1
▇▇▇▇▇▇ PRODUCTION SERVICES, INC.
AND
SUBSIDIARY GUARANTORS
% SENIOR NOTES DUE 2007
INDENTURE
Dated as of February , 1997
U.S. Trust Company of Texas, N.A.
Trustee
$130,000,000
2
CROSS REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6;7.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6;11.2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3;11.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.12
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3;11.4;11.5
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5;11.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316 (a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . 2.9
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
N.A. means not applicable.
*This Cross Reference Table is not part of the Indenture.
3
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . 1
SECTION 1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 OTHER DEFINITIONS . . . . . . . . . . . . . . . . . . 15
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . 16
SECTION 1.4 RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . 16
ARTICLE 2 THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.1 FORM AND DATING . . . . . . . . . . . . . . . . . . . 17
SECTION 2.2 EXECUTION AND AUTHENTICATION . . . . . . . . . . . . 17
SECTION 2.3 REGISTRAR AND PAYING AGENT . . . . . . . . . . . . . 18
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST . . . . . . . . . 18
SECTION 2.5 HOLDER LISTS . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.6 TRANSFER AND EXCHANGE . . . . . . . . . . . . . . . . 19
SECTION 2.7 REPLACEMENT NOTES . . . . . . . . . . . . . . . . . . 21
SECTION 2.8 OUTSTANDING NOTES . . . . . . . . . . . . . . . . . . 22
SECTION 2.9 TREASURY NOTES . . . . . . . . . . . . . . . . . . . 22
SECTION 2.10 TEMPORARY NOTES . . . . . . . . . . . . . . . . . . . 22
SECTION 2.11 CANCELLATION . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.12 DEFAULTED INTEREST . . . . . . . . . . . . . . . . . 23
SECTION 2.13 CUSIP NUMBERS . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 3 REDEMPTION AND PREPAYMENT . . . . . . . . . . . . . . . . . 23
SECTION 3.1 NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . 23
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED . . . . . . . . . . 23
SECTION 3.3 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . 24
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . 25
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE . . . . . . . . . . . . . 25
SECTION 3.6 NOTES REDEEMED IN PART . . . . . . . . . . . . . . . 25
SECTION 3.7 OPTIONAL REDEMPTION . . . . . . . . . . . . . . . . . 25
SECTION 3.8 MANDATORY REDEMPTION . . . . . . . . . . . . . . . . 26
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS . 26
ARTICLE 4 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.1 PAYMENT OF NOTES . . . . . . . . . . . . . . . . . . 28
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY . . . . . . . . . . . 29
SECTION 4.3 REPORTS . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.4 COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . 29
SECTION 4.5 TAXES . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.6 STAY, EXTENSION AND USURY LAWS . . . . . . . . . . . 30
SECTION 4.7 RESTRICTED PAYMENTS . . . . . . . . . . . . . . . . . 31
SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED
EQUITY . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.10 ASSET SALES . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.11 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . 37
SECTION 4.12 LIENS . . . . . . . . . . . . . . . . . . . . . . . . 37
i
4
SECTION 4.13 ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.14 SALE-AND-LEASEBACK TRANSACTIONS . . . . . . . . . . . 38
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL . . . . . 38
SECTION 4.16 BUSINESS ACTIVITIES . . . . . . . . . . . . . . . . . 39
ARTICLE 5 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS . . . . . . . 39
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED . . . . . . . . . . 40
ARTICLE 6 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 40
SECTION 6.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 40
SECTION 6.2 ACCELERATION . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.3 OTHER REMEDIES . . . . . . . . . . . . . . . . . . . 43
SECTION 6.4 WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . . 43
SECTION 6.5 CONTROL BY MAJORITY . . . . . . . . . . . . . . . . . 43
SECTION 6.6 LIMITATION ON SUITS . . . . . . . . . . . . . . . . . 43
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT . . . . 44
SECTION 6.8 COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . . 44
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . 44
SECTION 6.10 PRIORITIES . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.11 UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . 45
ARTICLE 7 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.1 DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . . 45
SECTION 7.2 RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . 46
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . 47
SECTION 7.4 TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . 47
SECTION 7.5 NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . 47
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES . . . . . . 47
SECTION 7.7 COMPENSATION AND INDEMNITY . . . . . . . . . . . . . 48
SECTION 7.8 REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . 49
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC . . . . . . . . . . 49
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . . 50
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY 50
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . 50
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE 50
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE . . . . . . . . . . . 50
SECTION 8.3 COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . 51
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE . . . . . 51
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS . . . . . . . . 52
SECTION 8.6 REPAYMENT TO THE COMPANY . . . . . . . . . . . . . . 53
SECTION 8.7 REINSTATEMENT . . . . . . . . . . . . . . . . . . . . 53
ii
5
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . . . . . 54
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES . . . . . . . . . 54
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES . . . . . . . . . . 55
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . . 56
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . . 56
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES . . . . . . . . . . 56
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC . . . . . . . . . . . . 57
ARTICLE 10 SUBSIDIARY GUARANTEES . . . . . . . . . . . . . . . . . . . 57
SECTION 10.1 SUBSIDIARY GUARANTEES . . . . . . . . . . . . . . . . 57
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES . . . . . . . . . . 58
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY . . . 59
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN
TERMS . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS . . . . . . . . . . 60
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT . . . . . . . . . . 61
SECTION 10.7 CONTRIBUTION . . . . . . . . . . . . . . . . . . . . 61
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES . . . . . . . . . 61
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.1 TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . 62
SECTION 11.2 NOTICES . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . 64
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION . . . . 64
SECTION 11.6 RULES BY TRUSTEE AND AGENTS . . . . . . . . . . . . . 65
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . 65
SECTION 11.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS . . . . 65
SECTION 11.10 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.11 SEVERABILITY . . . . . . . . . . . . . . . . . . . . 65
SECTION 11.12 COUNTERPART ORIGINALS . . . . . . . . . . . . . . . . 65
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC . . . . . . . . . . 65
iii
6
INDENTURE dated as of February , 1997, by and among ▇▇▇▇▇▇ Production
Services, Inc., a Texas corporation (the "Company"), the Subsidiary Guarantors
(as defined herein) and U.S. Trust Company of Texas, N.A., as trustee (the
"Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of one another and for the equal and ratable benefit of the
Holders of the % Senior Notes due 2007 of the Company (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Acquired Indebtedness" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary to such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquisition Line" means the loan facility under the credit agreement,
dated February , 1997, between the Company and the Frost National Bank for the
purpose of acquisitions of assets or businesses, as amended, modified,
supplemented, extended, restated or renewed from time to time.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Attributable Indebtedness" in respect of a sale-and-leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale-and-leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). As used in the preceding sentence, the
"net rental payments" under any lease for any such period shall mean the sum of
rental and other payments required to be paid with respect to such period by
the lessee thereunder, excluding any amounts required to be paid by such
lessee on account of maintenance and repairs, insurance, taxes, assessments,
water rates or similar charges. In the case of any lease that is terminable by
the lessee upon payment of penalty, such net rental payment shall also include
the amount of such penalty, but no rent
1
7
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.
"Bankruptcy Custodian" similar officer under any Bankruptcy Law.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
corporation or similar entity, any membership or other similar interests
therein and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) demand and time deposits and certificates of
deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million; (iii)
commercial paper with a maturity of 270 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-2
by Standard and Poor's or at least P-2 by ▇▇▇▇▇'▇; (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii) above; (v) overnight bank deposits and bankers'
acceptances at any commercial bank meeting the qualifications specified in
clause (ii) above; (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (ii) above,
provided all such deposits do not exceed $5.0 million in the aggregate at any
one time; (vii) demand and time deposits and certificates of deposit with any
commercial bank organized in the United States not meeting the qualifications
specified in clause (ii) above, provided that such deposits and certificates
support bond, letter of credit and other similar types of obligations incurred
in the ordinary course of business and (viii) investments in money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries
2
8
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act); (ii) the Company consolidates with or merges into another
Person or any Person consolidates with, or merges into, the Company, in any
such event pursuant to a transaction in which the outstanding Voting Stock of
the Company is changed into or exchanged for cash, securities or other
property, other than any such transaction where (a) the outstanding Voting
Stock of the Company is changed into or exchanged for Voting Stock of the
surviving or resulting Person that is Qualified Capital Stock and (b) the
holders of the Voting Stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than a majority of the Voting
Stock of the surviving or resulting Person immediately after such transaction;
(iii) the adoption of a plan relating to the liquidation or dissolution of the
Company; (iv) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Voting Stock of the Company or (v) the
first day on which a majority of the members of the Board of Directors are not
Continuing Directors. For purposes of this definition, any transfer of an
equity interest of an entity that was formed for the purpose of acquiring
Voting Stock of the Company will be deemed to be a transfer of such portion of
such Voting Stock as corresponds to the portion of the equity of such entity
that has been so transferred.
"Commission" means the Securities and Exchange Commission.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such
Consolidated Net Income, plus (iii) consolidated net interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Indebtedness, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Interest Rate Protection Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of
goodwill, debt issuance costs and other intangibles but excluding amortization
of prepaid cash expenses that were paid in a prior period) and other non-cash
charges (including any provision for the reduction in the carrying value of
assets recorded in accordance with GAAP but excluding any such non-cash charge
to the extent that it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income, minus (v) any non-cash
items increasing the Consolidated Net Income of such Person and its Restricted
Subsidiaries during such period (excluding any such items that represent the
reversal of any accrual of, or cash reserve for, anticipated cash charges in
any prior period commencing subsequent to the Issue Date), in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of a Restricted
Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in same proportion) that
the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net
3
9
Income of such Person and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained),
and without direct or indirect restriction pursuant to the terms of its charter
and all agreements, instruments, judgments, decrees, orders, statutes, rules
and governmental regulations applicable to that Restricted Subsidiary or its
shareholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof that is a Subsidiary Guarantor; (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its shareholders; (iii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded and (iv) the cumulative effect
of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common shareholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of cash dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the Issue Date in
the book value of any asset owned by such Person or a consolidated Restricted
Subsidiary of such Person, (y) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except,
in each case, Permitted Investments) and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the foregoing
determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of
Directors on the Issue Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.2 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facility" means, collectively, the Acquisition Line and the
Working Line.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time that were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or futures contract or other similar agreement or arrangement designed to
4
10
protect against or manage such Person's or any of its Subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereto.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required
to deliver a resolution of the Board of Directors under this Indenture, a
member of the Board of Directors who does not have any material direct or
indirect financial interest (other than an interest arising solely from the
beneficial ownership of Capital Stock of the Company) in or with respect to
such transaction or series of transactions.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the Holder thereof, in whole or in part, on or prior to the
date on which the Notes mature.
"Employee Stock Repurchases" means purchases by the Company of any of
its Capital Stock from employees, provided that the aggregate amount of all
such purchases shall not exceed $500,000 during any fiscal year of the Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Loss" means, with respect to any workover rig or similar or
related property or asset of the Company or any Restricted Subsidiary, (i) any
damage to such workover rig or similar or related property or asset that
results in an insurance settlement with respect thereto on the basis of a total
loss or a constructive or compromised total loss or (ii) the confiscation,
condemnation or requisition of title to such workover rig or similar or related
property or asset by any government or instrumentality or agency thereof. An
Event of Loss shall be deemed to occur as of the date of the insurance
settlement, confiscation, condemnation or requisition of title, as applicable.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
5
11
"Existing Indebtedness" means up to $3.75 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Credit Facility) in existence on the Issue Date, until
such amounts are repaid.
"Fair Market Value" means, with respect to any asset or Investment, the
fair market value of such asset or Investment at the time of the event
requiring such determination, and, with respect to any assets or Investment in
excess of $5.0 million (other than cash or Cash Equivalents) as determined by
an Independent Appraiser that is, in the reasonable judgment of the Board of
Directors, qualified to perform the task for which such Independent Appraiser
has been engaged and independent with respect to the Company.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person for
such period. In the event that the Company or any of its Restricted
Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other
than revolving credit borrowings) or issues preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the date on which the event for which the calculation
of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions of
businesses that have been made by the referent Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and prior to the Calculation Date shall be
deemed to have occurred on the first day of the four-quarter reference period;
(ii) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded; and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall
be excluded, but only to the extent that the obligations giving rise to such
Fixed Charges will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (i) the consolidated interest expense (net of any interest income) of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (excluding amortization of debt issuance costs and including, without
limitation, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Indebtedness, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Interest
Rate Protection Obligations); (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period;
(iii) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not
such guarantee or Lien is called upon) and (iv) the product of (A) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred stock of such Person, to
the extent such preferred stock is owned by Persons other than such Person or
its Restricted Subsidiaries, times (B) a fraction, the numerator of which is
one and the denominator of which is one minus the then current
6
12
combined federal, state and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession of the United States, which are in effect as of the date of
preparation of a financial statement or the date that a particular action is
taken or event occurs, as applicable.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
Note attached hereto as Exhibit A.
"Government Securities" means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation of the United States of America, which, in either case, are
not callable or redeemable as the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 2.13(a)(2)
of the Securities Act), as custodian with respect to any such Government
Security or a specific payment of principal of or interest on any such
Government Security held by such custodian for the account of the holder of
such depository receipt; provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Security or the specific payment of principal of
or interest on the Government Security evidenced by such depository receipt.
The term "guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection
in the ordinary course of business), direct or indirect, in any manner, of any
part or all of such obligation and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
nonperformance) of all or any part of such obligation, including, without
limiting the foregoing, the payment of amounts drawn down under letters of
credit. When used as a verb, "guarantee" has a corresponding meaning.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any obligations in respect
of Currency Hedge Obligations or Interest Rate Protection Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and
to the extent any of the foregoing indebtedness (other than letters of credit,
Currency Hedge
7
13
Obligations and Interest Rate Protection Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the guarantee by such Person of any Indebtedness
of any other Person.
"Indenture" means this indenture, as amended or supplemented from time
to time.
"Independent Appraiser" means an investment banking firm of national
standing with noninvestment grade debt underwriting experience or any third
party appraiser of national standing; provided, however, that such firm or
appraiser is not an Affiliate of the Company.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements or arrangements designed to
protect against or manage such Person's or any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that the following shall not constitute Investments: (i) an
acquisition of assets, Equity Interests or other securities by the Company for
consideration consisting of common equity securities of the Company, (ii)
extensions of trade credit or other advances to customers on commercially
reasonable terms in accordance with normal trade practices or otherwise in the
ordinary course of business, (iii) Interest Rate Protection Obligations and
Currency Hedge Obligations, but only to the extent that the same constitute
Permitted Indebtedness and (iv) endorsements of negotiable instruments and
documents in the ordinary course of business. If the Company or any Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any
direct or indirect Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"Issue Date" means the date on which the Notes were first issued under
this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of San Antonio, Texas or the City of New York or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday, payment may be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the
8
14
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction
other than a precautionary financing statement respecting a lease not intended
as a security agreement).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor to the
rating agency business thereof.
"Net Equity Proceeds" means (i) in the case of any sale by the Company
of Qualified Capital Stock of the Company, the aggregate net proceeds received
by the Company, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in other property
(valued as determined reasonably and in good faith by the Board of Directors,
as evidenced by a written resolution of said Board of Directors, at the fair
market value thereof at the time of receipt) and (ii) in the case of any
exchange, exercise, conversion or surrender of any outstanding Indebtedness of
the Company or any Restricted Subsidiary for or into shares of Qualified
Capital Stock of the Company, the amount of such Indebtedness (or, if such
Indebtedness was issued at an amount less than the stated principal amount
thereof, the accrued amount thereof as determined in accordance with GAAP) as
reflected in the consolidated financial statements of the Company prepared in
accordance with GAAP as of the most recent date next preceding the date of such
exchange, exercise, conversion or surrender (plus any additional amount
required to be paid by the holders of such Indebtedness to the Company or to
any Wholly Owned Restricted Subsidiary of the Company upon such exchange,
exercise, conversion or surrender and less any and all payments made to the
holders of such Indebtedness, and all other expenses incurred by the Company in
connection therewith), in the case of each of clauses (i) and (ii) to the
extent consummated after the Issue Date.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale-and-leaseback transactions) or other
sale of assets or (b) the disposition of any securities by such Person or any
of its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; (ii) any extraordinary or
nonrecurring item (but not loss), together with any related provision for taxes
on such extraordinary or nonrecurring gain (but not loss) and (iii) any
interest income, together with any related provision for taxes on such interest
income.
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (i) the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (ii) amounts required to be applied to the repayment of
Indebtedness (other than Indebtedness under the Credit Facility) secured by a
Lien on the asset or assets that were the subject of such Asset Sale, (iii)
amounts required to be paid to any Person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in the asset or assets that
were the subject of such Asset Sale, (iv) any reserve for adjustment in respect
of the sale price of such asset or assets established in accordance with GAAP
and (v) any adjustment for expenses of discontinuing any operations or line
9
15
of business or severance costs, in both cases associated with an Asset Sale;
provided that such adjustment does not exceed 15% of the aggregate cash
proceeds.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (A) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (B) is directly or indirectly liable (as a Subsidiary
Guarantor or otherwise) or (C) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries.
"Non-Recourse Purchase Money Indebtedness" means Indebtedness or that
portion of Indebtedness of the Company or any Restricted Subsidiary incurred in
connection with the acquisition by the Company or such Restricted Subsidiary,
subsequent to the Issue Date, of any property or assets and as to which (i) the
holders of such Indebtedness agree that they will look solely to the property
or assets so acquired (or, in the case of the acquisition of all of the
outstanding Capital Stock of a Person, the underlying properties and assets of
such Person at the time of such acquisition, including proceeds thereof) and
securing such Indebtedness for payment on or in respect of such Indebtedness,
and neither the Company nor any Restricted Subsidiary (A) provides credit
support, including any undertaking, agreement or instrument that would
constitute Indebtedness or (B) is directly or indirectly liable for such
Indebtedness and (ii) no default with respect to such Indebtedness would permit
(after notice or passage of time or both), according to the terms thereof, any
holder of any Indebtedness of the Company or a Restricted Subsidiary to declare
a default on such Indebtedness or cause the payment thereof to be accelerated
or payable prior to its stated maturity; and, provided however, that any
portion of the purchase price of such property or assets that is not financed
through the incurrence of such Indebtedness, shall be deemed to be a
"Restricted Investment" under this Indenture and shall only be permitted to be
expended by the Company or any Restricted Subsidiary to the extent that the
Company would be permitted to make a Restricted Payment in such amount under
the terms of Section 4.7 hereof.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chief Executive
Officer, President, Chief Financial Officer, Treasurer, Secretary or any Vice
President of such Person.
"Officers' Certificate" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer, principal
accounting officer or principal financial officer of the Company, that meets
the requirements of Section 11.5 hereof.
"Oil Service Business" means any businesses related to providing
services for the drilling for, or exploration and production of, oil, gas or
other hydrocarbons, including, but not limited to, (i) the well servicing
business, (ii) liquid services and (iii) production services.
10
16
"Opinion of Counsel" means an Opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.5 hereof. The counsel may be an employee of or counsel to the Company.
"Permitted Investments" means any of the following: (i) Investments in
Cash Equivalents; (ii) Investments in the Company or any of its Wholly Owned
Restricted Subsidiaries (including repurchases of any of the Notes on the open
market or as otherwise permitted by this Indenture); (iii) Investments by the
Company or any of its Restricted Subsidiaries in another Person, if as a result
of such Investment (A) such other Person becomes a Wholly Owned Restricted
Subsidiary or (B) such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its properties and assets to,
the Company or a Wholly Owned Restricted Subsidiary; (iv) Investments permitted
under Section 4.10 hereto; (v) Investments made in the ordinary course of
business in prepaid expenses, lease, utility, workers' compensation,
performance and other similar deposits; (vi) Investments in stock, obligations
or securities received in, settlement of debts owing to the Company or any
Restricted Subsidiary as a result of bankruptcy or insolvency proceedings or
upon the foreclosure, perfection or enforcement of any Lien in favor of the
Company or any Restricted Subsidiary, in each case as to debt owing to the
Company or any Restricted Subsidiary that arose in the ordinary course of
business of the Company or any such Restricted Subsidiary, provided that any
stocks, obligations or securities received in settlement of debts that arose in
the ordinary course of business (and received other than as a result of
bankruptcy or insolvency proceedings or upon foreclosure, perfection or
enforcement of any Lien) that are, within 30 days of receipt, converted into
cash or Cash Equivalents shall be treated as having been cash or Cash
Equivalents at the time received and (vii) other Investments in joint ventures,
corporations, limited liability companies or partnerships formed with or
organized by third Persons, which joint ventures, corporations, limited
liability companies or partnerships, engage in the Oil Service Business and are
not Unrestricted Subsidiaries at the time of such Investment, provided all such
Investments do not, in the aggregate, exceed $10.0 million.
"Permitted Liens" means the following types of Liens:
(i) Liens existing as of the Issue Date;
(ii) Liens securing the Notes or the Subsidiary
Guarantees;
(iii) Liens in favor of the Company;
(iv) Liens securing Indebtedness that constitutes
Permitted Indebtedness pursuant to clause (i), (ii) or (iv) of the
definition of "Permitted Indebtedness" included in Section 4.9 hereof;
(v) Liens for taxes, assessments and governmental
charges or claims either (A) not delinquent or (B) contested in good
faith by appropriate proceedings and as to which the Company or its
Restricted Subsidiaries shall have set aside on its books such reserves
as may be required pursuant to GAAP;
(vi) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law incurred in the ordinary course of business for
sums not delinquent or being contested in good faith, if such
11
17
reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(vii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the payment or performance of tenders, statutory or regulatory
obligations, surety and appeal bonds, bids, government contracts and
leases, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(viii) judgment Liens not giving rise to an Event of
Default so long as any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceeding may be
initiated shall not have expired;
(ix) any interest or title of a lessor under any Capital
Lease Obligation or operating lease;
(x) Liens securing Non-Recourse Purchase Money
Indebtedness and other purchase money Liens; provided, however, that (i)
the related Non-Recourse Purchase Money Indebtedness or other purchase
money Indebtedness shall not be secured by any property or assets of the
Company or any Restricted Subsidiary other than the property or assets
so acquired and any proceeds therefrom and (ii) the Lien securing any
such Indebtedness shall be created within 90 days of such acquisition;
(xi) Liens securing obligations under or in respect of
either Currency Hedge Obligations or Interest Rate Protection
Obligations;
(xii) Liens upon specific items of inventory or other
goods of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(xiii) Liens securing reimbursement obligations with
respect to commercial letters of credit that encumber documents and
other property or assets relating to such letters of credit and products
and proceeds thereof; and
(xiv) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has
12
18
a final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded and (iv) with respect to
any such Indebtedness of the Company being extended, refinanced, renewed,
replaced, defeased or refunded, such Permitted Refinancing Indebtedness shall
not be incurred by any Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Public Equity Offering" means an underwritten offer and sale of common
stock of the Company pursuant to a registration statement that has been
declared effective by the Commission pursuant to the Securities Act (other than
a registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of the Company) or a private sale in
which the Company is obligated to publicly register such common stock for
resale within 120 days of such sale.
"Qualified Capital Stock" of any Person means any and all Capital Stock
of such Person other than Disqualified Stock.
"Rating Agencies" means Standard and Poor's and ▇▇▇▇▇'▇, or any
successor to the respective rating agency businesses thereof.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means (without duplication) (i) the designation
of a Subsidiary as an Unrestricted Subsidiary in the manner described in the
definition of "Unrestricted Subsidiary", (ii) any Investment other than a
Permitted Investment and (iii) any amount constituting a "Restricted
Investment" as contemplated in the definition of "Non-Recourse Purchase Money
Indebtedness".
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means any (i) Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof, and (ii) any other Subsidiary that contributed more than 5% of
the Company's Consolidated Cash Flow for the most recent four fiscal quarters
for which financial statements are available.
13
19
"Standard and Poor's" means Standard and Poor's Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor to the rating
agency business thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Notes or the Subsidiary Guarantees, as the case maybe.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Voting Stock is at the time owned or controlled, directly or
indirectly, by such Person of one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (A) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (B) the only general partners of which are such Person or of
one or more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantors" means each of (i) the Company's Significant
Subsidiaries on the Issue Date or any other Restricted Subsidiary that provides
a guarantee under the Credit Facility, (ii) any other Subsidiary that executes
a Subsidiary Guarantee in accordance with Article 10 hereof and (iii) their
respective successors and assigns, as required under Article 10 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-
77bbbb)as in effect on the date on which this Indenture is qualified under the
TIA, except as provided in Section 9.3 hereof.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary (or any successor to any
of them) that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors; but only to the
extent that such Subsidiary (i) has no Indebtedness other than Non-Recourse
Indebtedness; (ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (iii) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (A) to
subscribe for additional Equity Interests or (B) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results and (iv) has not guaranteed or otherwise directly
or indirectly provided credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.7 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.9 hereof, the Company shall be in
default of such Section). The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted
14
20
if (i) such Indebtedness is permitted under Section 4.9 hereof and (ii) no
Default or Event of Default would be in existence following such designation.
"Voting Stock" means, with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary to
the extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be
partially owned by the government of such foreign jurisdiction or individual or
corporate citizens of such foreign jurisdiction in order for such Restricted
Subsidiary to transact business in such foreign jurisdiction, provided that the
Company, directly or indirectly, owns the remaining Capital Stock or ownership
interests in such Restricted Subsidiary and, by contract or otherwise, controls
the management and business of such Restricted Subsidiary and derives the
economic benefits of ownership of such Restricted Subsidiary to substantially
the same extent as if such Restricted Subsidiary were a wholly owned
Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of
the Capital Stock or other ownership interests in such Subsidiary, other than
any directors' qualifying shares mandated by applicable law, is owned directly
or indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction
in order for such Subsidiary to transact business in such foreign jurisdiction,
provided that the Company, directly or indirectly, owns the remaining Capital
Stock or ownership interests in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the
economic benefits of ownership of such Subsidiary to substantially the same
extent as if such Subsidiary were a wholly owned Subsidiary.
"Working Line" means the loan facility under the credit agreement, dated
February o, 1997, between the Company and the Frost National Bank for the
purposes of supporting accounts receivable, funding letters of credit and
providing for working capital needs, as amended, modified, supplemented,
extended, restated or renewed from time to time.
15
21
SECTION 1.2 OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Adjusted Net Assets" . . . . . . . . . . . . . . . . . . . . . . . 10.7
"Asset Sale" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
"Asset Sale Offer" . . . . . . . . . . . . . . . . . . . . . . . . 4.10
"Asset Sale Offer Payment" . . . . . . . . . . . . . . . . . . . . 3.9
"Asset Sale Offer Purchase Date" . . . . . . . . . . . . . . . . . . 3.9
"Asset Sale Offer Trigger Date" . . . . . . . . . . . . . . . . . . 4.10
"Benefitted Party" . . . . . . . . . . . . . . . . . . . . . . . . 10.1
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . 4.15
"Change of Control Payment" . . . . . . . . . . . . . . . . . . . . 4.15
"Change of Control Payment Date" . . . . . . . . . . . . . . . . . 4.15
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . . . . . . 8.3
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . 10.7
"incur" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9
"Interest Payment Date" . . . . . . . . . . . . . . . . . . . Exhibit A
"Legal Defeasance" . . . . . . . . . . . . . . . . . . . . . . . . 8.2
"Maximum Bank Facility Amount" . . . . . . . . . . . . . . . . . . 4.9
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Permitted Indebtedness" . . . . . . . . . . . . . . . . . . . . . 4.9
"refinancing" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.9
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Restricted Payments" . . . . . . . . . . . . . . . . . . . . . . . 4.7
"Subsidiary Guarantees" . . . . . . . . . . . . . . . . . . . . . . 10.1
"transfer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
16
22
"obligor" on the Notes means the Company, any Subsidiary Guarantor and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in
the plural include the singular;
(v) provisions apply to successive events and
transactions; and
(vi) references to sections of or rules under the
Securities Act or the Exchange Act shall be deemed to include
substitute, replacement of successor sections or rules adopted by the
Commission from time to time.
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING.
The Notes, the notation thereon relating to the Subsidiary Guarantees
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit A hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Note shall be
dated the date of its authentication. The Notes shall be issued in minimum
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the form of the Notes and the
notation thereon relating to the Subsidiary Guarantees annexed hereto as
Exhibit A and the Subsidiary Guarantees shall constitute, and are hereby
expressly made, a part of this Indenture and the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto). Notes issued in definitive form shall be substantially in the form
of Exhibit A attached hereto (but without including the text referred to in
17
23
footnotes 1 and 2 thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid. Each Subsidiary Guarantor shall execute its Subsidiary Guarantee in the
manner set forth in Section 10.8.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall authenticate the Notes for original issue up to the
aggregate principal amount of $130,000,000. The aggregate principal amount of
Notes outstanding at any time may not exceed $130,000,000 except as provided in
Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
18
24
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary thereof) shall have
no further liability for the money. If the Company or a Subsidiary thereof
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Notes.
SECTION 2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times
as the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of the Holders
of Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When
Definitive Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes;
or
(y) to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by his
attorney, duly authorized in writing.
(b) Transfer of a Definitive Note for a Beneficial Interest in
a Global Note. A Definitive Note may not be exchanged for a beneficial
interest in a Global Note except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with written instructions from the Holder thereof
directing the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the aggregate
principal amount of the Notes represented by the Global Note, in which case the
Trustee shall cancel such Definitive Note in accordance with Section 2.11
hereof and cause, or direct the Note Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Note Custodian, the aggregate principal amount of Notes represented by the
Global Note to be increased accordingly. If
19
25
no Global Notes are then outstanding, the Company shall issue and, upon receipt
of an authentication order in accordance with Section 2.2 hereof, the Trustee
shall authenticate,a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a beneficial
interest in a Global Note, the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the standing
instructions and procedures existing between the Depository and the Note
Custodian, cause the aggregate principal amount of Global Notes to be-
reduced accordingly and, following such reduction, the Company shall
execute and the Trustee shall authenticate and deliver to the transferee
a Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a
beneficial interest in a Global Note pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations
as the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Definitive Notes to the Persons in whose names such
Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Note may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor ▇▇▇▇▇▇▇▇▇▇ or a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of
Depository. If at any time:
(i) the Depository for the Notes notifies the Company
that the Depository is unwilling or unable to continue as Depository for
the Global Notes and a successor Depository for the Global Notes is not
appointed by the Company within 90 days after delivery of such notice;
or
(ii) the Company, at its discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive
Notes under this Indenture,
then the Company shall execute, and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Global Notes in exchange for such Global Notes.
20
26
(g) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or canceled, all Global Notes shall be
returned to or retained and canceled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for Definitive Notes, redeemed,
repurchased or canceled, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note, by the Trustee or the Note Custodian, at the direction of the
Trustee, to reflect such reduction.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive
Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.7, 3.9, 4.10, 4.15 and 9.5 hereto).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon
any registration of transfer or exchange of Definitive Notes or Global
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Definitive Notes or Global Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.2 hereof and ending at the close of
business on the day of selection;
(B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest
payment date.
(i) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and
21
27
interest on such Notes, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
SECTION 2.7 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company, and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.8 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.9 hereof, a Note
does not cease to be outstanding because the Company, any of the Subsidiary
Guarantors or any Affiliate of the Company or any of the Subsidiary Guarantors
holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.9 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any of the Subsidiary Guarantors or any Affiliate of the Company or
any of the Subsidiary Guarantors, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers thereof.
22
28
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate Definitive Notes
or the Global Note in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
such canceled Notes. The Trustee shall provide a certificate of destruction to
the Company from time to time, at the written request of the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation. If the Company or any
Subsidiary Guarantor shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.1 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or,
upon the written request of the Company, the Trustee in the name and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and the amount of
such interest to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers
printed on the Notes, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company shall promptly notify the
Trustee of any change in the CUSIP numbers.
23
29
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; provided that no Notes of $1,000 or less will
be redeemed in part. In the event that less than all of the Notes are to be
redeemed by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
The provisions of the two preceding paragraphs of this Section 3.2 shall
not apply with respect to any redemption affecting only a Global Note, whether
such Global Note is to be redeemed in whole or in part. In case of any such
redemption in part, the unredeemed portion of the principal amount of the
Global Note shall be in an authorized denomination.
SECTION 3.3 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.9 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address. Failure to receive such
notice or any defect in the notice to any such Holder shall not affect the
validity of the proceedings for the redemption of any other Notes or portion
thereof.
The notice shall identify the Notes to be redeemed (including CUSIP
number) and shall state:
(i) the redemption date;
24
30
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion
of the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(vi) that, unless the Company's defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in such
notice or printed on the Notes.
If any of the Notes to be redeemed is in the form of a Global Note, then
the Company shall modify such notice to the extent necessary to accord with the
procedures of the Depository applicable to redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days (unless the
Trustee and the Company agree to a shorter period) prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.4
hereof) money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes
or the portions of Notes called for
25
31
redemption. If a Note is redeemed on or after an interest record date but on
or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Note was registered at
the close of business on such record date. If any Note called for redemption
shall not be so paid upon surrender for redemption because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Note and in Section 4.1 hereof.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable at the Company's option
prior to February 1, 2002. Thereafter, the Notes will be subject to redemption
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages
of principal amount) set forth below plus accrued and unpaid interest thereon
to the applicable redemption date, if redeemed during the 12-month period
beginning on February 1, of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002.......................... o%
2003.......................... o%
2004.......................... o%
2005 and thereafter........... 100.000%
(b) Notwithstanding the foregoing, at any time on or prior to
February 1, 2000, the Company may redeem up to an aggregate of $45.5 million
principal amount of Notes at a redemption price of o% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date, with
the net proceeds of a Public Equity Offering; provided that at least $84.5
million in aggregate principal amount of Notes remain outstanding immediately
after the occurrence of such redemption; and, provided, further; that such
redemption shall occur within 60 days of the date of the closing of such Public
Equity Offering.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Sections 3.1 through 3.6 hereof.
SECTION 3.8 MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments or sinking fund
payments with respect to the Notes.
26
32
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
(i) The Asset Sale Offer shall be made to all Holders
and shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is
required by applicable law (the "Offer Period").
(ii) If the Asset Sale Offer Purchase Date is on or
after an interest record date and on or before the related interest
payment date, any accrued and unpaid interest thereon, if any, shall be
paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
(iii) Within 10 days following any Asset Sale Offer
Trigger Date, the Company shall send, by first class mail, a notice to
each of the Holders at such Holder's registered address, with a copy to
the Trustee. The notice, which shall govern the terms of the Asset Sale
Offer, shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer, and shall
state:
(A) that the Asset Sale Offer Trigger Date has
occurred pursuant to Section 4.10 hereof and that the Company is
offering to purchase the maximum principal of Notes that may be
purchased out of the Excess Proceeds (the "Offer Amount") at an
offer price in cash in an amount equal to 100.0% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any,
to date of purchase, which shall be a Business Day (the "Asset
Sale Offer Purchase Date") that is not earlier than 30 days nor
later than 60 days from the date such notice is mailed;
(B) the amount of accrued and unpaid interest,
if any, as of the Asset Sale Offer Purchase Date;
(C) that any Note subject to the Asset Sale
Offer not tendered shall continue to accrue interest;
(D) that, unless the Company defaults in the
payment of the purchase price for the Notes payable pursuant to
the Asset Sale Offer, any such Notes accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest,
after the Asset Sale Offer Purchase Date;
(E) that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer may only elect to have
all of such Note purchased and may not elect to have only a
portion of such Note purchased;
(F) that Holders electing to have a Note
purchased pursuant to any Asset Sale Offer shall be required to
surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed to the
Company;
27
33
a Paying Agent at the address specified in the notice at least
three Business Days before the Purchase Date;
(G) that Holders shall be entitled to withdraw
their election if the Company or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer
Period, a facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such ▇▇▇▇▇▇ is
withdrawing his election to have such Note purchased;
(H) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Offer Amount or less
than all of the Notes tendered pursuant to the Asset Sale Offer
are accepted for payment by the Company for any reason consistent
with this Indenture, the Trustee shall select the Notes to be
purchased in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee deems fair and
appropriate; provided that Notes accepted for payment in part
will only be purchased in integral multiples of $1,000; and
(I) that Holders whose Notes were purchased only
in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.
If any of the Notes subject to an Asset Sale Offer is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to repurchases.
(b) On the Asset Sale Offer Purchase Date, the Company shall:
(i) accept for payment the maximum principal amount of Notes or portions
thereof tendered pursuant to the Asset Sale Offer that can be purchased out of
the Excess Proceeds, (ii) deposit with the Paying Agent the aggregate purchase
price of all Notes or portions thereof accepted for payment and (iii) deliver
or cause to be delivered to the Trustee all Notes tendered pursuant to the
Asset Sale Offer. The Company or the Paying Agent, as the case may be, shall
promptly mail to each Holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes and the Trustee shall
promptly authenticate and mail to any such Holder of Notes accepted for payment
in part a new Note equal in principal amount to any unpurchased portion of the
Notes, and any Note not accepted for payment in whole or in part shall be
promptly returned to the Holder of such Note. The Company shall announce the
results of the Asset Sale Offer to Holders of the Notes on or as soon as
practicable after the Asset Sale Offer Purchase Date. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act, and any other
securities laws or regulations, if applicable, in connection with any Asset
Sale Offer.
(c) Other than as specifically provided in this Section 3.9,
any purchase pursuant to this Section 3.9 shall be made pursuant to the
provisions of Sections 3.1 through 3.6 hereof.
28
34
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on
the date due if the Paying Agent, if other than the Company or a Subsidiary
thereof, holds as of 2:00 p.m. Eastern Time one Business Day prior to the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1.0% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
presented for payment, surrendered for registration of transfer or for exchange
and where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.3
hereof.
SECTION 4.3 REPORTS.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Notes are outstanding, the Company shall furnish
to the Holders of Notes (i) either the actual Forms 10-Q and 10-K filed with
the Commission, or all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" that
describes the consolidated financial condition and
29
35
results of operations of the Company and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) either any actual Form 8-K filed with the Commission, or
all information that would be required to be contained in a filing with the
Commission on Form 8-K if the Company were required to file such Form. In
addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Company shall at all
times comply with TIA Section 314(a).
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company'
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred and is
continuing, describing all such Defaults or Events of Default of which he or
she may have knowledge and what action the Company is taking or proposes to
take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Notes is prohibited or
if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.3(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article 4 or Article 5 hereof
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto.
30
36
SECTION 4.5 TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.6 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
has been enacted.
SECTION 4.7 RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of
its Restricted Subsidiaries' Equity Interests (including, without limitation,
any payment in connection with any merger or consolidation involving the
Company) or to the direct or indirect holders of the Company's Equity Interests
in their capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly Owned Restricted Subsidiary
of the Company); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any Affiliate of the Company (other than
(A) any such Equity Interests owned by the Company or any Wholly Owned
Restricted Subsidiary of the Company that is a Subsidiary Guarantor and (B)
Employee Stock Repurchases); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Subordinated
Indebtedness (other than $3.75 million of Subordinated Indebtedness which is
Existing Indebtedness, provided that such Subordinated Indebtedness is redeemed
or repaid at or below par), except in accordance with the mandatory redemption
or repayment provisions set forth in the documentation governing such
Indebtedness or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
(in addition to Permitted Indebtedness) pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.9(a) hereof; and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding
31
37
Restricted Payments permitted by clauses (x) and (y) of the next
succeeding paragraph, but including the Restricted Payment permitted by
clause (z) of the next succeeding paragraph), is less than the sum of
(i) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the Issue Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate Net Equity Proceeds (A)
received by the Company from the issue or sale, subsequent to the Issue
Date, of Qualified Capital Stock of the Company or (B) of any other
Equity Interests or debt securities of the Company that have been issued
subsequent to the Issue Date and that have been converted into such
Qualified Capital Stock (other than any Qualified Capital Stock sold to
a Restricted Subsidiary of the Company) plus (iii) to the extent not
otherwise included in Consolidated Net Income, the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances, or other transfers of assets, in each
case to the Company or a Restricted Subsidiary after the Issue Date from
any Unrestricted Subsidiary or from the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary (valued as provided below), plus
(iv) $10.0 million.
The foregoing provisions shall not prohibit any of the following: (w)
the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Indenture; (x) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or
out of the Net Equity Proceeds of, the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of Qualified Capital Stock of
the Company (other than any Disqualified Stock); provided that the amount of
any such Net Equity Proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph and (y) the defeasance, redemption or
repurchase of Subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness or the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of
Qualified Capital Stock of the Company; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph.
For purposes of the foregoing provisions, the amount of any Restricted
Payment (other than cash) shall be the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than five days
following the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.7 were computed, which calculations may be based upon the
Company's latest available financial statements.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would be permitted by the
provisions of this Section 4.7 and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. For purposes of making
such determination, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid in cash prior to such
designation) in the Restricted Subsidiary so designated will be deemed to be
Restricted Payments at the time of such designation and will reduce the amount
available for Restricted Payments under paragraph (c) of this Section 4.7. All
such outstanding Investments will be
32
38
deemed to constitute Investments in an amount equal to the Fair Market Value of
such Investments at the time of such designation.
SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock
or (2) with respect to any other interest or participation in, or measured by,
its profits or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (r) Existing
Indebtedness as in effect on the Issue Date, (s) the Credit Facility as in
effect as of the Issue Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the Credit Facility as in effect on the Issue Date, (t) this
Indenture and the Notes, (u) applicable law, (v) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, provided
that, in the case of Indebtedness, such Indebtedness was permitted by the terms
of Section 4.9 hereof to be incurred, (w) by reason of customary non-assignment
provisions in leases entered into in the ordinary course of business and
customary provisions in other agreements that restrict assignment of such
agreements or rights thereunder, (x) customary restrictions contained in asset
sale agreements limiting the transfer of such assets pending the closing of
such sale, (y) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, or (z) Permitted Refinancing
Indebtedness with respect to any indebtedness referred to in clauses (r), (t)
and (v) above, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED EQUITY.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness but excluding any Permitted
Indebtedness) and that the Company will not issue any Disqualified Stock and
will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that the Company may incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock, and
any Restricted Subsidiary may incur Indebtedness (including Acquired
Indebtedness), if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least (i) 2.0 to 1.0 if such date occurs on or after the Issue
Date and on or prior to March 31, 1998, or (ii) 2.25 to 1.0 if such date occurs
after March 31, 1998, determined on a pro forma
33
39
basis (including a pro forma application of the net proceeds therefrom), as if
the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period.
(b) The Company shall not, and shall not permit any Subsidiary
Guarantor to, directly or indirectly, in any event incur any Indebtedness that
by its terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of that Company or such Subsidiary
Guarantor, as the case may be, unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Notes or the Subsidiary Guarantee of such Subsidiary
Guarantor, as the case may be, to the same extent and in the same manner as
such Indebtedness is subordinated pursuant to subordination provisions that are
most favorable to the holders of any other Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be.
The foregoing provisions shall not apply to the incurrence of any of the
following Indebtedness (collectively, "Permitted Indebtedness"):
(i) Indebtedness (and any guarantee thereof) under the
Working Line in an aggregate principal amount at any one time
outstanding not to exceed the greater of (A) $35.0 million, less any
amounts derived from Asset Sales and applied to the permanent reduction
of the Indebtedness thereunder as contemplated by Section 4.10 hereof or
(B) the sum of (1) 80% of the Company's Eligible Accounts Receivable (as
defined in the Working Line) and (2) 50% of the inventory of the Company
and its Restricted Subsidiaries determined in accordance with GAAP (the
"Maximum Bank Facility Amount"), and any renewals, amendments,
extensions, supplements, modifications, deferrals, refinancing or
replacements (each, for purposes of this clause (i), a "refinancing")
thereof, including any successive refinancing thereof, so long as the
aggregate principal amount of any such new Indebtedness, together with
the aggregate principal amount of all other Indebtedness outstanding
pursuant to this clause (i), shall not at any one time exceed the
Maximum Bank Facility Amount;
(ii) Indebtedness under the Acquisition Line in an
aggregate principal amount at any one time outstanding not to exceed
$10.0 million, and any renewals, amendments, extensions, supplements,
modifications, deferrals, refinancing or replacements (each, for
purposes of this clause (ii), a "refinancing") thereof, including any
successive refinancing thereof, so long as the aggregate principal
amount of any such new Indebtedness hereunder, together with the
aggregate principal amount of all other Indebtedness outstanding
pursuant to this clause (ii), shall not at any one time exceed $10.0
million;
(iii) Indebtedness under the Notes;
(iv) Indebtedness under any Existing Indebtedness and
any Indebtedness under Letters of Credit existing on the Issue Date;
(v) Indebtedness under Interest Rate Protection
Obligations, provided that (A) such Interest Rate Protection Obligations
are related to payment obligations on Permitted Indebtedness or
Indebtedness otherwise permitted by Section 4.9(a) hereof and (B) the
notional principal amount of such Interest Rate Protection Obligations
does not exceed
34
40
the principal amount of such Indebtedness to which such Interest Rate
Protection Obligations relate;
(vi) Indebtedness under Currency Hedge Obligations,
provided that (A) such Currency Hedge Obligations are related to payment
obligations on Permitted Indebtedness or Indebtedness otherwise
permitted by Section 4.9(a) hereof or to the foreign currency cash flows
reasonably expected to be generated by the Company and its Restricted
Subsidiaries and (B) the notional principal amount of such Currency Hedge
Obligations does not exceed the principal amount of such Indebtedness and
the amount of such foreign currency cash flows to which such Currency
Hedge Obligations relate;
(vii) the Subsidiary Guarantees of the Notes (and any
assumption of the obligations guaranteed thereby);
(viii) Indebtedness of the Company to a Wholly Owned
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary of
the Company to the Company or a Wholly Owned Restricted Subsidiary;
provided, however, that upon any subsequent issuance or transfer of any
Capital Stock or any other event that results in any such Wholly Owned
Restricted Subsidiary ceasing to be a Wholly Owned Restricted Subsidiary
or any other subsequent transfer of any such Indebtedness (except to the
Company or a Wholly Owned Restricted Subsidiary), such Indebtedness
shall be deemed, in each case, to be incurred and shall be treated as an
incurrence for purposes of Section 4.9(a) hereof at the time the Wholly
Owned Restricted Subsidiary in question ceased to be a Wholly Owned
Restricted Subsidiary or the time such subsequent transfer occurred;
(ix) Indebtedness in respect of bid, performance or
surety bonds issued for the account of the Company or any Restricted
Subsidiary thereof in the ordinary course of business, including
guarantees or obligations of the Company or any Restricted Subsidiary
thereof with respect to letters of credit supporting such bid,
performance or surety obligations (in each case other than for an
obligation for money borrowed);
(x) the incurrence by the Company or its Restricted
Subsidiaries of Non-Recourse Purchase Money Indebtedness;
(xi) any Permitted Refinancing Indebtedness incurred by
the Company or a Restricted Subsidiary of any Indebtedness incurred
pursuant to clause (iii) or (iv) of this definition, including any
successive refinancing by the Company or such Restricted Subsidiary;
(xii) Capital Lease Obligations in an aggregate amount
not in excess of $8.0 million at any one time outstanding; and
(xiii) any additional Indebtedness issued pursuant to one
or more credit agreements in an aggregate principal amount for all such
credit agreements not in excess of $5.0 million at any one time
outstanding and any guarantee thereof.
35
41
SECTION 4.10 ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, sell, issue, convey, transfer, lease or otherwise dispose of, to any Person
other than the Company or any of its Restricted Subsidiaries (including,
without limitation, by means of a sale-and-leaseback transaction or a merger or
consolidation) (collectively, for purposes of this Section 4.10, a "transfer"),
directly or indirectly, in one or a series of related transactions, (a) any
Capital Stock of any Restricted Subsidiary held by the Company or any other
Restricted Subsidiary, (b) all or substantially all of the properties and
assets of any division or line of business of the Company or any of its
Restricted Subsidiaries, (c) any Event of Loss or (d) any other properties or
assets of the Company or any of its Restricted Subsidiaries other than
transfers of cash, Cash Equivalents, accounts receivable, or properties or
assets in the ordinary course of business; provided that the sale, lease,
conveyance or other disposition of all or substantially all of the properties
or assets of the Company and its Restricted Subsidiaries, taken as a whole,
shall be governed by Sections 4.15 and/or 5.1 hereof and not by the provisions
of this Section 4.10 (each of the foregoing, an "Asset Sale"), unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are Subordinated Indebtedness or
otherwise by their terms subordinated to the Notes or the Subsidiary Guarantees)
that are assumed by the transferee of any such assets pursuant to a novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (y) any notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash within 180 days of closing such
Asset Sale (to the extent of the cash received), shall be deemed to be cash for
purposes of this clause (ii).
Notwithstanding the foregoing, any of the following shall, not be deemed
an "Asset Sale": (i) any transfer of properties or assets to an Unrestricted
Subsidiary, if such transfer is permitted under Section 4.7 hereof; (ii) sales
of damaged, worn-out or obsolete equipment or assets that, in the Company's
reasonable judgment, are either (A) no longer used or (B) no longer useful in
the business of the Company or its Restricted Subsidiaries; (iii) any lease of
any property entered into in the ordinary course of business and with respect
to which the Company or any Restricted Subsidiary is the lessor, except any
such lease that provides for the acquisition of such property by the lessee
during or at the end of the term thereof for an amount that is less than the
fair market value thereof at the time the right to acquire such property
occurs; (iv) any trade or exchange by the Company or any Restricted Subsidiary
of one or more workover rigs for one or more workover rigs owned or held by
another Person, provided that (A) the Fair Market Value of the workover rig or
rigs traded or exchanged by the Company or such Restricted Subsidiary
(including any cash or Cash Equivalents, not to exceed 15% of such Fair Market
Value, to be delivered by the Company or such Restricted Subsidiary) is
reasonably equivalent to the Fair Market Value of the workover rig or rigs
(together with any cash or Cash Equivalents, not to exceed 15% of such Fair
Market Value) to be received by the Company or such Restricted Subsidiary and
(B) such exchange is approved by a majority of the Disinterested Directors of
the Company; (v) sales of inventory in the ordinary course of business of the
Company and any Subsidiary consistent with past practices; (vi) the issuance by
the Company of its Capital Stock; (vii) a Restricted Payment permitted under
the terms of Section 4.7 hereof and (viii) any transfers that, but for this
clause (viii), would be Asset Sales,
36
42
if (A) the Company elects to designate such transfers as not constituting Asset
Sales and (B) after giving effect to such transfers, the aggregate Fair Market
Value of the properties or assets transferred in such transaction or any such
series of related transactions so designated by the Company does not exceed
$500,000.
Within 365 days after the receipt of any Net Proceeds from any Asset
Sale, the Company may (i) apply all or any of the Net Proceeds therefrom to
repay Indebtedness (other than Subordinated Indebtedness) of the Company or any
Restricted Subsidiary, provided, in each case, that the related loan commitment
of any revolving credit facility or other borrowing (if any) is thereby
permanently reduced by the amount of such Indebtedness so repaid or (ii) invest
all or any part of the Net Proceeds thereof in properties and other capital
assets that replace the properties or other capital assets that were the
subject of such Asset Sale or in other properties or other capital assets that
will be used in the business of the Company and its Restricted Subsidiaries or
in entities engaged in such business, provided that in such latter instance
such entities become a Subsidiary Guarantor or Restricted Subsidiary, as
applicable. Pending the final application of any such Net Proceeds, the
Company may temporarily reduce borrowings under any revolving credit facility
or otherwise invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph shall be deemed to
constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds
equals or exceeds $15.0 million (the date of such occurrence being called the
"Asset Sale Offer Trigger Date"), the Company shall make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon to the date of purchase in accordance with
the procedures set forth in Section 3.9 hereof. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. Upon completion of such Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
The Company shall not permit any Restricted Subsidiary to enter into or
suffer to exist any agreement that would place any restriction of any kind
(other than pursuant to law or regulation) on the ability of the Company to
make an Asset Sale Offer following any Asset Sale. The Company shall comply
with Rule 14e-1 under the Exchange Act, and any other securities laws and
regulations thereunder, if applicable, in the event that an Asset Sale occurs
and the Company is required to purchase Notes pursuant to this Section 4.10.
SECTION 4.11 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, (a) sell, lease, transfer or otherwise dispose of any of its
properties, assets or securities to, (b) purchase or lease any property, assets
or securities from, (c) make any Investment in or (d) enter into or suffer to
exist any other transaction or series of related transactions with, or for the
benefit of, any Affiliate of the Company unless (i) such transaction or series
of transactions is on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that would be available
in a comparable arm's length transaction with an unrelated third party, (ii)
with respect to any one transaction or series of related transactions involving
aggregate payments in excess of $1.0 million, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction or series
of related transactions complies with clause (i) above and (iii) with respect
to a transaction or series of related transactions involving payments in excess
of $10.0 million, the Company delivers an Officers' Certificate to the Trustee
37
43
certifying that (A) such transaction or series of related transactions complies
with clause (i) above and (B) such transaction or series of related
transactions has been approved by a majority of the Disinterested Directors of
the Company; provided, however, that the foregoing restriction shall not apply
to (u) any arrangements in effect on the Issue Date, (v) transactions between
or among the Company and its Wholly Owned Restricted Subsidiaries, (w) loans or
advances to officers, directors and employees of the Company or any Restricted
Subsidiary made in the ordinary course of business and consistent with past
practices of the Company and its Restricted Subsidiaries in an aggregate amount
not to exceed $1.0 million outstanding at any one time, (x) indemnities of
officers, directors and employees of the Company or any Restricted Subsidiary
permitted by bylaw or statutory provisions, (y) the payment of reasonable and
customary regular fees to directors of the Company or any of its Restricted
Subsidiaries who are not employees of the Company or any Affiliate and (z) the
Company's employee compensation and other benefit arrangements.
SECTION 4.12 LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, except for Permitted Liens, upon any of
their respective property or assets, whether now owned or acquired after the
Issue Date, or any income, profits or proceeds therefrom, to secure (i) any
Indebtedness of the Company or such Restricted Subsidiary (if it is not also a
Subsidiary Guarantor), unless prior to, or contemporaneously therewith, the
Notes are equally and ratably secured or (ii) any Indebtedness of any
Subsidiary Guarantor, unless prior to, or contemporaneously therewith, the
Subsidiary Guarantees are equally and ratably secured; provided, however, that
if such Indebtedness is expressly subordinated to the Notes or the Subsidiary
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Notes or the Subsidiary Guarantees, as the case may
be, with the same relative priority as such Indebtedness has with respect to
the Notes or the Subsidiary Guarantees. The foregoing covenant shall not apply
to any Lien securing Acquired Indebtedness, provided that any such Lien extends
only to the property or assets that were subject to such Lien prior to the
related acquisition by the Company or such Restricted Subsidiary and was not
created, incurred or assumed in contemplation of such transaction.
SECTION 4.13 ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, or otherwise
dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary of the
Company to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company), unless (A) such transfer, conveyance, sale or other
disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (B) the cash Net Proceeds from such transfer, conveyance, sale
or other disposition are applied in accordance with Section 4.10 hereof and
(ii) will not permit any Wholly Owned Restricted Subsidiary of the Company to
issue any of its Equity Interests to any Person other than to the Company or a
Wholly Owned Restricted Subsidiary of the Company; except, in the case of both
clauses (i) and (ii) above, with respect to dispositions or issuances by a
Wholly Owned Restricted Subsidiary of the Company as contemplated in clauses
(i) and (ii) of the definition of "Wholly Owned Restricted Subsidiary" included
in Section 1.1 hereof.
38
44
SECTION 4.14 SALE-AND-LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale-and-leaseback transaction; provided that
the Company or any Restricted Subsidiary, as applicable, may enter into a sale-
and-leaseback transaction if (i) the Company could have (A) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating to
such sale-and-leaseback transaction pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.9(a) hereof and (B) incurred a Lien to secure such
Indebtedness pursuant to Section 4.12 hereof; (ii) the gross cash proceeds of
such sale-and-leaseback transaction are at least equal to the fair market value
(as determined in good faith by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee) of the property that is the
subject of such sale-and-leaseback transaction and (iii) the transfer of assets
in such sale-and-leaseback transaction is permitted by, and the Company applies
the proceeds of such transaction in compliance with, Section 4.10 hereof.
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes on a
Business Day (the "Change of Control Payment Date") not more than 70 nor less
than 30 days following such Change of Control, pursuant to the offer described
below (the "Change of Control Offer") at an offer price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest
thereon to the date of purchase (the "Change of Control Payment"). Within 30
days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
this Section 4.15 and described in such notice. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. The Change of Control Offer shall be required to remain
open for at least 20 Business Days and until the close of business on the fifth
Business Day prior to the Change of Control Payment Date.
(b) On the Change of Control Payment Date, the Company shall,
to the extent lawful, (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with
the Paying Agent an amount equal to the Change of Control Payment in respect of
all Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted, together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail or
otherwise deliver to each Holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided that each such new Note shall be in a principal amount of $1,000 or an
integral multiple thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) The Change of Control provisions described above shall be
applicable whether or not any other provisions of this Indenture are
applicable.
39
45
(d) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.16 BUSINESS ACTIVITIES.
The Company shall not, and will not permit any Restricted Subsidiary to,
engage in any business other than (i) the Oil Service Business, (ii) such other
businesses as the Company or its Restricted Subsidiaries are engaged in on the
Issue Date and (iii) such other business activities as are reasonably related
or incidental thereto.
ARTICLE 5
SUCCESSORS
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia, (ii) the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
the Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Notes and this Indenture pursuant to a supplemental Indenture in a
form reasonably satisfactory to the Trustee, (iii) except in the case of a
merger of the Company with or into a Wholly Owned Subsidiary of the Company,
immediately after such transaction no Default or Event of Default exists and
(iv) except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company, the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness (in addition to
Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.9(a) hereof.
In connection with any consolidation, merger or transfer contemplated by
this provision, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent in this
Indenture provided for relating to such transaction or transactions have been
complied with.
40
46
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
properties or assets of the Company in accordance with Section 5.1 hereof, the
Person formed by such consolidation or into or with which the Company is merged
or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to "the Company" shall
refer instead to such Person and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect as if
such Person had been named as the Company herein; provided, however, that the
Company shall not be relieved from the obligation to pay the principal of,
premium, if any, and interest on the Notes except in the case of a sale of all
or substantially all of the Company's properties or assets that meets the
requirements of Section 5.1 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(i) the Company defaults for 30 days in the payment
when due of interest on the Notes;
(ii) the Company defaults in payment when due of the
principal of or premium, if any, on the Notes;
(iii) the Company fails to comply with the provisions of
Section 4.10, 4.15 or 5.1 hereof.
(iv) the Company fails for 45 days after notice to
comply with any of its other agreements in this Indenture or the Notes;
(v) the Company or any of its Restricted Subsidiaries
defaults under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the Issue Date, which default
(A) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"Payment Default") or (B) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more for any single Indebtedness or a total
of $10.0 million or more for all such Indebtedness and provided,
further, that if any such default is cured or waived or any
41
47
such acceleration rescinded, or such Indebtedness is repaid, within a
period of 10 days from the continuation of such default beyond the
applicable grace period or the occurrence of such acceleration, as the
case may be, such Event of Default under this Section 6.1(v) and any
consequential acceleration of the Notes shall be automatically
rescinded, so long as such recision does not conflict with any judgment
or decree;
(vi) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Subsidiaries and such judgment or
judgments remain unpaid and undischarged for a period (during which
execution shall not be effectively stayed) of 60 consecutive days,
provided that the aggregate of all such unpaid and undischarged
judgments exceeds $5.0 million;
(vii) any Subsidiary Guarantee shall for any reason cease
to be, or be asserted by the Company or any Subsidiary Guarantor, as
applicable, not to be, in full force and effect (except pursuant to the
release of any Subsidiary Guarantee in accordance with this Indenture);
(viii) the Company or any of its Restricted Subsidiaries
that constitutes a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy
Custodian of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit
of its creditors, or
(E) generally is not paying its debts as they
become due; or
(ix) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief, in an involuntary case,
against the Company or any of its Restricted Subsidiaries that
constitutes a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary;
(B) appoints a Bankruptcy Custodian of the
Company or any of its Restricted Subsidiaries that constitutes a
Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary,
for all or substantially all of the property of the Company or
any of such Restricted Subsidiaries; or
(C) orders the liquidation of the Company or any
of its Restricted Subsidiaries that constitutes a Significant
Subsidiary or any group of Restricted
42
48
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, for all of substantially all of the property of the
Company or any of such Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.2 ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.1 hereof with respect to the Company or any
of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause
(viii) or (ix) of Section 6.1 hereof occurs with respect to the Company or any
of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes shall be due and payable
immediately without further action or notice.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders waive any existing Default or Event of Default acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium) have been cured or waived.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes (including in connection
with an offer to purchase pursuant to Sections 3.7, 3.9, 4.10 or 4.15 hereof).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
43
49
SECTION 6.5 CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
SECTION 6.6 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Note only if:
(i) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(iii) such Holder of a Notes or Holders of Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority
in aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase pursuant to Sections 3.7,
3.9, 4.10 or 4.15 hereof), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(i) or (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
44
50
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect, receive and distribute any
money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.7 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made
45
51
by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.6 hereof, or a suit
by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the
Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, in the case of
any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b) and (c) of this Section 7.1.
46
52
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Compete with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest it
must eliminate such conflict within 90 days, apply to the Commission for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
47
53
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes
or any other document in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Notes, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the 12 months preceding
the reporting date, no report need be transmitted). The Trustee also shall
comply with TIA Section 313(b)(2) and Section 313(b)(1). The Trustee shall
also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation
as shall be agreed between the Company and the Trustee for its acceptance of
this Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all losses, liabilities, damages, claims or expenses,
including taxes (other than taxes based on the income of the Trustee), incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company (including this Section 7.7) and defending
itself against any claim (whether asserted by the
48
54
Company or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of much counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium,
if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(viii) or (ix) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law. The Trustee shall also be entitled to receive compensation for
extraordinary services in default administration.
The Trustee shall comply with the provisions of TIA Section 313 (b)(2)
to the extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in aggregate principal amount of the then outstanding Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Bankruptcy Custodian or public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee
49
55
takes office, the Holders of a majority in aggregate principal amount of the
then outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of Notes of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to another corporation,
the successor corporation without any further act shall be the successor
Trustee. As soon as practicable, the successor Trustee shall mail a notice of
its succession to the Company and the Holders of the Notes.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to 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.
50
56
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and each Subsidiary Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 8.4
hereof, be deemed to have been discharged from its obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in clauses (i) and (ii) below, and
the Company and each Subsidiary Guarantor shall be deemed to have satisfied all
of its other obligations under such Notes or Subsidiary Guarantee and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.4 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Notes when such payments are due; (ii) the Company's
obligations with respect to such Notes under Article 2 and Section 4.2 hereof;
(iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (iv) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.2 notwithstanding the prior exercise of its
option under Section 8.3 hereof.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be released from its
obligations under the covenants contained in Sections 4.5, 4.7, 4.8, 4.9, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof and Article 10 hereof with respect
to the outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and any Subsidiary Guarantor may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a
51
57
Default or an Event of Default under Section 6.1 hereof, but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.1
hereof of the option applicable to this Section 8.3 hereof, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, Sections 6.1(v)
and 6.1(vii) hereof shall not constitute Events of Default.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Sections 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars, non-
callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated date for payment thereof or on
the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Section 6.1(viii) or 6.1(ix)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
52
58
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that, as of the date such opinion, (i) the trust funds
will not be subject to rights of holders of Indebtedness other than the Notes
and (ii) assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit (assuming no Holder of Notes is
an insider of the Company) or the day following the end of such other
preference period in effect at the time of such opinion (assuming a Holder of
Notes is an insider of the Company), as applicable, following the deposit, the
trust funds will not be subject to the effects of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally under any applicable United States or state law;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over any other creditors of the
Company or any Subsidiary Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company, or any Subsidiary Guarantor or
others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, which, taken together, state
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.4 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.4 hereof that, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.6 REPAYMENT TO THE COMPANY.
Subject to the applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium, if any, or interest on any
Note and remaining unclaimed for two years after such principal, and
53
59
premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Notes shall thereafter, as a secured
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in The New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.5
hereof by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Sections
8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.5 hereof; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Note following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding Section 9.2 of this Indenture, the
Company, the Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture or the Notes without the consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to
or in place of certificated Notes;
(iii) to provide for the assumption of the Company's
obligations to the Holders of the Notes pursuant to
Article 5 or Section 10.4(b) hereof;
(iv) to secure the Notes pursuant to the requirements of
Section 4.12 or otherwise;
(v) to make any change that would provide any
additional rights or benefits to the Holders of the
Notes or that does not adversely affect the legal
rights under this Indenture of any such Holder;
54
60
(vi) to add any Restricted Subsidiary as an additional
Subsidiary Guarantor as provided in Section 10.2
hereof or to evidence the succession of another
Person to any Subsidiary Guarantor pursuant to
Section 10.4 hereof and the assumption by any such
successor of the covenants and agreements of such
Subsidiary Guarantor contained herein and in the
Subsidiary Guarantee of such Subsidiary Guarantor;
(vii) to release a Subsidiary Guarantor from its
obligations under this Indenture and its Subsidiary
Guarantee pursuant to Section 10.5 hereof, or
(viii) to comply with requirements of the Commission in
order to effect or maintain the qualification of
this Indenture under the TIA.
(b) Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 9.6 hereof, the Trustee shall join with the
Company and the Subsidiary Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture, the Subsidiary Guarantors or
the Notes with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes) and, subject to Sections 6.4 and 6.7 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except
a payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including consents obtained in connection with a
purchase of, tender offer or exchange offer for Notes).
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt
by the Trustee of the documents described in Section 9.6 hereof, the Trustee
shall join with the Company and the Subsidiary Guarantors in the execution of
such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
Subject to Sections 6.4 and 6.7 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance
in a particular instance by the Company and the Subsidiary Guarantors with any
provision of this Indenture or the Notes. However, without the consent
55
61
of each Holder affected, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed
maturity of any Note or alter or waive any of the
provisions with respect to the redemption of the
Notes (except as provided below with respect to
Sections 3.9, 4.10 and 4.15 hereof);
(iii) reduce the rate of or change the time for payment
of interest, including default interest, on any
Note;
(iv) waive a Default or Event of Default in the payment
of principal of or premium, if any, or interest on
the Notes (except a rescission of acceleration of
the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding
Notes and a waiver of the payment default that
resulted from such acceleration);
(v) make any Note payable in money other than that
stated in the Notes;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of
principal of or premium, if any, or interest on the
Notes;
(vii) waive a redemption payment with respect to any Note
(other than a payment required by Sections 4.10 or
4.15 hereof);
(viii) alter the ranking of the Notes relative to other
Indebtedness of the Company; or
(ix) make any change in the foregoing amendment and
waiver provisions.
In addition, without the consent of Holders of not less than 66-2/3% in
aggregate principal amount of the Notes then outstanding, no such amendment,
supplement or waiver may amend, change or modify the obligation of the Company
to make and consummate a Change of Control Offer in the event of a Change of
Control or make and consummate an Asset Sale Offer with respect to any Asset
Sale or modify any of the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.2 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not,
56
62
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting ▇▇▇▇▇▇'s Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental Indenture until its Board of
Directors approves it. In executing any amended or supplemental Indenture, the
Trustee shall be entitled to receive, and (subject to Section 7.1 hereof) shall
be fully protected in relying upon, Officers' Certificates and Opinions of
Counsel stating that the execution of such amended or supplemental Indenture is
authorized or permitted by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEES.
(a) The Subsidiary Guarantors and each Subsidiary of the
Company that in accordance with Section 10.2 hereof is required to guarantee
the obligations of the Company under the Notes and this Indenture hereby
jointly and severally and unconditionally guarantees, on a senior basis (each
such guarantee being a "Subsidiary Guarantee"), to each Holder of a Note
authenticated and
57
63
delivered by the Trustee irrespective of the validity or enforceability of this
Indenture, the Notes or the obligations of the Company under this Indenture or
the Notes, that: (i) the principal of, premium, if any, and interest on the
Notes shall be paid in full when due, whether at the maturity or interest
payment or mandatory redemption date, by acceleration, call for redemption or
otherwise, and interest on the overdue principal and interest, if any, of the
Notes and all other obligations of the Company to the Holders or the Trustee
under this Indenture or the Notes shall be promptly paid in full or performed,
all in accordance with the terms of this Indenture and the Notes and (ii) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, they shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to
pay the same whether or not such failure to pay has become an Event of Default
that could cause acceleration pursuant to Section 6.2 hereof. Each Subsidiary
Guarantor agrees that this is a guarantee of payment not a guarantee of
collection.
(b) Each Subsidiary Guarantor hereby agrees that its
obligations with regard to its Subsidiary Guarantee shall be unconditional,
irrespective of the validity or enforceability of the Notes or the obligations
of the Company under this Indenture, the absence of any action to enforce the
same, the recovery of any judgment against the Company or any other obligor
with respect to this Indenture, the Notes or the obligations of the Company
under this Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) that might otherwise constitute
a legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor further, to the extent permitted by law, waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims,
rights or remedies, including but not limited to: (i) any right to require the
Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed
against the Company or any other Person or to proceed against or exhaust any
security held by a Benefitted Party at any time or to pursue any other remedy
in any Benefitted Party's power before proceeding against such Subsidiary
Guarantor; (ii) the defense of the statute of limitations in any action
hereunder or in any action for the collection of any Indebtedness or the
performance of any obligation hereby guaranteed; (iii) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of
any other Person or the failure of a Benefitted Party to file or enforce a
claim against the estate (in administration, bankruptcy or any other
proceeding) of any other Person; (iv) demand, protest and notice of any kind
including but not limited to notice of the existence, creation or incurring of
any new or additional Indebtedness or obligation or of any action or non-action
on the part of such Subsidiary Guarantor, the Company, any Benefitted Party,
any creditor of such Subsidiary Guarantor, the Company or on the part of any
other Person whomsoever in connection with any Indebtedness or Obligations
hereby guaranteed; (v) any defense based upon an election of remedies by a
Benefitted Party, including but not limited to an election to proceed against
such Subsidiary Guarantor for reimbursement; (vi) any defense based upon any
statute or rule of law that provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (vii) any defense arising because of a Benefitted Party's election,
in any proceeding instituted under any Bankruptcy Law, of the application of
Section 1111(b)(2) under the Bankruptcy Law; (viii) any defense based on any
borrowing or grant of a security interest under Section 364 under the
Bankruptcy Law or (ix) any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever. Each Subsidiary Guarantor
hereby covenants that its Subsidiary Guarantee will not be discharged except by
complete performance of all of the obligations contained in its Subsidiary
Guarantee, the Notes and this Indenture.
58
64
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Subsidiary Guarantor, or any
custodian, trustee, or similar official acting in relation to either the
Company or such Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Holder, the applicable Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(d) Each Subsidiary Guarantor further agrees that, as between
such Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 6.2 hereof for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company or any other obligor on the
Notes of the obligations guaranteed hereby and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2
hereof, those obligations (whether or not due and payable) will forthwith
become due and payable by such Subsidiary Guarantor for the purpose of this
Subsidiary Guarantee.
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES.
(a) If, after the Issue Date, (i) the Company or any of its
Restricted Subsidiaries shall (A) transfer or cause to be transferred, any
assets, businesses, divisions, real property or equipment having a fair market
or book value in excess of $1.0 million to any Restricted Subsidiary that is
not a Subsidiary Guarantor or (B) make any Investment having an aggregate fair
market or book value in excess of $1.0 million in any Restricted Subsidiary
that is not a Subsidiary Guarantor or (ii) any Restricted Subsidiary that is
not a Subsidiary Guarantor (A) shall provide a guarantee under the Credit
Facility or (B) shall own any assets or properties having an aggregate fair
market or book value in excess of $1.0 million, then the Company shall cause
such Restricted Subsidiary to execute and deliver a supplemental indenture to
this Indenture agreeing to be bound by its terms applicable to a Subsidiary
Guarantor and providing for a Subsidiary Guarantee of the Notes by such
Restricted Subsidiary, in accordance with the terms of this Indenture.
(b) The Company shall not permit any of its Restricted
Subsidiaries, other than a Subsidiary Guarantor, directly or indirectly, to (i)
incur, guarantee or secure through the granting of Liens the payment of any
Indebtedness of the Company or (ii) pledge any intercompany notes representing
obligations of any of its Restricted Subsidiaries to secure the payment of any
Indebtedness of the Company, in each case, unless the Company shall cause such
Restricted Subsidiary to execute a Subsidiary Guarantee and deliver an Opinion
of Counsel in advance in accordance with the terms of this Indenture.
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY.
(a) Each Subsidiary Guarantor and by its acceptance hereof,
each beneficiary hereof, hereby confirm that it is its intention that the
Subsidiary Guarantee by such Subsidiary Guarantor not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to any of the Subsidiary
Guarantees. To effectuate the foregoing intention, each such person hereby
irrevocably agrees that the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee under this Article 10 shall be limited to the maximum
amount as will, after giving
59
65
effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
(b) For purposes of such limitations and the applicable
fraudulent conveyance laws, any indebtedness of a Subsidiary Guarantor incurred
from time to time pursuant to the Credit Facility and secured by a perfected
Lien on the assets of such Subsidiary Guarantor (assuming, for purposes of such
determination, that the incurrence of any such indebtedness and the granting of
any such security interest did not violate any such fraudulent conveyance laws)
shall be deemed, to the extent of the value of the assets subject to such Lien,
to have been incurred prior to the incurrence by such Subsidiary Guarantor of
liability under its Subsidiary Guarantee.
(c) Each beneficiary under the Subsidiary Guarantees, by
accepting the benefits hereof, confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Company or any
Subsidiary Guarantor in which concurrent claims are made upon such Subsidiary
Guarantor hereunder, to the extent such claims will not be fully satisfied,
each such claimant with a valid claim against the Company shall be entitled to
a ratable share of all payments by such Subsidiary Guarantor in respect of such
concurrent claims.
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN TERMS.
(a) No Subsidiary Guarantor may consolidate with or merge with
or into (whether or not such Subsidiary Guarantor is the surviving Person)
another Person (other than the Company or another Subsidiary Guarantor),
whether or not affiliated with such Subsidiary Guarantor, unless (i) subject to
the provisions of the following paragraph, the Person formed by or surviving
any such consolidation or merger (if other than such Subsidiary Guarantor)
shall execute and deliver a supplemental indenture to this Indenture agreeing
to be bound by its terms applicable to a Subsidiary Guarantor and providing for
a Subsidiary Guarantee of the Notes by such Person, in accordance with the
terms of this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; (iii) such Subsidiary
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Subsidiary Guarantor immediately preceding the transaction; (iv) the Company
would be permitted by virtue of the Company's pro forma Fixed Charge Coverage
Ratio, immediately after giving effect to such transaction, to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.9 hereof and (v) such transaction does not violate
any of the covenants contained in Articles 4 and 5 hereof. In connection with
any consolidation or merger contemplated by this provision, the Subsidiary
Guarantor shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation or merger and the
supplemental indenture in respect thereto comply with this provision and that
all conditions precedent in this Indenture provided for relating to such
transaction or transactions have been complied with.
(b) Notwithstanding the foregoing, (i) a Subsidiary Guarantor
may consolidate with or merge with or into the Company, provided that the
surviving corporation (if other than the Company)
60
66
shall expressly assume by supplemental indenture complying with the
requirements of this Indenture, the due and punctual payment of the principal
of, premium, if any, and interest on all of the Notes, and the due and punctual
performance and observance of all the covenants and conditions of this
Indenture to be performed by the Company and (ii) a Subsidiary Guarantor may
consolidate with or merge with or into any other Subsidiary Guarantor.
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS.
In the event of (i) the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary or (ii) a sale or other disposition of all or
substantially all of the properties or assets of any Subsidiary Guarantor to a
third party or an Unrestricted Subsidiary, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, in either case, in a transaction or manner that does not
violate any of the covenants or other provision of this Indenture, then such
Subsidiary Guarantor (in the event of such a designation or a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Subsidiary Guarantor) or the Person acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Subsidiary Guarantor) will be released from and
relieved of any obligations under this Indenture and its Subsidiary Guarantee,
provided that any Net Proceeds of such sale or other disposition are applied in
accordance with Section 4.10 hereof and provided, further, however, that any
such termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests that secure, any other
Indebtedness of the Company or its Restricted Subsidiaries shall also terminate
upon such release, sale or disposition.
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
SECTION 10.7 CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under a Subsidiary Guarantee, such Funding Guarantor shall
be entitled to a contribution from all other Subsidiary Guarantors in a pro
rata amount based on the Adjusted Net Assets (as defined below) of each
Subsidiary Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to such Subsidiary Guarantee. "Adjusted
Net Assets" of such Subsidiary Guarantor at any date shall mean the lesser of
the amount by which (x) the fair value of the property of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities, but excluding liabilities under the
Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the
present fair salable value of the assets of such Subsidiary Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Subsidiary Guarantor on its debts (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date and after giving
effect to any
61
67
collection from any subsidiary of such Subsidiary Guarantor in respect of the
obligations of such subsidiary under the Subsidiary Guarantees), excluding debt
in respect of the Subsidiary Guarantees, as they become absolute and matured.
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES.
To evidence its guarantee to each Holder of Notes, each of the
Subsidiary Guarantors hereby agree to execute its Subsidiary Guarantee in
substantially the form of Exhibit A recited to be endorsed on each Note ordered
to be authenticated and delivered by the Trustee. Each Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee set forth in Section 10.1 hereof
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Subsidiary Guarantee. Each such Subsidiary
Guarantee shall be signed on behalf of each Subsidiary Guarantor by one Officer
of such Subsidiary Guarantor who shall have been duly authorized by all
requisite corporate actions, and the delivery of such Note by the Trustee,
after the authentication thereof hereunder, shall constitute due delivery of
such Subsidiary Guarantee on behalf of such Subsidiary Guarantor. Such
signatures upon the Subsidiary Guarantee may be by manual or facsimile
signature of such Officer and may be imprinted or otherwise reproduced on the
Subsidiary Guarantee, and in case any such Officer who shall have signed the
Subsidiary Guarantee shall cease to be such Officer before the Note on which
such Subsidiary Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Note nevertheless
may be authenticated and delivered or disposed of as though the person who
signed the Subsidiary Guarantee had not ceased to be such officer of the
Subsidiary Guarantor.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.2 NOTICES.
Any notice or communication by the Company, any of the Subsidiary
Guarantors or the Trustee to any of the others is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), facsimile or overnight air courier guaranteeing
next-day delivery, to such other's address:
If to the Company:
▇▇▇▇▇▇ Production Services, Inc.
▇▇▇ ▇.▇. Loop ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
62
68
With a copy to:
▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
2200 One American Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Subsidiary Guarantor:
c/▇ ▇▇▇▇▇▇ Production Services, Inc.
▇▇▇ ▇.▇. Loop ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
With a copy to:
▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
2200 One American Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
For payment, registration, transfer, exchange and tender of
Notes:
By hand:
U.S. Trust Company of Texas, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.
New York, New York 10006
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust
By mail:
U.S. Trust Company of Texas, N.A.
P.O. Box 841
▇▇▇▇▇▇ Station
New York, New York 10276
63
69
For all other communications relating to the Notes:
U.S. Trust Company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust
The Company, any of the Subsidiary Guarantors or the Trustee, by notice
to the others, may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the United States mail,
postage prepaid, if mailed; when receipt acknowledged, if sent by facsimile;
the next Business Day after timely delivery to the courier, if sent for
overnight delivery by a courier guaranteeing next-day delivery; and the second
Business Day after timely delivery to the courier, if sent for second-day
delivery by a courier guaranteeing second-day delivery.
Any notice or communication to a Holder shall be mailed by first class
U.S. mail to its address shown on the register kept by the Registrar. Any
notice or communication shall also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA. Failure to mail a notice
or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Subsidiary Guarantors, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, such requesting entity shall furnish to the
Trustee:
(i) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.5 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
satisfied; and
64
70
(ii) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.5 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(i) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
SECTION 11.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No past, present or future director, officer, employee, incorporator or
shareholder of the Company or any Subsidiary Guarantor, as such, shall have any
liability for any obligations of the Company or such Subsidiary Guarantor under
the Notes, this Indenture or the Subsidiary Guarantees, as the case may be, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Notes and the Subsidiary Guarantees.
SECTION 11.8 GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
65
71
SECTION 11.10 SUCCESSORS.
All agreements of the Company or any Subsidiary Guarantor in this
Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12 COUNTERPART ORIGINALS.
The parties hereto may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[signature page follows]
66
72
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as
of the date first written above.
▇▇▇▇▇▇ PRODUCTION SERVICES, INC.,
a Texas corporation
By:
------------------------------
Name:
Title:
[intentionally left blank]
67
73
SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇ COMPANIES, INC.
▇▇▇▇▇▇ PRODUCTION SERVICES DE MEXICO,
S.A.
By:
------------------------------
Name:
(for each of the above-listed
Subsidiary Guarantors)
[intentionally left blank]
68
74
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
By:
---------------------------------------
Authorized Signatory
69
75
EXHIBIT A
[FORM OF NOTE]
% SENIOR NOTES DUE 2007
CUSIP: 239423 AA 4
No. $
▇▇▇▇▇▇ PRODUCTION SERVICES, INC., a Texas corporation, promises to pay
to ,
or registered assigns, the principal sum of Dollars on
February 1, 2007.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
▇▇▇▇▇▇ PRODUCTION SERVICES, INC.
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the
Notes referred to in the
within-mentioned Indenture:
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By:
-------------------------------
Authorized Signatory
A-1
76
(▇▇▇▇▇▇ PRODUCTION SERVICES, INC.)
% SENIOR NOTES DUE 2007
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) ("DTC"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co, has an interest
herein.(1)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. ▇▇▇▇▇▇ Production Services, Inc., a Texas corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at % per annum from February , 1997, until maturity. The Company shall pay
interest semi-annually on February 1 and August 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"Interest Payment Date"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that the first Interest Payment Date shall
be August 1, 1997. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the January 15 or July 15 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. The Notes will be payable
as to principal, premium and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of, and interest and premium on, all
Global Notes and all other Notes the Holders of which shall have provided
written wire transfer instructions to the Company or the Paying Agent at least
10 Business Days prior to the applicable
---------------
(1) This paragraph should be included only in the Note if issued in global
form.
A-2
77
payment date. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
3. Paying Agent and Registrar. Initially, U.S. Trust Company of
Texas, N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture and Subsidiary Guarantees. The Company issued the
Notes under an Indenture dated as of February , 1997 (the "Indenture"), among
the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are obligations of the Company limited to $130 million in aggregate
principal amount. Payment on each Note is guaranteed on a senior basis,
jointly and severally, by the Subsidiary Guarantors pursuant to Article 10 of
the Indenture.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Company shall not have the option to redeem the Notes prior to February
1, 2002. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the
applicable redemption date, if redeemed during the 12-month period beginning on
February 1 of each of the years indicated below:
YEAR PERCENTAGE
---- ----------
2002.................................. %
2003.................................. %
2004.................................. %
2005 and thereafter................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to February 1, 2000, the Company may
redeem up to an aggregate of $45.5 million principal amount of Notes at a
redemption price of % of the principal amount thereof, plus accrued and unpaid
interest thereon to the redemption date, with the net proceeds of a Public
Equity Offering; provided that at least $84.5 million in aggregate principal
amount of Notes remain outstanding immediately after the occurrence of such
redemption; and, provided, further, that such redemption shall occur within 60
days of the date of the closing of such Public Equity Offering.
6. Mandatory Redemption. The Company shall not be required to make
mandatory redemption payments or sinking fund payments with respect to the
Notes.
A-3
78
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and any unpaid interest thereon, if any, to the Change of
Control Payment Date (as hereinafter defined) (the "Change of Control
Payment"). Within 30 days of the occurrence of a Change of Control, the
Company shall notify the Trustee in writing of such proposed occurrence and
shall make a Change of Control Offer. Within 30 days following the occurrence
of a Change of Control, the Company shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, within 10 days following each Asset Sale Trigger Date, the Company
shall commence an offer to all Holders of Notes (an "Asset Sale Offer")
pursuant to Section 3.9 of the Indenture to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the Asset Sale Offer Purchase
Date in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may
use such excess for general corporate purposes. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before a redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes
or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date
and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes. Without
the consent of any Holder of a
A-4
79
Note, the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder, to secure the Notes, to
add or release any Subsidiary Guarantor pursuant to the terms of the Indenture
or to comply with the requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the TIA.
12. Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest on the Notes; (ii) default in
payment when due of principal of or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including in connection
with an offer to purchase) or otherwise, (iii) failure by the Company to comply
with Section 4.10, 4.15 or 5.1 of the Indenture; (iv) failure by the Company
for 45 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding to comply
with certain other agreements in the Indenture or the Notes; (v) default under
certain other agreements relating to Indebtedness of the Company, which default
(A) is caused by a failure to pay principal of or premium, if any, or interest
on such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") or (B)
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more for any single Indebtedness or a total of $10.0 million or
more for all such Indebtedness and provided, further, that if any such default
is cured or waived or any such acceleration rescinded, or such Indebtedness is
repaid, within a period of 10 days from the continuation of such default beyond
the applicable grace period or the occurrence of such acceleration, as the case
may be, such Event of Default under the Indenture and any consequential
acceleration of the Notes shall be automatically rescinded, so long as such
recision does not conflict with any judgment or decree; (vi) certain final
judgments for the payment of money that remain undischarged for a period of 60
days; (vii) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Restricted Subsidiary that is a Guarantor, as
applicable, not to be, in full force and effect (except pursuant to the release
of any Subsidiary Guarantee in accordance with the Indenture) and (viii)
certain events of bankruptcy or insolvency with respect to the Company or any
of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company, any Restricted Subsidiary that constitutes a Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing
A-5
80
Default or Event of Default in the payment of interest on, or the principal of,
the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or shareholder of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any obligations of the Company
or such Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary
Guarantees, as the case may be, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes and the Subsidiary Guarantees.
15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee.
16. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
▇▇▇▇▇▇ Production Services, Inc.
▇▇▇ ▇.▇. Loop ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention:
[intentionally left blank]
A-6
81
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEES]
Each of the Subsidiary Guarantors under the Indenture (the "Indenture")
referred to in the Note upon which this notation is endorsed, has
unconditionally guaranteed the obligations of the Company under the Notes and
the Indenture, jointly and severally (each such guarantee being a "Subsidiary
Guarantee"), to each Holder of a Note authenticated and delivered by the
Trustee irrespective of the validity or enforceability of the Indenture, the
Notes or the obligations of the Company under the Indenture or the Notes, that:
(i) the principal of, premium, if any, and interest on the Notes shall be paid
in full when due, whether at the maturity or interest payment or mandatory
redemption date, by acceleration, call for redemption or otherwise, and
interest on the overdue principal and interest, if any, of the Notes and all
other obligations of the Company to the Holders or the Trustee under the
Indenture or the Notes shall be promptly paid in full or performed, all in
accordance with the terms of the Indenture and the Notes and (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, they shall be paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to
pay the same whether or not such failure to pay has become an Event of Default
that could cause acceleration pursuant to Section 6.2 of the Indenture. Each
Subsidiary Guarantor agrees that this is a guarantee of payment, not a
guarantee of collection. Capitalized terms used herein have the meanings
assigned to them in the Indenture unless otherwise indicated, and the
obligations of the Subsidiary Guarantors pursuant to the Subsidiary Guarantees
are subject to the terms of the Indenture, to which reference is hereby made
for the precise terms thereof. The obligations of each Subsidiary Guarantor to
the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth, and are senior unsecured obligations
of each such Subsidiary Guarantor to the extent and in the manner provided, in
Article 10 of the Indenture, and may be released or limited under certain
circumstances. Reference is hereby made to such Indenture for the precise
terms of the Subsidiary Guarantee therein made.
The Subsidiary Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note on which the
Subsidiary Guarantees are noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
By each of the following, and any other Subsidiary Guarantor as may be
added or substituted from time to time, as Subsidiary Guarantors:
SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇ COMPANIES, INC.
▇▇▇▇▇▇ PRODUCTION SERVICE DE MEXICO,
S.A.
By:
----------------------------------
Name:
(for each of the above-listed
Subsidiary Guarantors)
A-7
82
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-----------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee.
A-8
83
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$
------------
Date:
----------------
Your Signature:
------------------------------
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee.
A-9
84
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES (2)
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Amount of Signature of
decrease in Principal Amount of authorized
Principal Amount of increase this Global Note signatory of
Date of Amount of this in Principal Amount following such Trustee or Note
Exchange Global Note of this Global Note decrease (or increase) Custodian
--------------- ---------------------- -------------------------- -------------------------- ----------------------
---------------
(2) This should be included only if the Note is issued in global form.
A-10