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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): May 21, 1998 (May 5, 1998)
GREY WOLF, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Texas 1-8226 74-2144774
(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
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10370 Richmond Avenue, Suite 600
Houston, Texas 77042-4136
(Address of Registrant's principal executive offices)
(713) 435-6100
(Registrant's telephone number, including area code)
(Not Applicable)
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
144A OFFERING OF $75.0 MILLION OF 8-7/8% SENIOR NOTES DUE 2007, SERIES B
On May 5, 1998, Grey Wolf, Inc. (the "Company") entered into a
Purchase Agreement with Donaldson, Lufkin & Jenrette Securities Corporation,
Lehman Brothers Inc., and Prudential Securities Incorporated (collectively, the
"Initial Purchasers") for the purchase of an aggregate of $75.0 million of 8
7/8% Senior Notes due 2007, Series B (the "Notes"). The offering of the Notes
(the "Offering") closed on May 8, 1998. The Notes have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and are
subject to certain transfer restrictions. The Notes were resold by the Initial
Purchaser pursuant to Rule 144A under the Securities Act to Qualified
Institutional Buyers, as defined in Rule 144A.
Interest on the Notes is payable semi-annually on January 1 and July 1
of each year, commencing July 1, 1998, accruing from May 8, 1998. The Notes
are general unsecured senior obligations of the Company, ranking pari passu in
right of payment with all indebtedness and other liabilities of the Company
that are not subordinated by their terms to other Indebtedness (as defined in
the Indenture (as defined herein)) of the Company and senior in right of
payment to all indebtedness of the Company that by its terms is so
subordinated. The Notes will rank pari passu in right of payment with $175.0
million of 8-7/8% Senior Notes due 2007 (the "Series A Notes") issued in 1997.
As of December 31, 1997, on a pro forma basis after giving effect to
the issuance of the Notes and the application of a portion of the net proceeds
thereof to repay amounts outstanding under the Bank Credit Facility, the
Company would have had outstanding approximately $3.2 million of secured
indebtedness. The Indenture, dated May 8, 1998, among the Company, the
Guarantors and Chase Bank of Texas, National Association, as trustee (the
"Indenture"), permits the Company and its Subsidiaries (as defined in the
Indenture) to incur additional Indebtedness, including senior indebtedness of
up to $100.0 million aggregate principal amount which may be secured by liens
on all of the assets of the Company and its Subsidiaries, subject to certain
limitations.
GUARANTEES
The Notes are unconditionally guaranteed (the "Guarantees"), on a
joint and several basis, by Grey Wolf Drilling Company, a Texas corporation and
wholly-owned subsidiary of the Company ("GW Drilling"); Murco Drilling
Corporation, a Delaware corporation and wholly-owned subsidiary of GW Drilling
("Murco"); Grey Wolf International, Inc., a Texas corporation and wholly-owned
subsidiary of the Company ("International"); and DI Energy, Inc., a Texas
corporation and wholly-owned subsidiary of the Company ("Energy," and with GW
Drilling, Murco, and International, collectively, the "Guarantors"), which
include all domestic, wholly-owned Subsidiaries and any other Subsidiary that
guarantees any Indebtedness of the Company and its Subsidiaries. The Guarantees
will be senior unsecured obligations of the Guarantors and will rank pari passu
in right
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of payment with the guarantee of the Series A Notes made by such Guarantors and
all other indebtedness and liabilities of such Guarantors that are not
subordinated by their terms to other Indebtedness of such Guarantors. In
addition, the Guarantees will be effectively subordinated to secured
Indebtedness of the Guarantors, including Indebtedness under the Bank Credit
Facility, which is secured by substantially all of the assets of the three most
significant Guarantors, GW Drilling, Murco and International. The Notes will be
effectively subordinated to claims of creditors (other than the Company) of the
Company's Subsidiaries other than the Guarantors. Claims of creditors (other
than the Company) of such Subsidiaries, including trade creditors, tort
claimants, secured creditors, taxing authorities and creditors holding
guarantees, will generally have priority as to the assets of such Subsidiaries
over the claims and equity interest of the Company and, thereby indirectly, the
holders of the indebtedness of the Company, including the Notes and the
Guarantees.
REDEMPTION OR REPURCHASE OF THE NOTES
Subject to certain limitations, the Notes will be redeemable, at the
Company's option, in whole or in part from time to time on or after July 1,
2002, at the following redemption prices, plus accrued and unpaid interest to
the redemption date:
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Year Percentage
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2002 104.4357%
2003 102.9580%
2004 101.4792%
2005 and thereafter 100.0000%
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In the event the Company consummates one or more Qualified Equity Offerings (as
defined in the Indenture) on or before June 27, 2000, subject to certain
limitations, the Company at its option may use all or a portion of the net cash
proceeds from such Qualified Equity Offerings to redeem up to 30% of the
aggregate principal amount of the Notes at a redemption price equal to 108.875%
of the aggregate principal amount thereof, together with accrued and unpaid
interest to the date of redemption, provided that at least $50.0 million
aggregate principal amount of Notes remains outstanding immediately after such
redemption.
Upon a Change of Control, each holder of Notes will have the right to
require the Company to repurchase all or any part of such holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest to the date of purchase.
CERTAIN COVENANTS
The Indenture contains covenants limiting the ability of the Company
and its Subsidiaries to, among other things, pay dividends or make other
Restricted Payments (as defined in the Indenture), incur additional
Indebtedness (as defined in the Indenture), make Investments (as defined in the
Indenture), permit Liens (as defined in the Indenture), incur dividend and
other payment restrictions affecting Subsidiaries, enter into consolidation,
merger, conveyance, lease or transfer
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transactions, make asset sales, enter into transactions with Affiliates (as
defined in the Indenture) and engage in unrelated lines of business. In
addition, the Indenture imposes restrictions on the ability of Subsidiaries to
issue guarantees. These covenants are subject to certain exceptions and
qualifications as provided in the Indenture.
USE OF PROCEEDS
Of the net proceeds of the Offering: (i) approximately $30.0 million
was applied to repay indebtedness incurred in connection with the acquisition
of Murco effected in January 1998; (ii) approximately $5.6 million is intended
to be used for refurbishment of drilling rigs, and (iii) the remainder is
expected to be used for general corporate purposes.
REGISTRATION RIGHTS
Pursuant to a Registration Rights Agreement, dated May 8, 1998, among
the Company, the Guarantors, and the Initial Purchasers (the "Registration
Rights Agreement"), the Company and the Guarantors will (i) file a registration
statement (the "Exchange Offer Registration Statement") on or prior to 60 days
after the consummation of the Offering (the "Closing Date") with respect to an
offer to exchange the Notes for new senior notes of the Company (the "Exchange
Notes") registered under the Securities Act with terms substantially identical
to those of the Notes (the "Exchange Offer") and (ii) to use their reasonable
best efforts to cause the Exchange Offer Registration Statement to be declared
effective by the Securities and Exchange Commission (the "Commission") on or
prior to 120 days after the Closing Date. If applicable law or interpretations
of the Commission's staff do not permit the Company and the Guarantors to
effect the Exchange Offer, or if certain holders of Notes are not permitted to
participate in, or do not receive the benefit of, the Exchange Offer, the
Company and the Guarantors will use their reasonable best efforts to cause to
become effective a shelf registration statement (the "Shelf Registration
Statement") with respect to the resale of the Notes and to keep such
registration statement effective for one year or such shorter period ending
when all of the Notes have been sold under such shelf registration statement.
If the Company fails to meet certain deadlines and other obligations
established by the Registration Rights Agreement (a "Registration Default"),
the Company would be obliged to pay additional interest ("Special Interest") to
each holder of Notes, with respect to the first 90-day period immediately
following the occurrence of such Registration Default in an amount equal to
$.05 per week per $1,000 principal amount of Notes held by such holder. The
amount of the Special Interest would increase by an additional $.05 per week
per $1,000 principal amount or Notes with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of Special Interest of $.25 per week per $1,000 principal amount of Notes. All
accrued Special Interest will be paid by the Company on each interest payment
date. Following the cure of all Registration Defaults, the accrual of Special
Interest will cease. The right of a holder of Notes to receive Special
Interest will be the exclusive remedy and liquidated damages for any
Registration Defaults.
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DISTRIBUTION
The Notes were initially issued in book entry form through the
facilities of The Depository Trust Company ("DTC") which will act as depository
for the Notes. Such Notes were issued in global form and interests in Global
Notes will be shown on and transfers will be effected only through records
maintained by DTC and its participants. The Notes sold to Qualified
Institutional Buyers (as defined in Rule 144A promulgated under the Securities
Act) are to be traded in the PORTAL market.
CONSENT SOLICITATION
Concurrent with the Offering, the Company sought the consent of the
holders of the Series A Notes to a Second Supplemental Indenture to the
indenture under which the Series A Notes were issued (the "Series A Indenture")
to permit the Offering. The Second Supplemental Indenture amended the
definition of "Permitted Indebtedness" under the Series A Indenture so as to
permit the Company's subsidiaries that guarantee the Series A Notes to also
guarantee (pursuant to Section 4.04 of the Series A Indenture) other
indebtedness of the Company incurred in compliance with Section 4.03 of the
Series A Indenture, which contains certain limitations of the Company's right
to incur additional indebtedness. The principal effect of this amendment was
to enable the guarantors of the Series A Notes to also guarantee the Series B
Notes. The Offering was closed upon receipt by the Company of executed
consents from the holders of a majority in aggregate principal amount of the
Series A Notes.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(C) EXHIBITS
Exhibit 4.1 Purchase Agreement, dated May 5, 1998, by and
among Grey Wolf, Inc. and the Guarantors, and
Donaldson, Lufkin & Jenrette Securities
Corporation, Lehman Brothers Inc., and
Prudential Securities Incorporated.
Exhibit 4.2 Registration Rights Agreement, dated May 8,
1998, by and among Grey Wolf, Inc., the
Guarantors, and Donaldson, Lufkin & Jenrette
Securities Corporation, Lehman Brothers Inc.,
and Prudential Securities Incorporated.
Exhibit 4.3 Indenture, dated May 8, 1998, by and among
Grey Wolf, Inc., the Guarantors, and Chase
Bank of Texas, National Association, as
Trustee.
Exhibit 4.4 Global Note, dated May 8, 1998.
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Exhibit 4.5 Indenture, dated as of June 27, 1997, among
Grey Wolf, Inc. (formerly "DI Industries,
Inc."), the Guarantors, and Chase Bank of
Texas, National Association (formerly "Texas
Commerce Bank National Association"), as
Trustee, as amended by Supplemental
Indenture, dated March 31, 1998, among Murco
Drilling Corporation, Grey Wolf, Inc., the
Guarantors, and Chase Bank of Texas, National
Association, as Trustee, and as further
amended by Second Supplemental Indenture,
dated May 8, 1998, by and among Grey Wolf,
Inc., the Guarantors, and Chase Bank of
Texas, National Association, as Trustee.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 19, 1998
GREY WOLF, INC.
/s/ David W. Wehlmann
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David W. Wehlmann,
Senior Vice President, Chief Financial
Officer and Secretary
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INDEX OF EXHIBITS
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Exhibit Number Description
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Exhibit 4.1 Purchase Agreement, dated May 5, 1998, by and among Grey Wolf, Inc. and the Guarantors, and
Donaldson, Lufkin & Jenrette Securities Corporation, Lehman Brothers Inc., and Prudential
Securities Incorporated.
Exhibit 4.2 Registration Rights Agreement, dated May 8, 1998, by and among Grey Wolf, Inc., the Guarantors,
and Donaldson, Lufkin & Jenrette Securities Corporation, Lehman Brothers Inc., and Prudential
Securities Incorporated.
Exhibit 4.3 Indenture, dated May 8, 1998, by and among Grey Wolf, Inc., the Guarantors, and Chase Bank of
Texas, National Association, as Trustee.
Exhibit 4.4 Global Note, dated May 8, 1998.
Exhibit 4.5 Indenture, dated as of June 27, 1997, among Grey Wolf, Inc. (formerly "DI Industries, Inc."),
the Guarantors, and Chase Bank of Texas, National Association (formerly "Texas Commerce Bank
National Association"), as Trustee, as amended by Supplemental Indenture, dated March 31, 1998,
among Murco Drilling Corporation, Grey Wolf, Inc., the Guarantors, and Chase Bank of Texas,
National Association, as Trustee, and as further amended by Second Supplemental Indenture,
dated May 8, 1998, by and among Grey Wolf, Inc., the Guarantors, and Chase Bank of Texas,
National Association, as Trustee.
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EXHIBIT 4.1
GREY WOLF, INC.
AND THE
GUARANTORS
$75,000,000
8-7/8% Senior Notes due 2007, Series B
Purchase Agreement
May 5, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
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$75,000,000
8-7/8% Senior Notes due 2007, Series B
GREY WOLF, INC.
AND THE GUARANTORS
PURCHASE AGREEMENT
May 5, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Grey Wolf, Inc., a Texas corporation (the "COMPANY"),
proposes to issue and sell to Donaldson,
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Lufkin & Jenrette Securities Corporation ("DLJ"), Lehman Brothers Inc. and
Prudential Securities Incorporated (each, an "INITIAL PURCHASER" and,
collectively, the "INITIAL PURCHASERS") an aggregate of $75,000,000 in principal
amount of its 8-7/8% Senior Notes due 2007, Series B (the "NOTES"), subject to
the terms and conditions set forth herein. The Notes are to be issued pursuant
to the provisions of an indenture (the "INDENTURE"), to be dated as of the
Closing Date (as defined below), among the Company, the Guarantors (as defined
below) and Chase Bank of Texas, N.A., as trustee (the "TRUSTEE"). The Notes and
the Exchange Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "NOTES." The Notes will initially be
guaranteed (the "SUBSIDIARY GUARANTEES") by each of the subsidiaries of the
Company listed on Schedule A hereto (each, a "GUARANTOR" and collectively the
"GUARANTORS"). Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
1. OFFERING MEMORANDUM. The Notes will be initially offered
and sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Company and the Guarantors have prepared an offering memorandum,
dated May 5, 1998, relating to the Notes and the Subsidiary Guarantees (such
offering memorandum together with the information incorporated by reference
therein, being herein referred to as the "OFFERING MEMORANDUM").
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture, the Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR
(B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR, (2) AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR
ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF
REGULATION S UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amounts
of Notes set forth opposite the name of such Initial Purchaser on Schedule B
hereto at a purchase price equal to 98% of the principal amount thereof (the
"PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
the Notes purchased hereunder on the terms set forth in the Offering Memorandum,
as amended or supplemented, solely to (i) persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBS") and (ii) to persons permitted to purchase the Notes
in offshore transactions in reliance upon Regulation S under the Act (each, a
"REGULATION S PURCHASER") (such persons specified in clauses (i) and (ii) being
referred to herein as the "ELIGIBLE PURCHASERS"). The Initial Purchasers will
offer the Notes to Eligible Purchasers initially at a price equal to 100.0% of
the principal amount thereof. Such price may be changed at any time without
notice.
Holders (including subsequent transferees) of the Notes will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Notes constitute "TRANSFER
RESTRICTED SECURITIES" (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company and the Guarantors
will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to the Company's 8-7/8% Senior Notes due 2007, Series B (the "EXCHANGE NOTES"),
to be offered in exchange for the Notes (such offer to exchange being referred
to as the "EXCHANGE OFFER") and the Subsidiary Guarantees thereof and (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Notes and to use its reasonable best efforts to cause such
Registration Statements to be
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declared and remain effective and usable for the periods specified in the
Registration Rights Agreement and to consummate the Exchange Offer. This
Agreement, the Indenture, the Notes, the Subsidiary Guarantees, the Supplemental
Series A Indenture (as defined herein) and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price
for, the Notes shall be made at the offices of Porter & Hedges, L.L.P. or such
other location as may be mutually acceptable. Such delivery and payment shall be
made at 9:00 a.m. Houston, Texas time, on May 8, 1998 or at such other time on
the same date or such other date as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Notes are herein called the "CLOSING DATE."
(b) One or more of the Notes in definitive global
form, registered in the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Notes (collectively, the "GLOBAL NOTE"), shall
be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the Company. The Global Note
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. Each of
the Company and the Guarantors hereby agrees with the Initial Purchasers as
follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Notes for offering or sale
in any jurisdiction designated by the Initial Purchasers pursuant to Section
5(e) hereof, or the initiation of any proceeding by any state securities
commission or any other federal or state regulatory authority for such purpose
and (ii) of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the Offering
Memorandum untrue or that requires any additions to or changes in the Offering
Memorandum in order to make the statements therein not misleading. The Company
and the Guarantors shall use their reasonable best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any Notes under any state securities or Blue Sky laws and, if at any time any
state securities commission or other federal or state regulatory authority shall
issue an order suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws, the Company and the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time.
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(b) To furnish the Initial Purchasers and those
persons identified by the Initial Purchasers to the Company as many copies of
the Offering Memorandum, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request for the time period specified in
Section 5(c). Subject to the Initial Purchasers' compliance with its
representations and warranties and agreements set forth in Section 7 hereof, the
Company consents to the use of the Offering Memorandum, and any amendments and
supplements thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) Prior to the sale of all Notes pursuant to Exempt
Resales as contemplated hereby, (i) not to make any amendment or supplement to
the Offering Memorandum of which the Initial Purchasers shall not previously
have been advised or to which the Initial Purchasers shall reasonably object
after being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of which, in
the judgment of the Company and the Guarantors or in the opinion of counsel to
the Initial Purchasers, it becomes necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if, in the opinion of counsel to the Initial
Purchasers, it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Offering Memorandum will comply
with applicable law, and to furnish to the Initial Purchasers and such other
persons as the Initial Purchasers may designate such number of copies thereof as
the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Notes for offer and sale to the Initial Purchasers and
pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters and
transactions relating to the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail
and make generally
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available as soon as practicable after the end of each fiscal year to the record
holders of the Notes a financial report of the Company and its subsidiaries on a
consolidated basis, all such financial reports to include a consolidated balance
sheet, a consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end of and
for such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by the Company's independent public
accountants and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows as of the end
of and for such period, and for the period from the beginning of such year to
the close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as the Notes are outstanding, to furnish
to the Initial Purchasers as soon as available copies of all reports or other
communications furnished by the Company or any of the Guarantors to its security
holders or furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company or any of the
Guarantors is listed and such other publicly available information concerning
the Company and/or its subsidiaries as the Initial Purchasers may reasonably
request.
(h) So long as any of the Notes remain outstanding
and during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), to make available to any holder of Notes in connection with any
sale thereof and any prospective purchaser of such Notes from such holder, the
information ("RULE 144A INFORMATION") required by Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the performance of the obligations of the
Company and the Guarantors under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Company and the Guarantors and
accountants of the Company and the Guarantors in connection with the sale and
delivery of the Notes to the Initial Purchasers and pursuant to Exempt Resales,
and all other fees and expenses in connection with the preparation, printing,
filing and distribution of the Offering Memorandum and all amendments and
supplements to any of the foregoing (including financial statements), including
the mailing and delivering of copies thereof to the Initial Purchasers and
persons designated by them in the quantities specified herein, (ii) all costs
and expenses related to the transfer and delivery of the Notes to the Initial
Purchasers and pursuant to Exempt Resales, including any transfer or other taxes
payable thereon, (iii) all costs of printing or reproducing this Agreement, the
other Operative Documents and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Notes, (iv) all expenses in
connection with the registration or qualification of the Notes and the
Subsidiary Guarantees for offer and sale under the securities or Blue Sky laws
of the several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Initial Purchasers in
connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Notes and the
Subsidiary Guarantees, (vi) all expenses and
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<PAGE> 8
listing fees in connection with the application for quotation of the Notes in
the National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee
and the Trustee's counsel in connection with the Indenture, the Notes and the
Subsidiary Guarantees, (viii) the costs and charges of any transfer agent,
registrar and/or depositary (including DTC), (ix) any fees charged by rating
agencies for the rating of the Notes, (x) all costs and expenses of the Exchange
Offer and any Registration Statement, as set forth in the Registration Rights
Agreement, and (xi) and all other costs and expenses incident to the performance
of the obligations of the Company and the Guarantors hereunder for which
provision is not otherwise made in this Section.
(j) To use its reasonable best efforts to effect the
inclusion of the Notes in PORTAL and to maintain the listing of the Notes on
PORTAL for so long as the Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry"
transfer of the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof
and continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise transfer or dispose of any debt securities of the Company
or any Guarantor or any warrants, rights or options to purchase or otherwise
acquire debt securities of the Company or any Guarantor substantially similar to
the Notes and the Subsidiary Guarantees (other than (i) the Notes and the
Subsidiary Guarantees and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Notes under the Act.
(n) Not to voluntarily claim, and to actively resist
any attempts to claim, the benefit of any usury laws against the holders of any
Notes and the related Subsidiary Guarantees.
(o) To file an Exchange Offer Registration Statement
and to use its reasonable best efforts to have the Exchange Offer Registration
Statement declared effective, all in accordance with and subject to the terms of
the Registration Rights Agreement, to permit Exchange Notes and guarantees
thereof by the Guarantors registered pursuant to the Act to be offered in
exchange for the Notes and the Subsidiary Guarantees and to comply with all
applicable federal and state securities laws in connection with the Exchange
Offer.
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<PAGE> 9
(p) To comply with all of its agreements set forth in
the Registration Rights Agreement.
(q) To use its reasonable best efforts to do and
perform all things required or necessary to be done and performed under this
Agreement by it prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Notes and the Subsidiary Guarantees.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
AND THE GUARANTORS. As of the date hereof, each of the Company and the
Guarantors represents and warrants to, and agrees with, the Initial Purchasers
that:
(a) The Offering Memorandum does not, and any
supplement or amendment to it will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements in or
omissions from the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been issued.
(b) Each of the Company, the Guarantors and their
subsidiaries has been duly organized, is validly existing as a corporation,
limited liability company or limited partnership in good standing under the laws
of its jurisdiction of incorporation or formation and has the requisite power
and authority to carry on its business as described in the Offering Memorandum
and to own, lease and operate its properties, and each is duly qualified and is
in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or draw into question the validity of this
Agreement or the other Operative Documents (a "MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable.
(d) The entities listed on Schedule C hereto are the
only subsidiaries, direct or
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<PAGE> 10
indirect, of the Company. All of the outstanding shares of capital stock of, or
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature (each, a "LIEN") except for Liens described in the
Offering Memorandum.
(e) This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors.
(f) The Indenture and the Series A Supplemental
Indenture have been duly authorized by the Company and each of the Guarantors
and, on the Closing Date, will have been validly executed and delivered by the
Company and each of the Guarantors. When the Indenture and the Series A
Supplemental Indenture have been duly executed and delivered by the Company and
each of the Guarantors, the Indenture and the Series A Supplemental Indenture
will be a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, moratorium or similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether such rights
and remedies are sought to be enforced at law or in equity). On the Closing
Date, the Indenture will conform in all material respects to the requirements of
the Trust Indenture Act of 1939, as amended (the "TIA" or "TRUST INDENTURE
ACT"), and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
(g) The Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Notes have been issued, executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Notes will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, moratorium or similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether such rights
and remedies are sought to be enforced at law or in equity). On the Closing
Date, the Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum, in all material respects.
(h) On the Closing Date, the Exchange Notes will have
been duly authorized by the Company. When the Exchange Notes are issued,
executed and authenticated in accordance with the terms of the Exchange Offer
and the Indenture, the Exchange Notes will be entitled to the benefits of the
Indenture and will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy,
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<PAGE> 11
insolvency, fraudulent conveyance, moratorium or similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether such rights
and remedies are sought to be enforced at law or in equity).
(i) The Subsidiary Guarantee arising under the
Indenture of each Guarantor has been duly authorized by such Guarantor and, on
the Closing Date, will have been duly executed and delivered by each such
Guarantor. When the Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Subsidiary
Guarantee of each Guarantor will be entitled to the benefits of the Indenture
and will be the valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether such rights and remedies are sought
to be enforced at law or in equity). On the Closing Date, the Subsidiary
Guarantees to be endorsed on the Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum, in all material
respects.
(j) The Subsidiary Guarantee arising under the
Indenture of by each Guarantor has been duly authorized by such Guarantor and,
when issued, will have been duly executed and delivered by each such Guarantor.
When the Exchange Notes have been issued, executed and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, the
Subsidiary Guarantee of each Guarantor will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. When the Exchange Notes are issued, authenticated and
delivered, the Subsidiary Guarantees to be endorsed on the Exchange Notes will
conform as to legal matters to the description thereof in the Offering
Memorandum, in all material respects.
(k) The Registration Rights Agreement has been duly
authorized by the Company and each of the Guarantors and, on the Closing Date,
will have been duly executed and delivered by the Company and each of the
Guarantors. When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Company and each of the Guarantors, enforceable against the
Company and each Guarantor in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether such rights and remedies are sought
to be enforced at law or in equity). On the Closing Date, the Registration
Rights Agreement will conform as to legal
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<PAGE> 12
matters to the description thereof in the Offering Memorandum, in all material
respects.
(l) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument, the
violation which would have a Material Adverse Effect, to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(m) The execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and each of the
Guarantors, compliance by the Company and each of the Guarantors with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), except for such consents, approvals,
authorizations or orders that have been, or will be, obtained prior to Closing,
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, except for such conflicts or breaches that have been, or will be, waived
prior to Closing or would not have a Material Adverse Effect, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property except for
matters of non-compliance that would not have a Material Adverse Effect, (iv)
result in the imposition or creation of (or the obligation to create or impose)
a Lien under, any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
their respective property is bound, or (v) result in the termination, suspension
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or result in any other impairment of the rights of the holder
of any such Authorization.
(n) There are no legal or governmental proceedings
pending or, to the Company's knowledge, threatened to which the Company or any
of its subsidiaries is or could be a party or to which any of their respective
property is or could be subject, which could reasonably be expected to result,
singly or in the aggregate, in a Material Adverse Effect.
(o) Neither the Company nor any of its subsidiaries
has violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except
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for such violations which, singly or in the aggregate, would not have a Material
Adverse Effect.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company, the Guarantors and their
respective subsidiaries has such permits, licenses, consents, exemptions,
franchises, authorizations of governmental or regulatory authorities
("PERMITS"), including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective properties, and
to conduct its business and is in compliance with all terms and conditions
thereof; and no event has occurred which allows or, after notice or lapse of
time or both, would allow, revocation or termination of such permits or results
or, after notice or lapse of time or both, would result in any other impairment
of the rights of the holder of any such permit; and such permits contain no
restrictions that are burdensome to the Company, the Guarantors or any of their
respective subsidiaries; except where such failure to have, or comply with the
terms or conditions of, such permits, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate, have a
Material Adverse Effect.
(r) The accountants, KPMG Peat Marwick LLP, that have
certified the financial statements incorporated by reference in the Offering
Memorandum for the years ended December 31, 1995, 1996 and 1997 are independent
public accountants with respect to the Company and the Guarantors, as required
by the Act and the Exchange Act.
(s) The historical financial statements, together
with related schedules and notes incorporated by reference in the Offering
Memorandum (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated in the Offering
Memorandum at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data incorporated by reference in the
Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(t) The pro forma financial data included in the
Offering Memorandum have been prepared on a basis consistent with the historical
financial statements of the Company and its subsidiaries and give effect to
assumptions used in the preparation thereof on a reasonable basis and in good
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<PAGE> 14
faith and present fairly the historical and proposed transactions contemplated
by the Offering Memorandum.
(u) The Company is not and, after giving effect to
the offering and sale of the Notes and the application of the net proceeds
thereof as described in the Offering Memorandum, will not be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(v) There are no contracts, agreements or
understandings between the Company or any Guarantor and any person granting such
person the right to require the Company or such Guarantor to include such
person's securities with the Notes and Subsidiary Guarantees registered pursuant
to any Registration Statement.
(w) Neither the Company nor any of its subsidiaries
nor any agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance or sale of
the Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R.
Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
224) of the Board of Governors of the Federal Reserve System.
(x) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act (i) has imposed (or has informed the Company or any Guarantor that it is
considering imposing) any condition (financial or otherwise) on the Company's or
any Guarantor's retaining any rating assigned to the Company or any Guarantor,
any securities of the Company or any Guarantor or (ii) has indicated to the
Company or any Guarantor that it is considering (a) the downgrading, suspension,
or withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company, any Guarantor or any securities of
the Company or any Guarantor.
(y) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any change
having a Material Adverse Effect or any development that could reasonably be
expected to have a Material Adverse Effect, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any liability or obligation, direct or contingent, except as did not,
or could be reasonably expected not to have, a Material Adverse Effect.
(z) The Offering Memorandum, as of its date, contains
all the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.
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(aa) When the Notes and the Subsidiary Guarantees are
issued and delivered pursuant to this Agreement, neither the Notes nor the
Subsidiary Guarantees will be of the same class (within the meaning of Rule 144A
under the Act) as any security of the Company or the Guarantors that is listed
on a national securities exchange registered under Section 6 of the Exchange Act
or that is quoted in a United States automated inter-dealer quotation system.
(bb) No form of general solicitation or general
advertising (as defined in Regulation D under the Act) was used by the Company,
the Guarantors or any of their respective representatives (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) in connection with the offer and sale of the Notes contemplated
hereby, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising. No securities of the same
class as the Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(cc) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(dd) None of the Company, the Guarantors nor any of
their respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("REGULATION S") with respect
to the Notes or the Subsidiary Guarantees.
(ee) The sale of the Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of the Act.
(ff) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
have complied with and will comply with the offering restrictions requirements
of Regulation S in connection with the offering of the Notes outside the United
States and, in connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(h).
(gg) The Company is a "reporting issuer," as defined
in Rule 902 under the Act.
(hh) Assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof, no
registration under the Act of the Notes or the
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<PAGE> 16
Subsidiary Guarantees is required for the sale of the Notes and the Subsidiary
Guarantees to the Initial Purchasers as contemplated hereby or for the Exempt
Resales.
(ii) Each certificate signed by any officer of the
Company or any Guarantor and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be deemed to be a representation and warranty by
the Company or such Guarantor to the Initial Purchasers as to the matters
covered thereby.
(jj) The Company and its subsidiaries have good and
indefeasible title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all Liens
and defects, except such as are described in the Offering Memorandum or such as
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Offering
Memorandum.
(kk) The Company and its subsidiaries own or possess,
or can acquire on reasonable terms, all licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("INTELLECTUAL PROPERTY") currently employed by
them in connection with the business now operated by them except where the
failure to own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of such intellectual property which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(ll) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; and neither the Company nor any of its subsidiaries (i)
has received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers at a cost that would
not have a Material Adverse Effect.
(mm) There is no (i) significant unfair labor
practice complaint, grievance or arbitration proceeding pending or, to the
Company's knowledge, threatened against the Company or any of its subsidiaries
before the National Labor Relations Board or any state or local labor relations
board, (ii) strike, labor dispute, slowdown or stoppage pending or, to the
Company's knowledge, threatened against the
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<PAGE> 17
Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. To the knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries.
(nn) The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(oo) All material tax returns required to be filed by
the Company and each of its subsidiaries in any jurisdiction have been filed,
other than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(pp) The indebtedness represented by the Notes is
being incurred for proper purposes and in good faith, and each of the Company
and the Guarantors was, at the time of the incurrence of such indebtedness that
will be repaid with the proceeds of the issuance and sale of the Notes, and will
be on the Closing Date (after giving effect to the application of the proceeds
from the issuance of the Notes) solvent and had, at the time of the incurrence
of such indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will have on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Notes) sufficient capital
for carrying on its respective business and was, at the time of the incurrence
of such indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Notes) able to pay its
respective debts as they mature.
(qq) No action has been taken and no law, statute,
rule or regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the execution, delivery and
performance of any of the Operative Documents, the issuance of the Notes or the
Subsidiary Guarantees, or suspends the sale of the Notes or the Subsidiary
Guarantees in any jurisdiction referred to in Section 4(e); and no injunction,
restraining order or other order or relief of any nature by a federal or state
court or other tribunal of competent jurisdiction has been issued with respect
to the Company or any of its subsidiaries which would prevent or suspend the
issuance or sale of the Notes or the Subsidiary Guarantees in any jurisdiction
referred to in Section 4(e).
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(rr) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
The Company and the Guarantors acknowledge that the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 9 hereof, counsel to the Company and the Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and hereby consent to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of
the Initial Purchasers, severally, and not jointly, represents and warrants to
the Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is a QIB with such
knowledge and experience in financial and business matters as is necessary in
order to evaluate the merits and risks of an investment in the Notes.
(b) Such Initial Purchaser (A) is not acquiring the
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Notes in a transaction that would violate the Act
or the securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Notes only to (x) QIBs
in compliance with the exemption from the registration requirements of the Act
provided by Rule 144A and (y) in offshore transactions in compliance with
Regulation S under the Act.
(c) No form of general solicitation or general
advertising (within the meaning of Regulation D under the Act) has been or will
be used by such Initial Purchaser or any of its representatives in connection
with the offer and sale of the Notes pursuant hereto, including, but not limited
to, articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general solicitation or
general advertising.
(d) In connection with Exempt Resales, such Initial
Purchaser will solicit offers to buy the Notes only from, and will offer to sell
the Notes only to, Eligible Purchasers. Each Initial Purchaser further agrees
that it will offer to sell the Notes only to, and will solicit offers to buy the
Notes only from (A) Eligible Purchasers that the Initial Purchaser reasonably
believes are QIBs purchasing for its account or for the account of another QIB
in a transaction meeting the requirements of Rule 144A under the Act, and (B)
Regulation S Purchasers, in each case, that agree that (x) the Notes purchased
by them may be resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule 144(d)
under the Act, if applicable) under the Act, as in effect on the date of
17
<PAGE> 19
the transfer of such Notes, only (I) to the Company or any of its subsidiaries,
(II) to a person whom the seller reasonably believes is a QIB purchasing for its
own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Act, (III) in an offshore transaction (as
defined in Rule 902 under the Act) meeting the requirements of Rule 904 of the
Act, (IV) in a transaction meeting the requirements of Rule 144 under the Act,
(V) in accordance with another exemption from the registration requirements of
the Act (and based upon an opinion of counsel acceptable to the Company) or (VI)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Notes or an interest therein is transferred a notice substantially to the
effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Notes or the Subsidiary Guarantees.
(f) The Notes offered and sold by such Initial
Purchaser in reliance on Regulation S have been and will be offered and sold
only in offshore transactions.
(g) The sale of the Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) It has not offered or sold and will not offer or
sell the Notes in the United States or to, or for the benefit or account of, a
U.S. Person (other than a distributor), in each case, as defined in Rule 902
under the Act (i) as part of its distribution at any time and (ii) otherwise
until 40 days after the later of the commencement of the offering of the Notes
pursuant hereto and the Closing Date, other than in accordance with Regulation S
of the Act or another exemption from the registration requirements of the Act.
Such Initial Purchaser agrees that, during such 40-day distribution compliance
period, it will not cause any advertisement with respect to the Notes (including
any "tombstone" advertisement) to be published in any newspaper or periodical or
posted in any public place and will not issue any circular relating to the
Notes, except such advertisements as are permitted by and include the statements
required by Regulation S.
(i) At or prior to confirmation of a sale of Notes by
it to any distributor, dealer or person receiving a selling concession, fee or
other remuneration during the 40-day distribution compliance period referred to
in Rule 903(c)(2) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a confirmation
or notice to substantially the following effect:
"The Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered and sold within the United States or to,
18
<PAGE> 20
or for the account or benefit of, U.S. persons (i) as part of your distribution
at any time or (ii) otherwise until 40 days after the later of the commencement
of the Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or pursuant to another
transaction that is exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the Notes covered
hereby in reliance on Regulation S during the period referred to above to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation S."
Such Initial Purchaser acknowledges that the Company
and the Guarantors and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchaser hereby
consents to such reliance.
8. INDEMNIFICATION.
(a) The Company and each Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, their officers and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto) or any Rule 144A Information provided by the Company or any
Guarantor to any holder or prospective purchaser of Notes pursuant to Section
5(h) or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the Initial Purchasers
furnished in writing to the Company by such Initial Purchasers; provided,
further, that such indemnity with respect to the Offering Memorandum shall not
inure to the benefit of an Initial Purchaser (or any persons controlling such
Initial Purchaser) from whom the person asserting such loss, claim, damage or
liability purchased the Securities which are the subject thereof if such person
did not receive a copy of the Offering Memorandum (or the Offering Memorandum as
amended or supplemented) at or prior to the confirmation of the sale of such
Securities to such person and any such untrue statement or omission or alleged
untrue statement or omission of a material fact contained in such Offering
Memorandum was corrected in the Offering Memorandum.
(b) The Initial Purchasers, severally and not jointly
in proportion to the principal amount of Notes which they have respectively
agreed to purchase under Section 2 hereto, agree to indemnify
19
<PAGE> 21
and hold harmless the Company and the Guarantors, and their respective directors
and officers and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company or the
Guarantors, to the same extent as the foregoing indemnity from the Company and
the Guarantors to the Initial Purchasers but only with reference to information
relating to the Initial Purchasers furnished in writing to the Company by the
Initial Purchasers expressly for use in the Offering Memorandum.
(c) In case any action shall be commenced involving
any person in respect of which indemnity may be sought pursuant to Section 8(a)
or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and that, as a matter of professional
responsibility, such counsel is unable to represent both the indemnifying and
indemnified (in which case the indemnifying party shall not have the right to
assume the defense of such action on behalf of the indemnified party). In any
such case, the indemnifying party shall not, in connection with any one action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of moe than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
in good faith without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request unless within
30 days after such reimbursement request is received, the indemnifying party
shall have made a good faith written challenge to the reasonableness of the
amount or nature of the reimbursement requested or the sufficiency of the
documentation supporting the reimbursement requested (which challenge shall set
forth the amount or nature of the requested reimbursement which the indemnifying
party in good faith
20
<PAGE> 22
believes to be reasonable or the basis of the good faith claim as to the
insufficiency of any supporting documentation), in which event this clause (ii)
shall apply only if, and to the extent that, such indemnifying party shall not
have reimbursed the indemnified party for the amount which is not being so
challenged. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment wit respect to, any pending or threatened action in respect of
which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
this Section 8 is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers on the
other hand from the offering of the Notes or (ii) if the allocation provided by
clause 8(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors, on the one hand and the Initial Purchasers, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes (after underwriting discounts and commissions, but before
deducting expenses) received by the Company, and the total discounts and
commissions received by the Initial Purchasers bear to the total price to
investors of the Notes, in each case as set forth in the table on the cover page
of the Offering Memorandum. The relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Guarantors, and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section
21
<PAGE> 23
8, the Initial Purchasers shall not be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Notes purchased by each of the Initial Purchasers hereunder
and not joint.
(e) The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase the Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the
Company and the Guarantors contained in this Agreement shall be true and correct
on the Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) On or after the date hereof, (i) there shall not
have occurred any downgrading, suspension or withdrawal of, nor shall any notice
have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of the Company or any Guarantor or any securities of the Company or
any Guarantor (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any Guarantor or any securities of the
Company or any Guarantor by any such rating organization and (iii) no such
rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which the Notes
were marketed.
(c) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred any
change or any development involving a material and adverse prospective change in
the condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there
shall not have been any change or any development involving a material and
adverse
22
<PAGE> 24
prospective change in the capital stock or in the long-term debt of the Company
or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(c)(i),
9(c)(ii) or 9(c)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date a
certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company and each of the Guarantors, confirming the
matters set forth in Sections 6(y), 9(a) and 9(b) and stating that each of the
Company and the Guarantors has complied with all the agreements and satisfied
all of the conditions herein contained and required to be complied with or
satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchasers), dated the
Closing Date, of Porter & Hedges, L.L.P., counsel for the Company and the
Guarantors, to the effect set forth in Exhibit B hereto.
(f) The Initial Purchasers shall have received an
opinion of Venezuelan counsel to the Company substantially in the form attached
as Schedule D hereto.
(g) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., counsel for the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
(h) The Initial Purchasers shall have received, at
the time this Agreement is executed and at the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchasers
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(i) The Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(j) The Initial Purchasers shall have received a
counterpart, conformed as executed, of the Indenture which shall have been
entered into by the Company, the Guarantors and the Trustee.
23
<PAGE> 25
(k) The Company and the Guarantors shall have
executed the Registration Rights Agreement and the Initial Purchasers shall have
received an original copy thereof, duly executed by the Company and the
Guarantors.
(l) Neither the Company nor the Guarantors shall have
failed at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company or the Guarantors, as the case may be, at or prior to the Closing Date.
(m) The Company shall have received any approvals or
consents from the lenders under the Bank Credit Facility (as defined in the
Offering Memorandum) necessary in order to consummate the issuance of Notes
contemplated hereby.
(n) The Company shall have received the requisite
consent from the holders of the Series A Notes (as defined in the Offering
Memorandum) to issue the Second Supplemental Indenture (the "Series A
Supplemental Indenture") to the Indenture, dated June 27, 1997, governing the
Series A Notes, and shall have entered into the Series A Supplemental Indenture
with the trustee under such indenture.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Notes on the terms
and in the manner contemplated in the Offering Memorandum, (ii) the suspension
or material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company or any Guarantor on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States and would, in your opinion, make
it impracticable or inadvisable to market the Notes.
24
<PAGE> 26
If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Notes to be purchased on such date by all
Initial Purchasers, each non-defaulting Initial Purchaser shall be obligated
severally, in the proportion which the principal amount of the Notes set forth
opposite its name in Schedule B bears to the aggregate principal amount of the
Notes which all the non-defaulting Initial Purchasers, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of the Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Notes without the written consent of such Initial
Purchaser. If on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase the Notes and the aggregate principal amount of
the Notes with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Notes to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Company for purchase of such the Notes are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closig Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or any
Guarantor, to 10370 Richmond Avenue, Suite 600, Houston, Texas 77042 (713)
435-6100, Attention: Secretary and (ii) if to the Initial Purchasers, Donaldson,
Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New York, New York
10172, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Guarantors
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling the
Initial Purchasers, the Company, any Guarantor, the officers or directors of the
Company or any Guarantor, or any person controlling the Company or any
Guarantor, (ii) acceptance of the Notes and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Notes are not tendered for delivery by or
on behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the
25
<PAGE> 27
Company and each Guarantor, jointly and severally, agree to reimburse the
Initial Purchaser for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company and each Guarantor also
agree, jointly and severally, to reimburse the Initial Purchasers and its
officers, directors and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act for any and all fees and expenses (including without limitation the
fees and expenses of counsel) incurred by them in connection with enforcing
their rights under this Agreement (including without limitation its rights under
Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the directors of the Company and the
Guarantors and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Notes from the Initial Purchaser merely
because of such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
[The remainder of this page intentionally left blank.]
26
<PAGE> 28
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
GREY WOLF, INC.
By: /s/DAVID W. WEHLMANN
----------------------------------------------------
Name: David W. Wehlmann
Title:Senior Vice President and Chief Financial Officer
GREY WOLF DRILLING COMPANY
By:/s/ DAVID W. WEHLMANN
----------------------------------------------------
Name: David W. Wehlmann
Title:Senior Vice President and Chief Financial Officer
DI ENERGY, INC.
By: /s/ DAVID W. WEHLMANN
----------------------------------------------------
Name: David W. Wehlmann
Title:Senior Vice President and Chief Financial Officer
<PAGE> 29
GREY WOLF INTERNATIONAL, INC.
By:/s/ DAVID W. WEHLMANN
----------------------------------------------------
Name: David W. Wehlmann
Title:Senior Vice President and Chief Financial Officer
MURCO DRILLING CORPORATION
By:/s/ DAVID W. WEHLMANN
----------------------------------------------------
Name: David W. Wehlmann
Title: Secretary
<PAGE> 30
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ CRAIG KLAASMEYER
--------------------------------------
Name: Craig Klaasmeyer
Title: Vice President
<PAGE> 31
A-1
SCHEDULE A
INITIAL GUARANTORS
<TABLE>
<CAPTION>
Name of Guarantor State of Incorporation
- ------------------------------------------ --------------------------------------------
<S> <C>
Grey Wolf Drilling Company Texas
Murco Drilling Corporation (a Delaware
wholly-owned subsidiary of Grey
Wolf Drilling Company)
Grey Wolf International, Inc. Texas
DI Energy, Inc. Texas
</TABLE>
<PAGE> 32
B-1
SCHEDULE B
INITIAL PURCHASERS
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
INITIAL PURCHASER OF NOTES
----------------- ----------------
<S> <C>
Donaldson, Lufkin & Jenrette
Securities Corporation.................................................. $ 37,500,000
Lehman Brothers Inc.......................................................... 18,750,000
Prudential Securities Incorporated.......................................... 18,750,000
-------------
TOTAL................................................................... $ 75,000,000
=============
</TABLE>
<PAGE> 33
C-1
SCHEDULE C
SUBSIDIARIES
<PAGE> 34
SCHEDULE D
OPINION OF VENEZUELAN COUNSEL
C-1
<PAGE> 35
C-2
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE> 1
EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
Dated as of May 8, 1998
by and among
GREY WOLF, INC.
THE GUARANTORS
and
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and entered
into as of May 8, 1998, by and among Grey Wolf, Inc., a Texas corporation (the
"COMPANY"), each of the subsidiaries listed on Schedule A attached hereto (each
a "GUARANTOR" and, collectively, the "GUARANTORS"), and Donaldson, Lufkin &
Jenrette Securities Corporation, Lehman Brothers Inc. and Prudential Securities
Incorporated (each an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS"), each of whom has agreed to purchase the Company's 8 7/8% Senior
Notes due 2007, Series B (the "NOTES") pursuant to the Purchase Agreement (as
defined below).
This Agreement is made pursuant to the Purchase Agreement, dated May
5, 1998 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors
and the Initial Purchasers. In order to induce the Initial Purchasers to
purchase the Notes, the Company has agreed to provide the registration rights
set forth in this Agreement, on the terms and subject to the conditions herein
set forth. The execution and delivery of this Agreement is the condition to
the obligations of the Initial Purchasers set forth in Section 9(k) of the
Purchase Agreement. Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Indenture, dated May 8, 1998,
between the Company and Chase Bank of Texas, N.A., as Trustee, relating to the
Notes and the Exchange Notes (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange
Act.
BUSINESS DAY: Any day other than a Saturday, Sunday or day that
commercial banks in New York are required or permitted to be closed.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the
Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
<PAGE> 3
maintenance of such Exchange Offer Registration Statement continuously
effective and the keeping of the Exchange Offer open for a period not less than
the period required pursuant to Section 3(b) hereof and (c) the delivery by the
Company to the Registrar under the Indenture (as such term is defined therein)
of Exchange Notes in the same aggregate principal amount as the aggregate
principal amount of Notes tendered by Holders thereof pursuant to the Exchange
Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE NOTES: The Company's 8 7/8% Exchange Notes due 2007, Series
B to be issued pursuant to the Indenture in the Exchange Offer.
EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal
amount of Notes that are tendered by such Holders in connection with such
exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
and the Guarantors relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case, (i) that
is filed pursuant to the provisions of this Agreement and (ii) including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
2
<PAGE> 4
REGULATION S: Regulation S promulgated under the Act.
RULE 144: Rule 144 promulgated under the Act.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
TRANSFER RESTRICTED SECURITIES: Each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer for
a Exchange Note which is entitled to be resold to the public by the Holder
thereof without complying with the prospectus delivery requirements of the Act,
(b) the date on which such Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued Exchange
Notes), or (c) the date on which such Note is distributed to the public
pursuant to Rule 144 under the Act (and purchasers thereof have been issued
Exchange Notes), and each Exchange Note until the date on which such Exchange
Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law or interpretations of the staff of the Commission (after the
procedures set forth in Section 6(a)(i) below have been complied with), the
Company and the Guarantors shall (i) cause the Exchange Offer Registration
Statement to be filed with the Commission as soon as practicable after the
Closing Date, but in no event later than 60 days after the Closing Date (such
60th day being the "FILING DEADLINE"), (ii) use its reasonable best efforts to
cause such Exchange Offer Registration Statement to become effective at the
earliest possible time, but in no event later than 120 days after the Closing
Date (such 120th day being the "EFFECTIVENESS DEADLINE"), (iii) in connection
with the foregoing, (A) file all pre-effective amendments to such Exchange
Offer Registration Statement as may be necessary in order to cause it to become
effective, (B) file, if applicable, a post-effective amendment to such Exchange
Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings, if any, in connection with the registration and
qualification of the Exchange Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer,
and (iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (i) registration of the Exchange Notes to be
offered in exchange for the Notes that are Transfer Restricted Securities and
(ii) resales of Exchange Notes by Broker- Dealers that tendered into the
Exchange Offer Notes that such Broker-Dealer acquired for its own account as a
result of market making activities or other trading
3
<PAGE> 5
activities (other than Notes acquired directly from the Company or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their respective
reasonable best efforts to cause the Exchange Offer Registration Statement to
be effective continuously, and shall keep the Exchange Offer open for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Exchange Notes shall
be included in the Exchange Offer Registration Statement. The Company and the
Guarantors shall use their respective reasonable best efforts to cause the
Exchange Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no event
later than 30 days thereafter (such 30th day being the "CONSUMMATION
DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker-Dealer who holds Transfer Restricted
Securities that were acquired for the account of such Broker-Dealer as a result
of market-making activities or other trading activities (other than Notes
acquired directly from the Company or any Affiliate of the Company), may
exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such Broker-Dealer, except to the
extent required by the Commission as a result of a change in policy, rules or
regulations after the date of this Agreement. See the Shearman & Sterling no-
action letter (available July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus meeting
the requirements of the Act in connection with its initial sale of any Exchange
Notes received by such Broker-Dealer in the Exchange Offer, the Company and
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the prospectus
contained in the Exchange Offer Registration Statement is available for sales
of Exchange Notes by Broker-Dealers, the Company and the Guarantors agree to
use their respective reasonable best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and
current as required by, and subject to, the provisions of Section 6(a) and (c)
hereof and in conformity with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the Consummation Deadline or such shorter
period as will terminate when all Transfer Restricted Securities covered by
such Registration Statement have been sold pursuant thereto. The Company and
the Guarantors shall provide sufficient copies of the latest version of such
Prospectus to such Broker-Dealers, promptly upon request, and in no event later
than three Business Days after such request, at any time during such period.
4
<PAGE> 6
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not permitted
by applicable law or interpretations of the staff of the Commission (after the
Company and the Guarantors have complied with the procedures set forth in
Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 30 days following the Consummation Deadline
that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer and stating the reason for the application
of such prohibition to the Holder or (B) such Holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is legally unavailable for such resales by such Holder
or (C) such Holder is a Broker-Dealer and holds Notes acquired directly from
the Company or any of its Affiliates, then the Company and the Guarantors
shall:
(x) cause to be filed as promptly as practicable but no later than 45 days
after the earlier of (i) the date on which the Company determines that the
Exchange Offer Registration Statement cannot be filed as a result of clause
(a)(i) above and (ii) the date on which the Company receives the notice
specified in clause (a)(ii) above, (such earlier date, the "FILING DEADLINE"),
a shelf registration statement pursuant to Rule 415 under the Act (which may be
an amendment to the Exchange Offer Registration Statement (the "SHELF
REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities, and
(y) shall use their respective reasonable best efforts to cause such Shelf
Registration Statement to become effective on or prior to 60 days after the
Filing Deadline for the Shelf Registration Statement (such 60th day, the
"EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) above), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
provided that, in such event, the Company shall remain obligated to meet the
Effectiveness Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the other
securities required to be registered therein pursuant to Section 6(b)(ii)
hereof, the Company and the Guarantors shall use their respective reasonable
best efforts to keep any Shelf Registration Statement required by this Section
4(a) continuously effective, supplemented, amended and current as required by,
and subject to, the provisions of Sections 6(b) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period ending the earlier of (i) the time when the Notes covered thereby can be
sold pursuant to Rule 144 under the Act without any limitations under clause
(c), (e), (f) and (h) thereof and (ii) at least two years (as extended pursuant
to Section 6(c)(i)) following the Closing Date, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, the information specified in Item 507 or 508 of
Regulation S-K, as applicable, of the Act for use in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus
5
<PAGE> 7
included therein, such information to be provided within 10 days after a
request therefor in the case of a Shelf Registration Statement to be filed as a
consequence of Section 4(a)(i) or, in the case of a Shelf Registration
Statement filed as a consequence of a Holder's notification under Section
4(a)(ii), within 10 days after such notice. No Holder of Transfer Restricted
Securities shall be entitled to special interest (as defined herein) pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish in writing
additional information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
SECTION 5. SPECIAL INTEREST
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation
Deadline or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose (for reasons other than those permitted by
Section 6(c) or 6(d)) without being succeeded by a post-effective amendment to
such Registration Statement that cures such failure and that is itself declared
effective (each such event referred to in clauses (i) through (iv), a
"REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly and
severally agree to pay to each Holder of Transfer Restricted Securities
affected thereby additional interest ("SPECIAL INTEREST") in an amount equal to
$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
held by such Holder for each week or portion thereof that the Registration
Default continues for the first 90-day period immediately following the
occurrence of such Registration Default. The amount of the special interest
shall increase by an additional $.05 per week per $1,000 in principal amount of
Transfer Restricted Securities with respect to each subsequent 90-day period
until all Registration Defaults have been cured, up to a maximum amount of
special interest of $.25 per week per $1,000 in principal amount of Transfer
Restricted Securities; provided that the Company and the Guarantors shall in no
event be required to pay special interest for more than one Registration
Default at any given time. Notwithstanding anything to the contrary set forth
herein, (1) upon filing of the Exchange Offer Registration Statement (and/or,
if applicable, the Shelf Registration Statement), in the case of (i) above, (2)
upon the effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (ii) above, (3)
upon Consummation of the Exchange Offer, in the case of (iii) above, or (4)
upon the filing of a post-effective amendment to the Registration Statement or
an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement) to again be declared effective or made usable in the case of (iv)
above, the special interest payable with respect to the Transfer Restricted
Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable,
shall cease. The right of each Holder to receive Special Interest shall be the
exclusive remedy and liquidated damages for any and all Registration Defaults.
All accrued special interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture,
on each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which special interest
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay special interest with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.
6
<PAGE> 8
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective
reasonable best efforts to effect such exchange and to permit the resale of
Exchange Notes by Broker-Dealers that tendered in the Exchange Offer Notes that
such Broker-Dealer acquired for its own account as a result of its market
making activities or other trading activities (other than Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and (z) comply
with all of the following provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as the
Exchange Offer, that in the reasonable opinion of counsel to the Company
raises a substantial question as to whether the Exchange Offer is
permitted by applicable federal law, the Company and the Guarantors hereby
agree to seek a no-action letter or other favorable decision from the
Commission allowing the Company and the Guarantors to Consummate an
Exchange Offer for such Transfer Restricted Securities. The Company and
the Guarantors hereby agree to pursue the issuance of such a decision to
the Commission staff level. In connection with the foregoing, the Company
and the Guarantors hereby agree to take all such other actions as may be
requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (A) participating
in telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded that
such an Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker-Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange Offer, a
written representation to the Company and the Guarantors (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate of
the Company, (B) it is not engaged in, and does not intend to engage in,
and has no arrangement or understanding with any person to participate in,
a distribution of the Exchange Notes to be issued in the Exchange Offer
and (C) it is acquiring the Exchange Notes in its ordinary course of
business. As a condition to its participation in the Exchange Offer, each
Holder using the Exchange Offer to participate in a distribution of the
Exchange Notes shall acknowledge and agree that, if the resales are of
Exchange Notes obtained by such Holder in exchange for Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not, under
Commission policy as in effect on the date of this Agreement, rely on the
position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available
May 13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters (including, if
applicable, any no-action letter obtained pursuant to clause (i) above),
and (2) must comply with the registration and prospectus delivery
requirements of the Act in connection with a secondary resale transaction
and that such a secondary resale transaction must be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K.
7
<PAGE> 9
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
interpreted in the Commission's letter to Shearman & Sterling dated July
2, 1993, and, if applicable, any no-action letter obtained pursuant to
clause (i) above, (B) including a representation that neither the Company
nor any Guarantor has entered into any arrangement or understanding with
any Person to distribute the Exchange Notes to be received in the Exchange
Offer and that (if true) to the best of the Company's and each Guarantor's
information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Notes in its ordinary course of business and has no
arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes received in the Exchange Offer and (C)
any other undertaking or representation required by the Commission as set
forth in any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall (i) comply with
all the provisions of Section 6(c) below and use their respective reasonable
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
and the Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act
(which may include an amendment to the Exchange Offer Registration Statement),
which form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of distribution
thereof within the time periods and otherwise in accordance with the provisions
hereof and
(ii) issue, upon the request of any Holder covered by any Shelf
Registration Statement contemplated by this Agreement, Exchange Notes having an
aggregate principal amount equal to the aggregate principal amount of Notes
sold pursuant to the Shelf Registration Statement and surrendered to the
Company for cancellation; and the Company shall register Exchange Notes on the
Shelf Registration Statement for this purpose.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company
and the Guarantors shall:
(i) use their respective reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading or
(B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company and
the Guarantors shall file promptly (unless excused by Section 6(d) with
respect to an event or circumstance contemplated by Section 6(c)(iii)(E))
an appropriate amendment or Prospectus Supplement to such Registration
Statement curing such defect, and, if Commission review is required, use
their respective reasonable best efforts to cause such amendment to be
declared effective as soon as practicable.
8
<PAGE> 10
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as may
be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may be;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under
the Act, and to comply fully with Rules 424, 430A and 462, as applicable,
under the Act in a timely manner; and comply with the provisions of the
Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set
forth in such Registration Statement or supplement to the Prospectus;
(iii) advise each Holder promptly and, if requested by such
Holder, confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to any applicable Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B)
of any request by the Commission for post-effective amendments to the
Registration Statement or post-effective amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement under the Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make
the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (E) if a material condition or event contemplated by the
immediately preceding clause (D) exists, has occurred or is anticipated,
but that the disclosure in the Registration Statement or Prospectus
necessary to supplement or correct the Registration Statement or
Prospectus as required by clause (D) would be detrimental to the Company
and the Guarantors, taken as a whole. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company and the Guarantors shall use
their respective reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(v) furnish to each Initial Purchaser in connection with such
exchange or sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or Prospectus
(including all
9
<PAGE> 11
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review and
comment of such Initial Purchasers in connection with such sale, if any,
for a period of at least five Business Days, and the Company will not file
any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including all
such documents incorporated by reference) to which such Holders shall
reasonably object within five Business Days after the receipt thereof. An
Initial Purchaser shall be deemed to have reasonably objected to such
filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading or fails to comply in any
material respect with the applicable requirements of the Act;
(vi) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement prior to its
effectiveness, provide copies of such document to each Initial Purchaser
in connection with such exchange or sale, if any, make the Company's and
the Guarantors' representatives available for discussion of such document
and other customary due diligence matters, and include such information in
such document prior to the filing thereof as such Initial Purchasers may
reasonably request;
(vii) in connection with such Registration Statement or any
post-effective amendment thereto subsequent to the filing thereof and
prior to its effectiveness, make available, at reasonable times, for
inspection by each Holder and any attorney or accountant retained by such
Holders, all financial and other records, pertinent corporate documents of
the Company and the Guarantors and cause the Company's and the Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, attorney or accountant; provided, however,
that such Persons shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by the Company
in writing as confidential at the time of delivery of such information
shall be kept confidential by such Persons, unless (i) disclosure of such
information is required by court or administrative order or is necessary
to respond to inquiries or regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of any
Registration Statement or the use of any prospectus referred to in this
Agreement), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by
such Person or (iv) such information becomes lawfully available to such
Person from a source other than the Company and such source lawfully
obtained such information and is not otherwise bound by a confidentiality
agreement;
(viii) if requested by any Initial Purchasers in connection
with such sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Initial Purchasers may reasonably
request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(ix) furnish to each Initial Purchaser in connection with such
exchange or sale, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);
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(x) deliver to each Initial Purchaser and each Holder without
charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons
reasonably may request; the Company and the Guarantors hereby consent to
the use (in accordance with law) of the Prospectus and any amendment or
supplement thereto by each selling Holder in connection with the offering
and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(xi) in connection with the Shelf Registration Statement, upon
the request of any Holder, enter into such agreements (including
underwriting agreements in form, scope and substance as is customary in
underwritten offerings) and take such other reasonable actions in
connection therewith in order to expedite or facilitate the disposition of
the Transfer Restricted Securities pursuant to any applicable Registration
Statement contemplated by this Agreement as may be reasonably requested by
any Holder in connection with any sale or resale pursuant to any
applicable Registration Statement. In such connection, the Company and
the Guarantors shall:
(A) upon request of any Initial Purchaser or Holder, furnish
(or in the case of paragraphs (2) and (3), use its reasonable best
efforts to cause to be furnished) to each Initial Purchaser or
Holder, upon Consummation of the Exchange Offer or upon the
effectiveness of the Shelf Registration Statement, as the case may
be:
(1) a certificate, dated such date, signed on behalf of
the Company and each Guarantor by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company and such Guarantor, confirming, as of the date
thereof, the matters set forth in Sections 6(y), 9(a) and 9(b)
of the Purchase Agreement and such other similar matters as such
Holders may reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors covering matters similar to those set
forth in Exhibit B of the Purchase Agreement and such other
matters as such Initial Purchaser or Holder may reasonably
request, and in any event including a statement to the effect
that such counsel has participated in conferences with officers
and other representatives of the Company and the Guarantors,
representatives of the independent public accountants for the
Company and the Guarantors and the Initial Purchasers at which
the contents of the Registration Statement and Prospectus were
discussed, although such counsel is not passing upon and has not
independently verified or assumed responsibility for the
accuracy, completeness or fairness of such statements; and that
such counsel advises that, on the basis of the foregoing
(relying as to materiality to the extent such counsel deems
appropriate upon the statements of officers and other
representatives of the Company and the Guarantors) and without
independent check or verification), no facts came to such
counsel's attention that caused such counsel to believe that the
applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation of the Exchange Offer,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated
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<PAGE> 13
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date and, in the case of the
opinion dated the date of Consummation of the Exchange Offer, as
of the date of Consummation, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further
that such counsel expresses no opinion or belief with respect
to, assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial
data included in any Registration Statement contemplated by this
Agreement or the related Prospectus or with respect to that part
of the Registration Statement that constitutes the Statement Of
Eligibility (Form T-1) under the TIA;
(3) an opinion, dated the date of the Consummation of the
Exchange Offer or the date of the effectiveness of the Shelf
Registration Statement, as the case may be, of Venezuelan
counsel of the Company covering matters similar to those set
forth in paragraph (f) of Section 9 of the Purchase Agreement;
and
(4) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 9(h) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by the Company
and the Guarantors pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that neither the
Company nor any Guarantor shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to
register such Transfer Restricted Securities in such denominations and
such names as the selling Holders may request at least two Business Days
prior to such sale of Transfer Restricted Securities;
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(xiv) use their respective reasonable best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xii)
above;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration Statement
covering such Transfer Restricted Securities and provide the Trustee under
the Indenture with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with The Depository
Trust Company;
(xvi) otherwise use their respective reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and
make generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) covering a twelve-month period beginning after the effective date
of the Registration Statement (as such term is defined in paragraph (c) of
Rule 158 under the Act);
(xvii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required
by this Agreement and, in connection therewith, cooperate with the Trustee
and the Holders to effect such changes to the Indenture as may be required
for such Indenture to be so qualified in accordance with the terms of the
TIA; and execute and use its best efforts to cause the Trustee to execute,
all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of Section
13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any
fact or circumstance of the kind described in Section 6(c)(iii)(D) or Section
6(c)(iii)(E) hereof (in each case, a "SUSPENSION NOTICE"), such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until (i) such Holder has received copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(iv)
hereof, or (B) such Holder is advised in writing by the Company that the use of
the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension
Notice hereby agrees that it will either (i) destroy any Prospectuses, other
than permanent file copies, then in such Holder's possession which have been
replaced by the Company with more recently dated Prospectuses or (ii) deliver
to the Company (at the Company's expense) all copies, other than permanent file
copies, then in such Holder's possession of the Prospectus covering such
Transfer Restricted Securities that was current at the time of receipt of the
Suspension Notice. Notwithstanding anything in this Agreement to the contrary,
if the Company shall issue a Suspension Notice based on an event or
circumstances contemplated by Section 1(c)(iii)(E), the Company and the
Guarantors may delay any filing with the Commission that would otherwise be
required by this Agreement to maintain the effectiveness of the Registration
Statement, to
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<PAGE> 15
amend the Registration Statement or to correct or Supplement the Prospectus,
for a period of time not to exceed 30 consecutive days from the date of the
Suspension Notice or a maximum of 60 days in any twelve-month period. Promptly
after the Company determines that the event or circumstance contemplated by
Section 6(c)(iii)(E) no longer exists, and in any event promptly after the
expiration of any delay permitted by the preceding sentence, the Company shall
prepare and file with the Commission the amendments to the Registration
Statement and supplements to the Prospectus required by Section 6(c)(i) and
Section 6(c)(ii). The time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall
be extended by a number of days equal to the number of days in the period from
and including the date of delivery of the Suspension Notice to the date of
delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantor(s)'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing
certificates for the Exchange Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company, the Guarantors and the
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing the Exchange Notes on a national securities exchange
or automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities who are tendering Notes into in the Exchange Offer and/or selling or
reselling Notes or Exchange Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf
Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel to be selected by the Initial
Purchasers.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all
losses, claims, damages, liabilities, judgments, (including without limitation,
any legal or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement
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<PAGE> 16
of a material fact contained in any Registration Statement, preliminary
prospectus or Prospectus (or any amendment or supplement thereto) provided by
the Company to any Holder or any prospective purchaser of Exchange Notes or
registered Notes, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or omission
or alleged untrue statement or omission that is based upon information relating
to any of the Holders furnished in writing to the Company by any of the
Holders.
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company and the Guarantors,
and their respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act) the Company, or the Guarantors to the same extent as the
foregoing indemnity from the Company and the Guarantors set forth in Section
8(a) above, but only with reference to information relating to such Holder
furnished in writing to the Company by such Holder expressly for use in any
Registration Statement. In no event shall any Holder, its directors, officers
or any Person who controls such Holder be liable or responsible for any amount
in excess of the amount by which the total amount received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages that such
Holder, its directors, officers or any Person who controls such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required
to assume the defense of such action pursuant to this Section 8(c), but may
employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and that, as a matter of professional responsibility, such
counsel is unable to represent both the indemnifying and indemnified party (in
which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of the indemnified party). In any such case,
the indemnifying party shall not, in connection with any one action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all indemnified parties and all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in writing
by a majority of the Holders, in the case of the parties indemnified pursuant
to Section 8(a), and by the Company and
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<PAGE> 17
Guarantors, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected in good faith without its written consent if the settlement is
entered into more than 20 Business Days after the indemnifying party shall have
received a request from the indemnified party for reimbursement for the fees
and expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request unless within 30 days after such reimbursement request is received, the
indemnifying party shall have made a good faith written challenge to the
reasonableness of the amount or nature of the reimbursement requested or
sufficiency of the documentation supporting the reimbursement requested (which
challenge shall set forth the amount or nature of the requested reimbursement
which the indemnifying party in good faith believes to be reasonable or the
basis for the good faith claims as to the insufficiency of any supporting
documentation), in which event this clause (ii) shall apply only if, and to the
extent that, such indemnifying party shall not have reimbursed the indemnified
party for the amount which is not being so challenged. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatend action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could
have been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Holders, on the other
hand, from their sale of Transfer Restricted Securities or (ii) if the
allocation provided by clause 8(d)(i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the Company
and the Guarantors, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and the
Guarantors, on the one hand, and of the Holder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or such
Guarantor, on the one hand, or by the Holder, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and judgments
referred to above shall be deemed to include, subject to the limitations set
forth in the second paragraph of Section 8(a), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
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<PAGE> 18
The Company, the Guarantors and each Holder agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
matter, including any action that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Holder, its directors, its officers or any Person, if any, who
controls such Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total received by such Holder with
respect to the sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant
to this Section 8(c) are several in proportion to the respective principal
amount of Transfer Restricted Securities held by each Holder hereunder and not
joint.
SECTION 9. RULE 144A AND RULE 144
The Company and each Guarantor agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding and during any period
in which the Company or such Guarantor (i) is not subject to Section 13 or
15(d) of the Exchange Act, to make available, upon request of any Holder, to
such Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and agree
that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantor's obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would
be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither the Company nor any Guarantor has previously
entered into any agreement granting any registration rights
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with respect to its debt securities to any Person. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's and the Guarantors' debt
securities under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case
of Section 5 hereof and this Section 10(c)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities
and (ii) in the case of all other provisions hereof, the Company has obtained
the written consent of Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities (excluding Transfer Restricted
Securities held by the Company or its Affiliates). Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose Transfer Restricted
Securities are being tendered pursuant to the Exchange Offer, and that does not
affect directly or indirectly the rights of other Holders whose Transfer
Restricted Securities are not being tendered pursuant to such Exchange Offer,
may be given by the Holders of a majority of the outstanding principal amount
of Transfer Restricted Securities subject to such Exchange Offer, and vice
versa.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or the Guarantors:
Grey Wolf, Inc.
10370 Richmond Avenue, Suite 600
Houston, Texas 77042
Telecopier No.: (713) 435-6100
Attention: Chief Financial Officer
With a copy to:
Porter & Hedges, L.L.P.
700 Louisiana Street, Suite 3500
Houston, Texas 77002
Telecopier No.: (713) 226-0600
Attention: Nick D. Nicholas
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All such notices and communications 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 mail, postage prepaid, if mailed; when
receipt acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be deemed
to permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Transfer Restricted Securities
such Person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement, including the
restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such Person shall be entitled to receive the benefits
hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
[Remainder of page is intentionally left blank.]
19
<PAGE> 21
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
GREY WOLF, INC.
By: /s/ DAVID W. WEHLMANN
---------------------
Name: David W. Wehlmann
Title: Senior Vice President and
Chief Financial Officer
GREY WOLF DRILLING COMPANY
By: /s/ DAVID W. WEHLMANN
---------------------
Name: David W. Wehlmann
Title: Senior Vice President and
Chief Financial Officer
DI ENERGY, INC.
By: /s/ DAVID W. WEHLMANN
---------------------
Name: David W. Wehlmann
Title: Senior Vice President and
Chief Financial Officer
GREY WOLF INTERNATIONAL, INC.
By: /s/ DAVID W. WEHLMANN
---------------------
Name: David W. Wehlmann
Title: Senior Vice President and
Chief Financial Officer
MURCO DRILLING CORPORATION
By: /s/ DAVID W. WEHLMANN
---------------------
Name: David W. Wehlmann
Title: Secretary
<PAGE> 22
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
LEHMAN BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ CRAIG KLAASMEYER
--------------------
Name: Craig Klaasmeyer
Title: Vice President
<PAGE> 23
EXHIBIT A
NOTICE OF FILING OF
EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guarneri (Compliance Department)
Fax: (212) 892-7272
From: Grey Wolf, Inc.
8 7/8% Senior Notes due 2007, Series B
Date: _______________, 1998
For your information only (NO ACTION REQUIRED):
Today, ___________, 199__, we filed [an Exchange Registration Statement/a
Shelf Registration Statement] with the Securities and Exchange Commission. We
currently expect this registration statement to be declared effective within
_____ business days of the date hereof.
Exhibit A
<PAGE> 24
SCHEDULE A
INITIAL GUARANTORS
<TABLE>
<CAPTION>
NAME OF GUARANTOR STATE OF INCORPORATION
----------------------------------------- ----------------------
<S> <C>
Grey Wolf Drilling Company Texas
Murco Drilling Corporation (a wholly- Delaware
owned subsidiary of Grey Wolf
Drilling Company)
Grey Wolf International, Inc. Texas
DI Energy, Inc. Texas
</TABLE>
Schedule A
<PAGE> 1
EXHIBIT 4.3
================================================================================
GREY WOLF, INC.
AND
GUARANTORS
$75,000,000
8-7/8% Senior Notes due 2007, Series B
--------------------
INDENTURE
Dated as of May 8, 1998
--------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE
Reconciliation and tie between The Trust Indenture Act as amended, and
The Indenture dated as of May 8, 1998.
<TABLE>
<CAPTION>
TIA Indenture
Section Section
------- ---------
<S> <C>
310(a)(1) ........................................... 7.10
(a)(2) ........................................... 7.10
(a)(3) ........................................... N/A
(a)(4) ........................................... N/A
(a)(5) ........................................... 7.10
(b) ........................................... 7.8; 7.10
(c) ........................................... N/A
311(a) ........................................... 7.11
(b) ........................................... 7.11
(c) ........................................... N/A
312(a) ........................................... 2.7
(b) ........................................... 12.6
(c) ........................................... 12.6
313(a) ........................................... 7.6
(b)(1) ........................................... N/A
(b)(2) ........................................... 7.6
(c) ........................................... 7.6, 12.5
(d) ........................................... 7.6
314(a) ........................................... 4.2; 4.22;
12.5
(b) ........................................... N/A
(c)(1) ........................................... 12.1, 12.2
(c)(2) .......................................... 12.1; 12.2
(c)(3) ........................................... N/A
(d) ........................................... N/A
(e) ........................................... 12.1; 12.2
(f) ........................................... N/A
315(a) ........................................... 7.1
(b) ........................................... 4.22; 7.5; 12.2
(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) ........................................... 10.5
317(a)(1) ........................................... 6.3; 6.8
(a)(2) ........................................... 6.9
(b) ........................................... 2.4
</TABLE>
C-1
<PAGE> 3
<TABLE>
<CAPTION>
TIA Indenture
Section Section
Section Section
------- ---------
<S> <C>
318(a) ........................................... 12.4
</TABLE>
N/A Means Not Applicable.
- -------------------
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
C-2
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1. Definitions and Incorporation by Reference..................................................1
SECTION 1.1. Definitions......................................................................1
SECTION 1.2. Incorporation by Reference of Trust Indenture Act...............................21
SECTION 1.3. Rules of Construction...........................................................21
ARTICLE 2. THE SENIOR NOTES...........................................................................22
SECTION 2.1. Form and Dating.................................................................22
SECTION 2.2. Execution and Authentication....................................................24
SECTION 2.3. Registrar and Paying Agent......................................................24
SECTION 2.4. Paying Agent to Hold Money in Trust.............................................25
SECTION 2.5. Computation of Interest.........................................................25
SECTION 2.6. Transfer and Exchange...........................................................25
SECTION 2.7. Holder Lists....................................................................33
SECTION 2.8. Replacement of Senior Notes.....................................................34
SECTION 2.9. Outstanding Senior Notes........................................................34
SECTION 2.10. Reserved........................................................................34
SECTION 2.11. Cancellation....................................................................34
SECTION 2.12. Payment of Interest; Interest Rights Preserved..................................35
SECTION 2.13. Authorized Denominations........................................................36
SECTION 2.14. CUSIP Number....................................................................36
SECTION 2.15. Treasury Senior Notes...........................................................36
ARTICLE 3. Redemption.................................................................................36
SECTION 3.1. Notices to Trustee..............................................................36
SECTION 3.2. Selection of Senior Notes To Be Redeemed........................................36
SECTION 3.3. Notice of Redemption............................................................37
SECTION 3.4. Effect of Notice of Redemption..................................................38
SECTION 3.5. Deposit of Redemption Price.....................................................38
SECTION 3.6. Senior Notes Redeemed in Part...................................................38
SECTION 3.7. Optional Redemption.............................................................39
ARTICLE 4. Covenants..................................................................................39
SECTION 4.1. Payment of Senior Notes.........................................................39
SECTION 4.2. Commission Reports..............................................................40
SECTION 4.3. Limitation on Indebtedness......................................................40
SECTION 4.4. Limitation on Subsidiary Indebtedness and Preferred Stock.......................40
SECTION 4.5. Limitation on Restricted Payments...............................................41
SECTION 4.6. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries..........................................................43
SECTION 4.7. Limitation on Asset Sales.......................................................43
SECTION 4.8. Limitation on Transactions with Affiliates......................................46
SECTION 4.9. Change of Control...............................................................47
SECTION 4.10. Limitation on Liens.............................................................49
SECTION 4.11. Limitation on Guarantees by Guarantors..........................................49
SECTION 4.12. Unrestricted Subsidiaries.......................................................49
SECTION 4.13. Limitation on Sale and Lease-Back Transactions..................................50
SECTION 4.14. Limitation on Line of Business..................................................50
SECTION 4.15. Limitation on Restrictive Covenants.............................................50
</TABLE>
i
<PAGE> 5
<TABLE>
<S> <C> <C>
SECTION 4.16. Limitation on Redemptions and Other Repayments of
Notes and Series A Notes........................................................50
SECTION 4.17. Maintenance of Office or Agency.................................................51
SECTION 4.18. Money for the Senior Note Payments to be Held in Trust..........................52
SECTION 4.19. Corporate Existence.............................................................52
SECTION 4.20. Maintenance of Property.........................................................52
SECTION 4.21. Payment of Taxes and Other Claims...............................................52
SECTION 4.22. Compliance Certificate; Notice of Default or Event of
Default.........................................................................53
SECTION 4.23. Further Instruments and Acts....................................................53
SECTION 4.24. Prohibition on Company and Guarantors Becoming
Investment Companies............................................................53
SECTION 4.25. Stay, Extension and Usury Laws..................................................53
ARTICLE 5 Consolidation, Merger, Conveyance, Lease or Transfer.......................................54
SECTION 5.1. Consolidation, Merger, Conveyance, Lease or Transfer............................54
SECTION 5.2. Officers' Certificate and Opinion of Counsel....................................55
SECTION 5.3. Substitution of Surviving Entity................................................55
ARTICLE 6 Defaults and Remedies......................................................................56
SECTION 6.1. Events of Default...............................................................56
SECTION 6.2. Acceleration....................................................................57
SECTION 6.3. Other Remedies..................................................................58
SECTION 6.4. Waiver of Past Defaults.........................................................59
SECTION 6.5. Control by Majority.............................................................59
SECTION 6.6. Limitation on Suits.............................................................59
SECTION 6.7. Rights of Holders to Receive Payment............................................59
SECTION 6.8. Collection Suit by Trustee......................................................60
SECTION 6.9. Trustee May File Proofs of Claim................................................60
SECTION 6.10. Priorities......................................................................61
SECTION 6.11. Undertaking for Costs...........................................................61
SECTION 6.12. Restoration of Rights and Remedies..............................................61
SECTION 6.13. Rights and Remedies Cumulative..................................................62
SECTION 6.14. Delay or Omission Not Waiver....................................................62
ARTICLE 7 Trustee....................................................................................62
SECTION 7.1. Duties of Trustee...............................................................62
SECTION 7.2. Rights of Trustee...............................................................63
SECTION 7.3. Individual Rights of Trustee....................................................64
SECTION 7.4. Trustee's Disclaimer............................................................64
SECTION 7.5. Notice of Defaults..............................................................65
SECTION 7.6. Reports by Trustee to Holders...................................................65
SECTION 7.7. Compensation and Indemnity......................................................65
SECTION 7.8. Replacement of Trustee..........................................................66
SECTION 7.9. Successor Trustee by Merger.....................................................67
SECTION 7.10. Eligibility; Disqualification...................................................67
SECTION 7.11. Preferential Collection of Claims Against Company...............................68
ARTICLE 8 Satisfaction and Discharge.................................................................68
SECTION 8.1. Satisfaction and Discharge......................................................68
SECTION 8.2. Application of Trust Money......................................................69
SECTION 8.3. Repayment to the Company........................................................69
SECTION 8.4. Reinstatement...................................................................70
</TABLE>
ii
<PAGE> 6
<TABLE>
<S> <C> <C>
ARTICLE 9 Defeasance.................................................................................70
SECTION 9.1. Company's Option to Effect Defeasance or Covenant
Defeasance......................................................................70
SECTION 9.2. Defeasance and Discharge........................................................70
SECTION 9.3. Covenant Defeasance.............................................................71
SECTION 9.4. Conditions to Defeasance or Covenant Defeasance.................................71
SECTION 9.5. Deposited Money and U. S. Government Obligations to be
Held in Trust; Miscellaneous Provisions.........................................72
SECTION 9.6. Repayment to Company............................................................73
SECTION 9.7. Reinstatement...................................................................73
ARTICLE 10 Amendments.................................................................................74
SECTION 10.1. Without Consent of Holders......................................................74
SECTION 10.2. With Consent of Holders.........................................................74
SECTION 10.3. Effect of Supplemental Indentures...............................................75
SECTION 10.4. Compliance with Trust Indenture Act.............................................75
SECTION 10.5. Revocation and Effect of Consents and Waivers...................................76
SECTION 10.6. Notation on or Exchange of Senior Notes.........................................76
SECTION 10.7. Trustee To Execute Supplemental Indentures......................................76
SECTION 10.8. Payment for Consent.............................................................77
ARTICLE 11 Guarantees.................................................................................77
SECTION 11.1. Guarantees......................................................................77
SECTION 11.2. Limitation on Liability.........................................................80
SECTION 11.3. Execution and Delivery of Guarantees............................................80
SECTION 11.4. When a Guarantor May Merge, etc.................................................80
SECTION 11.5. No Waiver.......................................................................81
SECTION 11.6. Modification....................................................................81
SECTION 11.7. Release of Guarantor............................................................81
SECTION 11.8. Execution of Supplemental Indentures for Future Guarantors......................81
ARTICLE 12 Miscellaneous..............................................................................82
SECTION 12.1. Compliance Certificates and Opinions............................................82
SECTION 12.2. Form of Documents Delivered to Trustee..........................................82
SECTION 12.3. Acts of Holders.................................................................83
SECTION 12.4. Trust Indenture Act Controls....................................................84
SECTION 12.5. Notices.........................................................................85
SECTION 12.6. Communication by Holders with Other Holders.....................................86
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar....................................86
SECTION 12.8. Payments on Business Days.......................................................86
SECTION 12.9. GOVERNING LAW...................................................................86
SECTION 12.10. No Recourse Against Others......................................................86
SECTION 12.11. Submission to Jurisdiction; Appointment of Agent for Service
of Process; Waiver of Immunities................................................86
SECTION 12.12. Successors......................................................................87
SECTION 12.13. Multiple Originals..............................................................88
SECTION 12.14. Table of Contents; Headings.....................................................88
</TABLE>
iii
<PAGE> 7
<TABLE>
<S> <C>
EXHIBIT A Form of Global Senior Note
EXHIBIT B-1 Form of Certificate For Exchange or Registration of Transfer
From U.S. Global Note To Regulation S Global Note
EXHIBIT B-2 Form of Certificate For Exchange or Registration of Transfer
From Regulation S Global Note To U.S. Global Note
EXHIBIT B-3 Form of Certificate For Exchange or Registration of Transfer
of Definitive Senior Notes
EXHIBIT B-4 Form of Certificate For Exchange or Registration of Transfer From U.S.
Global Note or Regulation S Permanent Global Note To Definitive Senior
Note
EXHIBIT C Form of Supplemental Indenture
</TABLE>
iv
<PAGE> 8
INDENTURE dated as of May 8, 1998, among Grey Wolf, Inc., a
Texas corporation (the "Company"), certain of the Company's subsidiaries
signatory hereto (each, a "Guarantor", collectively, the "Guarantors") and Chase
Bank of Texas, National Association, a national banking association, as trustee
(the "Trustee").
RECITALS
The Company has duly authorized the creation and issuance of
its 8-7/8% Senior Notes due 2007, Series B (the "Initial Senior Notes") of
substantially the tenor and amount hereinafter set forth; and to provide
therefor and for, if and when issued as further evidence of the Company's
indebtedness and in substitution for the Initial Senior Notes pursuant to this
Indenture and the Registration Rights Agreement (as defined herein), the
Company's 8-7/8% Senior Notes due 2007, Series B (the "Exchange Notes," and
together with the Initial Senior Notes, the "Senior Notes"), the Company has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Senior Notes, when executed
by the Company and authenticated and delivered by the Trustee hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid instrument of the Company and the Guarantors, in accordance
with their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Senior Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Senior Notes, as follows:
ARTICLE 1.
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a subsidiary
of such specified Person.
"Act", when used with respect to any Holder, has the meaning set forth
in Section 12.3.
1
<PAGE> 9
"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and Property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date.
"Affiliate" of any specified Person means another 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, however,
that beneficial ownership of 10% or more of the Voting Stock of a Person shall
be deemed to be control.
"Applicable Procedures" means, with respect to any transfer or exchange
of beneficial interests in a Global Note, the rules and procedures of the
Depository that apply to such transfer and exchange.
"Asset Sale Offer" has the meaning specified in Section 4.7(b).
"Asset Sale Offer Purchase Date" has the meaning specified in Section
4.7(c).
"Asset Sale Offer Purchase Price" has the meaning specified in Section
4.7(b).
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction) by the Company
or any Subsidiary to any Person other than the Company, a Guarantor or a Wholly
Owned Subsidiary, in one transaction, or a series of related transactions, of
(i) any Capital Stock of any Subsidiary (except for directors' qualifying shares
or certain minority interests sold to other Persons solely due to local law
requirements that there be more than one stockholder, but which are not in
excess of what is required for such purpose), or (ii) any other Property or
assets of the Company or any Subsidiary, other than (A) sales of drill-string
components and obsolete or worn out equipment in the ordinary course of business
or other assets that, in the Company's reasonable judgment, are no longer used
or useful in the conduct of the business of the Company and its Subsidiaries),
(B) any drilling contract, charter or other lease of Property or other assets
entered into by the Company or any Subsidiary in the ordinary course of
business, other than any Bargain Purchase Contract, (C) a Restricted Payment or
Restricted Investment permitted under the provisions of Section 4.5 of this
Indenture, (D) a Change of Control, (E) a consolidation, merger, continuance or
the disposition of all or substantially all of the assets of the Company and the
Subsidiaries, taken as a whole, in compliance with the provisions of Section
2
<PAGE> 10
5.1 of this Indenture, (F) any trade or exchange by the Company or any
Subsidiary of one or more drilling rigs for one or more other drilling rigs of
like kind owned or held by another Person, provided that (x) the Fair Value of
the rig or rigs traded or exchanged by the Company or such Subsidiary (including
cash or cash equivalents to be delivered by the Company or such Subsidiary) is
reasonably equivalent to the Fair Value of the drilling rig or rigs (together
with cash or cash equivalents to be received by the Company or such Subsidiary)
or other assets as determined by written appraisal by a nationally (or industry)
recognized investment banking firm or appraisal firm and (y) such exchange is
approved by a majority of the disinterested directors of the Company. An Asset
Sale shall include the requisition of title to, seizure of or forfeiture of any
Property or assets, or any actual or constructive total loss or an agreed or
compromised total loss of any Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, the present value (discounted
at the interest rate borne by the Senior Notes, compounded annually) of the
total obligations of the lessee for rental payments during the remaining term of
the lease (or to the first date on which the lessee is permitted to terminate
such lease without the payment of a penalty) included in such Sale and
Lease-Back Transaction (including any period for which such lease has been
extended).
"Average Life" means, as of any date, with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (x)
the number of years from such date to the date of each scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied in each case by (y) the amount of
such principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facility" means the $50,000,000 Amended and Restated
Senior Secured Revolving Credit Agreement dated December 31, 1996, as amended
and restated as of April 30, 1997, among the Company and Grey Wolf Drilling
Company, as co-borrowers, Grey Wolf International, Inc. and Murco Drilling
Corporation, as guarantors, the lending institutions party thereto, Bankers
Trust Company, as agent and administrative agent, and ING (US) Capital
Corporation, as co-agent and documentation agent, as from time to time amended.
"Bargain Purchase Contract" means a drilling contract, charter or lease
that provides for acquisition of Property by the other party to such agreement
during or at the end of the term thereof for less than Fair Market Value thereof
at the time such right to acquire such Property is granted.
"Board of Directors" means the Board of Directors of the Company or any
Subsidiary, as applicable, or any committee thereof duly authorized to act on
behalf of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Subsidiary, as
applicable, to have been duly adopted by the Board
3
<PAGE> 11
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions are authorized or
obligated by law or executive order or regulation to close in The City of New
York and Houston, Texas and, with respect to any payment of cash or delivery of
securities, the place of such payment or delivery.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to acquire
any equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any Person,
the aggregate consideration received for such Asset Sale by such Person in the
form of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof), including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to such Person or any subsidiary thereof).
"Cedel" means Cedel Bank, societe anonyme.
"Certificated Senior Notes" means Senior Notes that are substantially
in the form of the Senior Note attached hereto as Exhibit A, that do not include
the information or text called for by footnotes 1, 3 and 4 thereto.
"Change of Control" means (i) a determination by the Company that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act)
has become the direct or beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) of more than 50% of the Voting Stock of the Company other than
Permitted Holders; (ii) the Company is merged with or into or consolidated with
another corporation and, immediately after giving effect to the merger or
consolidation, less than 50% of the outstanding voting securities entitled to
vote generally in the election of directors or persons who serve similar
functions of the surviving or resulting entity are then beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by (x)
the stockholders of the Company immediately prior to such merger or
consolidation, or (y) if the record
4
<PAGE> 12
date has been set to determine the stockholders of the Company entitled to vote
on such merger or consolidation, the stockholders of the Company as of such a
record date; (iii) the Company, either individually or in conjunction with one
or more Subsidiaries, sells, conveys, transfers or leases, or the Subsidiaries
sell, convey, transfer or lease, all or substantially all of the assets of the
Company or the Company and the Subsidiaries, taken as a whole (either in one
transaction or a series of related transactions), including Capital Stock of the
Subsidiaries, to any Person (other than a Wholly Owned Subsidiary); (iv) the
liquidation or dissolution of the Company; or (v) the first day on which a
majority of the individuals who constitute the Board of Directors of the Company
are not Continuing Directors.
"Change of Control Offer" has the meaning specified in Section 4.9(a).
"Change of Control Payment Date" has the meaning specified in Section
4.9(b)(ii).
"Change of Control Purchase Price" has the meaning specified in Section
4.9(a).
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act, or
if at any time after the execution of this instrument, such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company and its consolidated Subsidiaries for the four fiscal
quarters for which financial information in respect thereof is available
immediately prior to the applicable Transaction Date (the "Determination
Period") to (ii) the aggregate Consolidated Interest Expense of the Company and
its consolidated Subsidiaries that is anticipated to accrue during a period
consisting of the fiscal quarter in which the Transaction Date occurs and the
three fiscal quarters immediately subsequent thereto (based upon the pro forma
amount and maturity of, and interest payments in respect of, Indebtedness of the
Company and its consolidated Subsidiaries expected by the Company to be
outstanding on the Transaction Date), assuming for the purposes of this
measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as of
the Transaction Date, provided that if the Company or any of its consolidated
Subsidiaries is a party to any Interest Swap Obligation that would have the
effect of changing the interest rate on any Indebtedness of the Company or any
of its consolidated Subsidiaries for such four-quarter period (or a portion
thereof), the resulting rate shall be used for
5
<PAGE> 13
such four-quarter period or portion thereof; provided, further, that any
Consolidated Interest Expense of the Company with respect to Indebtedness
incurred or retired by the Company or any of its Subsidiaries during the fiscal
quarter in which the Transaction Date occurs shall be calculated as if such debt
was incurred or retired on the first day of the fiscal quarter in which the
Transaction Date occurs; provided, further, that if the transaction giving rise
to the need to calculate the Consolidated Interest Coverage Ratio would have the
effect of increasing or decreasing EBITDA in the future and if such increase or
decrease is readily quantifiable and is attributable to such transaction, EBITDA
shall be calculated on a pro forma basis as if such transaction had occurred on
the first day of the four fiscal quarters referred to in clause (i) of this
definition, and if, during the same four fiscal quarters, (x) the Company or any
of its consolidated Subsidiaries shall have engaged in any Asset Sale, EBITDA
for such period shall be reduced by an amount equal to the EBITDA (if positive),
or increased by an amount equal to the EBITDA (if negative), directly
attributable to the assets which are the subject of such Asset Sale for such
period calculated on a pro forma basis as if such Asset Sale and any related
retirement of Indebtedness had occurred on the first day of such period or (y)
after the Series A Issue Date, the Company or any of its consolidated
Subsidiaries shall have acquired any material assets other than in the ordinary
course of business, EBITDA and Consolidated Interest Expense shall be calculated
on a pro forma basis as if such acquisition had occurred on the first day of
such period.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication (A) the sum of (i) the aggregate amount of cash
and noncash interest expense (including capitalized interest) of such Person and
its subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP in respect of Indebtedness (including, without limitation,
(v) any amortization of debt discount, (w) net costs associated with Interest
Swap Obligations (including any amortization of discounts), (x) the interest
portion of any deferred payment obligation calculated in accordance with the
effective interest method, (y) all accrued interest and (z) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bankers acceptances or similar facilities) paid or accrued, or scheduled to be
paid or accrued, during such period; (ii) dividends on Preferred Stock or
Redeemable Stock of such Person (and Preferred Stock or Redeemable Stock of its
subsidiaries if paid to a Person other than such Person or its subsidiaries)
declared and payable in cash; (iii) the portion of any rental obligation of such
Person or its subsidiaries in respect of any Capital Lease Obligation allocable
to interest expense in accordance with GAAP; (iv) the portion of any rental
obligation of such Person or its subsidiaries in respect of any Sale and
Lease-Back Transaction allocable to interest expense (determined as if such were
treated as a Capital Lease Obligation); and (v) to the extent any debt of any
other Person is guaranteed by such Person or any of its subsidiaries, the
aggregate amount of interest paid, accrued or scheduled to be paid or accrued,
by such other Person during such period attributable to any such debt, less (B)
to the extent included in (A) above, amortization or write-off of deferred
financing costs of such Person and its subsidiaries during such period and any
charge related or any premium or penalty paid in connection with redeeming or
retiring any Indebtedness
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<PAGE> 14
of such Person and its subsidiaries prior to its stated maturity; in the case of
both (A) and (B) above, after elimination of intercompany accounts among such
Person and its subsidiaries and as determined in accordance with GAAP. For
purposes of clause (ii) above, dividend requirements attributable to any
Preferred Stock or Redeemable Stock shall be deemed to be an amount equal to the
amount of dividend requirements on such Preferred Stock or Redeemable Stock
times a fraction, the numerator of which is one, and the denominator of which is
one minus the applicable combined federal, state, local and foreign income tax
rate of the Company and its Subsidiaries (expressed as a decimal), on a
consolidated basis, for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, provided that there shall be excluded therefrom, without duplication,
(i) any net income of any Unrestricted Subsidiary, except that the Company's or
any Subsidiary's interest in the net income of such Unrestricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash or cash equivalents actually distributed by such
Unrestricted Subsidiary during such period to the Company or a Subsidiary as a
dividend or other distribution, (ii) gains and losses, net of taxes, from Asset
Sales or reserves relating thereto, (iii) the net income of any Person that is
not a subsidiary or that is accounted for by the equity method of accounting
which shall be included only to the extent of the amount of dividends or
distributions paid to such Person or its subsidiaries, (iv) items (but not loss
items) classified as extraordinary, unusual or nonrecurring (other than the tax
benefit, if any, of the utilization of net operating loss carryforwards or
alternative minimum tax credits), (v) the net income (but not net loss) of any
Person acquired by such specified Person or any of its subsidiaries in a
pooling-of-interests transaction for any period prior to the date of such
acquisition, (vi) any gain or loss, net of taxes, realized on the termination of
any employee pension benefit plan, (vii) the net income (but not net loss) of
any subsidiary of such specified Person to the extent that the transfer to that
Person of that income is not at the time permitted, directly or indirectly, by
any means (including by dividend, distribution, advance or loan or otherwise),
by operation of the terms of its charter or any agreement with a Person other
than with such specified Person, instrument held by a Person other than by such
specified Person, judgment, decree, order, statute, law, rule or governmental
regulations applicable to such subsidiary or its stockholders, except for any
dividends or distributions actually paid by such subsidiary to such Person, and
(viii) with regard to a non-Wholly Owned Subsidiary, any aggregate net income
(or loss) in excess of such Person's or such subsidiary's pro rata share of such
non-Wholly Owned Subsidiary's net income (or loss).
"Consolidated Net Worth" of any Person means, as of any date, the sum
of the Capital Stock and additional paid-in capital plus retained earnings (or
minus accumulated deficit) of such Person and its subsidiaries on a consolidated
basis at such date, each item determined in accordance with GAAP, less amounts
attributable to Redeemable Stock of such Person or any of its subsidiaries.
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<PAGE> 15
"Continuing Director" means an individual who (i) is a member of the
Board of Directors of the Company and (ii) either (A) was a member of the Board
of Directors of the Company on the Series A Issue Date or (B) whose nomination
for election or election to the Board of Directors of the Company was approved
by vote of at least a majority of the directors then still in office who were
either directors on the Series A Issue Date or whose election or nomination for
election was previously so approved.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 600 Travis Street, Suite 1150, Houston, Texas 77002.
"Covenant Defeasance" has the meaning specified in Section 9.3.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to protect
against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition the occurrence of which is,
or after notice or the passage time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.12.
"Defeasance" has the meaning specified in Section 9.2.
"Depositary" means The Depository Trust Company, its nominees and their
respective successors.
"Depositary" means, with respect to the Senior Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.3 hereof
as the Depositary with respect to the Senior Notes, until a successor shall have
been appointed and become such Depositary pursuant to the applicable provision
of this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Determination Period" has the meaning specified under clause (i) of
the definition of "Consolidated Interest Coverage Ratio."
"DTC" has the meaning specified in Section 2.3.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus to the extent
reflected in the income statement of such Person
8
<PAGE> 16
for such period from which Consolidated Net Income is determined, without
duplication, (i) Consolidated Interest Expense, (ii) income tax expense, (iii)
depreciation expense, (iv) amortization expense, (v) any charge related to any
premium or penalty paid in connection with redeeming or retiring any
Indebtedness prior to its stated maturity, (vi) any other non-cash charges and
(vii) to the extent not otherwise covered by the adjustments contained in the
proviso to this definition, non-recurring charges of approximately $6.1 million
incurred during 1996 in employment severance costs, exit costs attributable to
its exiting Argentina and Mexico and other non-recurring charges, all as
described in the Company's Form 10-K for the year ended December 31, 1996 and
minus, to the extent reflected in such income statement, any noncash credits
that had the effect of increasing Consolidated Net Income of such Person for
such period; provided that for purposes of determining EBITDA with respect to
the Company, Consolidated Net Income shall exclude any net income or loss for
the year ended December 31, 1996 associated with the Company's Argentine or
Mexican divisions.
"Euroclear" means the Euroclear System for which Morgan Guaranty Trust
Company of New York, Brussels office, is the operator and depositary.
"Event of Default" has the meaning specified in Section 6.1.
"Excess Proceeds" has the meaning specified in Section 4.7(b).
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Exchange Global Note" means one or more Global Notes that do not and
are not required to bear the Private Placement Legend.
"Exchange Notes" has the meaning set forth in the Recitals to this
Indenture and more particularly means any of the Senior Notes authenticated and
delivered under this Indenture pursuant to the Exchange Offer.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Exchange Notes for
Initial Senior Notes.
"Fair Market Value" means, with respect to consideration received or to
be received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Fair Value" means, with respect to any asset or Property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing
9
<PAGE> 17
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction.
"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
("AICPA") and statements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be designated by the AICPA, that
are applicable to the circumstances as of the date of determination; provided,
however, that all calculations made for purposes of determining compliance with
the provisions set forth in this Indenture shall utilize GAAP in effect at the
Series A Issue Date.
"Global Note" or "Global Senior Note" means, individually and
collectively, the Regulation S Global Notes, the U.S. Global Notes and the
Exchange Global Note.
"Grey Wolf Acquisition" means the agreement to merge Grey Wolf into
Drillers, Inc. pursuant to an Agreement and Plan of Merger dated March 7, 1997,
by and among the Company, Drillers, Inc. and Grey Wolf, as such may be amended
to the Issue Date.
"Grey Wolf" means Grey Wolf Drilling Company, a Texas corporation.
"Guarantee" means an unconditional guaranty of the Senior Notes given
by any Subsidiary pursuant to the provisions of Article 11 of this Indenture.
"Guarantor" means Grey Wolf Drilling Company, Grey Wolf International,
Inc., Murco Drilling Corporation and DI Energy Inc., each a Texas corporation
and a Subsidiary, and each other Subsidiary of the Company that is required to
guarantee the Company's Obligations under the Senior Notes and this Indenture
pursuant to the provisions of Article 11 of this Indenture and any other
Subsidiary of the Company that executes a supplemental indenture in which such
Subsidiary agrees to guarantee the Company's Obligations under the Senior Notes
and this Indenture.
"Holder" means the Person in whose name a Senior Note is registered on
the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, suffer to exist, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "incurrence," "incurred," "incurrable" and "incurring" shall
have meanings correlative to the foregoing); provided that a change in GAAP that
results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed an incurrence of such Indebtedness.
Indebtedness otherwise incurred by a Person before it becomes a Subsidiary shall
be deemed to have been incurred at the time at which it becomes a Subsidiary.
10
<PAGE> 18
"Indebtedness" as applied to any Person means, at any time, without
duplication, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including, without limitation,
any such obligations incurred in connection with acquisition of Property, assets
or businesses, excluding accounts payable made in the ordinary course of
business which are not more than 90 days overdue or which are being contested in
good faith and by appropriate proceedings; (iii) any obligation of such Person
for all or any part of the purchase price of Property or for the cost of
Property constructed or of improvements thereto (including any obligation under
or in connection with any letter of credit related thereto), other than accounts
payable incurred in respect of Property and services purchased in the ordinary
course of business which are no more than 90 days overdue or which are being
contested in good faith and by appropriate proceedings; (iv) any obligation of
such Person upon which interest charges are customarily paid (other than
accounts payable incurred in the ordinary course of business); (v) any
obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property; (vi) any obligation of such Person
issued or assumed as the deferred purchase price of Property (other than
accounts payable incurred in the ordinary course of business which are no more
than 90 days overdue or which are being contested in good faith and by
appropriate proceedings); (vii) any Capital Lease Obligation or Attributable
Indebtedness pursuant to any Sale and Lease-Back Transaction of such Person;
(viii) any obligation of any other Person secured by (or for which the obligee
thereof has an existing right, contingent or otherwise, to be secured by) any
Lien on Property owned or acquired, whether or not any obligation secured
thereby has been assumed, by such Person; (ix) any obligation of such Person in
respect of any letter of credit supporting any obligation of any other Person;
(x) the maximum fixed repurchase price of any Redeemable Stock of such Person
(or if such Person is a subsidiary, any Preferred Stock of such Person); (xi)
the notional amount of any Interest Swap Obligation or Currency Hedge Obligation
of such Person at the time of determination; and (xii) any obligation which is
in economic effect a guarantee, regardless of its characterization (other than
an endorsement in the ordinary course of business), with respect to any
Indebtedness of another Person, to the extent guaranteed. For purposes of the
preceding sentence, the maximum fixed repurchase price of any Redeemable Stock
or subsidiary Preferred Stock that does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Stock or
subsidiary Preferred Stock as if such Redeemable Stock or subsidiary Preferred
Stock were repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; provided, however, that if such Redeemable
Stock or subsidiary Preferred Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Redeemable Stock or subsidiary
Preferred Stock. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability of any guarantees at such date;
provided that for purposes of calculating the amount of any non-interest bearing
or other discount security, such Indebtedness shall be deemed to be the
principal amount thereof that would be shown on the balance sheet of the issuer
dated such date prepared in accordance with GAAP but
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<PAGE> 19
that such security shall be deemed to have been incurred only on the date of the
original issuance thereof.
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Indenture, and any such supplemental indenture,
respectively.
"Indirect Participant" means a Person who holds an interest through a
Participant.
"Indrillers" means INDRILLERS, L.L.C., a Michigan limited liability
company.
"Initial Senior Notes" has the meaning set forth in the Recitals to
this Indenture and more particularly means any of the Senior Notes authenticated
and delivered under this Indenture other than Exchange Notes.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Senior Notes, which date shall be January 1 and July 1 of each
year, commencing July 1, 1998.
"Interest Swap Obligation" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its subsidiaries'
exposure to fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct, indirect or
contingent investment in another Person, whether by means of a share purchase,
capital contribution, loan, advance (other than advances to employees for moving
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or similar credit extension constituting Indebtedness of
such other Person, and any guarantee of Indebtedness of any other Person;
provided that the term "Investment" shall not include any transaction involving
the purchase or other acquisition (including by way of merger) of Property
(including Capital Stock) by the Company or any Subsidiary in exchange for
Capital Stock (other than Redeemable Stock) of the Company. The amount of any
Person's Investment shall be the original cost of such Investment to such
Person, plus the cost of all additions thereto paid by such Person, and minus
the amount of any portion of such Investment repaid to such Person in cash as a
repayment of principal or a return of capital, as the case may be, but without
any other adjustments for increases or decreases in value, or write-ups,
writedowns, or write-offs with respect to such Investment. In determining the
amount of any Investment involving a transfer of any Property or assets other
than cash, such Property or assets shall be valued at its Fair Value at the time
of such transfer as determined in good faith by the board of directors (or
comparable body) of the Person making such transfer. The Company shall be deemed
to make an
12
<PAGE> 20
"Investment" in the amount of the Fair Value of the Assets of a Subsidiary at
the time such Subsidiary is designated an Unrestricted Subsidiary.
"Issue Date" means the date on which the Senior Notes are first
authenticated and delivered under this Indenture.
"Joint Venture" means any Person (other than a Guarantor) designated as
such by a Board Resolution of the Company and as to which (i) the Company, any
Guarantor or any Joint Venture owns less than 50% of the Capital Stock of such
Person; (ii) no more than 10 unaffiliated Persons own of record any Capital
Stock of such Person; (iii) at all times, each such Person owns the same
proportion of each class of Capital Stock of such Person outstanding at such
time; (iv) no Indebtedness of such Person is or becomes outstanding other than
Non-Recourse Indebtedness; (v) there exist no consensual encumbrances or
restrictions on the ability of such Person to (x) pay, directly or indirectly,
dividends or make any other distributions in respect of its Capital Stock to the
holders of its Capital Stock or (y) pay any Indebtedness or other obligation
owed to the holders of its Capital Stock or (z) make any Investment in the
holders of its Capital Stock, in each case other than the types of consensual
encumbrances or restrictions that would be permitted under the provisions of
Section 4.6 of this Indenture if such Person were a Subsidiary; and (vi) the
business engaged in by such Person is a Related Business.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Maturity" means the date on which the principal of a Senior Note
becomes due and payable as provided therein or in this Indenture, whether at the
Stated Maturity or the Change of Control Payment Date or purchase date
established pursuant to the terms of this Indenture for an Asset Sale Offer or
by declaration of acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc., or, if Moody's
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
successor Person, such successor person; provided that if Moody's Investors
Service, Inc. ceases rating the specified debt securities and its ratings
business with respect thereto shall not have been transferred to any successor
Person or such successor Person is S&P, then "Moody's" shall mean any other
nationally recognized rating agency (other than S&P) that rates the specified
debt securities selected in good faith by the Board of Directors of the Company
in a Board Resolution.
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<PAGE> 21
"Net Available Proceeds" means, (a) as to any Asset Sale (other than a
Bargain Purchase Contract), the Cash Proceeds therefrom, net of all legal and
title expenses, commissions and other fees and expenses incurred, and all
Federal, state, foreign, recording and local taxes payable as a consequence of
such Asset Sale, net of all payments made to any Person other than the Company
or a Subsidiary on any Indebtedness which is secured by such assets, in
accordance with the terms of any Lien upon or with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale
and, as for any Asset Sale by a Subsidiary, net of the equity interest in such
Cash Proceeds of any holder of Capital Stock of such Subsidiary (other than the
Company, any other Subsidiary or any Affiliate of the Company or any such other
Subsidiary) and (b) as to any Bargain Purchase Contract, an amount equal to (i)
that portion of the rental or other payment stream arising under a Bargain
Purchase Contract that represents an amount in excess of the Fair Market Value
of the rental or other payments with respect to the pertinent Property or other
asset and (ii) the Cash Proceeds from the sale of such Property or other asset,
net of the amount set forth in clause (a) above, in each case as and when
received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of an Unrestricted Subsidiary or a foreign Subsidiary not
constituting a Guarantor as to which (a) neither the Company nor any other
Subsidiary (other than an Unrestricted Subsidiary or a Subsidiary of such
foreign Subsidiary) (i) provides credit support including any undertaking,
agreement or instrument which would constitute Indebtedness or (ii) is directly
or indirectly liable for such Indebtedness and (b) no default with respect to
such Indebtedness (including any rights which the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary or such foreign
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or its other Subsidiaries to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Obligations" means, with respect to any Indebtedness, any obligation
thereunder, including, without limitation, principal, premium and interest
(including post petition interest thereon), penalties, fees, costs, expenses,
indemnifications, reimbursements, damages and other liabilities.
"Obligors" means the Company and the Guarantors, collectively;
"Obligor" means the Company or any Guarantor.
"Offering Memorandum" means the Offering Memorandum, dated May 5, 1998,
relating to the Company's offering and placement of the Initial Senior Notes.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President, the Chief Executive
Officer, the Chief Operating Officer or a Vice President, and by the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company or a
Subsidiary (each,
14
<PAGE> 22
an "Officer") and delivered to the Trustee, which shall comply with this
Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company, a Guarantor or the Trustee.
"Order" means a written order signed in the name of the Company by an
officer and delivered to the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person
who has an account with DTC, Euroclear or Cedel, respectively (and, with respect
to DTC, shall include Euroclear and Cedel).
"Paying Agent" has the meaning specified in Section 2.3.
"Permitted Holders" means Norex Industries, Inc., Somerset Capital
Partners, Mike L. Mullen and Roy T. Oliver, Jr. and their respective Affiliates.
"Permitted Indebtedness" means (a) Indebtedness of the Company under
the Senior Notes and the Series A Notes; (b) Indebtedness (and any guarantee
thereof) under one or more credit or revolving credit facilities with a bank or
syndicate of banks or financial institutions or other lenders, including,
without limitation, the Bank Credit Facility, as such may be amended, modified,
revised, extended, replaced, or refunded from time to time, in an aggregate
principal amount at any one time outstanding not to exceed $100,000,000, less
any amounts derived from Asset Sales and applied to the required permanent
reduction of Senior Debt (and a permanent reduction of the related commitment to
lend or amount available to be reborrowed in the case of a revolving credit
facility) under such credit facilities as contemplated by the provisions of
Section 4.7 of this Indenture (provided that the aggregate principal amount of
Indebtedness deemed to be incurred under this clause (b) shall be the same
amount as is deemed incurred under clause (b) of the definition of the term
"Permitted Indebtedness" in the Series A Indenture); (c) Indebtedness of the
Company or any Subsidiary under Interest Swap Obligations, provided that (i)
such Interest Swap Obligations are related to payment obligations on
Indebtedness otherwise permitted under the provisions of Section 4.3 of this
Indenture and (ii) the notional principal amount of such Interest Swap
Obligations does not exceed the principal amount of the Indebtedness to which
such Interest Swap Obligations relate; (d) Indebtedness of the Company or any
Subsidiary under Currency Hedge Obligations, provided that (i) such Currency
Hedge Obligations are related to payment obligations on Indebtedness otherwise
permitted under the provisions of Section 4.3 of this Indenture or to the
foreign currency cash flows reasonably expected to be generated by the Company
and the Subsidiaries and (ii) the notional principal amount of such Currency
Hedge Obligations does not exceed the principal amount of the Indebtedness and
the amount of the foreign currency cash flows to which such Currency Hedge
Obligations relate; (e) Indebtedness of the Company or any Subsidiary
outstanding on the Series A Issue Date and listed on a schedule attached to the
Series A
15
<PAGE> 23
Indenture; (f) (1)the Guarantees of the Senior Notes and the Series A Notes (and
any assumption of the Obligations guaranteed thereby) and (2) Indebtedness of a
Guarantor constituting a guarantee of Indebtedness of the Company incurred in
compliance with Section 4.3 of this Indenture (and any assumption of the
Obligations guaranteed thereby); (g) Indebtedness of the Company or any
Subsidiary in respect of bid performance bonds, surety bonds, appeal bonds and
letters of credit or similar arrangements issued for the account of the Company
or any Subsidiary, in each case in the ordinary course of business and other
than for an obligation for money borrowed; (h) Indebtedness of the Company to a
Guarantor or other Wholly Owned Subsidiary and Indebtedness of a Guarantor or
other Wholly Owned Subsidiary to the Company or another Guarantor or other
Wholly Owned Subsidiary; provided that upon any subsequent issuance or transfer
of any Capital Stock or any other event which results in any such Guarantor
ceasing to be a Guarantor or such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary, as the case may be, or any other subsequent transfer of any
such Indebtedness (except to the Company or a Guarantor or other Wholly Owned
Subsidiary), such Indebtedness shall be deemed, in each case, to be incurred and
shall be treated as an incurrence for purposes of Section 4.3 of this Indenture
at the time the Guarantor in question ceased to be a Guarantor or the Wholly
Owned Subsidiary in question ceased to be a Wholly Owned Subsidiary; (i)
Subordinated Indebtedness of the Company to an Unrestricted Subsidiary for money
borrowed; (j) Indebtedness of the Company in connection with a purchase of the
Senior Notes and the Series A Notes pursuant to a Change of Control Offer under
this Indenture and the Series A Indenture, provided that the aggregate principal
amount of such Indebtedness does not exceed 101% of the aggregate principal
amount at Stated Maturity of the Senior Notes and the Series A Notes purchased
pursuant to such Change of Control Offer; provided, further, that such
Indebtedness (A) has an Average Life equal to or greater than the remaining
Average Life of the Senior Notes and the Series A Notes and (B) does not mature
prior to one year following the Stated Maturity of the Senior Notes and the
Series A Notes; (k) Permitted Refinancing Indebtedness; (l) Permitted Subsidiary
Refinancing Indebtedness; and (m) additional Indebtedness incurred after the
Series A Issue Date in an aggregate principal amount not in excess of $2,500,000
at any one time outstanding (provided that the aggregate principal amount of
Indebtedness deemed to be incurred under this clause (m) shall be the same
amount as is deemed incurred under clause (m) of the definition of the term
"Permitted Indebtedness" in the Series A Indenture). So as to avoid duplication
in determining the amount of Permitted Indebtedness under any clause of this
definition, guarantees permitted to be incurred pursuant to this Indenture of,
or Obligations permitted to be incurred pursuant to this Indenture in respect of
letters of credit supporting, Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by a commercial bank organized in the United
States with final maturities of one year or less issued by commercial banks
organized in the United States having capital and surplus in excess of
$300,000,000; (b) commercial paper issued by any corporation, if such commercial
paper has credit ratings of at least "A-1" or its
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equivalent by S&P and at least "P-I" or its equivalent by Moody's; (c) U.S.
Government Obligations with a maturity of four years or less; (d) repurchase
obligations for instruments of the type described in clause (c) with any bank
meeting the qualifications specified in clause (a) above; (e) shares of money
market mutual or similar funds having assets in excess of $100,000,000; (f)
payroll advances in the ordinary course of business; (g) other advances and
loans to officers and employees of the Company or any Subsidiary, so long as the
aggregate principal amount of such advances and loans does not exceed $500,000
at any one time outstanding; (h) Investments represented by that portion of the
proceeds from Asset Sales that is not required to be Cash Proceeds by Section
4.7 of this Indenture; (i) Investments made by the Company in Guarantors or in
its other Wholly Owned Subsidiaries (or any Person that will be a Wholly Owned
Subsidiary as a result of such Investment) or by a Subsidiary in the Company or
in one or more Guarantors or other Wholly Owned Subsidiaries (or any Person that
will be a Wholly Owned Subsidiary as a result of such Investment); (j)
Investments in stock, obligations or securities received in settlement of debts
owing to the Company or any 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 Subsidiary, in each case as to debt owing to the
Company or any Subsidiary that arose in the ordinary course of business of the
Company or any such Subsidiary; (k) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by a commercial bank organized in the United
States with final maturities of one year or less and in an aggregate amount not
to exceed $5,000,000 at any one time outstanding with a commercial bank
organized in the United States having capital and surplus in excess of
$75,000,000; (l) Venezuelan and other foreign bank deposits and cash equivalents
in jurisdictions where the Company or its Subsidiaries are then actively
conducting business; (m) Investments in Grey Wolf pursuant to the Grey Wolf
Acquisition agreement; (n) Interest Swap Obligations with respect to any
floating rate Indebtedness that is permitted by the terms of this Indenture to
be outstanding; (o) Currency Hedge Obligations, provided that such Currency
Hedge Obligations constitute Permitted Indebtedness permitted by clause (d) of
the definition thereof; (p) Investments in prepaid expenses, negotiable
instruments held for collection and lease, utility, worker's compensation and
performance and other similar deposits in the ordinary course of business; and
(q) Investments pursuant to any agreement or obligation of the Company or any
Subsidiary in effect on the Series A Issue Date and listed on a schedule
attached to the Series A Indenture.
"Permitted Liens" means (a) Liens in existence on the Series A Issue
Date; (b) Liens created for the benefit of the Senior Notes, the Guarantees, the
Series A Notes and/or any guarantees thereof; (c) Liens on Property of a Person
existing at the time such Person is merged or consolidated with or into the
Company or a Subsidiary (and not incurred as a result of, or in anticipation of,
such transaction), provided that any such Lien relates solely to such Property;
(d) Liens on Property existing at the time of the acquisition thereof (and not
incurred as a result of, or in anticipation of such transaction), provided that
any such Lien relates solely to such Property; (e) Liens incurred or pledges and
deposits made in connection with worker's compensation, unemployment insurance
and
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other social security benefits, statutory obligations, bid, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (f) Liens imposed by law or arising by operation of
law, including without limitation, landlords', mechanics', carriers',
warehousemen's, materialmen's, suppliers' and vendors Liens and Liens for
master's and crew's wages and other similar maritime Liens, and incurred in the
ordinary course of business for sums not delinquent or being contested in good
faith, if such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made with respect thereof; (g) zoning
restrictions, easements, licenses, covenants, reservations, restrictions on the
use of real property and defects, irregularities and deficiencies in title to
real property that do not, individually or in the aggregate, materially affect
the ability of the Company or any Subsidiary to conduct its business presently
conducted; (h) Liens for taxes or assessments or other governmental charges or
levies not yet due and payable, or the validity of which is being contested by
the Company or a Subsidiary in good faith and by appropriate proceedings upon
stay of execution or the enforcement thereof and for which adequate reserves in
accordance with GAAP or other appropriate provision has been made; (i) Liens to
secure Indebtedness incurred for the purpose of financing all or a part of the
purchase price or construction cost of Property acquired or constructed after
the Series A Issue Date, provided that (l) the principal amount of Indebtedness
secured by such Liens shall not exceed 100% of the lesser of cost or Fair Market
Value of the Property so acquired, upgraded or constructed plus transaction
costs related thereto, (2) such Liens shall not encumber any other assets or
Property of the Company or any Subsidiary (other than the proceeds thereof and
accessions and upgrades thereto) and (3) such Liens shall attach to such
Property within 120 days of the date of the completion of the construction or
acquisition of such Property; (j) Liens securing Capital Lease Obligations,
provided, further, that such Liens secure Capital Lease Obligations which, when
combined with (l) the outstanding secured Indebtedness of the Company and its
Subsidiaries (other than Indebtedness secured by Liens described under clauses
(b) and (i) hereof) and (2) the aggregate principal amount of all other Capital
Lease Obligations of the Company and Subsidiaries, does not exceed $5,000,000 at
any one time outstanding; (k) Liens to secure any extension, renewal,
refinancing or refunding (or successive extensions, renewals, refinancings or
refundings), in whole or in part, of any Indebtedness secured by Liens referred
to in the foregoing clauses (a), (c) and (d), provided, further, that such Lien
does not extend to any other Property of the Company or any Subsidiary and the
principal amount of the Indebtedness secured by such Lien is not increased; (l)
any charter or lease; (m) leases or subleases of real property to other Persons;
(n) Liens securing Permitted Indebtedness described in clause (b) of the
definition thereof; (o) judgment liens not giving rise to an Event of Default so
long as any appropriate legal proceedings which may have been 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; (p) rights
of off-set of banks and other Persons; and (q) liens in favor of the Company.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company,
incurred in exchange for, or the net proceeds of which are used to renew,
extend, refinance, refund or
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repurchase, outstanding Indebtedness of the Company which outstanding
Indebtedness was incurred in accordance with, or is otherwise permitted by, the
terms of clauses (a) and (e) of the definition of "Permitted Indebtedness,"
provided that (i) if the Indebtedness being renewed, extended, refinanced,
refunded or repurchased is pari passu with or subordinated in right of payment
(without regard to its being secured) to the Senior Notes, then such new
Indebtedness is pari passu with or subordinated in right of payment (without
regard to its being secured) to, as the case may be, the Senior Notes at least
to the same extent as the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, (ii) such new Indebtedness is scheduled to mature later
than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (iii) such new Indebtedness has an Average Life at the time such
Indebtedness is incurred that is greater than the Average Life of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, and
(iv) such new Indebtedness is in aggregate principal amount (or, if such
Indebtedness is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom is) not in excess of the aggregate
principal amount then outstanding of the Indebtedness being renewed, extended,
refinanced, refunded or repurchased (or if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased was issued at a price less than
the principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP) plus the amount of
reasonable fees, expenses and premium, if any, incurred by the Company or such
Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of
any Subsidiary, incurred in exchange for, or the net proceeds of which are used
to renew, extend, refinance, refund or repurchase, outstanding Indebtedness of
such Subsidiary which outstanding Indebtedness was incurred in accordance with,
or is otherwise permitted by, the terms of clauses (e) and (f) of the definition
of "Permitted Indebtedness," provided that (i) if the Indebtedness being
renewed, extended, refinanced, refunded or repurchased is pari passu with or
subordinated in right of payment (without regard to its being secured) to the
Guarantee of such Subsidiary, then such new Indebtedness is pari passu with or
subordinated in right of payment (without regard to its being secured) to, as
the case may be, the Guarantee of such Subsidiary at least to the same extent as
the Indebtedness being renewed, extended, refinanced refunded or repurchased,
(ii) such new Indebtedness is scheduled to mature later than the Indebtedness
being renewed, extended, refinanced, refunded or repurchased, (iii) such new
Indebtedness has an Average Life at the time such Indebtedness is incurred that
is greater than the Average Life of the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, and (iv) such new Indebtedness is in an
aggregate principal amount (or, if such Indebtedness is issued at a price less
than the principal amount thereof, the aggregate amount of gross proceeds
therefrom is) not in excess of the aggregate principal amount then outstanding
of the Indebtedness being renewed, extended, refinanced, refunded or repurchased
(or if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP) plus the amount of reasonable fees, expenses and
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premium, if any, incurred by the Company or such Subsidiary in connection
therewith.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends and/or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of at least one other class of such Person.
"Private Placement Layered" has the meaning specified in Section
2.6(e)(i).
"Proceeding" has the meaning specified in Section 12.11(a).
"Process Agent" has the meaning specified in Section 12.11(a).
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.
"Qualified Equity Offering" means an offering made after the Series A
Issue Date of Capital Stock (other than Redeemable Stock) of the Company for
cash, whether pursuant to an effective registration statement under the
Securities Act or pursuant to an available exemption from registration under the
Securities Act.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Record Date" means, for the interest payable on any Interest Payment
Date, the date specified in Section 2.12.
"Redeemable Stock" means, with respect to any Person, any equity
security that by its terms or otherwise is required to be redeemed, or is
redeemable at the option of the holder thereof, at any time prior to one year
following the Stated Maturity of the Senior Notes or is exchangeable into
Indebtedness of such Person or any of its subsidiaries.
"Redemption Date" means, when used with respect to any Senior Note or
part thereof to be redeemed hereunder, the date fixed for redemption of such
Senior Notes pursuant to the terms of the Senior Notes and this Indenture.
"Redemption Price" means, when used with respect to any Senior Note or
part thereof to be
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redeemed hereunder, the price fixed for redemption of such Senior Note pursuant
to the terms of the Senior Notes and this Indenture, plus accrued and unpaid
interest thereon, if any to the Redemption Date.
"Registrar" has the meaning specified in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
Initial Purchasers, as such agreement may be amended, modified or supplemented
from time to time.
"Regulation S Global Note" means a permanent global senior note that
contains the text referred to in footnotes 1 and 3 and the additional schedule
referred to in footnote 4 to the form of the Senior Note attached hereto as
Exhibit A, and that is deposited with the Senior Note Custodian and registered
in the name of the Depository or its nominee, representing the Initial Senior
Notes sold in reliance on Regulation S.
"Regulation S" means Regulation S under the Securities Act (including
any successor regulation thereto), as it may be amended from time to time.
"Related Business" means the land drilling business and activities
incidental thereto and any business related or ancillary thereto.
"Replacement Asset" means a Property or asset that, as determined by
the Board of Directors of the Company as evidenced by a Board Resolution, is
used or is useful in a Related Business.
"Responsible Officer" means, when used with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant secretary or any other officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Investment" means any Investment in any Person, including
an Unrestricted Subsidiary or the designation of a Subsidiary as an Unrestricted
Subsidiary, other than a Permitted Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or
make any distribution in respect of, or purchase, redeem, retire or otherwise
acquire for value, any Capital Stock of the Company or any Affiliate of the
Company, or warrants, rights or options to acquire such Capital Stock, other
than (x) dividends payable solely in the Capital Stock (other than Redeemable
Stock) of the Company or such Affiliate, as the case may be, or in warrants,
rights or options to acquire such Capital Stock and (y) dividends or
distributions by a Subsidiary to the Company or to a Wholly Owned Subsidiary;
(ii) make any principal payment on, or redeem, repurchase, defease (including
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an in-substance or legal defeasance) or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants), prior to any scheduled
principal payment, scheduled sinking fund payment or other stated maturity,
Indebtedness of the Company or any Subsidiary which is subordinated (whether
pursuant to its terms or by operation of law) in right of payment to the Senior
Notes or the Guarantees, as applicable; or (iii) make any Restricted Investment
in any Person.
"Retired Indebtedness or Stock" has the meaning specified in Section
4.4.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc., or if Standard & Poor's Ratings Group shall cease rating the specified
debt securities and such ratings ceases with respect thereto shall have been
transferred to a successor Person, such successor Person, provided that if
Standard & Poor's Ratings Group ceases rating the specified debt securities and
its ratings business with respect thereto shall not have been transferred to any
successor Person or such successor Person is Moody's, then "S&P" shall mean any
other nationally recognized rating agency selected in good faith by the Board of
Directors of the Company in a Board Resolution.
"Sale and Lease-Back Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means any Indebtedness incurred by the Company, unless
the instrument under which such Indebtedness is incurred expressly provides that
it is subordinated in right of payment to the Senior Notes, provided that Senior
Debt will not include (a) any liability for federal, state, local or other taxes
owed or owing, (b) any Indebtedness owing to any Subsidiaries of the Company,
(c) any trade payables or (d) any Indebtedness that is incurred in violation of
this Indenture.
"Senior Note" has the meaning stated in the first paragraph of this
Indenture and more particularly means any Senior Note authenticated and
delivered under this Indenture.
"Senior Note Custodian" means the Trustee, as custodian for the
Depository with respect to the Senior Notes in global form, or any successor
entity thereto.
"Senior Note Register" has the meaning specified in Section 2.3.
"Series A Indenture" means the Indenture dated as of June 27, 1997
among the Company,
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the subsidiary guarantors parties thereto, and Chase Bank of Texas, National
Association (formerly known as Texas Commerce Bank National Association), as
Trustee, providing for the issuance of the Series A Notes in the aggregate
principal amount of $175,000,000, as such may be amended and supplemented from
time to time.
"Series A Issue Date" means the date on which the Series A Notes were
originally issued under the Series A Indenture.
"Series A Notes" means the Company's 8-7/8% Senior Notes due July 1,
2007 issued pursuant to the Series A Indenture, as such may be amended or
supplemented from time to time.
"Significant Subsidiary" means a Subsidiary that is a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the Securities
Act and the Exchange Act.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.12 for the payment of Defaulted Interest.
"Stated Maturity" when used with respect to a Senior Note or any
installment of interest thereon, means the date specified in such Senior Note as
the fixed date on which the principal of such Senior Note or such installment of
interest is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or
any Guarantor that is subordinated in right of payment to the Senior Notes or
the Guarantees, as the case may be, and does not mature prior to one year
following the Stated Maturity of the Senior Notes.
"Subsidiary" means a subsidiary of the Company other than an
Unrestricted Subsidiary; provided that Indrillers shall not be considered a
Subsidiary for purposes of this Indenture.
"subsidiary" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding Voting Stock of which is owned, directly or
indirectly, by such Person, or by one or more other subsidiaries or such Person,
or by such Person and one or more other subsidiaries of such Person, (ii) any
general partnership, joint venture or similar entity, more than 50% of the
outstanding partnership or similar interest of which is owned, directly or
indirectly, by such Person, or by one or more other subsidiaries of such Person,
or by such Person and one or more other subsidiaries of such Person and (iii)
any limited partnership of which such Person or any subsidiary of such Person is
a general partner.
"Surviving Entity" has the meaning specified in Section 5.1.
"Transaction Date" has the meaning specified within the definition of
"Consolidated Interest Coverage Ratio."
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"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provision of this Indenture, and thereafter "Trustee"
shall mean such successor Trustee.
"U.S. Global Note" means a permanent Global Note that contains the text
referred to in footnotes 1 and 3 and the additional schedule referred to in
footnote 4 to the form of the Senior Note attached hereto as Exhibit A, and that
is deposited with the Senior Note Custodian and registered in the name of the
Depositary or its nominee, representing Senior Notes sold in reliance on Rule
144A or in reliance on another exemption from the registration requirements of
the Securities Act.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) above, are not callable or redeemable at the option of the
issuers thereof; or (iii) depository receipts issued by a bank or trust company
as custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a 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 U.S.
Government Obligation evidenced by such Depository receipt.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"Unrestricted Subsidiary" means any subsidiary of the Company that the
Company has classified as an Unrestricted Subsidiary and that has not been
reclassified as a Subsidiary pursuant to the terms of this Indenture.
"Voting Stock" means with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holder thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
"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
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<PAGE> 32
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 interest 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.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the
TIA which are incorporated by reference in and made a part of this Indenture.
The following TIA terms have the following meanings:
"indenture securities" means the Senior Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meanings assigned to them by such definitions.
SECTION 1.3. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
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(5) words in the singular include the plural and words in the
plural include the singular;
(6) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision;
(7) provisions apply to successive events and transactions;
(8) references to agreements and other instruments include
subsequent amendments and waivers but only to the extent not prohibited
by this Indenture; and
(9) unless otherwise expressly provided herein, the principal
amount of any Preferred Stock shall be the greater of (i) the maximum
liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred
Stock.
ARTICLE 2.
THE SENIOR NOTES
SECTION 2.1. Form and Dating.
(a) General. The Senior Notes, together with the Trustee's
certificate of authentication and the Guarantors' notation of Guarantees, shall
be substantially in the form set forth in Exhibit A hereto. The Senior Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Senior Note shall be dated the date of its authentication. The
Senior Notes shall be in denominations of $1,000 and integral multiples thereof.
The Initial Senior Notes and the Exchange Notes will be the same except that the
Private Placement Legend and paragraph 18 will be omitted from the Exchange
Notes.
The terms and provisions contained in the Senior Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(b) Initial Senior Notes. Initial Senior Notes, with the notations
of the Guarantees endorsed thereon, shall be issued in the form of one or more
permanent Global Notes in definitive fully registered form without coupons.
Senior Notes offered and sold to QIBs in reliance on Rule 144A, shall be issued
initially in the form of the U.S. Global Notes, which shall be deposited on
behalf of the purchasers of the Senior Notes represented thereby with the Senior
Note Custodian, and registered in the name of the Depository or a nominee of the
Depository, duly executed by the
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<PAGE> 34
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the U.S. Global Notes may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depository
or its nominee as hereinafter provided. Initial Senior Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Global Note, which shall be deposited on behalf of the purchasers of the
Senior Notes represented thereby with the Senior Note Custodian, and registered
in the name of the Depository or the nominee of the Depository for the accounts
of designated agents holding on behalf of Euroclear or Cedel, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. During the
"40-day distribution compliance period" (as defined in Regulation S) (the "40-
day restricted period") beneficial interests in the Regulation S Global Note
shall be held only through Euroclear or Cedel, and, pursuant to the Depository's
procedures, Indirect Participants that hold a beneficial interest in the
Regulation S Global Note shall not be able to transfer such interest to a person
that takes delivery thereof in the form of an interest in the U.S. Global Notes.
Following the termination of the 40-day restricted period, beneficial interests
in the Regulation S Global Notes shall be exchanged for beneficial interests in
U.S. Global Notes and beneficial interests in the U.S. Global Notes shall be
exchanged for beneficial interests in the Regulation S Global Notes, pursuant to
the Applicable Procedures. The aggregate principal amount of the Regulation S
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Senior
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Senior Notes from time to time
endorsed on Schedule A thereto and that the aggregate amount of outstanding
Senior Notes represented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges, redemptions and transfers of interests.
Any endorsement of Schedule A of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Senior Notes represented
thereby shall be made by the Trustee or the Senior Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Cedel shall be
applicable to interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel. The Trustee shall have no obligation to
notify Holders of any such procedures or to monitor or enforce compliance with
the same.
Except as set forth in Section 2.6 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depository
or to a successor of the Depository or its nominee.
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(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to
Global Notes deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(c), authenticate and deliver the Global Notes that (i)
shall be registered in the name of the Depository or the nominee of the
Depository and (ii) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Senior Note Custodian.
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depository or by the
Senior Note Custodian as custodian for the Depository or under such Global Note,
and the Depository may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Participants, the
operation of customary practices of such Depository governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(d) Certificated Senior Notes. Senior Notes issued in certificated
form shall be substantially in the form of Exhibit A attached hereto (but
without including the text referred to in footnotes 1, 3 and 4 thereto) and
shall be printed, typewritten, lithographed or engraved or produced by any
combination of these methods or may be produced by any other method permitted by
the rules of any securities exchange on which the Senior Notes may be listed, as
evidenced by the execution of such Senior Notes.
(e) Provisions Applicable to Forms of Notes. The Senior Notes may
also have such additional provisions, omissions, variations or substitutions as
are not inconsistent with the provisions of this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with this Indenture,
any applicable law or with any rules made pursuant thereto or with the rules of
any securities exchange or governmental agency or as may be determined
consistently herewith by the Officers of the Company executing such Senior
Notes, as conclusively evidenced by their execution of such Senior Notes. All
Senior Notes will be otherwise substantially identical except as provided
herein.
Subject to the provisions of this Article 2, a Holder of a Global
Note may grant proxies and otherwise authorize any Person to take any action
that a Holder is entitled to take under this Indenture or the Senior Notes.
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SECTION 2.2. Execution and Authentication.
One Officer shall sign the Senior Notes for the Company by manual
or facsimile signature.
If an Officer whose signature is on a Senior Note no longer holds
that office at the time a Senior Note is authenticated, the Senior Note shall
nevertheless be valid.
A Senior Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Senior Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Senior Notes shall be
substantially as set forth in Exhibit A hereto.
The Trustee shall authenticate (i) Initial Senior Notes for
original issue in an aggregate principal amount not to exceed $75,000,000 and
(ii) Exchange Notes for issue only in the Exchange Offer pursuant to the
Exchange Offer Registration Statement for a like principal amount of Initial
Senior Notes exchanged in such Exchange Offer, in each case upon the receipt of
a Company Order directing the Trustee to authenticate such Senior Notes and
certifying that all conditions precedent to the issuance of the relevant Senior
Notes contained herein have been complied with. The aggregate principal amount
of Senior Notes outstanding at any time may not exceed $75,000,000, except as
provided in Section 2.8 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Senior 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.
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SECTION 2.3. Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Senior
Notes may be presented for registration of transfer or for exchange
("Registrar"), (ii) an office or agency where Senior Notes may be presented for
payment ("Paying Agent"), and (iii) and an office or agency where notices or
demands to or upon the Company and the Guarantors in respect of the Senior Notes
and this Indenture may be saved. The Registrar shall keep a register of the
Senior Notes and of their transfer and exchange (the "Securities Register"). The
Company may appoint one or more co-registrars and one or more additional paying
agents except as otherwise provided in this Indenture. 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 (at the Corporate Trust
Office of the Trustee) to act as the Registrar and Paying Agent and to act as
Senior Note Custodian with respect to the Global Notes.
SECTION 2.4. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, on, interest on, and Special Interest, if any,
on, the Senior Notes, and shall 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) shall have no further liability for the money. If the
Company or a Subsidiary 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 Senior Notes.
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SECTION 2.5. Computation of Interest.
Interest on the Senior Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
SECTION 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of beneficial interests in Global Notes shall be effected through the
Depository, in accordance with this Indenture and the Applicable Procedures,
which shall include restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Beneficial interests in a
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in the same Global Note in accordance with the transfer
restrictions set forth in the legend in subsection (e) of this Section 2.6.
Transfers of beneficial interests in the Global Notes to Persons required to
take delivery thereof in the form of an interest in another Global Note shall be
permitted as follows:
(i) U.S. Global Note to Regulation S Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a
beneficial interest in a U.S. Global Note deposited with the
Depository (or the Senior Note Custodian) will not be
permitted to transfer its interest to a Person who wishes to
take delivery thereof in the form of an interest in the
Regulation S Global Note. If, at any time after the
expiration of the 40-day restricted period, an owner of a
beneficial interest in a U.S. Global Note deposited with the
Depository (or the Senior Note Custodian) wishes to transfer
its beneficial interest in such U.S. Global Note to a Person
who is required or permitted to take delivery thereof in the
form of an interest in a Regulation S Global Note, such
owner shall, subject to the Applicable Procedures, exchange
or cause the exchange of such interest for an equivalent
beneficial interest in a Regulation S Global Note as
provided in this Section 2.6(a)(i). Upon receipt by the
Trustee of (1) instructions given in accordance with the
Applicable Procedures from a Participant directing the
Trustee to credit or cause to be credited a beneficial
interest in the Regulation S Global Note in an amount equal
to the beneficial interest in the U.S. Global Note to be
exchanged, (2) a written order given in accordance with the
Applicable Procedures containing information regarding the
Participant account of the Depository and the Euroclear or
Cedel account to be credited with such increase, and (3) a
certificate in the form of Exhibit B-1 hereto given by the
owner of such beneficial interest stating that the transfer
of such interest has been made in compliance with the
transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 of
Regulation S, then the Trustee, as Registrar, shall instruct
the Depository to reduce or cause to be reduced the
aggregate
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principal amount at Maturity of the applicable U.S. Global
Note and to increase or cause to be increased the aggregate
principal amount at Maturity of the applicable Regulation S
Global Note by the principal amount at Maturity of the
beneficial interest in the U.S. Global Note to be exchanged
or transferred, to credit or cause to be credited to the
account of the Person specified in such instructions, a
beneficial interest in the Regulation S Global Note equal to
the reduction in the aggregate principal amount at Maturity
of the U.S. Global Note, and to debit, or cause to be
debited, from the account of the Person making such exchange
or transfer the beneficial interest in the U.S. Global Note
that is being exchanged or transferred.
(ii) Regulation S Global Note to U.S. Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a
beneficial interest in a Regulation S Global Note deposited
with the Depository (or the Senior Note Custodian) will not
be permitted to transfer its interest to a Person who wishes
to take delivery thereof in the form of an interest in a
U.S. Global Note. If, at any time, after the expiration of
the 40-day restricted period, an owner of a beneficial
interest in a Regulation S Global Note deposited with the
Depository or with the Senior Note Custodian wishes to
transfer its beneficial interest in such Regulation S Global
Note to a Person who is required or permitted to take
delivery thereof in the form of an interest in a U.S. Global
Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a U.S. Global Note
as provided in this Section 2.6(a)(ii). Upon receipt by the
Trustee of (1) instructions from Euroclear or Cedel, if
applicable, and the Depository, directing the Trustee, as
Registrar, to credit or cause to be credited a beneficial
interest in the U.S. Global Note equal to the beneficial
interest in the Regulation S Global Note to be exchanged,
such instructions to contain information regarding the
Participant account with the Depository to be credited with
such increase, (2) a written order given in accordance with
the Applicable Procedures containing information regarding
the participant account of the Depository and (3) a
certificate in the form of Exhibit B-2 attached hereto given
by the owner of such beneficial interest stating (A) if the
transfer is pursuant to Rule 144A, that the Person
transferring such interest in a Regulation S Global Note
reasonably believes that the Person acquiring such interest
in a U.S. Global Note is a QIB and is obtaining such
beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or
securities laws of any state of the United States, (B) that
the transfer complies with the requirements of Rule 144
under the Securities Act or (C) if the transfer is pursuant
to any other exemption
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from the registration requirements of the Securities Act,
that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the
requirements of the exemption claimed, such statement to be
supported by an Opinion of Counsel from the transferee or
the transferor in form and substance reasonably acceptable
to the Company and to the Registrar and, in each case, in
accordance with any applicable securities laws of any state
of the United States or any other applicable jurisdiction,
then the Trustee, as Registrar, shall instruct the
Depository to reduce or cause to be reduced the aggregate
principal amount at maturity of such Regulation S Global
Note and to increase or cause to be increased the aggregate
principal amount at maturity of the applicable U.S. Global
Note by the principal amount at maturity of the beneficial
interest in the Regulation S Global Note to be exchanged or
transferred, and the Trustee, as Registrar, shall instruct
the Depository, concurrently with such redemption, to credit
or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
applicable U.S. Global Note equal to the reduction in the
aggregate principal amount at maturity of such Regulation S
Global Note and to debit or cause to be debited from the
account of the Person making such transfer the beneficial
interest in the Regulation S Global Note that is being
exchanged or transferred.
(b) Transfer and Exchange of Certificated Senior Notes. When
Certificated Senior Notes are presented by a Holder to the Registrar with a
request to register the transfer of the Certificated Senior Notes or to exchange
such Certificated Senior Notes for an equal principal amount of Certificated
Senior Notes of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested only if the Certificated Senior Notes
are presented or surrendered for registration of transfer or exchange, are
endorsed and contain a signature guarantee or are accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney and contains a signature guarantee, duly
authorized in writing and the Registrar received the following documentation
(all of which may be submitted by facsimile):
in the case of Certificated Senior Notes that are Transfer
Restricted Senior Notes, such request shall be accompanied
by the following additional information and documents, as
applicable:
(A) if such Transfer Restricted Senior Note is being
delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer, or such
Transfer Restricted Senior Note is being transferred to
the Company, a certification to that effect from such
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Holder (in substantially the form of Exhibit B-3
hereto); or
(B) if such Transfer Restricted Senior Note is being
transferred to a QIB in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 under the
Securities Act or in an offshore transaction pursuant
to and in compliance with Rule 904 under the Securities
Act or pursuant to an effective registration statement
under the Securities Act, a certification to that
effect from such Holder (in substantially the form of
Exhibit B-3 hereto); or
(C) if such Transfer Restricted Senior Note is being
transferred in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto) and an
Opinion of Counsel from such Holder or the transferee
reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in
compliance with the Securities Act.
(c) Transfer of a Beneficial Interests in Global Notes for
Certificated Senior Notes.
(i) The Global Notes that are Transfer Restricted Senior Notes
or the Exchange Global Notes, as the case may be, shall be
exchanged by the Company for one or more Certificated
Senior Notes representing Initial Senior Notes or Exchange
Notes, as the case may be, if (x) the Depositary (i) has
notified the Company that it is unwilling or unable to
continue as, or ceases to be, a "Clearing Agency"
registered under Section 17A of the Exchange Act and (ii) a
successor to the Depositary registered as a "Clearing
Agency" under Section 17A of the Exchange Act is not able
to be appointed by the Company within 90 calendar days or
(y) the Depositary is at any time unwilling or unable to
continue as Depositary and a successor to the Depositary is
not able to be appointed by the Company within 90 calendar
days or (iii) the Company, at its option, delivers a notice
in the form of an Officers' Certificate that it elects to
cause the issuance of Certificated Senior Notes. If an
Event of Default occurs and is continuing, the Company
shall, at the request of the Holder thereof, exchange all
or part of a Global Note that is a Transfer Restricted
Senior Note or an Exchange Global Note, as the case may be,
for one or more Certificated Senior Notes representing
Initial Senior Notes or Exchange Notes, as the case may be;
provided that the principal amount of each of such
Certificated Senior Notes, and such Global Note,
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after such exchange, shall be $1,000 or an integral
multiple thereof. Whenever a Global Note is exchanged as a
whole for one or more Certificated Senior Notes, it shall
be surrendered by the Holder thereof to the Trustee for
cancellation. Whenever a Global Note is exchanged in part
for one or more Certificated Senior Notes, it shall be
surrendered by the Holder thereof to the Trustee and the
Trustee shall make the appropriate notations to Schedule A
thereof pursuant to Section 2.1 hereof. All Certificated
Senior Notes or Exchange Notes, as the case may be, issued
in exchange for a Global Note or any portion thereof shall
be registered in such names, and delivered, as the
Depositary shall instruct the Trustee. Any Certificated
Senior Notes issued pursuant to this Section 2.6(c)(i)
shall include the Private Placement Legend, except as
otherwise provided for by Section 2.6 hereof. Interests in
a Global Note may not be exchanged for Certificated Senior
Notes other than as provided in this Section 2.6. If a
beneficial interest in a Transfer Restricted Senior Note is
being transferred, the following additional documents and
information must be submitted (including by facsimile):
(A) if such beneficial interest is being transferred to
the Person designated by the Depository as being the
beneficial owner, a certification to that effect from
such Person (in substantially the form of Exhibit B-4
hereto);
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or
in an offshore transaction pursuant to and in
compliance with Rule 904 under the Securities Act or
pursuant to an effective registration statement under
the Securities Act, a certification to that effect
from the transferor (in substantially the form of
Exhibit B-4 hereto);
(C) if such beneficial interest is being transferred in
reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the
form of Exhibit B-4 hereto) and an Opinion of Counsel
from the transferee or the transferor reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act, in which case the Trustee or the
Senior Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing
instructions and procedures existing between the
Depository and the Senior Note Custodian, cause the
aggregate
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principal amount of U.S. Global Notes or Regulation S
Global Notes, as applicable, to be reduced accordingly
and, following such reduction, the Company shall
execute and, the Trustee shall authenticate and
deliver to the transferee a Certificated Senior Note
in the appropriate principal amount.
(ii) Certificated Senior Notes issued in exchange for a
beneficial interest in a U.S. Global Note or Regulation S
Global Note, as applicable, pursuant to this Section
2.6(c) shall be registered in such names and in such
authorized denominations as the Depository, pursuant to
instructions from its Participants or Indirect
Participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Certificated Senior Notes to
the Persons in whose names such Senior Notes are so
registered. Following any such issuance of Certificated
Senior Notes, the Trustee, as Registrar, shall instruct
the Depository to reduce or cause to be reduced the
aggregate principal amount at maturity of the applicable
Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (e) 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 Depository or
a nominee of such successor Depository. Any Holder of a beneficial interest in a
Global Note shall, by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Note may be effected only through a book
entry system maintained by the Holder of such Global Note (or its agent), and
that ownership of a beneficial interest in the Senior Notes represented hereby
shall be required to be reflected in book entry form. Interests of beneficial
owners in a Global Note may be transferred in accordance with the rules and
procedures of the Depositary (or its successors).
(e) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Senior Note certificate evidencing Global Notes and
Certificated Senior Notes (and all Senior Notes issued in
exchange therefor or substitution thereof) shall bear a legend
(the "Private Placement Legend") in substantially the following
form:
THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE
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TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND
SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), OR (B) IT HAS ACQUIRED THIS
SENIOR NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, OR (2) AGREES THAT IT
WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SENIOR
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN VIOLATION
OF THE FOREGOING.
(ii) Upon any sale or transfer of a Transfer Restricted Senior Note
(including any Transfer Restricted Senior Note represented by a
Global Note) pursuant to Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act:
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(A) in the case of any Transfer Restricted Senior Note that is
a Certificated Senior Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Senior
Note for a Certificated Senior Note that does not bear the
legend set forth in (i) above and rescind any restriction
on the transfer of such Transfer Restricted Senior Note
upon receipt of a certification from the transferring
Holder substantially in the form of Exhibit B-4 hereto;
and
(B) in the case of any Transfer Restricted Senior Note
represented by a Global Note, such Transfer Restricted
Senior Note shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.6(a) and (b) hereof; provided,
however, that with respect to any request for an exchange
of a Transfer Restricted Senior Note that is represented
by a Global Note for a Certificated Senior Note that does
not bear the legend set forth in (i) above, which request
is made in reliance upon Rule 144, the Holder thereof
shall certify in writing to the Registrar that such
request is being made pursuant to Rule 144 (such
certification to be substantially in the form of Exhibit
B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Senior Note
(including any Transfer Restricted Senior Note represented by a
Global Note) in reliance on any exemption from the registration
requirements of the Securities Act (other than exemptions
pursuant to Rule 144A or Rule 144 under the Securities Act) in
which the Holder or the transferee provides an Opinion of
Counsel to the Company and the Registrar in form and substance
reasonably acceptable to the Company and the Registrar (which
Opinion of Counsel shall also state that the transfer
restrictions contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Senior Note that is
a Certificated Senior Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Senior
Note for a Certificated Senior Note that does not bear the
legend set forth in (i) above and rescind any restriction
on the transfer of such Transfer Restricted Senior Note;
and
(B) in the case of any Transfer Restricted Senior Note
represented by a Global Note, such Transfer Restricted
Senior Note shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.6(a) and (b) hereof.
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(iv) By its acceptance of any Initial Senior Note represented by a
certificate bearing the Private Placement Legend, each Holder
of, and beneficial owner of an interest in, such Initial Senior
Note acknowledges the restrictions on transfer of such Initial
Senior Note set forth in the Private Placement Legend and under
the heading "Notice to Investors" in the Offering Memorandum and
agrees that it will transfer such Initial Senior Note only in
accordance with the Private Placement Legend and the
restrictions set forth under the heading "Notice to Investors"
in the Offering Memorandum.
(v) Notwithstanding the foregoing, upon the occurrence of the
Exchange Offer in accordance with the Registration Rights
Agreement, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2 hereof, the
Trustee shall authenticate (i) one or more unrestricted Global
Notes in aggregate principal amount equal to the principal
amount of the restricted beneficial interests validly tendered
and not properly withdrawn by Persons that certify in the letter
of transmittal delivered in the Exchange Offer that they are not
(x) broker-dealers, (y) Persons participating in the
distribution of the Exchange Notes or (z) Persons who are
affiliates (as defined in Rule 144 under the Securities Act) of
the Company and accepted for exchange in the Exchange Offer and
(ii) Certificated Senior Notes that do not bear the Private
Placement Legend in an aggregate principal amount equal to the
principal amount of the Certificated Senior Notes that are
Transfer Restricted Senior Notes accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Senior
Notes, the Trustee shall cause the aggregate principal amount of
the applicable Global Notes to be reduced accordingly and the
Company shall execute and the Trustee shall authenticate and
deliver to the Persons designated by the Holders of Certificated
Senior Notes so accepted Certificated Senior Notes in the
appropriate principal amount.
(f) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Certificated
Senior Notes, redeemed, repurchased or cancelled, all Global Notes shall be
returned to or retained and cancelled 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 Certificated Senior Notes, redeemed,
repurchased or cancelled, the principal amount of Senior 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 Senior Notes Custodian, at the
direction of the Trustee, to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges.
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(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Global Notes and Certificated Senior
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
stamp or transfer tax or similar governmental charge
payable in connection therewith (other than any such
stamp or transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to
Sections 3.6, 4.7, 4.9 and 10.6 hereto).
(iii) All Global Notes and Certificated Senior Notes issued
upon any registration of transfer or exchange of
Global Notes or Certificated Senior Notes shall be
the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under
this Indenture, as the Global Notes or Certificated
Senior Notes surrendered upon such registration of
transfer or exchange.
(iv) The Registrar shall not be required: (A) to issue, to
register the transfer of or to exchange Senior Notes
during a period beginning at the opening of fifteen
(15) Business Days before the day of any selection of
Senior 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 Senior Note so selected for redemption
in whole or in part, except the unredeemed portion of
any Senior Note being redeemed in part, or (C) to
register the transfer of or to exchange a Senior Note
between a Record Date and the next succeeding
Interest Payment Date.
(v) Prior to due presentment for the registration of a
transfer of any Senior Note, the Trustee, any Agent
and the Company may deem and treat the Person in
whose name any Senior Note is registered as the
absolute owner of such Senior Note for the purpose of
receiving payment of principal of and interest on
such Senior Notes and for all other purposes, and
neither the Trustee, any Agent nor the Company shall
be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and
Certificated Senior Notes in accordance with the
provisions of Section 2.2 hereof.
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SECTION 2.7. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Senior Notes, and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.8. Replacement of Senior Notes.
If any mutilated Senior 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 Senior Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Senior 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 Guarantors, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Senior Note is replaced. In case any such mutilated, destroyed,
lost or stolen Senior Note has become or is about to become due and payable, the
Company, in its discretion may, instead of issuing a new Senior Note, pay such
Senior Note.
SECTION 2.9. Outstanding Senior Notes.
The Senior Notes outstanding at any time are all the Senior 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 2.15 hereof, a
Senior Note does not cease to be outstanding because the Company or an Affiliate
of the Company holds the Senior Note.
If a Senior Note is replaced pursuant to Section 2.8 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Senior Note is held by a bona fide purchaser.
If the principal amount of any Senior Note is considered paid
under Section 4.1 hereof, it ceases to be outstanding and interest (including
Special Interest, if any) on it ceases to accrue.
If the Paying Agent (other than the Company, a Guarantor, a
Subsidiary or an
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Affiliate of any thereof) holds, on a Redemption Date or Maturity, money
sufficient to pay Senior Notes payable on that date, then on and after that date
such Senior Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest (including Special Interest, if any).
SECTION 2.10. Reserved.
SECTION 2.11. Cancellation.
The Company at any time may deliver Senior Notes to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Senior Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall upon the written request of the Company, return such canceled Senior Notes
to the Company. The Company may not issue new Senior Notes to replace Senior
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. Payment of Interest; Interest Rights Preserved.
Interest (including Special Interest, if any) on any Senior Note
which is payable, and is punctually paid or duly provided for, on any January 1
or July 1 (an "Interest Payment Date"), commencing on July 1, 1998, shall be
paid to the Person in whose name such Senior Note is registered at the close of
business on the Record Date for such interest payment, which shall be the
December 15 or June 15 (whether or not a Business Day) immediately preceding
such Interest Payment Date.
Any interest on any Senior Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Record Date, and, except as hereinafter
provided, such Defaulted Interest and any interest payable on such Defaulted
Interest may be paid by the Company, at its election, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest, and any interest payable on such Defaulted Interest, to the Persons in
whose names the Senior Notes are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on the Senior Notes and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest (including Special Interest, if any)
or shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as provided
in this clause (a).
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Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 calendar days and not less
than 10 calendar days prior to the date of the proposed payment and not less
than 10 calendar days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be sent, first class mail, postage prepaid, to each Holder at
such Holder's address as it appears in the Senior Note Register, not less than
10 calendar days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
in whose names the Senior Notes are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
clause (b).
(b) The Company may make payment of any Defaulted Interest
(including Special Interest, if any), and any interest payable on such Defaulted
Interest, on the Senior Notes in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Senior Notes may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Senior Note delivered under this Indenture upon registration of transfer of, or
in exchange for, or in lieu of, or in substitution for, any other Senior Note,
shall carry the rights to interest (and Special Interest, if any) accrued and
unpaid, and to accrue, which were carried by such other Senior Note.
SECTION 2.13. Authorized Denominations.
The Senior Notes shall be issuable in denominations of $1,000 and
any integral multiple thereof.
SECTION 2.14. CUSIP Number.
The Company in issuing the Senior Notes may use a "CUSIP" number,
and if it does so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Senior Notes and
that reliance may be placed only on the other identification numbers printed on
the Senior Notes. The Company shall promptly notify the Trustee of any change in
the CUSIP number.
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SECTION 2.15. Treasury Senior Notes.
In determining whether the Holders of the required principal
amount of Senior Notes have concurred in any direction, waiver or consent,
Senior Notes owned by the Company or any Guarantor, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any Guarantor, 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
Senior Notes that a Responsible Officer knows are so owned shall be so
disregarded.
ARTICLE 3.
Redemption
SECTION 3.1. Notices to Trustee.
If the Company elects to redeem Senior Notes pursuant to Section
3.7 and paragraph 5 of the Senior Notes, it shall notify the Trustee in writing
of the Redemption Date, the principal amount of Senior Notes to be redeemed, the
Redemption Price and the Section of this Indenture and the paragraph of the
Senior Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section at least 60 days before the Redemption Date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein and in the Senior Notes.
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SECTION 3.2. Selection of Senior Notes To Be Redeemed.
If less than all the Senior Notes are to be redeemed at any time,
the Trustee shall select the Senior Notes to be redeemed on a pro rata basis, or
by any other method which the Trustee shall determine to be fair and appropriate
and which complies with any securities exchange and other applicable
requirements, provided that the Trustee may select for redemption in part only
Senior Notes in denominations larger than $1,000. In selecting Senior Notes to
be redeemed pursuant to this Section 3.2, the Trustee shall make such
adjustments, reallocations and eliminations as it shall deem proper so that the
principal amount at Stated Maturity of each Senior Note to be redeemed shall be
$1,000 or an integral multiple thereof, by increasing, decreasing or eliminating
any amount less than $1,000 which would be allocable to any Holder. If the Notes
to be redeemed are Certificated Senior Notes, the Certificated Senior Notes to
be redeemed shall be selected by the Trustee by prorating, as nearly as may be,
or by any other method which the Trustee shall determine to be fair and
appropriate and which complies with any securities exchange and other applicable
requirements, the principal amount of Certificated Senior Notes to be redeemed
among the Holders of Certificated Senior Notes registered in their respective
names. The Trustee in its discretion may determine the particular Senior Notes
(if there are more than one) registered in the name of any Holder which are to
be redeemed, in whole or in part. Provisions of this Indenture that apply to
Senior Notes called for redemption also apply to portions of Senior Notes called
for redemption. The Trustee shall notify the Company promptly of the Senior
Notes or portions of Senior Notes to be redeemed.
SECTION 3.3. Notice of Redemption.
At least 30 days but not more than 60 days before a date for
redemption of Senior Notes, the Company shall mail a notice of redemption by
first-class mail to each Holder of Senior Notes to be redeemed.
The notice shall identify the Senior Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Senior Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if any Global Senior Note is being redeemed in part, the
portion of the principal amount of such Senior Note to be redeemed and
that, after the Redemption Date,
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<PAGE> 53
the Global Senior Note, with a notation on Schedule A thereof adjusting
the principal amount thereof to be equal to the unredeemed portion,
will be returned to the Holder thereof;
(6) if any Certificated Senior Note is being redeemed in part,
the portion of the principal amount of such Senior Note to be redeemed
and that, after the Redemption Date, a new Certificated Senior Note or
Certificated Senior Notes in principal amount equal to the unredeemed
portion will be issued;
(7) if fewer than all the outstanding Senior Notes are to be
redeemed, the identification and principal amounts of the particular
Senior Notes to be redeemed;
(8) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Senior
Notes (or portion thereof) called for redemption ceases to accrue on
and after the redemption date;
(9) 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 Senior Notes;
(10) the paragraph of the Senior Notes and the Section of the
Indenture pursuant to which the Senior Notes are being called for
redemption; and
(11) any other information necessary to enable Holders to
comply with the notice of redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period.
SECTION 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed, Senior Notes called for
redemption become due and payable on the Redemption Date and at the Redemption
Price stated in the notice. Upon surrender to the Paying Agent, such Senior
Notes shall be paid at the Redemption Price stated in the notice, plus accrued
and unpaid interest to the Redemption Date. Failure to give notice or any defect
in the notice to any Holder shall not affect the validity of the notice to any
other Holder.
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SECTION 3.5. Deposit of Redemption Price.
Prior to the Redemption Date, the Company shall deposit with the
Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price of and
accrued and unpaid interest on all Senior Notes to be redeemed on that date
other than Senior Notes or portions of Senior Notes called for redemption which
have been delivered by the Company to the Trustee for cancellation.
So long as the Company complies with the preceding paragraph and
the other provisions of this Article 3, interest on the Senior Notes to be
redeemed on the applicable Redemption Date shall cease to accrue from and after
such date and such Senior Notes or portions thereof shall be deemed not to be
entitled to any benefit under this Indenture except to receive payment of the
Redemption Price on the Redemption Date. If any Senior Note called for
redemption shall not be so paid upon surrender for redemption, then, from
Redemption Date until such principal is paid, interest shall be paid on the
unpaid principal and, to the extent permitted by law, on any accrued but unpaid
interest thereon, in each case at the rate prescribed therefor by this Indenture
and such Senior Notes.
SECTION 3.6. Senior Notes Redeemed in Part.
Upon surrender and cancellation of a Certificated Senior Note that
is redeemed in part, the Company shall issue and the Trustee shall authenticate
and deliver to the surrendering Holder (at the Company's expense) a new
Certificated Senior Note equal in principal amount to the unredeemed portion of
the Certificated Senior Note surrendered and canceled, provided that each such
Certificated Senior Note shall be in a principal amount at Stated Maturity of
$1,000 or an integral multiple thereof.
Upon surrender of a Global Senior Note that is redeemed in part,
the Paying Agent shall forward such Global Senior Note to the Trustee who shall
make a notation on Schedule A thereof to reduce the principal amount of such
Global Senior Note to an amount equal to the unredeemed portion of such Global
Note.
SECTION 3.7. Optional Redemption.
(a) Except as set forth in subsection (b) of this Section 3.7, the
Company shall not have the option to redeem the Senior Notes prior to July 1,
2002. On or after such date, the Company shall have the option to redeem the
Senior Notes , in whole or in part upon not less than 30 days' nor more than 60
days' notice, at the Redemption Prices (expressed as percentages of principal
amount at Stated Maturity), if redeemed during the twelve month period beginning
July 1 of the years indicated below, in each case, together with any interest
accrued and unpaid to the Redemption Date:
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<TABLE>
<CAPTION>
Year Percentage
- ---- ----------
<S> <C>
2002 104.4375%
2003 102.9580%
2004 101.4792%
2005 and thereafter 100.0000%
</TABLE>
(b) Notwithstanding the foregoing, at any time on or before June
27, 2000, the Company may, at its option, redeem up to a maximum of 30% of the
aggregate principal amount at Stated Maturity of the Senior Notes with the net
cash proceeds of one or more Qualified Equity Offerings at a Redemption Price
equal to 108.875% of the principal amount thereof, plus accrued and unpaid
interest thereon to the Redemption Date; provided that at least $50,000,000
aggregate principal amount at Stated Maturity of the Senior Notes shall remain
outstanding immediately after the occurrence of any such redemption; and
provided, further, that each such redemption shall occur within 90 days of the
closing of such Qualified Equity Offering.
(c) Optional redemptions under this Indenture are subject to
Section 4.16 hereof.
ARTICLE 4.
Covenants
SECTION 4.1. Payment of Senior Notes.
The Company shall promptly pay the principal of, premium, if any,
on and interest on the Senior Notes on the dates and in the manner provided in
the Senior Notes and in this Indenture. Principal, premium and interest shall be
considered paid on the date due if on or before 10:00 a.m., Houston time, on
such date the Trustee or a Paying Agent, other than the Company or a Guarantor,
or an Affiliate of the Company or a Guarantor, holds in accordance with this
Indenture money sufficient to pay all principal, premium and interest then due
and the Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Holders on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Senior Notes plus 1% per annum, and it shall pay
interest on overdue installments of interest (without regard to any applicable
grace period) at the same rate to the extent lawful.
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SECTION 4.2. Commission Reports.
So long as any Senior Notes are outstanding, whether or not the
Company is subject to Section 13(a) or 15(d) of the Exchange Act, or any
successor provision thereto, the Company shall file with the Commission the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to such Section 13(a) or
15(d) or any successor provision thereto if the Company were subject thereto,
such documents to be filed with the Commission on or prior to the respective
dates (the "Required Filing Dates") by which the Company would have been
required to file them. The Company shall also (whether or not it is required to
file reports with the Commission), within 30 days of each Required Filing Date,
(i) transmit by mail to all Holders of Senior Notes, as their names and
addresses appear in the Senior Note Register, without cost to such Holders or
Persons, and (ii) file with the Trustee, copies of the annual reports, quarterly
reports and other documents (without exhibits) which the Company has filed or
would have filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act, any successor provisions thereto or this Section 4.2. The Company
shall not be required to file any report, document or other information with the
Commission if the Commission does not permit such filing.
SECTION 4.3. Limitation on Indebtedness.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness) unless, after giving pro forma effect to the incurrence of such
Indebtedness, the Consolidated Interest Coverage Ratio for the Determination
Period would be at least 2.0 to 1.0 if such Indebtedness is incurred prior to
July 1, 1998 and at least 2.25 to 1.0 if such Indebtedness is incurred
thereafter. Notwithstanding the foregoing, the Company or any Subsidiary
(subject to the provisions of Sections 4.4 and 4.11) may incur Permitted
Indebtedness. Any Indebtedness of a Person existing at the time at which such
Person becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed incurred by such Subsidiary at the time at which it
becomes a Subsidiary.
SECTION 4.4. Limitation on Subsidiary Indebtedness and Preferred Stock.
The Company will not permit any Subsidiary to, directly or
indirectly, incur any Indebtedness or issue any Preferred Stock except:
(i) Indebtedness or Preferred Stock issued to and held by the Company,
a Guarantor or a Wholly Owned Subsidiary, so long as any transfer of such
Indebtedness or Preferred Stock to a Person other than the Company, Guarantor or
a Wholly Owned Subsidiary will be deemed to constitute an incurrence of such
Indebtedness or Preferred Stock by the issuer thereof as of the date of such
transfer;
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(ii) Acquired Indebtedness or Preferred Stock of a Subsidiary issued
and outstanding prior to the date on which such Subsidiary was acquired by the
Company (other than Indebtedness or Preferred Stock issued in connection with or
in anticipation of such acquisition);
(iii) Indebtedness or Preferred Stock outstanding on the Series A Issue
Date and listed in a schedule attached to the Series A Indenture;
(iv) Indebtedness described in clauses (b), (c), (d), (e), (f), (g) and
(h) under the definition of "Permitted Indebtedness";
(v) Permitted Subsidiary Refinancing Indebtedness of such Subsidiary;
(vi) Indebtedness or Preferred Stock issued in exchange for, or the
proceeds of which are used to refinance, repurchase or redeem, Indebtedness or
Preferred Stock described in clauses (i) and (iii) of this Section (the "Retired
Indebtedness or Stock"), provided that the Indebtedness or the Preferred Stock
so issued has (A) a principal amount or liquidation value, as the case may be,
not in excess of the principal amount or liquidation value of the Retired
Indebtedness or Stock plus related expenses for redemption and issuance, (B) a
final redemption date later than the stated maturity or final redemption date
(if any) of the Retired Indebtedness or Stock and (C) an Average Life at the
time of issuance of such Indebtedness or Preferred Stock that is greater than
the Average Life of the Retired Indebtedness or Stock;
(vii) Indebtedness of a Subsidiary which represents the assumption by
such Subsidiary of Indebtedness of another Subsidiary in connection with a
merger of such Subsidiaries, provided that no Subsidiary or any successor (by
way of merger) thereto existing on the Series A Issue Date shall assume or
otherwise become responsible for any Indebtedness of an entity which was not a
Subsidiary on the Series A Issue Date, except to the extent that a Subsidiary
would be permitted to incur such Indebtedness under this Section; and
(viii) Non-Recourse Indebtedness incurred by a foreign Subsidiary not
constituting a Guarantor.
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SECTION 4.5. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Subsidiaries to, make any Restricted Payment, unless at the time of and after
giving effect to the proposed Restricted Payment, (i) no Default shall have
occurred and be continuing (or would result therefrom), (ii) the Company could
incur at least $1.00 of additional Indebtedness under the tests described in the
first sentence of Section 4.3 of this Indenture and (iii) the aggregate amount
of all Restricted Payments declared or made on or after the Series A Issue Date
by the Company or any Subsidiary shall not exceed the sum of (A) 50% (or if such
Consolidated Net Income shall be a deficit, minus 100% of such deficit) of the
aggregate Consolidated Net Income accrued during the period beginning on the
first day of the fiscal quarter in which the Series A Issue Date occurred and
ending on the last day of the fiscal quarter ending immediately prior to the
date of such proposed Restricted Payment, minus 100% of the amount of any
writedowns, write-offs and other negative extraordinary charges not otherwise
reflected in Consolidated Net Income during such period, plus (B) an amount
equal to the aggregate net cash proceeds received by the Company, subsequent to
the Series A Issue Date, from the issuance or sale (other than to a Subsidiary)
of shares of its Capital Stock (excluding Redeemable Stock, but including
Capital Stock issued upon the exercise of options, warrants or rights to
purchase Capital Stock (other than Redeemable Stock) of the Company) and the
liability (expressed as a positive number) as expressed on the face of a balance
sheet in accordance with GAAP in respect of any Indebtedness of the Company or
any of its Subsidiaries, or the carrying value of Redeemable Stock, which has
been converted into, exchanged for or satisfied by the issuance of shares of
Capital Stock (other than Redeemable Stock) of the Company, subsequent to the
Series A Issue Date, plus (C) 100% of the net reduction in Restricted
Investments, subsequent to the Series A Issue Date, in any Person, resulting
from payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of Property (but only to the extent such interest,
dividends, repayments or other transfers of Property are not included in the
calculation of Consolidated Net Income), in each case to the Company or any
Subsidiary from any Person (including, without limitation, from Unrestricted
Subsidiaries) or from redesignations of Unrestricted Subsidiaries as
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed in the case of any Person the amount of Restricted
Investments previously made by the Company or any Subsidiary in such Person and
in each such case which was treated as a Restricted Payment.
(b) The foregoing provisions will not prevent (i) the payment of
any dividend on Capital Stock of any class within 60 days after the date of its
declaration if at the date of declaration such payment would be permitted by
this Indenture; (ii) any repurchase or redemption of Capital Stock or
Subordinated Indebtedness of the Company or a Subsidiary made by exchange for
Capital Stock of the Company (other than Redeemable Stock), or out of the net
cash proceeds from the substantially concurrent issuance or sale (other than to
a Subsidiary) of Capital Stock of the Company (other than Redeemable Stock),
provided that the net cash proceeds from such sale are
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<PAGE> 59
excluded from computations under Section 4.5(a)(iii)(B) above to the extent that
such proceeds are applied to purchase or redeem such Capital Stock or
Subordinated Indebtedness; (iii) so long as no Default shall have occurred and
be continuing or should occur as a consequence thereof, any repurchase or
redemption of Subordinated Indebtedness of the Company or a Subsidiary solely in
exchange for, or out of the net cash proceeds from the substantially concurrent
sale of, new Subordinated Indebtedness of the Company or a Subsidiary, so long
as such Subordinated Indebtedness is permitted under Section 4.3 of this
Indenture and (1) is subordinated to the Senior Notes at least to the same
extent as the Subordinated Indebtedness so exchanged, purchased or redeemed, (2)
has a stated maturity later than the stated maturity of the Subordinated
Indebtedness so exchanged, purchased or redeemed and (3) has an Average Life at
the time incurred that is greater than the remaining Average Life of the
Subordinated Indebtedness so exchanged, purchased or redeemed; (iv) Investments
subsequent to the Series A Issue Date in any Joint Ventures, foreign
Subsidiaries not constituting Guarantors and Indrillers in an aggregate amount
not to exceed $10,000,000 and (v) redemptions subsequent to the Series A Issue
Date of the Series A Preferred Stock issued and outstanding on the Series A
Issue Date for an aggregate redemption price of not more than $1,000,000.
Notwithstanding the foregoing, the amount available for Investments in Joint
Ventures and foreign Subsidiaries pursuant to clause (iv) of the preceding
sentence may be increased by the aggregate amount received by the Company and
its Subsidiaries subsequent to the Series A Issue Date from a Joint Venture or a
foreign Subsidiary on or before the date of such proposed Investment resulting
from payments of interest on Indebtedness, dividends, repayments of loans or
advances or other transfers of Property made to such Joint Venture or foreign
Subsidiary (but only to the extent such interest dividends, repayments or other
transfers of Property are not included in the calculation of Consolidated Net
Income). Restricted Payments permitted to be made as described in the first
sentence of this Section 4.5(b) will be excluded in calculating the amount of
Restricted Payments thereafter, except that any such Restricted Payments
permitted to be made pursuant to clause (iv) will be included in calculating the
amount of Restricted Payments made pursuant to such clause (iv) thereafter.
(c) For purposes of this Section 4.5, if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the Fair
Market Value of the non-cash portion of such Restricted Payment.
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SECTION 4.6. Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries.
The Company will not, and will not permit any Subsidiary, directly
or indirectly, to create, enter into any agreement with any Person or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind which by its terms restricts the ability of any
Subsidiary to (a) pay dividends, in cash or otherwise, or make any other
distributions on its Capital Stock to the Company or any Subsidiary, (b) pay any
Indebtedness owed to the Company or any Subsidiary, (c) make loans or advances
to the Company or any Subsidiary or (d) transfer any of its Property or assets
to the Company or any Subsidiary except any encumbrance or restriction contained
in any agreement or instrument:
(i) existing on the Issue Date (including those under
the Series A Indenture);
(ii) relating to any Property or assets acquired
after the Series A Issue Date, so long as such encumbrance or
restriction relates only to the Property or assets so acquired and is
not and was not created in anticipation of such acquisition;
(iii) relating to any Acquired Indebtedness of any
Subsidiary at the date on which such Subsidiary was acquired by the
Company or any Subsidiary (other than Indebtedness incurred in
anticipation of such acquisition);
(iv) effecting a refinancing of Indebtedness incurred
pursuant to an agreement referred to in the foregoing clauses (i)
through (iii), so long as the encumbrances and restrictions contained
in any such refinancing agreement are no more restrictive than the
encumbrances and restrictions contained in such agreements;
(v) constituting customary provisions restricting
subletting or assignment of any lease of the Company or any Subsidiary
or provisions in license agreements or similar agreements that restrict
the assignment of such agreement or any rights thereunder;
(vi) constituting restrictions on the sale or other
disposition of any Property securing Indebtedness as a result of a
Permitted Lien on such Property; or
(vii) constituting any temporary encumbrance or
restriction with respect to a Subsidiary pursuant to an agreement that
has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or Property and assets of,
such Subsidiary.
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SECTION 4.7. Limitation on Asset Sales.
(a) The Company will not engage in, and will not permit any
Subsidiary to engage in, any Asset Sale unless (a) except in the case of (i) an
Asset Sale resulting from the requisition of title to, seizure or forfeiture of
any Property or assets or any actual or constructive total loss or an agreed or
compromised total loss or (ii) a Bargain Purchase Contract, the Company or such
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the Property; (b) at least 75%
of such consideration consists of Cash Proceeds (or the assumption of
Indebtedness of the Company or such Subsidiary relating to the Capital Stock or
Property or asset that was the subject of such Asset Sale and the unconditional
release of the Company or such Subsidiary from such Indebtedness); (c) after
giving effect to such Asset Sale, the total non-cash consideration held by the
Company from all such Asset Sales made after the Series A Issue Date does not
exceed $10,000,000; and (d) the Company delivers to the Trustee an Officers'
Certificate certifying that such Asset Sale complies with clauses (a), (b) and
(c). The Company or such Subsidiary, as the case may be, may apply the Net
Available Proceeds from each Asset Sale (x) to the acquisition of one or more
Replacement Assets, or (y) to repurchase or repay Senior Debt (with a permanent
reduction of availability in the case of revolving credit borrowings); provided
that such acquisition or such repurchase or repayment shall be made within 270
days after the consummation of the relevant Asset Sale.
(b) Any Net Available Proceeds from any Asset Sale made after the
Series A Issue Date that are not used to so acquire Replacement Assets or to
repurchase or repay Senior Debt within 270 days after consummation of the
relevant Asset Sale constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $15,000,000, the Company shall within 30 days thereafter
(or at any time after receipt of Excess Proceeds but prior to there being
$15,000,000 of Excess Proceeds, the Company may, at its option) make a pro rata
offer (an "Asset Sale Offer") to purchase from all holders of Senior Notes and
all holders of other Senior Debt containing provisions similar to those set
forth herein with respect to offers to purchase or redeem such Indebtedness with
the proceeds of sales of assets (including, without limitation, the Series A
Notes) (collectively, "Asset Sale Senior Debt") an aggregate principal amount of
Indebtedness equal to the Excess Proceeds, at a price in cash (the "Asset Sale
Offer Purchase Price") equal to 100% of the outstanding principal amount at
Stated Maturity thereof plus accrued interest, if any, to the Asset Sale
Purchase Date, in accordance with the procedures set forth in Section 4.7(c).
Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero and the Company may use any remaining amount for general corporate
purposes.
Notwithstanding the foregoing, the Company may, at its option,
elect to limit the Asset Sale Offer referred to above to Asset Sale Senior Debt
other than the Series A Notes. In such event, the Company shall (i) allocate the
Excess Proceeds pro rata among all Asset Sale Senior Debt (for this purpose,
including, without limitation, the Series A Notes), (ii) make the Asset Sale
Offer only with respect to that portion of the Excess Proceeds allocated to the
Asset Sale Senior Debt other
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than the Series A Notes, and (iii) retain the portion of the Excess Proceeds
allocated to the Series A Notes and use such funds to make an "Asset Sale Offer"
as defined in the Series A Indenture.
(c) Within 30 days of the date that the amount of Excess Proceeds
exceeds $15,000,000, the Company, or the Trustee at the request and expense of
the Company, shall send to each Holder by first class mail, postage prepaid, a
notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made pursuant
to this Section 4.7 and that all Senior Notes properly tendered will be
accepted for payment, subject to proration in the event that the amount
of Excess Proceeds is less than the aggregate Asset Sale Offer Purchase
Price of all Senior Notes properly tendered pursuant to the Asset Sale
Offer;
(ii) the Asset Sale Offer Purchase Price, the amount
of Excess Proceeds that are available to be applied to purchase
tendered Senior Notes, and the date Senior Notes are to be purchased
pursuant to the Asset Sale Offer (the "Asset Sale Offer Purchase
Date"), which date shall be a date no earlier than 30 days and not
later than 40 days subsequent to the date such notice is mailed;
(iii) that any Senior Notes or portions thereof not
properly tendered or accepted for payment will continue to accrue
interest;
(iv) that, unless the Company defaults in the payment
of the Asset Sale Offer Purchase Price with respect thereto, all Senior
Notes or portions thereof accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest from and after the Asset Sale
Offer Purchase Date;
(v) that any Holder electing to have any Senior Notes
or portions thereof purchased pursuant to the Asset Sale Offer will be
required to surrender such Senior Notes, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of such Senior Notes
completed, to the Paying Agent at the address specified in the notice,
prior to the close of business on the third Business Day preceding the
Asset Sale Offer Purchase Date;
(vi) that any Holder shall be entitled to withdraw
such election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Asset Sale Offer
Purchase Date, a telegram, telex, facsimile transmission or letter,
setting forth the name of the Holder, the principal amount of Senior
Notes delivered for purchase, and a statement that such Holder is
withdrawing such Holder's election to have such Senior Notes or
portions thereof purchased pursuant to the Asset Sale Offer;
(vii) that any Holder electing to have Senior Notes
purchased pursuant to the Asset Sale Offer must specify the principal
amount at Stated Maturity that is being
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tendered for purchase, which principal amount at Stated Maturity must
be $1,000 or an integral multiple thereof;
(viii) if Certificated Senior Notes have been issued
pursuant to Section 2.6(a), that any Holder of Certificated Senior
Notes whose Certificated Senior Notes are being purchased only in part
will be issued new Certificated Senior Notes equal in principal amount
at Stated Maturity to the unpurchased portion of the Certificated
Senior Note or Senior Notes surrendered, which unpurchased portion will
be equal in principal amount at Stated Maturity to $1,000 or an
integral multiple thereof;
(ix) that the Trustee will return to the Holder of a
Global Senior Note that is being purchased in part, such Global Senior
Note with a notation on Schedule A thereof adjusting the principal
amount at Stated Maturity thereof to be equal to the unpurchased
portion of such Global Senior Note; and
(x) the instructions and any other information
necessary to enable any Holder to tender Senior Notes and to have such
Senior Notes purchased, or to withdraw such tender, pursuant to this
Section 4.7.
(d) If the aggregate Asset Sale Offer Purchase Price of the Senior
Notes surrendered by Holders exceeds the amount of Excess Proceeds as indicated
in the notice required by Section 4.7(c) hereof, the Trustee shall select the
Senior Notes to be purchased on a pro rata basis based on the principal amount
of the Senior Notes tendered, with such adjustments as may be deemed appropriate
by the Trustee and to comply with any securities exchange and other applicable
requirements, so that only Senior Notes in denominations of $1,000 or integral
multiples thereof shall be purchased.
(e) On or before the Asset Sale Offer Purchase Date, the Company
shall (i) accept for payment any Senior Notes or portions thereof properly
tendered and selected for purchase pursuant to the Asset Sale and Section 4.7(d)
hereof; (ii) irrevocably deposit with the Paying Agent, by 10:00 a.m., New York
City time, on such date, in immediately available funds, an amount equal to the
Asset Sale Offer Purchase Price in respect of all Senior Notes or portions
thereof so accepted; and (iii) deliver, or cause to be delivered, to the Trustee
the Senior Notes so accepted together with an Officers' Certificate listing the
Senior Notes or portions thereof tendered to the Company and accepted for
payment. The Paying Agent shall promptly send by first class mail, postage
prepaid, to each Holder of Senior Notes or portions thereof so accepted for
payment, payment in an amount equal to the Asset Sale Offer Purchase Price for
such Senior Notes or portions thereof. The Company shall publicly announce the
results of the Asset Sale Offer on or as soon as practicable after the Asset
Sale Offer Purchase Date. For purposes of this Section 4.7, the Trustee shall
act as the Paying Agent.
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(f) Upon surrender and cancellation of a Certificated Senior Note
that is purchased in part, the Company shall promptly issue and the Trustee
shall authenticate and deliver to the surrendering Holder of such Certificated
Senior Note a new Certificated Senior Note equal in principal amount to the
unpurchased portion of such surrendered Certificated Senior Note; provided that
each such new Certificated Senior Note shall be in a principal amount at Stated
Maturity of $1,000 or an integral multiple thereof.
(g) Upon surrender of a Global Senior Note that is purchased in
part pursuant to an Asset Sale Offer, the Paying Agent shall forward such Global
Senior Note to the Trustee who shall make a notation on Schedule A thereof to
reduce the principal amount of such Global Senior Note to an amount equal to the
unpurchased portion of such Global Senior Note, as provided in Section 2.6
hereof.
(h) Upon completion of an Asset Sale Offer (including payment of
the Asset Sale Offer Purchase Price for accepted Senior Notes), any surplus
Excess Proceeds that were subject to such offer shall cease to be Excess
Proceeds, the amount of Excess Proceeds shall be reset to zero and the Company
may use any remaining amount for general corporate purposes.
(i) The Company shall comply with any applicable tender offer
rules (including, without limitation, any applicable requirements of Rule 14e-1
under the Exchange Act) in the event that an Asset Sale Offer is required under
the circumstances described herein.
(j) Asset Sale Offers are subject to Section 4.16 hereof.
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SECTION 4.8. Limitation on Transactions with Affiliates.
(a) Subsequent to the Issue Date, the Company will not, and will
not permit any Subsidiary to, directly or indirectly, enter into or permit to
exist any transaction or series of related transaction (including, but not
limited to, the purchase, sale or exchange of Property, the making of any
Investment, the giving of any guarantee or the rendering of any service with any
Affiliate of the Company, other than transactions among the Company and any
Guarantors or any Wholly Owned Subsidiaries) unless (i) such transaction or
series of related transactions is on terms no less favorable to the Company or
such Subsidiary than those that could be obtained in a comparable arm's length
transaction with a Person that is not such an Affiliate and (ii) (A) with
respect to a transaction or series of related transactions that has a Fair
Market Value in excess of $2,000,000 but less than $5,000,000, the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (i) above; or
(B) with respect to a transaction or series of related transactions that has a
Fair Market Value equal to or in excess of $5,000,000, the transaction or series
of related transactions is approved by a majority of the Board of Directors of
the Company (including a majority of the disinterested directors), which
approval is set forth in a Board Resolution certifying that such transaction or
series of transactions complies with clause (i) above.
(b) The foregoing provisions shall not be applicable to (i)
reasonable and customary compensation, indemnification and other benefits paid
or made available to an officer, director or employee of the Company or a
Subsidiary for services rendered in such person's capacity as an officer,
director or employee (including reimbursement or advancement of reasonable
out-of-pocket expenses and provisions of directors' and officers' liability
insurance) or (ii) the making of any Restricted Payment otherwise permitted by
this Indenture.
SECTION 4.9. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will
have the right to require the Company to repurchase all of such Holder's Senior
Notes in whole or in part (the "Change of Control Offer") at a purchase price
(the "Change of Control Purchase Price") in cash equal to 101% of the aggregate
principal amount at Stated Maturity thereof, plus accrued and unpaid interest
thereon, if any, to the Change of Control Payment Date on the terms described
below.
(b) Within 30 days following any Change of Control, the Company or
the Trustee (at the expense of the Company) will mail a notice to each Holder
and to the Trustee stating,
(i) that a Change of Control has occurred and a
Change of Control Offer is being made pursuant to this Section 4.9, and
that, although Holders are not required to tender their Senior Notes,
all Senior Notes that are timely tendered will be accepted for payment;
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(ii) the Change of Control Purchase Price and the
repurchase date, which will be no earlier than 30 days and no later
than 60 days after the date such notice is mailed (the "Change of
Control Payment Date");
(iii) that any Senior Note or portion thereof
accepted for payment pursuant to the Change of Control Offer (and duly
paid for on the Change of Control Payment Date) will cease to accrue
interest after the Change of Control Payment Date;
(iv) that any Senior Note or portion thereof not
properly tendered will continue to accrue interest;
(v) that any Holder electing to have any Senior Notes
or portions thereof purchased pursuant to a Change of Control Offer
will be required to surrender such Senior Notes, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of such Senior
Notes completed, to the Paying Agent at the address specified in the
notice, prior to the close of business on the third Business day
preceding the Change of Control Date;
(vi) that any Holder shall be entitled to withdraw
such election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter,
setting forth the name of the Holder, the principal amount of Senior
Notes delivered for purchase, and a statement that such Holder is
withdrawing such Holder's election to have such Senior Notes or
portions thereof purchased pursuant to the Change of Control Offer;
(vii) that any Holder electing to have Senior Notes
purchased pursuant to the Change of Control Offer must specify the
principal amount at Stated Maturity that is being tendered for
purchase, which principal amount at Stated Maturity must be $1,000 or
an integral multiple thereof;
(viii) if Certificated Senior Notes have been issued
pursuant to Section 2.6(a), that any Holder of Certificated Senior
Notes whose Certificated Notes are being purchased only in part will be
issued new Certificated Senior Notes equal in principal amount at
Stated Maturity to the unpurchased portion of the Certificated Senior
Note or Securities surrendered, which unpurchased portion will be equal
in principal amount at Stated Maturity to $1,000 or an integral
multiple thereof;
(ix) that the Trustee will return to the Holder of a
Global Senior Note that is being purchased in part, such Senior Note
with a notation on Schedule A thereof adjusting the principal amount at
Stated Maturity thereof to be equal to the unpurchased portion of such
Global Senior Note;
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(x) the instructions and any other information
necessary to enable any Holder to accept a Change of Control Offer or
effect withdrawal of such acceptance; and
(xi) the instructions and any other information
necessary to enable Holders to tender their Senior Notes and have such
Senior Notes purchased pursuant to the Change of Control Offer.
(c) On or before the Change of Control Payment Date, the
Company shall (i) accept for payment any Senior Notes or portions thereof
properly tendered pursuant to the Change of Control Offer; (ii) irrevocably
deposit with the Paying Agent, by 10:00 a.m., New York City time, on such date,
in immediately available funds, an amount equal to the Change of Control
Purchase Price in respect of all Senior Notes or portions thereof so accepted,
including interest, if applicable; and (iii) deliver, or cause to be delivered,
to the Trustee the Senior Notes so accepted together with an Officers'
Certificate listing the Senior Notes or portions thereof tendered to the Company
and accepted for payment. The Paying Agent shall promptly send by first class
mail, postage prepaid, to each Holder of Senior Notes or portions thereof so
accepted for payment, payment in an amount equal to the Change of Control
Purchase Price for such Senior Notes or portions 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. For purposes of this
Section 4.9, the Trustee shall act as the Paying Agent.
(d) Upon surrender and cancellation of a Certificated Senior
Note that is purchased in part pursuant to the Change of Control Offer, the
Company shall promptly issue and the Trustee shall authenticate and deliver to
the surrendering Holder of such Certificated Senior Note, a new Certificated
Note equal in principal amount at Stated Maturity to the unpurchased portion of
such surrendered Certificated Note; provided that each such new Certificated
Senior Note shall be in a principal amount of $1,000 at Stated Maturity or an
integral multiple thereof.
Upon surrender of a Global Senior Note that is purchased in
part pursuant to a Change of Control Offer, the Paying Agent shall forward such
Global Senior Note to the Trustee who shall make a notation on Schedule A
thereof to reduce the principal amount at Stated Maturity of such Global Note to
an amount equal to the unpurchased portion of such Global Senior Note, as
provided in Section 2.6 hereof.
(e) The Company will 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 repurchases all Senior Notes validly tendered and not
withdrawn under such Change of Control Offer.
(f) The Company will comply with any applicable tender offer
rules (including,
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without limitation, any applicable requirements of Rule 14e-1 under the Exchange
Act) in the event that the Change of Control Offer is triggered under the
circumstances described herein.
(g) Change of Control Offers are subject to Section 4.16 hereof.
SECTION 4.10. Limitation on Liens.
The Company will not, and will not permit any Subsidiary to,
directly or indirectly, create, affirm, incur, assume or suffer to exist any
Liens of any kind other than Permitted Liens on or with respect to any Property
or assets of the Company or such Subsidiary or any interest therein or any
income or profits therefrom, whether owned at the Series A Issue Date or
thereafter acquired, without effectively providing that the Senior Notes shall
be secured equally and ratably with (or prior to) the Indebtedness so secured
for so long as such obligations are so secured.
SECTION 4.11. Limitation on Guarantees by Guarantors.
The Company will not permit any Guarantor to guarantee the payment
of any Subordinated Indebtedness of the Company unless such guarantee shall be
subordinated to such Guarantor's Guarantee at least to the same extent as such
Subordinated Indebtedness is subordinated to the Senior Notes; provided that
this covenant will not be applicable to any guarantee of any Guarantor that (i)
existed at the time at which such Person became a Subsidiary of the Company and
(ii) was not incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Company.
SECTION 4.12. Unrestricted Subsidiaries.
(a) The Company may designate a subsidiary (including a newly
formed or newly acquired subsidiary) of the Company or any of its Subsidiaries
as an Unrestricted Subsidiary; provided that (i) immediately after giving effect
to the transaction, the Company could incur $1.00 of additional Indebtedness
pursuant to the first sentence of Section 4.3 and (ii) such designation is at
the time permitted under Section 4.5. Notwithstanding any provisions of this
covenant all subsidiaries of an Unrestricted Subsidiary will be Unrestricted
Subsidiaries.
(b) The Company will not, and will not permit any of its
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person (other than a newly formed subsidiary
having no outstanding Indebtedness (other than Indebtedness to the Company or a
Subsidiary) at the date of determination) becoming a Subsidiary (whether through
an acquisition, the redesignation of an Unrestricted Subsidiary or otherwise)
unless, after giving effect to such action, transaction or series of
transactions on a pro forma basis, (i) the Company could incur at least $1.00 of
additional Indebtedness pursuant to the first sentence of Section 4.3 and (ii)
no Default or Event of Default would occur.
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(c) Subject to Sections 4.12(a) and (b), an Unrestricted
Subsidiary may be redesignated as a Subsidiary. The designation of a subsidiary
as an Unrestricted Subsidiary or the designation of an Unrestricted Subsidiary
as a Subsidiary in compliance with this Section 4.12 shall be made by the Board
of Directors pursuant to a Board Resolution delivered to the Trustee and shall
be effective as of the date specified in such Board Resolution, which shall not
be prior to the date such Board Resolution is delivered to the Trustee. Any
Unrestricted Subsidiary shall become a Subsidiary if it incurs any Indebtedness
other than Non-Recourse Indebtedness. If at any time Indebtedness of an
Unrestricted Subsidiary which was Non-Recourse Indebtedness no longer so
qualifies, such Indebtedness shall be deemed to have been incurred when such
Non-Recourse Indebtedness becomes Indebtedness.
SECTION 4.13. Limitation on Sale and Lease-Back Transactions.
The Company will not, and will not permit any Subsidiary to,
directly or indirectly, enter into, assume, guarantee or otherwise become liable
with respect to any Sale and Lease-Back Transaction unless (i) the proceeds from
such Sale and Lease-Back Transaction are at least equal to the Fair Market Value
of such Property being transferred and (ii) the Company or such Subsidiary would
have been permitted to enter into such transaction under the provisions of
Sections 4.3, 4.4 and 4.10.
SECTION 4.14. Limitation on Line of Business.
None of the Company or any of its Subsidiaries will directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than a Related Business.
SECTION 4.15. Limitation on Restrictive Covenants.
The restrictive covenants set forth herein, including, without
limitation, those set forth in Sections 4.5, 4.7 and 4.8, shall be and shall be
deemed limited to the extent necessary so that the creation, existence and
effectiveness of such restrictive covenants shall not result in a breach of
Section 4.6 of the Series A Indenture.
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SECTION 4.16. Limitation on Redemptions and Other Repayments of Notes and Series
A Notes.
The Company will not optionally make any principal payment on, or
redeem, repurchase, defease (including in-substance or legal defeasance) or
otherwise acquire or retire for value (including pursuant to mandatory
repurchase covenants), prior to any scheduled principal payment, scheduled
sinking fund payment or other stated maturity (collectively, for purposes of
this covenant only, "redeem," and such action being a "redemption") the Senior
Notes unless, substantially concurrently with such redemption, the Company
redeems (or, if such redemption requires the consent of the holders of the
Series A Notes, offers to redeem) an aggregate principal amount of the Series A
Notes (rounded to the nearest integral multiple of $1,000) equal to the product
of (i) a fraction, the numerator of which is the aggregate principal amount of
the Senior Notes to be so redeemed (or for which such offer to redeem will be
made) and the denominator of which is the aggregate principal amount of the
Senior Notes outstanding immediately prior to such proposed redemption and (ii)
the aggregate principal amount of the Series A Notes outstanding immediately
prior to such proposed redemption.
The Company will not optionally redeem the Series A Notes unless,
substantially concurrently with such redemption, the Company redeems (or, if
such redemption requires the consent of the holders of the Senior Notes, offers
to redeem) an aggregate principal amount of the Senior Notes (rounded to the
nearest integral multiple of $1,000) equal to the product of (i) a fraction, the
numerator of which is the aggregate principal amount of the Series A Notes to be
so redeemed (or for which such offer to redeem will be made) and the denominator
of which is the aggregate principal amount of the Series A Notes outstanding
immediately prior to such proposed redemption and (ii) the aggregate principal
amount of the Senior Notes outstanding immediately prior to such proposed
redemption.
SECTION 4.17. Maintenance of Office or Agency.
The Company shall maintain in The City of New York, an office or
agency where Senior Notes may be presented or surrendered for payment, where
Senior Notes may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Senior Notes
and this Indenture may be served. Unless otherwise designated by the Company by
written notice to the Trustee such office or agency shall be the office of the
Trustee's agent, Chase Trust Company of New York, which is located at 55 Water
Street, North Building, Room 234, Windows 20 and 21, New York, New York 10041,
Attention: Vice President, Global Trust Services. 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, and the Company hereby
appoints the Trustee its agent to receive all presentations, surrenders, notices
and demands.
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The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Senior
Notes may be presented or surrendered for any or all of such purposes, and may
from time to time rescind such designations; provided that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York, for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
and any change in the location of any such other office or agency.
SECTION 4.18. Money for the Senior Note Payments to be Held in Trust.
If the Company, any Subsidiary of the Company or any of their
respective Affiliates shall at any time act as Paying Agent with respect to the
Senior Notes, such Paying Agent shall, on or before each due date of the
principal of (and premium, if any) or interest on any of the Senior Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the principal (and premium, if any) or interest so
becoming due until such money shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Senior Notes, it shall, prior to or on each due date of the
principal of (and premium, if any) or interest on any of the Senior Notes,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Paying Agent shall promptly notify
the Trustee of the Company's action or failure so to act.
SECTION 4.19. Corporate Existence.
The Company will, and will cause each of its Subsidiaries to,
preserve and keep in full force and effect its corporate existence in accordance
with applicable law, except as permitted in Sections 5.1 and 5.2; provided,
however, that the Company may terminate the corporate existence of any
Subsidiary if, in the good faith judgment of the Board of Directors of the
Company, such termination is desirable in the conduct of the business of the
Company and its Subsidiaries and is not disadvantageous in any material respect
to the Holders of the Senior Notes.
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SECTION 4.20. Maintenance of Property.
The Company shall cause all Property used in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
good condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as,
in the judgment of the Company, may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times; provided that nothing in this Section 4.20 shall prevent the Company from
discontinuing the operation or maintenance of any of such Property if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any of its Subsidiaries and not disadvantageous
in any material respect to the Holders of the Senior Notes.
SECTION 4.21. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (a) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Subsidiaries or upon the income, profits or property of the Company or
any of its Subsidiaries and (b) all material lawful claims for labor, materials
and supplies which, if unpaid, might by law become a Lien upon the Property or
assets of the Company or any of its Subsidiaries; provided that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP or other appropriate provision has been made.
SECTION 4.22. Compliance Certificate; Notice of Default or Event of Default.
(a) The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate (which shall be signed by officers satisfying the
requirements of Section 314 of the Trust Indenture Act) stating whether or not,
to the best knowledge of such officers, the Company has complied with all
conditions and covenants under this Indenture, and, if the Company shall be in
Default, specifying all such Defaults and the nature thereof of which such
officer may have knowledge.
(b) The year-end financial statements delivered pursuant to
Section 4.2 above shall be accompanied by a written statement of the Company's
independent public accountants (who shall be a firm of established national
reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the Company or any
of its Subsidiaries has violated the provisions of Section 4.1, 4.3, 4.4, 4.5,
4.7, 4.9 or 4.19 hereof or of Article 5 of this Indenture or, if any such
violation has occurred, specifying the nature and period of existence
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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, and it being further understood that such statement may not be
provided to the extent contrary to the then current recommendations of the
accountants' governing body.
(c) The Company will, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, within 5 days of any Officer becoming aware
of (i) any Default or Event of Default or (ii) any event of default under any
other mortgage, indenture or instrument referred to in Section 6.1(e), an
Officers' Certificate specifying such Default, Event of Default or other event
of default and what action the Company or applicable Subsidiary is taking or
proposes to take with respect thereto.
SECTION 4.23. Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
SECTION 4.24. Prohibition on Company and Guarantors Becoming Investment
Companies.
None of the Company or the Guarantors shall become an "investment
company" as defined in the Investment Company Act of 1940, as amended.
SECTION 4.25. Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenant (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 of 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 and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waive 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.
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ARTICLE 5
Consolidation, Merger, Conveyance, Lease or Transfer
SECTION 5.1. Consolidation, Merger, Conveyance, Lease or Transfer.
(a) The Company will not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than a
merger of a Subsidiary into the Company in which the Company is the continuing
corporation), or continue in any new jurisdiction, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the Property
and assets of the Company and the Subsidiaries, taken as a whole, to any Person,
unless
(i) either (A) the Company shall be the continuing
corporation or (B) the corporation (if other than the Company)
formed by such consolidation or into which the Company is
merged, or the Person which acquires, by sale, assignment,
conveyance, transfer, lease or disposition, all or
substantially all of the Property and assets of the Company
and the Subsidiaries, taken as a whole (such corporation or
Person, the "Surviving Entity"), shall be a corporation
organized and validly existing under the laws of the United
States of America, any political subdivision thereof or any
state thereof or the District of Columbia, and shall expressly
assume, by a supplemental indenture, the due and punctual
payment of the principal of (and premium, if any) and interest
on all the Senior Notes and the performance of the Company's
covenants and obligations under this Indenture;
(ii) immediately before and after giving effect to
such transaction or series of transactions on a pro forma
basis (including, without limitation, any Indebtedness
incurred or anticipated to be incurred in connection with or
in respect of such transaction or series of transactions), no
Event of Default or Default shall have occurred and be
continuing or would result therefrom;
(iii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction or series of transactions), the Company (or
the Surviving Entity if the Company is not continuing) shall
have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to
such transactions; and
(iv) immediately after giving effect to any such
transaction or series of transactions on a pro forma basis as
if such transaction or series of transactions had occurred on
the first day of the Determination Period, the Company (or the
Surviving
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Entity if the Company is not continuing) would be permitted to
incur $1.00 of additional Indebtedness pursuant to the
provisions of the first sentence of Section 4.3.
(b) The provision of Section 5.1(a)(iv) above shall not apply
to any merger or consolidation into or with, or any such transfer of all or
substantially all of the Property and assets of the Company and the Subsidiaries
taken as a whole into, the Company.
SECTION 5.2. Officers' Certificate and Opinion of Counsel.
In connection with any consolidation, merger, continuance,
transfer of assets or other transactions contemplated by Section 5.1, 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,
continuance, sale, assignment, conveyance or transfer and the supplemental
indenture in respect thereto comply with the provisions of this Indenture and
that all conditions precedent in this Indenture relating to such transactions
have been complied with.
SECTION 5.3. Substitution of Surviving Entity.
Upon any transaction or series of transactions that are of the
type described in, and are effected in accordance with, this Article 5, the
Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Senior Notes
with the same effect as if such Surviving Entity had been named as the Company
in this Indenture; and when a Surviving Person duly assumes all of the
obligations and covenants of the Company pursuant to this Indenture and the
Senior Notes, except in the case of a lease, the predecessor Person shall be
relieved of all such obligations.
If such Surviving Entity shall have succeeded to and been
substituted for the Company, such Surviving Entity may cause to be signed,, and
may issue either in its own name or in the name of the Company prior to such
succession any or all of the Senior Notes delivered to the Trustee; and, upon
the order of such Surviving Entity, instead of the Company, and subject to all
the terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Senior Notes which previously shall
have been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Senior Notes which such Surviving Entity thereafter
shall cause to be signed and delivered to the Trustee for that purpose (in each
instance with endorsements of Guarantees thereon by the Guarantors). All of the
Senior Notes so issued and so endorsed shall in all respects have the same legal
rank and benefit under this Indenture as the Senior Notes theretofore or
thereafter issued and endorsed in accordance with the terms of this Indenture
and the Guarantee as though all of such Senior Notes had been issued and
endorsed at the date of the execution hereof.
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In case of any such consolidation, merger, continuance, sale,
transfer, conveyance or other disposal, such changes in phraseology and form
(but not in substance) may be made in the Senior Notes thereafter to be issued
or the Guarantees to be endorsed thereon as may be appropriate.
For all purposes of this Indenture and the Senior Notes,
Subsidiaries of any Surviving Entity will, upon such transaction or series of
transactions, become Subsidiaries or Unrestricted Subsidiaries as provided
pursuant to this Indenture and all Indebtedness, and all Liens on Property or
assets, of the Surviving Entity and its Subsidiaries immediately prior to such
transaction or series of transactions shall be deemed to have been incurred upon
such transaction or series of transactions.
ARTICLE 6
Defaults and Remedies
SECTION 6.1. Events of Default.
Whenever used herein, an "Event of Default" means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of interest on any Senior Note pursuant
to this Indenture when the same becomes due and payable, and the continuance of
such Default for a period of 30 days;
(b) default in the payment of principal of (or premium, if any,
on) any Senior Note when the same becomes due and payable, whether upon
Maturity, upon optional redemption, required repurchase (including pursuant to a
Change of Control Offer or an Asset Sale Offer) or otherwise or the failure to
make an offer to purchase any such Senior Note as required pursuant to the
provisions of the Senior Notes and this Indenture;
(c) the Company fails to comply with any of its covenants or
agreements contained in Sections 4.3, 4.4, 4.5, 4.7, 4.9, 4.13 and 5.1 of this
Indenture;
(d) the Company defaults in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than a covenant or
warranty addressed in clause (a), (b) or (c) above) and continuance of such
Default or breach for a period of 30 days after written notice thereof has been
given to the Company by the Trustee or to the Company and the Trustee by Holders
of at least 25% of the aggregate principal amount at Stated Maturity of the
outstanding Senior Notes;
(e) Indebtedness of the Company or any Subsidiary is not paid when
due within
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the applicable grace period, if any, or is accelerated by the holders thereof
and, in either case, the principal amount of such unpaid or accelerated
Indebtedness exceeds $10,000,000;
(f) the entry by a court of competent jurisdiction of one or more
final judgments against the Company or any Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 which is not discharged,
waived, appealed, stayed, bonded or satisfied for a period of 60 consecutive
days;
(g) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or (ii) a decree or order adjudging
the Company or any Significant Subsidiary a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant Subsidiary under
U.S. bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal, state or foreign bankruptcy, insolvency, or similar law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Significant Subsidiary or of any
substantial part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs of the
Company or any Significant Subsidiary, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days;
(h) (i) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under U.S. bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent; or (ii) the consent by the Company or
any Significant Subsidiary to the entry of a decree or order for relief in
respect of the Company or any Significant Subsidiary in an involuntary case or
proceeding under U.S. bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company or any Significant Subsidiary; or (iii) the
filing by the Company or any Significant Subsidiary of a petition or answer or
consent seeking reorganization or relief under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law; or (iv) the consent by the Company
or any Significant Subsidiary to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the Property or assets of
the Company or any Significant Subsidiary or of any substantial part of the
Property or assets of the Company or any Significant Subsidiary, or the making
by the Company or any Significant Subsidiary of an assignment for the benefit of
creditors; or (v) the admission by the Company or any Significant
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Subsidiary in writing of its inability to pay its debts generally as they become
due; or (vi) the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action; or
(i) any Guarantee shall for any reason cease to be, or be asserted
by the Company or any Guarantor, as applicable, not to be, in full force and
effect (except pursuant to the release of any such Guarantee in accordance with
the provisions of this Indenture).
SECTION 6.2. Acceleration.
If an Event of Default (other than an Event of Default described
in clause (g) or (h) of Section 6.1) occurs and shall be continuing, then in
each and every case the Trustee or the Holders of not less than 25% of the
outstanding aggregate principal amount at Stated Maturity of the Senior Notes
may declare the principal amount at Stated Maturity of the Senior Notes to be
due and payable immediately by a notice in writing to the Company (and to the
Trustee if given by Holders of such Senior Notes), and upon any such declaration
the principal amount at Stated Maturity of, premium, if any, on, any accrued and
unpaid interest on, and any other amounts payable in respect of, the Senior
Notes then outstanding will become and be immediately due and payable. If any
Event of Default specified in clause (g) or (h) of Section 6.1 occurs, the
principal amount at Stated Maturity of, premium, if any, and any accrued and
unpaid interest on, and any other amount payable in respect of, the Senior Notes
then outstanding shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of such Senior
Notes. In the event of a declaration of acceleration because an Event of Default
set forth in Section 6.1(e) above has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to Section 6.1(e)
shall be remedied or cured or waived by the holders of the relevant Indebtedness
within 30 days after such event of default; provided that no judgment or decree
for the payment of the money due on the Senior Notes has been obtained by the
Trustee as provided in this Indenture.
After any such acceleration, but before a judgment or decree based
on acceleration, the Holders of a majority in aggregate principal amount at
Stated Maturity of the Senior Notes at the time outstanding may rescind and
annul such acceleration if
(a) the Company or any Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursement and advances of
the Trustee, its agents and counsel,
(ii) all overdue installments of interest on any other
amounts due in
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respect of all Senior Notes;
(iii) the principal of (and premium, if any, on ) any Senior
Notes that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in the Senior Notes and this Indenture; and
(iv) to the extent that payment of such interest is lawful,
interest upon Defaulted Interest at the rate or rates
prescribed therefor in the Senior Notes and this Indenture;
(b) all Events of Default, other than the nonpayment of principal
of Senior Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.4;
(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
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 (and premium, if
any) of or interest on, and any other amounts then due in respect of, the Senior
Notes or to enforce the performance of any provision of the Senior Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Senior Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
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SECTION 6.4. Waiver of Past Defaults.
The Holders of a majority in principal amount at Stated Maturity
of the Senior Notes then outstanding by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Senior Note or (ii) a Default in respect of a
provision that under Section 9.2 cannot be amended without the consent of each
Holder affected. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right.
SECTION 6.5. Control by Majority.
The Holders of a majority in principal amount at Stated Maturity
of the Senior Notes then outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Holders, it being understood that the Trustee shall have no duty
to ascertain whether or not such actions or forbearances are unduly prejudiced
to such Holders, or would involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
SECTION 6.6. Limitation on Suits.
No Holder of any Senior Notes shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or a trustee, or for any other remedy hereunder,
unless:
(i) such Holder has previously given to the Trustee
written notice of a continuing Event of Default with respect to the
Senior Notes;
(ii) the Holders of at least 25% in aggregate
principal amount at Stated Maturity of the Senior Notes then
outstanding have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee; and
(iii) the Trustee has failed to institute such
proceeding, and has not received from the Holders of a majority in
aggregate principal amount at Stated Maturity of the Senior Notes then
outstanding a direction inconsistent with such request, within 60 days
after such notice, request and offer.
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A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of and interest on the Senior
Notes held by such Holder, on or after the respective due dates expressed in the
Senior Notes, 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(a) or (b) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount then due
and owing (together with interest on any unpaid interest to the extent lawful)
and the amounts provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim.
The Trustee shall be entitled and empowered, without regard to
whether the Trustee or any Holder shall have made any demand or performed any
other act pursuant to the provisions of this Article and without regard to
whether the principal of the Senior Notes shall then be due and payable as
therein expressed or by declaration or otherwise, by intervention in any
proceedings relative to the Company or any Obligor upon the Senior Notes, or to
the creditors or Property or assets of the Company, any Guarantor or any other
Obligor or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be entitled and empowered
in such instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest and any other amounts owing and unpaid
in respect of the Senior Notes, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including all amounts owing to the Trustee and each predecessor Trustee
pursuant to Section 7.7 hereof) and of the Holders allowed in any judicial
proceedings relative to the Company or other obligor upon the Senior Notes, or
to the creditors or property of the Company, any Guarantor, or any such other
Obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Senior Notes in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other bankruptcy
or insolvency proceedings or Person performing
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similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other Property or assets
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Holders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Holders, to pay to the Trustee such amounts as shall be
sufficient to cover all amounts owing to the Trustee and each predecessor
Trustee pursuant to Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Notes or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party), the Trustee shall be held to represent all
the Holders of the Senior Notes, and it shall not be necessary to make any
Holders of the Senior Notes parties to any such proceedings.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article 6, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Holders for amounts due and unpaid on the Senior Notes
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Senior Notes for
principal (premium, if any) and interest, respectively; and
THIRD: to the Company or the Guarantors or to such other party as
a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section. At least 15 days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid. The Trustee may mail such
notice in the name and at the expense of the Company.
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SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant 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, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 or a suit by Holders of more than 10% in principal
amount at Stated Maturity of the Senior Notes.
SECTION 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder of Senior Notes has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.
SECTION 6.13. Rights and Remedies Cumulative.
No right or remedy conferred herein, upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Senior
Note to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
6 or by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
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ARTICLE 7
Trustee
SECTION 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture.
However, 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 liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this subsection does not limit the effect of subsection
(b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it
is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to
Section 6.5.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to subsections (a), (b) and (c) of this Section.
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(e) 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.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.
SECTION 7.2. Rights of Trustee.
(a) Subject to the provisions of Section 7.1(a) hereof, the
Trustee may rely on 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. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Senior Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, Officer's Certificate, or other certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture,
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note, coupon, security, or other paper or document unless requested in writing
to do so by the Holders of not less than a majority in aggregate principal
amount of the Senior Notes then outstanding; provided that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company or,
if advanced by the Trustee, shall be repaid by the Company upon demand.
(g) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(h) The Trustee shall not be bound to ascertain or inquire as to
the performance or observance of any covenants, conditions, or agreements on the
part of the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein and shall be entitled in
connection herewith to examine the books, records and premises of the Company.
(i) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.1(a) or (b), or (ii)
any other event of which the Trustee has "actual knowledge" and which event,
with the giving of notice or the passage of time or both, would constitute an
Event of Default under this Indenture, the Trustee shall not be deemed to have
notice of any Default or Event of Default unless specifically notified in
writing of such event by the Company or the Holders of not less than 25% in
aggregate principal amount at Stated Maturity of the Senior Notes then
outstanding; provided that the Trustee shall comply with the "automatic stay"
provisions contained in the U.S. bankruptcy laws, if applicable; and as used
herein, the term "actual knowledge" means the actual fact or statement of
knowing by a Responsible Officer, without any duty to make any investigation
with regard thereto.
SECTION 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
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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 Senior
Notes, it shall not be accountable for the Company's use of the proceeds from
the Senior Notes, and it shall not be responsible for any statement of the
Company in this Indenture or in any document issued in connection with the sale
of the Senior Notes or in the Senior Notes other than the Trustee's certificate
of authentication.
SECTION 7.5. Notice of Defaults.
If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to each Holder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal of
(or premium, if any) or interest on any Senior Note (including payments pursuant
to the mandatory repurchase provisions of such Senior Note, if any), the Trustee
may withhold the notice if and so long as the Trustee in good faith determines
that withholding the notice is in the interests of Holders.
SECTION 7.6. Reports by Trustee to Holders.
As promptly as practicable after May 15 beginning with the May 15
following the date of this Indenture, and in any event prior to August 15 in
each year, the Trustee shall mail to each Holder a brief report dated as of such
date that complies with TIA Section 313(a) if and to the extent required by TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and
313(c).
A copy of each report at the time of its mailing to Holders shall
be filed with the Commission and each stock exchange (if any) on which the
Senior Notes are listed. The Company agrees to notify promptly the Trustee
whenever the Senior Notes become listed on any stock exchange and of any
delisting thereof.
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SECTION 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee promptly upon request from
time to time the compensation for its services as agreed to by the Trustee and
the Company. 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 out-of-pocket expenses incurred
or made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any and
all loss, liability or reasonable expense (including reasonable attorneys' fees)
incurred by it in connection with the acceptance and administration of this
trust and the performance of its duties hereunder. 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 may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith. The Company need not pay for any
settlement made by the Trustee without the Company's consent, such consent not
to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Senior Notes on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Senior Notes.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(g) or (h) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any applicable bankruptcy laws.
SECTION 7.8. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company.
The Holders of a majority in principal amount at Stated Maturity of the Senior
Notes may remove the Trustee by so notifying the Trustee and may appoint a
successor Trustee. If at any time:
(i) the Trustee shall fail to comply with Section
310(b) of the Trust Indenture Act after written request thereof by the
Company or by any Holder who has been a bona fide Holder of a Senior
Note for at least six months, unless the Trustee's duty to resign is
stayed in accordance with the provisions of TIA Section 310(b); or
(ii) the Trustee shall cease to be eligible under
Section 7.10 hereof and
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shall fail to resign after written request therefor by the Company or
by any Holder; or
(iii) the Trustee shall become incapable of acting or
a decree or order for relief by a court having jurisdiction in the
premises shall have been entered in respect of the Trustee in an
involuntary case under the United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or similar law, or a decree or order by a court
having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its
Property and assets or affairs, or any public officer shall take charge
or control of the Trustee or of its Property and assets or affairs for
the purpose of rehabilitation, conservation, winding-up or liquidation;
or
(iv) the Trustee shall commence a voluntary case
under the United States bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or
taking possession by a receiver, custodian, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trustee or of
its Property and assets or affairs, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or shall take corporate action
in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Senior Notes, or (ii) subject to Section 6.11
hereof, any Holder who has been a bona fide Holder of a Note for at least six
months may, on behalf of such Holder and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee for the Senior Notes.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount at Stated Maturity of the Senior Notes
and such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint 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. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the Lien provided for
in Section 7.7.
If a successor Trustee does not take office within 60 days after
the retiring Trustee
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resigns or is removed, the retiring Trustee or the Holders of 10% in principal
amount at Stated Maturity of the Senior Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Senior Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Senior Notes so
authenticated; and in case at that time any of the Senior Notes shall not have
been authenticated, any successor to the Trustee may authenticate such Senior
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Senior Notes or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a). The Trustee shall have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
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SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
Satisfaction and Discharge
SECTION 8.1. Satisfaction and Discharge.
This Indenture shall upon the request of the Company cease to be
of further effect (except as to surviving rights of registration of transfer or
exchange of Senior Notes herein expressly provided for, the Company's
obligations under Sections 7.7 and 8.4 hereof, and the Company's, the Trustee's
and the Paying Agent's obligations under Section 8.3 hereof) and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(a) either
(i) all Senior Notes therefore authenticated and
delivered (other than (A) Senior Notes which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
2.8 and (B) Senior Notes for whose payment money has been deposited in
trust with the Trustee or any Paying Agent and thereafter paid to the
Company or discharged from such trust) have been delivered to the
Trustee for cancellation; or
(ii) all such Senior Notes not theretofore delivered
to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year, or
(C) are to be called for redemption within one year
under irrevocable arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of clause (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose money or U.S. Government
Obligations in an amount sufficient (as certified by an independent
public
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accountant designated by the Company) to pay and discharge the entire
indebtedness of such Senior Notes not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any, on) and
interest, if any, to the date of such deposit (in the case of Senior
Notes which have become due and payable) or the Stated Maturity or
Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums
then due and payable hereunder by the Company;
(c) no Default or Event of Default with respect to the Senior
Notes shall have occurred and be continuing on the date of such deposit and
after giving effect to such deposit; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the Company's obligations in Sections 2.3, 2.4, 2.6, 2.8, 2.11, 7.7,
7.8, 8.2, 8.3 and 8.4, and the Trustee's and Paying Agent's obligations in
Section 8.3 shall survive until the Senior Notes are no longer outstanding.
Thereafter, only the Company's obligations in Sections 7.7, 8.3 and 8.4 and the
Trustee's and Paying Agent's obligations in Section 8.3 shall survive.
In order to have money available on a payment date to pay
principal (and premium, if any, on) or interest on the Senior Notes, the U.S.
Government Obligations shall be payable as to principal (and premium, if any) or
interest at least one Business Day before such payment date in such amounts as
will provide the necessary money. U.S. Government Obligations shall not be
callable at the issuer's option.
SECTION 8.2. Application of Trust Money.
All money deposited with the Trustee pursuant to Section 8.1 shall
be held in trust and, at the written direction of the Company, be invested prior
to maturity in U.S. Government Obligations, and applied by the Trustee in
accordance with the provisions of the Senior Notes and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for the payment of which money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
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SECTION 8.3. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal or interest
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided that the Company shall have either caused notice
of such payment to be mailed to each Senior Noteholder entitled thereto no less
than 30 days prior to such repayment or within such period shall have published
such notice in a financial newspaper of widespread circulation published in The
City of New York, including, without limitation, The Wall Street Journal. After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 8.4. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court of
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and Guarantors' obligations under this Indenture, the
Senior Notes and the Guarantees shall be revived and reinstated as though no
deposit has occurred pursuant to Section 8.1 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 8.2; provided, however, that if the Company or the
Guarantors have made any payment of interest on or principal of any Senior Notes
because of the reinstatement of their Obligations, the Company or such
Guarantors shall be subrogated to the rights of the Holders of such Senior Notes
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
Defeasance
SECTION 9.1. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option, at any time, to have Section
9.2 or Section 9.3 hereof applied to the outstanding Senior Notes (in whole and
not in part) upon compliance with the conditions set forth below in this Article
9, such election to be evidenced by a Board Resolution delivered to the Trustee.
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SECTION 9.2. Defeasance and Discharge.
Upon the Company's exercise of its option to have this Section 9.2
applied to the outstanding Senior Notes (in whole and not in part), the Company
shall be deemed to have been discharged from its Obligations with respect to
such Senior Notes as provided in this Section 9.2 on and after the date on which
the conditions set forth in Section 9.4 hereof are satisfied (hereinafter called
"Defeasance"). For this purpose, Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by such
Senior Notes and the Company and the Guarantors shall be deemed to have
satisfied all of their other obligations under such Senior Notes, this Indenture
and the Guarantees (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), subject to the following
which shall survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of such Senior Notes to receive, solely
from the trust fund described in Section 9.4 hereof and as more fully set forth
in Section 9.4, payments in respect of the principal of and any premium and
interest on such Senior Notes when payments are due,
(b) the Company's obligations with respect to such Senior Notes
under Sections 2.6, 2.8, 4.17, 4.18 and 4.19 hereof,
(c) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture,
(d) Article 3 hereof, and
(e) this Article 9.
Subject to compliance with this Article 9, the Company may
exercise its option to have this Section 9.2 applied to the outstanding Senior
Notes notwithstanding the prior exercise of its option to have Section 9.3
hereof applied to such Senior Notes.
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SECTION 9.3. Covenant Defeasance.
Upon the Company's exercise of its option to have this Section 9.3
applied to the outstanding Senior Notes (in whole and not in part), (i) the
Company and the Guarantors shall be released from their respective obligations
under Sections 5.1 and 5.2, Sections 4.2 through 4.14, inclusive, Sections 4.20,
4.21 and 4.22 and any covenant added to this Indenture subsequent to the Issue
Date pursuant to Section 10.1 hereof, and (ii) the occurrence of any event
specified in Section 6.1(c) or 6.1(d) hereof, with respect to any of Section 5.1
and 5.2, Sections 4.3 through 4.14, inclusive, Sections 4.20, 4.21 and 4.22, and
any covenant added to this Indenture subsequent to the Issue Date pursuant to
Section 10.1 hereof, shall be deemed not to be or result in an Event of Default,
in each case with respect to such Senior Notes as provided in this Section 9.3
on and after the date on which the conditions set forth in Section 9.4 hereof
are satisfied (hereinafter called "Covenant Defeasance"). For this purpose,
Covenant Defeasance means that, with respect to such Senior Notes, the Company
and the Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Section 6.1(c) and 6.1(d)
hereof), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provisions herein or in any other document; but the remainder of this
Indenture, the Guarantees and such Senior Notes shall be unaffected thereby.
SECTION 9.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
Section 9.3 or Section 9.4 hereof to the outstanding Senior Notes:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to the benefits of the Holders of such Senior Notes, (i) money in an amount, or
(ii) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one Business Day before the due date of any payment,
money in an amount, or (iii) a combination thereof, in each case sufficient, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge the principal of (premium, if any on) and any installment of
interest on such Senior Notes on the Stated Maturity thereof, in accordance with
the terms of this Indenture and such Senior Notes.
(b) In the event of an election to have Section 9.2 hereof apply
to the outstanding Senior Notes, the Company shall have delivered to the Trustee
an Opinion of Counsel stating 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 United States
federal income tax law, in either case (i) or (ii) to the effect that, and based
thereon such opinion
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shall confirm that, the Holders of such Senior Notes will not recognize gain or
loss for United States federal income tax purposes as a result of the deposit,
Defeasance and discharge to be effected with respect to such Senior Notes and
will be subject to United States federal income tax in the same amount, in the
same manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.
(c) In the event of an election to have Section 9.3 hereof apply
to the outstanding Senior Notes, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of such Senior Notes will
not recognize gain or loss for United States federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect to
such Senior Notes and will be subject to United States federal income tax in the
same amount, in the same manner and at the same times as would be the case if
such deposit, Covenant Defeasance and discharge were not to occur.
(d) No Default or Event of Default with respect to the outstanding
Senior Notes shall have occurred and be continuing at the time of such deposit
after giving effect thereto or and no Default or Event of Default under Section
6.1(g) or 6.1(h) shall have occurred at any time on or prior to the 91st day
after the date of such deposit and be continuing on such 91st day (it being
understood that this condition shall not be deemed satisfied until after such
91st day).
(e) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming for the purpose of this clause (e) that all Senior Notes are in
default within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company or the Guarantor is a party or by which it is
bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
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SECTION 9.5. Deposited Money and U. S. Government Obligations to be Held in
Trust; Miscellaneous Provisions.
Subject to Section 9.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 9.4 hereof in respect of the outstanding Senior Notes shall be held
in trust and applied by the Trustee, in accordance with the provisions of such
Senior Notes and this Indenture, to the payment, either directly or through any
such Paying Agent as the Trustee may determine, to the Holders of such Senior
Notes, of all sums due and to become due thereon in respect of principal and any
premium and interest, but money so held in trust need not be segregated upon
other funds except to the extent required by law. The Company shall pay and
indemnity the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
9.4 hereof or the principal and interest received in respect thereof other than
such tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 9.4 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 outstanding Senior
Notes.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company Order
any money or U.S. Government Obligations held by it as provided in Section 9.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be,
with respect to the outstanding Senior Notes.
SECTION 9.6. Repayment to Company.
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, if any, on any Senior Note and remaining unclaimed for two
years after such principal, premium, if any, or interest, if any, have 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 Senior
Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Company as trustee
thereof, shall thereupon cease; provided 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.
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SECTION 9.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money in
accordance with this Article 9 with respect to any Notes by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations under this
Indenture, the Guarantees and such Senior Notes from which the Company or the
Guarantors have been discharged or released pursuant to Section 9.2 or 9.3
hereof shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 9 with respect to such Senior Notes, until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 9.5 hereof with respect to such Senior Notes in accordance
with this Article 9; provided that if the Company or any Guarantor makes any
payment of principal of, premium, if any, or interest on any such Senior Note
following such reinstatement of its obligations, the Company or such Guarantor,
as the case may be, shall be subrogated to the Holders of such Senior Notes to
receive such payment from the money so held in trust.
ARTICLE 10
Amendments
SECTION 10.1. Without Consent of Holders.
(a) The Company, the Guarantors and the Trustee may at any time
and from time to time, without notice to or consent of any Holder, enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(i) to evidence the succession of another Person to the
Company and the Guarantors and the assumption by such successor of
the covenants and Obligations of the Company under this Indenture and
contained in the Senior Notes and the Guarantors contained in this
Indenture and the Guarantees;
(ii) to add to the covenants of the Company, for the
benefit of the Holders, or to surrender any right or power conferred
upon the Company or the Guarantors by this Indenture;
(iii) to add any additional Events of Default;
(iv) to provide for uncertificated Senior Notes in addition
to or in place of Certificated Senior Notes;
(v) to evidence and provide for the acceptance of
appointment under this Indenture by the successor Trustee;
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(vi) to secure the Senior Notes and/or the Guarantees;
(vii) to cure any ambiguity, to correct or supplement
any provision in this Indenture which may be inconsistent with any
other provision therein or to add any other provisions with respect to
matters or questions arising under this Indenture, provided that such
actions will not adversely affect the interests of the Holders in any
material respect; or
(viii) to add or release any Guarantor pursuant to the
terms of this Indenture.
SECTION 10.2. With Consent of Holders.
With the consent of the Holders of at least a majority of the
principal amount at Stated Maturity of the outstanding Senior Notes (including
consents obtained in connection with a tender offer or an exchange offer for the
Senior Notes), by Act delivered to the Company, the Guarantors and the Trustee,
the Company, the Guarantors and the Trustee may enter into one or more
indentures supplemental hereto for the purpose of adding any provisions to or
changing or eliminating any of the provisions of this Indenture or modifying the
rights of the Holders of the Senior Notes, provided that no such supplemental
indenture, without the consent of the Holder of each outstanding Senior Note
affected thereby, will:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Senior Note, or reduce the principal amount
thereof (or any premium, if any), or the interest thereon, that would be due and
payable upon Maturity thereof, or change the place of payment where, or the coin
or currency in which, any Senior Note or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof; or
(b) reduce the percentage in principal amount at Stated Maturity
of the outstanding Senior Notes, the consent of whose Holders is required for
any such supplemental indenture or required for any waiver of compliance with
the provisions of this Indenture; or
(c) modify any of the provisions of Section 6.4 hereof, except to
increase the percentage set forth therein or to provide that certain other
provisions of this Indenture cannot be amended or waived without the consent of
the Holder of each outstanding Senior Note affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate, the
Senior Notes or the Guarantees to any other Indebtedness; or
(e) modify any provision of this Indenture relating to the
obligations of the Company to make offers to purchase Senior Notes upon a Change
of Control or from the proceeds
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of an Asset Sale; or
(f) modify any of the provisions of this Section 10.2 except to
increase any percentage set forth herein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holders of each outstanding Senior Note affected thereby; or
(g) amend, supplement or otherwise modify the provisions of this
Indenture relating to the Guarantees.
It shall not be necessary for any Act of Holders under this
Section 10.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 10.3. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article 10, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Senior Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby. After a supplemental indenture
becomes effective, the Company shall mail to Holders a notice briefly describing
such amendment. The failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 10.4. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Senior Notes shall comply
with the Trust Indenture Act as then in effect.
SECTION 10.5. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a Holder of a Senior
Note shall bind the Holder and every subsequent Holder of that Senior Note or
portion of the Senior Note that evidences the same debt as the consenting
Holder's Senior Note, even if notation of the consent or waiver is not made on
the Senior Note. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's Senior Note or portion of the Senior Note
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Holder. An amendment or waiver becomes effective upon the
execution of a supplemental indenture containing such amendment or waiver by the
Trustee.
(b) The Company may, but shall not be obligated to, fix a record
date for the
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purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding subsection, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
SECTION 10.6. Notation on or Exchange of Senior Notes.
If an amendment changes the terms of a Senior Note, the Trustee
may require the Holder of the Senior Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Senior Note regarding the
changed terms and return it to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Senior Note shall issue
and the Trustee shall authenticate a new Senior Note that reflects the changed
terms. Failure to make the appropriate notation or to issue a new Senior Note
shall not affect the validity of such amendment.
SECTION 10.7. Trustee To Execute Supplemental Indentures.
The Trustee shall execute any supplemental indenture authorized
pursuant to this Article 10 if such supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may, but shall not be required to, execute such supplemental
indenture. In executing any supplemental indenture, the Trustee shall be
entitled to receive indemnity reasonably satisfactory to it and to receive, and
(subject to Section 7.1 hereof) shall be fully protected in relying upon, an
Officers' Certificate (which need only cover the matters set forth in clause (a)
below) and an Opinion of Counsel provided by the Company stating that:
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied:
(b) the Company and the Guarantors have all necessary corporate
power and authority to execute and deliver the supplemental indenture and that
the execution, delivery and performance of such supplemental indenture has been
duly authorized by all necessary corporate action of the Company and the
Guarantors;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or (iii)
any material agreement or instrument to which the Company or any Guarantor is
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subject and of which such counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of
Counsel, the execution, delivery and performance of the supplemental indenture
do not conflict with, or result in the breach of any of the terms, conditions or
provisions of (i) any law or regulation applicable to the company or any
Guarantor, or (ii) any material order, writ, injunction or decree of any court
or governmental instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and validly executed
and delivered by the Company and the Guarantors, and the Indenture together with
such supplemental indenture constitutes a legal, valid and binding obligations
of the Company and the Guarantors enforceable against the Company and the
Guarantors, as applicable, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles; and
(f) the Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
SECTION 10.8. Payment for Consent.
Neither the Company nor any Affiliate of the Company shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Senior Notes unless such consideration is offered to be paid to all
Holders that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
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ARTICLE 11
Guarantees
SECTION 11.1. Guarantees.
(a) For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Guarantors, hereby
jointly and severally and irrevocably and unconditionally guarantees to the
Trustee and to each Holder of a Senior Note authenticated and delivered by the
Trustee irrespective of the validity or enforceability of this Indenture or the
Senior Notes or the Obligations of the Company and the Guarantors under this
Indenture, that: (i) the principal of, premium, if any, and any interest, on the
Senior Notes (including, without limitation, any interest that accrues after the
filing of a proceeding of the type described in Sections 6.1(g) and (h)) and any
fees, expenses and other amounts owing under this Indenture will be duly and
punctually paid in full when due, whether at Stated Maturity, by acceleration,
call for redemption, upon a Change of Control Offer, Asset Sale Offer, purchase
or otherwise, and interest on the overdue principal and (to the extent permitted
by law) interest, if any, on the Senior Notes and any other amounts due in
respect of the Senior Notes, and all other Obligations of the Company and the
Guarantors to the Holders of the Senior Notes under this Indenture and the
Senior Notes, whether now or hereafter existing, will be promptly paid in full
or performed, all strictly in accordance with the terms hereof and of the Senior
Notes; and (ii) in case of any extension of time of payment or renewal of any
Senior Notes or any of such other Obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration, call for redemption, upon
Change of Control Offer, Asset Sale Offer, purchase or otherwise. If payment is
not made when due of any amount so guaranteed for whatever reason, each
Guarantor shall be jointly and severally obligated to pay the same individually
whether or not such failure to pay has become an Event of Default which could
cause acceleration pursuant to Sction 6.2. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection. An Event of Default
under this Indenture or the Senior Notes shall constitute an Event of Default
under this Guarantee, and shall entitle the Holders to accelerate the
Obligations of each Guarantor hereunder in the same manner and to the same
extent as the Obligations of the Company. This Guarantee is intended to be
superior to or pari passu in right of payment with all Indebtedness of the
Guarantors and each Guarantor's Obligations are independent of any Obligation of
the Company or any other Guarantor.
(b) Each Guarantor waives presentation to, demand of, payment from
and protest to the Company of any of the Obligations under this Indenture or the
Senior Notes and also waives notice of protest for nonpayment. Each Guarantor
waives notice of any default under the Senior Notes or the Obligations. The
Obligations of each Guarantor hereunder shall not be affected by (a) the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
right or remedy against the Company or any other Person under this Indenture,
the Senior Notes or any other
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agreement or otherwise; (b) any extension or renewal of any thereof; (c) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Senior Notes or any other agreement; (d) the release of
any security held by any Holder or the Trustee for the Obligations or any of
them; (e) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Obligations; or (f) any change in the
ownership of such Guarantor.
(c) The Obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations of the Company or otherwise. Without
limiting the generality of the foregoing, the Obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Senior Notes or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations of the Company, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law or equity.
(d) Each Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of, premium, if any, on or interest
on any Obligation of the Company is rescinded or must otherwise be restored by
any Holder or the Trustee upon the bankruptcy or reorganization of the Company
or otherwise.
(e) In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of, premium, if any, on or interest on any Obligation when and as the same shall
become due, whether at maturity, by acceleration, by redemption or otherwise, or
to perform or comply with any other Obligation, each Guarantor hereby promises
to and will, upon receipt of written demand by the Trustee, forthwith pay, or
cause to be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders and the
Trustee.
(f) Until such time as the Senior Notes and the other Obligations
of the Company guaranteed hereby have been satisfied in full, each Guarantor
hereby irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's Obligations
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under this Guarantee, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Holders or the Trustee against the
Company or any other Guarantor or any security, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company or
any other Guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim,
remedy or right. If any amount shall be paid to such Guarantor in violation of
the preceding sentence at any time prior to the later of the payments in full of
the Senior Notes and all other amounts payable under this Indenture, this
Guarantee and the Stated Maturity of the Notes, such amount shall be held in
trust for the benefit of the Holders and the Trustee and shall forthwith be paid
to the Trustee to be credited and applied to the Notes and all other amounts
payable under this Guarantee, whether matured or unmatured, in accordance with
the terms of this Indenture, or to be held as security for any Obligations or
other amounts payable under this Guarantee thereafter arising.
(g) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 11.1 is knowingly made in
contemplation of such benefits. Each Guarantor further agrees that, as between
it, on the one hand, and the Holders and the Trustee, on the other hand, (x)
subject to this Article 11, the maturity of the Obligations guaranteed hereby
may be accelerated as provided in Article 6 for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such Obligations guaranteed hereby as provided in
Article 6, such Obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of this Guarantee.
(h) A Guarantor that makes a distribution or payment under a
Guarantee shall be entitled to contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each such other Guarantor for
all payments, damages and expenses incurred by that Guarantor in discharging the
Company's obligations with respect to the Senior Notes and this Indenture or any
other Guarantor with respect to its Guarantee, so long as the exercise of such
right does not impair the rights of the Holders of the Senior Notes under the
Guarantees.
(i) Each Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
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SECTION 11.2. Limitation on Liability.
Any term or provision of this Indenture to the contrary
notwithstanding, the maximum aggregate amount of the Obligations guaranteed
hereunder by any Guarantor shall not exceed the maximum amount that can be
hereby guaranteed without rendering this Indenture, as it relates to such
Guarantor, void, voidable or unenforceable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally. To effectuate the foregoing intention, the
Obligations of each Guarantor shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the Obligations of such other
Guarantor under its Guarantee or pursuant to its contribution Obligations
hereunder, result in the Obligations of such Guarantor under its Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal, state
or foreign law. Each Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each Guarantor.
SECTION 11.3. Execution and Delivery of Guarantees.
To further evidence its Guarantee set forth in Section 11.1
hereof, each Guarantor hereby agrees that notation of such Guarantee shall be
endorsed on each Senior Note authenticated and delivered by the Trustee and
executed by either manual or facsimile signature of an authorized officer of
such Guarantor. Each Guarantor hereby agrees that its Guarantee set forth in
Section 11.1 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Guarantee. If an officer of a
Guarantor whose signature is on this Indenture or a Senior Note no longer holds
that office at the time the Trustee authenticates such Senior Note or at any
time thereafter, such Guarantor's Guarantee of such Senior Note shall be valid
nevertheless. The delivery of any Senior Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of the Guarantor.
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SECTION 11.4. When a Guarantor May Merge, etc.
No Guarantor shall consolidate with or merge with or into (whether
or not such Guarantor is the surviving person) another corporation, Person or
entity whether or not affiliated with such Guarantor (but excluding any
consolidation, amalgamation or merger if the surviving corporation is no longer
a Subsidiary) unless (i) subject to the provisions of Section 11.7 hereof, the
Person formed by or surviving any such consolidation or merger (if other than
such Guarantor) assumes all the Obligations of such Guarantor pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee under the
Senior Notes and this Indenture and (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists. In connection with any such
consolidation or merger, the Trustee shall be entitled to receive an Officers'
Certificate and an Opinion of Counsel stating that such consolidation or merger
is permitted by this Section 11.4.
SECTION 11.5. No Waiver.
Neither a failure nor a delay on the part of either the Trustee or
the Holders in exercising any right, power or privilege under this Article 11
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or privilege.
The rights, remedies and benefits of the Trustee and the Holders herein
expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 11 at law, in
equity, by statute or otherwise.
SECTION 11.6. Modification.
No modification, amendment or waiver of any provision of this
Article 11, nor the consent to any departure by any Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.
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SECTION 11.7. Release of Guarantor.
Upon the sale or other transfer of all of the Capital Stock of a
Guarantor to any Person that is not an Affiliate of the Company in compliance
with the terms of this Indenture (including, without limitation, Section 4.7
hereof) and in a transaction that does not result in a Default or an Event of
Default being in existence or continuing immediately thereafter, such Guarantor
shall be deemed automatically and unconditionally released and discharged from
all obligations under this Indenture without any further action required on the
part of the Trustee or any Holder; provided that the Net Available Proceeds of
such sale or other disposition are applied in accordance with Section 4.7 of
this Indenture as if such sale or disposition were an Asset Sale and in
accordance with the applicable provisions of this Indenture. The Trustee shall
deliver at the expense of the Company an appropriate instrument or instruments
evidencing such release upon receipt of a request of the Company accompanied by
an Officers' Certificate and Opinion of Counsel certifying as to the compliance
with this Section 11.7 and the other applicable provisions of this Indenture.
SECTION 11.8. Execution of Supplemental Indentures for Future Guarantors.
Any Wholly Owned Subsidiary that is a domestic Subsidiary or any
other Subsidiary that guarantees any Indebtedness of an Obligor is required to
become a Guarantor and the Company shall cause each such Subsidiary to promptly
execute and deliver to the Trustee a supplemental indenture in the form of
Exhibit C hereto pursuant to which such Subsidiary shall become a Guarantor
under this Article 11 and shall guarantee the Obligations of the Company under
the Senior Notes and this Indenture. Concurrently with the execution and
delivery of such supplemental indenture, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors' rights
generally and to the principles of equity, whether considered in a proceeding at
law or in equity, the Guarantee of such Guarantor is a legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, and as to any such other matters as the Trustee may reasonably
request.
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ARTICLE 12
Miscellaneous
SECTION 12.1. Compliance Certificates and Opinions.
Upon any application or request by the Company or the Guarantors
to the Trustee to take any action under any provision of this Indenture, the
Company and the Guarantors, as applicable, shall furnish to the Trustee, to the
extent required by the TIA or this Indenture, (i) an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant, compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with;
and
(4) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been
complied with.
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SECTION 12.2. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, and may state that it is so based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an officer or officers of the Company or such Guarantor stating that the
information with respect to such factual matters is in the possession of the
Company or such Guarantor, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 12.3. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by a specified percentage of Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such specified
percentage of Holders in person or by agents duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are received by the Trustee and,
where it is hereby expressly required, to the Company and the Guarantors. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Sections 7.1 and 7.2) conclusive in favor of the
Trustee, the Company and the Guarantors, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary
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public or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing acknowledged
to him the execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient, including the execution of such instrument or writing without
more.
(c) The ownership, principal amount and serial numbers of Senior
Notes held by any Person, and the date of holding the same, shall be proved by
the Senior Note Register.
(d) If the Company shall solicit from the Holders of Senior Notes
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Such record date shall be the
record date specified in or pursuant to such Board Resolution, which shall be a
date not earlier than the date 30 days prior to the first solicitation is
completed. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of outstanding Senior Notes have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
outstanding Senior Notes shall be computed as of such record date; provided that
no such authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the record date.
(e) Except to the extent otherwise expressly provided in this
Indenture, any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Senior Note shall bind every future
Holder of the same Senior Note and the Holder of every Senior Note issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Senior Note.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action with regard to any particular Senior Note may do so with
regard to all or any part of the principal amount of such Senior Note or by one
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
104
<PAGE> 112
SECTION 12.4. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by
Sections 310 to 318, inclusive, of the Trust Indenture Act, the required
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the TIA that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.
105
<PAGE> 113
SECTION 12.5. Notices.
Any notice or communication shall be in writing and delivered in
person, or sent by registered or certified mail, by air courier guaranteeing
overnight delivery or by fax (promptly confirmed by telephone) and addressed as
follows:
if to the Company or any Guarantor:
Grey Wolf, Inc.
10370 Richmond Avenue
Suite 600
Houston, Texas 77042
Attn: Chief Financial Officer
Phone: (281) 435-6100
Fax: (281) 435-6171
if to the Trustee:
Chase Bank of Texas, National Association
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Corporate Trust Division
Phone: (713) 216-5811
Fax: (713) 216-5476
with a copy to the Trustee's Dallas Payment Office:
Chase Bank of Texas, National Association
1201 Main Street
Dallas, Texas 75202
Attn: Corporate Trust Services
The Company, the Guarantors or the Trustee by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be sent to
the Holder by first class mail, postage prepaid, at the Holder's address as it
appears in the Senior Note Register and shall be given if so sent within the
time prescribed. Failure to mail a notice or communications to a Holder or any
default in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed or faxed to the Company, the Guarantors, the
Trustee or a Holder in the manner provided above, it is duly given, whether or
not the addressee receives it but shall not be
106
<PAGE> 114
effective unless in the case of the Company, the Guarantors or the Trustee
actually received. In case by reason of the suspension of regular mail service
or by reason or any other cause it shall be impracticable to give notice by mail
to Holders, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 12.6. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Senior Notes.
The Company, the Guarantors, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting
of Holders. The Registrar and the Paying Agent may make reasonable rules for
their functions.
SECTION 12.8. Payments on Business Days.
If a payment hereunder is scheduled to be made on a date that is
not a Business Day, payment shall be made on the next succeeding day that is a
Business Day, and no interest shall accrue with respect to that payment during
the intervening period. If a regular Record Date is not a Business Day, such
Record Date shall not be affected.
SECTION 12.9. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.10. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or a Guarantor under the Senior Notes, the Guarantees or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Senior Note, each Holder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Senior Notes.
107
<PAGE> 115
SECTION 12.11. Submission to Jurisdiction; Appointment of Agent for Service of
Process; Waiver of Immunities.
(a) The Company and each Guarantor hereby irrevocably, to the
fullest extent it may do so under applicable law, submits to the jurisdiction of
any New York State or federal court sitting in the Borough of Manhattan, The
City of New York and to the courts of its own corporate domicile with respect to
all actions brought against it as a defendant in respect of any suit, action or
proceeding or arbitral award arising out or relating to this Indenture, the
Senior Notes or any transaction contemplated hereby or thereby (a "Proceeding"),
and irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts, to the fullest extent
it may do so under applicable law. The Company and each Guarantor irrevocably
waives, to the fullest extent it may do so under applicable law, trial by jury
and any objection which it may now or hereafter have to the laying of the venue
of any such Proceeding brought in any such court and any claim that any such
Proceeding brought in any such court has been brought in an inconvenient forum.
The Company and each Guarantor acknowledges that it has, by separate written
instrument, irrevocably appointed CT Corporation System (the "Process Agent"),
with an office at 1633 Broadway, New York, New York 10019, as its authorized
agent to receive on behalf of the Company and each Guarantor and its property
service of copies of the summons and complaint and any other process which may
be served in any Proceeding, and that the Process Agent has accepted such
appointment. If for any reason such Process Agent shall cease to be such agent
for service of process, the Company and each Guarantor shall forthwith appoint a
new agent of recognized standing for service of process in the State of New
York, United States and deliver to the Trustee a copy of the new agent's
acceptance of that appointment within 30 days. Nothing herein shall affect the
right of the Trustee, any Paying Agent or any Holder to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Company or the Guarantors in any other court of competent
jurisdiction.
(b) Service may be made by delivering by hand a copy of such
process to the Company or the Guarantors, as the case may be, in care of the
Process Agent at the address specified above. The Company and the Guarantors
hereby irrevocably authorize and direct the Process Agent to accept such service
on their behalf. Failure of the Process Agent to give notice to the Company or
the Guarantors or failure of the Company or the Guarantors to receive notice of
such service of process shall not affect in any way the validity of such service
on the Process Agent or the Company or the Guarantors. As an alternative method
of service, the Company and the Guarantors also irrevocably consent to the
service of any and all process in any such proceeding by the delivery by hand of
copies of such process to the Company or the Guarantors, as the case may be, at
the applicable address specified in Section 12.5 hereof or at the address most
recently furnished in writing by the Company or the Guarantors to the Trustee.
The Company and the Guarantors covenant and agree that they shall take any and
all reasonable action, including the execution and filing of any and all
documents, that may be necessary to continue the designation of the Process
108
<PAGE> 116
Agent specified above in full force and effect during the term of the Senior
Notes, and to cause the Process Agent to continue to act as such.
(c) The Company and the Guarantors irrevocably agree that, in any
Proceedings anywhere (whether for an injunction, specific performance or
otherwise), no immunity (to the extent that it may at any time exist, whether on
the grounds of sovereignty or otherwise) from such Proceedings, from attachment
(whether in aid of execution, before judgment or otherwise) of their assets or
from execution of judgment shall be claimed by them or on their behalf or with
respect to their assets, except to the extent required by applicable law, any
such immunity being irrevocably waived, to the fullest extent permitted by
applicable law. The Company and the Guarantors irrevocably agree that, where
permitted by applicable law, they and their assets are, and shall be, subject to
such Proceedings, attachment or execution in respect of their obligations under
this Indenture or the Senior Notes.
SECTION 12.12. Successors.
All agreements of the Company in this Indenture and the Senior
Notes shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
SECTION 12.13. Multiple Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture. This Indenture may
be executed in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 12.14. Table of Contents; Headings.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
109
<PAGE> 117
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first above written.
COMPANY:
GREY WOLF, INC.
By:/s/ DAVID W. WEHLMANN
--------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
GUARANTORS:
GREY WOLF DRILLING COMPANY
By:/s/ DAVID W. WEHLMANN
--------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
GREY WOLF INTERNATIONAL, INC.
By:/s/ DAVID W. WEHLMANN
--------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
DI ENERGY, INC.
By: /s/ DAVID W. WEHLMANN
--------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
<PAGE> 118
MURCO DRILLING CORPORATION
By: /s/DAVID W. WEHLMANN
--------------------------------------------------
Name: David W. Wehlmann
Title: Secretary
TRUSTEE:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
By:/s/ MAURI J. COWEN
--------------------------------------------------
Name: Mauri J. Cowen
Title: Vice President and Trust Officer
<PAGE> 119
EXHIBIT A
(Face of Senior Note)
[THIS SENIOR NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
REFERRED TO ON THE REVERSE THEREOF.
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
GREY WOLF, INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL NOTE IS EXCHANGEABLE FOR A SENIOR NOTE IN DEFINITIVE, FULLY
REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE COMPANY THAT
IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS GLOBAL NOTE OR IF
AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY" REGISTERED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND A SUCCESSOR DEPOSITORY IS NOT APPOINTED BY
THE COMPANY WITHIN 90 DAYS OF SUCH NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS
TO THE TRUSTEE A NOTICE THAT THIS GLOBAL NOTE SHALL BE SO TRANSFERABLE,
REGISTRABLE, AND EXCHANGEABLE, AND SUCH TRANSFER SHALL BE SO REGISTRABLE, OR (C)
AN EVENT OF DEFAULT (AS HEREINAFTER DEFINED) HAS OCCURRED AND IS CONTINUING WITH
RESPECT TO THE SENIOR NOTE.1]
[THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
A-1
<PAGE> 120
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT IS ACQUIRING THIS
SENIOR NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C)
IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SENIOR NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN VIOLATION OF THE FOREGOING.](1)
- -----------
(1) This paragraph should be removed upon the exchange of Initial Senior Notes
for Exchange Notes in the Exchange Offer or upon the registration of Initial
Senior Notes pursuant to the terms of the Registration Rights Agreement.
A-2
<PAGE> 121
8-7/8% Senior Notes due 2007, Series B
GREY WOLF, INC.
No.
CUSIP No. _____________
$-----------
Grey Wolf, Inc. promises to pay to ___________ or registered
assigns, [the principal sum of Seventy-Five Million United States Dollars, or
such greater or lesser amount as may from time to time be endorsed on Schedule A
hereto](2) on July 1, 2007.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Reference is hereby made to the further provisions of this
Senior Note set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authorization hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Senior Note shall not be entitled to any benefit of this Indenture or be
valid or obligatory for any purpose.
- --------
(2) This phrase should be included only if the Senior Note is issued in global
form.
A-3
<PAGE> 122
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
GREY WOLF, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title
---------------------------------------
Dated: May 8, 1998
Certificate of Authentication:
This is one of the Senior Notes
referred to in the within-mentioned
Indenture:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By:
-------------------------------------------
Authorized Signatory
A-4
<PAGE> 123
(Reverse of Senior Note)
8-7/8% Senior Note due 2007, Series B
Capitalized terms used herein shall have the meanings assigned
to them in this Indenture referred to below unless otherwise indicated.
1. Interest. Grey Wolf, Inc., a Texas corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being called the "Company"), promises to pay interest on the
principal amount of this Senior Note at 8-7/8% per annum until Maturity and
shall pay Special Interest, if any, payable pursuant to the Registration Rights
Agreement referred to below. The Company will pay interest, if any, and Special
Interest, if any, semi-annually in arrears on January 1 and July 1 of each year
(each, an "Interest Payment Date"), or if any such day is not a Business Day, on
the next succeeding Business Day. Interest on the Senior Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issue Date; provided that if there is no existing Default in the
payment of interest, and if this Senior Note is authenticated between a Record
Date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be July 1, 1998.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
("Defaulted Interest"), and Special Interest, if any, (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 will pay interest on the
Senior Notes (except Defaulted Interest) and Special Interest, if any, to the
Persons who are registered Holders of Senior Notes at the close of business on
the December 15 and June 15 immediately preceding the Interest Payment Date
(each, a "Record Date"), even if such Senior 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 Senior
Notes will be payable as to principal, premium, interest and Special Interest at
the office or agency of the Company maintained for such purpose within the City
and State of New York, or, at the option of the Company, payment of interest and
Special Interest may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium, if any, and Special Interest, if any, on, all Global Notes
and all other Senior Notes the Holders of which shall have provided wire
transfer instructions to the Company and the Paying Agent prior to the
applicable Record Date for such payment. 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, 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. In certain situations,
the Company or any of its Subsidiaries may act in any such capacity.
A-5
<PAGE> 124
4. Indenture. The Company issued the Senior Notes under an
Indenture dated as of May 8, 1998 (as such may be amended or supplemented,
"Indenture") between the Company, the Persons acting as guarantors and named
therein (the "Guarantors") and Chase Bank of Texas, National Association, as
trustee (the "Trustee," which term includes any successor trustee under the
Indenture). The terms of the Senior Notes include those stated in the Indenture
and those made part of the Indenture by reference to the U.S. Trust Indenture
Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb) as in effect on the
date of the Indenture. The Senior Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Senior Notes are unsecured obligations of the Company limited to
$75,000,000 in aggregate principal amount (subject to Section 2.2 of the
Indenture). This Senior Note is one of the Senior Notes referred to in the
Indenture.
5. Optional Redemption. (a) Except as set forth in clause 5(b)
of this Senior Note, the Senior Notes shall not be redeemable at the Company's
option prior to July 1, 2002. On or after such date, the Senior Notes shall be
redeemable at the option of the Company, in whole at any time or in part from
time to time, at the following prices (expressed in percentages of principal
amount thereof) if redeemed during the twelve-month period beginning after July
1 of each of the years indicated below, in each case together with interest (and
Special Interest, if any) accrued to the Redemption Date (subject to the right
of Holders of record on the relevant Record Date to receive interest (and
Special Interest, if any) due on the relevant Interest Payment Date):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2002............................................................. 104.4375 %
2003............................................................. 102.9580 %
2004............................................................. 101.4792 %
2005 and thereafter.............................................. 100.0000 %
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this clause 5,
at any time on or before June 27, 2000, the Company may at its option redeem up
to a maximum of 30% of the aggregate principal amount of the Senior Notes with
the net cash proceeds of one or more Qualified Equity Offerings at a Redemption
Price equal to 108.875% of the principal amount thereof, plus accrued and unpaid
interest (and Special Interest, if any), thereon to the Redemption Date;
provided that at least $50,000,000 of the aggregate principal amount of the
Senior Notes originally issued shall remain outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption shall
occur within 90 days of the date of the closing of such Qualified Equity
Offering.
(c) Notices of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the Redemption Date to each
Holder whose Senior Notes are to be redeemed at its registered address. Senior
Notes in denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000, unless all of the Senior Notes held by a Holder
are to be redeemed. Unless the Company defaults in making such redemption
payment, on
A-6
<PAGE> 125
and after the Redemption Date interest (including Special Interest, if any)
ceases to accrue on Senior Notes or portions thereof called for redemption.
6. Mandatory Redemption. Except as contemplated by clause 7
below, the Company shall not be required to make any mandatory redemption,
purchase or sinking fund payments with respect to the Senior Notes prior to the
maturity date.
7. Repurchase at Option of Holder. (a) Upon the occurrence of
a Change of Control, each Holder will have the right to require the Company to
repurchase such Holder's Senior Notes in whole or in part (the "Change of
Control Offer") at a purchase price (the "Change of Control Purchase Price") in
cash equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, and Special Interest, if any, to the Change of
Control Payment Date on the terms described in the Indenture.
Within 30 days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Senior Notes. The Holder
of this Senior Note may elect to have this Senior Note or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Require Purchase" appearing below and tendering this Senior Note
pursuant to the Change of Control Offer. Unless the Company defaults in the
payment of the Change of Control Payment with respect thereto, all Senior Notes
or portions thereof accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest (and Special Interest, if any) from and after the
Change of Control Purchase Date.
(b) Subject to the limitations set forth in the next following
paragraph and the Indenture, if at any time the Company or any Subsidiary
engages in an Asset Sale as result of which the aggregate amount of Excess
Proceeds exceeds $15,000,000, the Company shall within 30 days thereafter, or at
any time after receipt of Excess Proceeds but prior to there being $15,000,000
of Excess Proceeds, the Company may, at its option, make a pro rata offer (an
"Asset Sale Offer") to all Holders of Senior Notes and holders of other Senior
Debt, if and to the extent the Company is required by the instruments governing
such other Senior Debt to make such an offer, to purchase other Senior Notes and
such Senior Debt in an aggregate amount equal to the Excess Proceeds, at a price
in cash (the "Asset Sale Offer Purchase Price") equal to 100% of the outstanding
principal of the Senior Notes plus accrued interest and Special Interest, if
any, to the date of purchase and, in the case of such other Senior Debt, 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, thereon
to the date of purchase. Upon completion of such Asset Sale Offer, the amount of
Excess Proceeds shall be reset to zero and the Company may use any remaining
amount for general corporate purposes.
Within 30 days of the date the amount of Excess Proceeds exceeds
$15,000,000, the Company shall send, or cause to be sent, by first class mail,
postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Senior Notes. The Holder of this Senior Note may elect to have this Senior Note
or a portion hereof in an authorized denomination purchased by completing the
form entitled "Option of Holder to Elect Purchase" appearing below and tendering
this Senior Note
A-7
<PAGE> 126
pursuant to the Asset Sale Offer. Unless the Company defaults in the payment of
the Asset Sale Offer Purchase Price with respect thereto, all Senior Notes or
portions thereof selected for payment pursuant to the Asset Sale Offer will
cease to accrue interest from and after the Asset Sale Offer Purchase Date.
8. Denominations; Transfer and Exchange. The Senior Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Notes may be registered and Senior
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 (including in certain cases, opinions of
counsel) 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 Senior Note or portion of a Senior Note selected for
redemption, except for the unredeemed portion of any Senior Note being redeemed
in part. Also, it need not exchange or register the transfer of any Senior Notes
for a period of 15 days before a selection of Senior Notes to be redeemed or
during the period between a Record Date and the corresponding Interest Payment
Date.
9. Persons Deemed Owners. The registered Holder of a Senior
Note may be treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. With the consent of the
holders of not less than a majority in aggregate principal amount at Stated
Maturity of the outstanding Senior Notes (including consents obtained in
connection with a tender offer or exchange offer for the Senior Notes), the
Company, the Guarantors and the Trustee may enter into one or more indentures
supplemental to the Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the holders; provided that no such
supplemental indenture will, without the consent of the Holder of each
outstanding Senior Note affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest on, any Senior Note, or reduce the
principal amount thereof (or premium, if any), or the interest thereon that
would be due and payable upon Maturity thereof, or change the place of payment
where, or the coin or currency in which, any Senior Note or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof, (b)
reduce the percentage in principal amount at Stated Maturity of the outstanding
Senior Notes, the consent of whose Holders is required for any such supplemental
indenture or required for any waiver of compliance with certain provisions of
the Indenture, (c) modify the Obligations of the Company to make offers to
purchase Senior Notes upon a Change of Control or from the proceeds of Asset
Sales, (d) subordinate in right of payment, or otherwise subordinate, the Senior
Notes or the Guarantees to any other Indebtedness, (e) amend, supplement or
otherwise modify the provisions of the Indenture relating to Guarantees or (f)
modify any of the provisions of this clause (except to increase any percentage
set forth herein).
11. Defaults and Remedies. Under the Indenture, Events of
Default include in summary form (i) default in the payment of interest on the
Senior Notes when due, continued for 30 days; (ii) default in the payment of
principal of (or premium, if any, on) the Senior Notes when due;
A-8
<PAGE> 127
(iii) failure to comply with certain of the covenants in the Indenture,
including the Change of Control covenant, the Asset Sale covenant and the
Restrictive Payments covenant; (iv) failure to perform any other covenant of the
Company or any Guarantor in the Indenture, continued for 30 days after written
notice as provided in the Indenture; (v) Indebtedness of the Company or any
Subsidiary is not paid when due within the applicable grace period, or is
accelerated and, in either case, the principal amount of such unpaid
Indebtedness exceeds $10,000,000; (vi) one or more final judgments or orders by
a court of competent jurisdiction are entered against the Company or any
Subsidiary in an uninsured or unindemnified aggregate amount in excess of
$5,000,000 and such judgments or orders are not discharged, waived, appealed,
stayed, satisfied or bonded for a period of 60 consecutive days; (vii) certain
events of bankruptcy, insolvency or reorganization; or (viii) a Guarantee ceases
to be in full force and effect (other than in accordance with the terms of the
Indenture and such Guarantee) or a Guarantor denies or disaffirms its
obligations under its Guarantee.
Holders may not enforce the Indenture or the Senior Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Senior Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount at Stated
Maturity of the Senior Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders. The Holders of a majority
in principal amount at Stated Maturity of the outstanding Senior Notes, by
written notice to the Company and the Trustee, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
12. Defeasance Prior to Maturity or Redemption. The Company,
at its election, shall (a) be deemed to have paid and discharged its debt on the
Senior Notes and the Indenture and Guarantees shall cease to be of further
effect as to all outstanding Senior Notes (except as to (i) rights of
registration of transfer, substitution and exchange of Senior Notes, (ii) the
Company's right of optional redemption, (iii) rights of Holders to receive
payments of principal of, premium, if any, and interest on the Senior Notes (but
not the Change of Control Purchase Price or the Asset Sale Offer Purchase Price)
and any rights of the Holders with respect to such amounts, (iv) the rights,
obligations and immunities of the Trustee under the Indenture, and (v) certain
other specified provisions in the Indenture) or (b) cease to be under any
obligation to comply with certain restrictive covenants that are described in
the Indenture, after the irrevocable deposit by the Company with the Trustee, in
trust for the benefit of the Holders, at any time prior to the Stated Maturity
of the Senior Notes, of (A) money in an amount, (B) U.S. Government Obligations
which through the payment of interest and principal will provide, not later than
one Business Day before the due date of payment in respect of such Senior Notes,
money in an amount, or (C) a combination thereof sufficient to pay and discharge
the principal of, premium, if any on, and interest (including Special Interest,
if any) on, such Senior Notes then outstanding on the dates on which any such
payments are due in accordance with the terms of the Indenture and of such
Senior Notes.
A-9
<PAGE> 128
13. Trustee Dealings with the Company. Subject to certain
limitations imposed by the Trust Indenture Act, 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. A director, officer, employee,
incorporator or stockholder, of the Company or a Guarantor, as such, shall not
have any liability for any obligations of the Company or the Guarantors under
the Senior Notes, the Indenture, the Guarantees or for any claim based on, in
respect of, or by reason of, such Obligations or their creation. Each Holder by
accepting a Senior Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior Notes.
15. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SENIOR NOTE, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
16. Authentication. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. 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).
18. Additional Rights of Holders of Transfer Restricted Senior
Notes. In addition to the rights provided to Holders of Senior Notes under the
Indenture, Holders of Transferred Restricted Senior Notes (as defined in the
Registration Rights Agreement) shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, between the
Company and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Senior Note Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior 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 Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Indenture Governs. In the event of a conflict between the
terms of this Note and the terms of the Indenture, the terms of the Indenture
shall govern.
A-10
<PAGE> 129
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Grey Wolf, Inc.
10370 Richmond Avenue
Suite 600
Houston, Texas 77042
Telephone No.: (713) 435-6100
Attention: Chief Financial Officer
Telephone No.: (713) 435-6100
Telecopier No.: (713) 435-6171
A-11
<PAGE> 130
GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors
(as defined in the Indenture referred to in this Senior Note and each
hereinafter referred to as a "Guarantor," which term includes any successor or
additional Guarantor under the Indenture) have jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment of
the principal (and premium, if any) of and interest (and Special Interest, if
any), on the Senior Notes, whether at Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer, purchase or
otherwise, (b) the due and punctual payment of interest on the overdue principal
of and interest, (and Special Interest, if any), on the Senior Notes to the
extent lawful, (c) the due and punctual performance of all other Obligations of
the Company and the Guarantors to the Holders under the Indenture and the Senior
Notes and (d) in case of any extension of time of payment or renewal of any
Senior Notes or any of such other Obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise.
Payment on each Senior Note is guaranteed, jointly and severally, by
the Guarantors pursuant to Article 11 of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The Obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor, and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution Obligations under the Indenture, result in the Obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any applicable federal or state law or not otherwise
being void, voidable or unenforceable under any applicable bankruptcy,
reorganization, receivership, liquidation or other similar legislation or legal
principles under any applicable federal law. Each Guarantor that makes a payment
or distribution under a Guarantee shall be entitled to a contribution from each
other Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Guarantor.
Guarantors may be released from their Guarantees upon the terms and
subject to the conditions provided in the Indenture.
A-12
<PAGE> 131
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions in the Indenture.
GREY WOLF DRILLING COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
GREY WOLF INTERNATIONAL, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
DI ENERGY, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MURCO DRILLING CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A-13
<PAGE> 132
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
- -------------------------------------------------------------------------------
(Insert assignee's Social Senior Note or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
to transfer this Senior Note on the books of the Company or the agent appointed
by the Company to maintain such books. The agent appointed hereby may substitute
another to act for him.
- -------------------------------------------------------------------------------
Date:
-------------------------
Your signature: ______________________________
(Sign exactly as your name appears on
the face of this Senior Note)
Signature Guarantee:
A-14
<PAGE> 133
Option of Holder to Elect Purchase
If you want to elect to have this Senior Note purchased by the
Company pursuant to Section 4.7 or 4.9 of the Indenture, check the box below:
Section 4.7 Section 4.9
If you want to elect to have only part of the Senior Note
purchased by the Company pursuant to Section 4.7 or Section 4.9 of the
Indenture, state the amount you elect to have purchased (must be an integral
multiple of $1,000): $__________________
Date: Your Signature:
- -----------------------------
(Sign exactly as your name appears
on the Senior Note)
Social Senior Note or
Tax Identification No.:
------------
Signature Guarantee:
A-15
<PAGE> 134
SCHEDULE A
CHANGES IN PRINCIPAL AMOUNT OF SENIOR NOTE(3)
The following changes in the principal amount of this Global
Note have been recorded:
<TABLE>
<CAPTION>
Principal Amount of this
Amount of decrease in Amount of increase in Global Note Signature of
Principal Amount of Principal Amount of following such decrease authorized officer
Date of Transaction this Global Note this Global Note (or increase) of Trustee
- ---------------------- ------------------------------------------------ ----------------------- -------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(3) This should be included only if the Senior Note is issued in global form.
A-16
<PAGE> 135
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.6(a)(1) of the Indenture)
Chase Bank of Texas, National Association
600 Travis
Houston, Texas 77002
Attention: Corporate Trust Administration
Re: 8-7/8% Senior Notes due 2007, Series B of Grey Wolf, Inc.
Reference is hereby made to the Indenture, dated as of May 8,
1998 (the "Indenture"), between Grey Wolf, Inc. (the "Company"), the Persons
acting as guarantors and named therein (the "Guarantors") and Chase Bank of
Texas, National Association, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S.$___________ principal amount of
Senior Notes which are evidenced by one or more U.S. Global Notes and held with
the Depository in the name of _____________ (the "Transferor"). The Transferor
has requested a transfer of such beneficial interest in the Senior Notes to a
Person who will take delivery thereof in the form of an equal principal amount
of Senior Notes evidenced by one or more Regulation S Global Notes, which
amount, immediately after such transfer, is to be held with the Depository
through Euroclear or Cedel or both.
In connection with such request and in respect of such Senior
Notes, the Transferor hereby certifies that such transfer has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 of Regulation S under
the United States Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor hereby further certifies that:
(1) The offer of the Senior Notes was not made to a
person in the United States and, if the 40-day
restricted period has not yet expired and the
Transferor is a dealer (as defined in Section 2(12)
of the Securities Act), or a person receiving a
selling concession, fee or other remuneration in
respect of the Senior Notes being sold (collectively,
"Dealers"), (i) neither the Transferor or any person
acting on its behalf knows that the transferee is a
U.S. person and (ii) if the Transferor or any person
acting on its behalf knows that the transferee is a
Dealer, the Transferor or person acting on its behalf
has sent a confirmation or other notice to the
transferee stating that the Senior Notes may be
offered or sold during the 40-day restricted period
only in accordance with the provisions of Regulation
S, pursuant to registration under the
B-1-1
<PAGE> 136
Securities Act or pursuant to an available exemption
from the registration requirements of the Securities
Act;
(2) either:
(a) at the time the buy order was originated,
the transferee was outside the United States
or the Transferor and any person acting on
its behalf reasonably believed and believes
that the transferee was outside the United
States; or
(b) the transaction was executed in, on or
through the facilities of a designated
offshore securities market and neither the
Transferor nor any person acting on its
behalf knows that the transaction was
prearranged with a buyer in the United
States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 904(b) of
Regulation S;
(4) the transaction is not part of a plan or scheme to
evade the registration provisions of the Securities
Act; and
(5) upon completion of the transaction, the beneficial
interest being transferred as described above is to
be held with the Depository through Euroclear or
Cedel or both.
Upon giving effect to this request to exchange a beneficial
interest in a U.S. Global Note for a beneficial interest in a Regulation S
Global Note. The resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Regulation S Global Notes pursuant to the
Indenture and the Securities Act and, if such transfer occurs prior to the end
of the 40-day restricted period associated with the initial offering of Senior
Notes, the additional restrictions applicable to transfers of interest in the
Regulation S Global Note.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Lehman Brothers, Inc. and Prudential Securities
Incorporated (collectively, the Initial Purchasers"), the Initial Purchasers of
such Senior Notes being transferred. We acknowledge that you, the Company and
the Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
B-1-2
<PAGE> 137
[Insert Name of Transferor]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Dated:
-------------------------------
cc: Grey Wolf, Inc.
Initial Purchasers
B-1-3
<PAGE> 138
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO U.S. GLOBAL NOTE
(Pursuant to Section 2.6(a)(ii) of the Indenture)
Chase Bank of Texas, National Association
600 Travis
Houston, Texas 77002
Attention: Corporate Trust Administration
Re: 8-7/8% Senior Notes due 2007, Series B of Grey Wolf, Inc.
Reference is hereby made to the Indenture dated as of May 8,
1998 (the "Indenture"), between Grey Wolf, Inc. (the "Company"), the Persons
acting as guarantors and named therein (the "Guarantors") and Chase Bank of
Texas, National Association, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $____________ principal amount of
Senior Notes which are evidenced by one or more Regulation S Global Notes and
held with the Depository through Euroclear or Cedel in the name of
_________________ (the "Transferor"). The Transferor has requested a transfer of
such beneficial interest in the Senior Notes to a Person who will take delivery
thereof in the form of an equal principal amount of Senior Notes evidenced by
one or more U.S.
Global Notes, to be held with the Depository.
In connection with such request and in respect of such Senior
Notes, the Transferor hereby certifies that:
[CHECK ONE]
[ ] such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act") and, accordingly, the Transferor hereby further
certifies that the Senior Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the Senior Notes for
its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A;
or
such transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;
B-2-1
<PAGE> 139
or
[ ] such transfer is being effected in an offshore transaction pursuant to
and in accordance with Rule 904 under the Securities Act;
or
[ ] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that
the Senior Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and such Senior Notes are being transferred in compliance with any applicable
blue sky or securities laws of any state of the United States or any other
applicable jurisdiction.
Upon giving effect to this request to exchange a beneficial
interest in Regulation S Global Notes for a beneficial interest in U.S. Global
Notes, the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to U.S. Global Notes pursuant to the Indenture and the
Securities Act.
B-2-2
<PAGE> 140
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporations, Lehman Brothers, Inc. and Prudential Securities
Incorporated (collectively, the "Initial Purchasers"), the Initial Purchasers of
such Senior Notes being transferred. We acknowledge that you, the Company and
the Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Dated:
--------------------------
cc: Grey Wolf, Inc.
Initial Purchasers
B-2-3
<PAGE> 141
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE SENIOR NOTES
(Pursuant to Section 2.6(b) of the Indenture)
Chase Bank of Texas, National Association
600 Travis
Houston, Texas 77002
Attention: Corporate Trust Administration
Re: 8-7/8% Senior Notes due 2007, Series B of Grey Wolf, Inc.
Reference is hereby made to the Indenture dated as of May 8,
1998 (the "Indenture"), between Grey Wolf, Inc. (the "Company"), the Persons
acting as guarantors and named therein (the "Guarantors") and Chase Bank of
Texas, National Association, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This relates to $_________ principal amount of Senior Notes
which are evidenced by one or more Certificated Senior Notes in the name of
______________ (the "Transferor"). The Transferor has requested an exchange or
transfer of such Certificated Senior Note(s) in the form of an equal principal
amount of Senior Notes evidenced by one or more Certificated Senior Notes, to be
delivered to the Transferor or, in the case of a transfer of such Senior Notes,
to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Senior
Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior
Notes"), the Holder of such Surrendered Senior Notes hereby certifies that:
[CHECK ONE]
[ ] the Surrendered Senior Notes are being acquired for the Transferor's
own account, without transfer;
or
[ ] the Surrendered Senior Notes are being transferred to the Company;
or
[ ] the Surrendered Senior Notes are being transferred pursuant to and in
accordance with Rule
B-3-1
<PAGE> 142
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Senior Notes are being transferred to a
Person that the Transferor reasonably believes is purchasing the
Surrendered Senior Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A;
or
[ ] the Surrendered Senior Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
[ ] the Surrendered Senior Notes are being transferred in an offshore
transaction pursuant to and in accordance with Rule 904 under the
Securities Act;
or
[ ] the Surrendered Senior Notes are being transferred pursuant to an
effective registration statement under the Securities Act;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that
the Senior Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and the Surrendered Senior Notes are being transferred in compliance with any
applicable blue sky or securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Lehman Brothers, Inc. and Prudential Securities
Incorporated (collectively, the "Initial Purchasers"), the Initial Purchasers of
such Senior Notes being transferred. We acknowledge that you, the Company and
the Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth
B-3-2
<PAGE> 143
herein, and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and complete. Terms
used in this certificate and not otherwise defined in the Indenture have the
meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Dated:
-------------------------------
cc: Grey Wolf, Inc.
Initial Purchasers
B-3-3
<PAGE> 144
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO DEFINITIVE SENIOR NOTE
(Pursuant to Section 2.6(c) of the Indenture)
Chase Bank of Texas, National Association
600 Travis
Houston, Texas 77002
Attention: Corporate Trust Administration
Re: 8-7/8% Senior Notes due 2007, Series B of Grey Wolf, Inc.
Reference is hereby made to the Indenture dated as of May 8,
1998 (the "Indenture"), between Grey Wolf, Inc. (the "Company"), the Persons
acting as guarantors and named therein (the "Guarantors") and Chase Bank of
Texas, National Association, as trustee (the "Trustee"). Capitalized terms used
but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $_____________ principal amount of
Senior Notes which are evidenced by a beneficial interest in one or more U.S.
Global Notes or Regulation S Global Notes in the name of __________________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
beneficial interest in the form of an equal principal amount of Senior Notes
evidenced by one or more Certificated Senior Notes, to be delivered to the
Transferor or, in the case of a transfer of such Senior Notes, to such Person as
the Transferor instructs the Trustee.
In connection with such request and in respect of the Senior
Notes surrendered to the Trustee herewith for exchange (the "Surrendered Senior
Notes"), the Holder of such surrendered Senior Notes hereby certifies that:
[CHECK ONE]
[ ] the Surrendered Senior Notes are being transferred to the beneficial
owner of such Senior Notes;
or
[ ] the Surrendered Senior Notes are being transferred pursuant to and in
accordance
B-4-1
<PAGE> 145
with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Senior Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Senior Notes for its own account, or for one
or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A;
or
[ ] the Surrendered Senior Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
[ ] such transfer is being effected in an offshore transaction pursuant to
and in accordance with Rule 904 under the Securities Act;
or
[ ] the Surrendered Senior Notes are being transferred pursuant to an
effective registration statement under the Securities Act;
or
[ ] the Surrendered Senior Notes are being transferred pursuant to an
exemption from the registration requirements of the Securities Act
other than those contemplated above, and the Transferor hereby further
certifies that the Senior Notes are being transferred in compliance
with the transfer restrictions applicable to the Global Notes and in
accordance with the requirements of the exemption claimed, which
certification is supported by an Opinion of Counsel, provided by the
transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act;
and the Surrendered Senior Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Lehman Brothers, Inc. and Prudential Securities
Incorporated (collectively, the "Initial Purchasers"), the Initial Purchasers of
such Senior Notes being transferred. We acknowledge
B-4-2
<PAGE> 146
that you, the Company and the Initial Purchasers will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete. Terms used in this certificate and
not otherwise defined in the Indenture have the meanings set forth in Regulation
S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Dated:
----------------------------
cc: Grey Wolf, Inc.
Initial Purchasers
B-4-3
<PAGE> 147
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among [GUARANTOR] (the "New Guarantor"), a subsidiary of Grey
Wolf, Inc. (or its successor), a Texas corporation (the "Company"), GREY WOLF,
INC., the Guarantors (the "Existing Guarantors") under the Indenture referred to
below, and Chase Bank of Texas, National Association, a national banking
association, as trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the
Trustee an Indenture (as such may be amended from time to time, the
"Indenture"), dated as of _______________, providing for the issuance of an
aggregate principal amount of $75,000,000 of 8-7/8% Senior Notes due 2007 (the
"Senior Notes");
WHEREAS Section 11.8 of the Indenture provides that the Company is
required to cause the New Guarantor to execute and deliver to the Trustee a
supplemental indenture pursuant to which the New Guarantor shall jointly and
severally and unconditionally and irrevocably guarantee all of the Company's
Obligations under the Senior Notes and the Indenture pursuant to a Guarantee
contained in the Indenture on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 10.1 of the Indenture, the Trustee, the
Company and Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Senior Notes as follows:
1. Definitions. (a) Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly
and severally and unconditionally and irrevocably, with all other Guarantors, to
guarantee the Company's
C-1
<PAGE> 148
Obligations under the Senior Notes and the Indenture on the terms and subject to
the conditions set forth in Article 11 of the Indenture and to be bound by all
other applicable provisions of the Indenture. From and after the date hereof,
the New Guarantor shall be a Guarantor for all purposes under the Indenture and
the Senior Notes.
3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Senior Notes
heretofore or hereafter authenticated and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. Trustee Makes No Representation. The Trustee makes no representation
as to the validity or sufficiency of this Supplemental Indenture.
6. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR]
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
GREY WOLF, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
C-2
<PAGE> 149
[ALL EXISTING GUARANTORS]
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
C-3
<PAGE> 150
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
as Trustee
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
C-4
<PAGE> 1
EXHIBIT 4.4
(Face of Senior Note)
THIS SENIOR NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED
TO ON THE REVERSE THEREOF.
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
GREY WOLF, INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL NOTE IS EXCHANGEABLE FOR A SENIOR NOTE IN DEFINITIVE, FULLY
REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE COMPANY THAT
IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS GLOBAL NOTE OR IF
AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY" REGISTERED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND A SUCCESSOR DEPOSITORY IS NOT APPOINTED BY
THE COMPANY WITHIN 90 DAYS OF SUCH NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS
TO THE TRUSTEE A NOTICE THAT THIS GLOBAL NOTE SHALL BE SO TRANSFERABLE,
REGISTRABLE, AND EXCHANGEABLE, AND SUCH TRANSFER SHALL BE SO REGISTRABLE, OR (C)
AN EVENT OF DEFAULT (AS HEREINAFTER DEFINED) HAS OCCURRED AND IS CONTINUING WITH
RESPECT TO THE SENIOR NOTE.
THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
1
<PAGE> 2
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT IS ACQUIRING
THIS SENIOR NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SENIOR NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN VIOLATION OF
THE FOREGOING.
2
<PAGE> 3
8 7/8% Senior Notes due 2007, Series B
GREY WOLF, INC.
No. R-001
CUSIP No. 397888 AA 6
$75,000,000
Grey Wolf, Inc. promises to pay to CEDE & CO. or registered
assigns, the principal sum of SEVENTY-FIVE MILLION UNITED STATES DOLLARS, or
such greater or lesser amount as may from time to time be endorsed on Schedule A
hereto, on July 1, 2007.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Reference is hereby made to the further provisions of this
Senior Note set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authorization hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Senior Note shall not be entitled to any benefit of this Indenture or be
valid or obligatory for any purpose.
3
<PAGE> 4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
GREY WOLF, INC.
By: /s/ DAVID W. WEHLMANN
--------------------------------------
Name: David W. Wehlmann
------------------------------------
Title: Senior Vice President and
-----------------------------------
Chief Financial Officer
-----------------------------------
Dated: May 8, 1998
Certificate of Authentication:
This is one of the Senior Notes
referred to in the within-mentioned
Indenture:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By: /s/ MAURI J. COWEN
--------------------------------------------
Authorized Signatory
4
<PAGE> 5
(Reverse of Senior Note)
8 7/8% Senior Note due 2007, Series B
Capitalized terms used herein shall have the meanings assigned
to them in this Indenture referred to below unless otherwise indicated.
1. Interest. Grey Wolf, Inc., a Texas corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being called the "Company"), promises to pay interest on the
principal amount of this Senior Note at 8 7/8% per annum until Maturity and
shall pay Special Interest, if any, payable pursuant to the Registration Rights
Agreement referred to below. The Company will pay interest, if any, and Special
Interest, if any, semi-annually in arrears on January 1 and July 1 of each year
(each, an "Interest Payment Date"), or if any such day is not a Business Day, on
the next succeeding Business Day. Interest on the Senior Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issue Date; provided that if there is no existing Default in the
payment of interest, and if this Senior Note is authenticated between a Record
Date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be July 1, 1998.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
("Defaulted Interest"), and Special Interest, if any, (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 will pay interest on the
Senior Notes (except Defaulted Interest) and Special Interest, if any, to the
Persons who are registered Holders of Senior Notes at the close of business on
the December 15 and June 15 immediately preceding the Interest Payment Date
(each, a "Record Date"), even if such Senior 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 Senior
Notes will be payable as to principal, premium, interest and Special Interest at
the office or agency of the Company maintained for such purpose within the City
and State of New York, or, at the option of the Company, payment of interest and
Special Interest may be made by check mailed to the Holders at their addresses
set forth in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium, if any, and Special Interest, if any, on, all Global Notes
and all other Senior Notes the Holders of which shall have provided wire
transfer instructions to the Company and the Paying Agent prior to the
applicable Record Date for such payment. 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, 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. In certain situations,
the Company or any of its Subsidiaries may act in any such capacity.
5
<PAGE> 6
4. Indenture. The Company issued the Senior Notes under an
Indenture dated as of May 8, 1998 (as such may be amended or supplemented,
"Indenture") between the Company, the Persons acting as guarantors and named
therein (the "Guarantors") and Chase Bank of Texas, National Association, as
trustee (the "Trustee," which term includes any successor trustee under the
Indenture). The terms of the Senior Notes include those stated in the Indenture
and those made part of the Indenture by reference to the U.S. Trust Indenture
Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb) as in effect on the
date of the Indenture. The Senior Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Senior Notes are unsecured obligations of the Company limited to
$75,000,000 in aggregate principal amount (subject to Section 2.2 of the
Indenture). This Senior Note is one of the Senior Notes referred to in the
Indenture.
5. Optional Redemption. (a) Except as set forth in clause 5(b)
of this Senior Note, the Senior Notes shall not be redeemable at the Company's
option prior to July 1, 2002. On or after such date, the Senior Notes shall be
redeemable at the option of the Company, in whole at any time or in part from
time to time, at the following prices (expressed in percentages of principal
amount thereof) if redeemed during the twelve-month period beginning after July
1 of each of the years indicated below, in each case together with interest (and
Special Interest, if any) accrued to the Redemption Date (subject to the right
of Holders of record on the relevant Record Date to receive interest (and
Special Interest, if any) due on the relevant Interest Payment Date):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2002 ....................................................... 104.4375 %
2003 ....................................................... 102.9580 %
2004 ....................................................... 101.4792 %
2005 and thereafter ........................................ 100.0000 %
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this
clause 5, at any time on or before June 27, 2000, the Company may at its option
redeem up to a maximum of 30% of the aggregate principal amount of the Senior
Notes with the net cash proceeds of one or more Qualified Equity Offerings at a
Redemption Price equal to 108.875% of the principal amount thereof, plus accrued
and unpaid interest (and Special Interest, if any), thereon to the Redemption
Date; provided that at least $50,000,000 of the aggregate principal amount of
the Senior Notes originally issued shall remain outstanding immediately after
the occurrence of such redemption; and provided, further, that such redemption
shall occur within 90 days of the date of the closing of such Qualified Equity
Offering.
(c) Notices of redemption will be mailed by first class mail
at least 30 days but not more than 60 days before the Redemption Date to each
Holder whose Senior Notes are to be redeemed at its registered address. Senior
Notes in denominations larger than $1,000 may be redeemed in part but only in
integral multiples of $1,000, unless all of the Senior Notes held by a Holder
are to be redeemed. Unless the Company defaults in making such redemption
payment, on
6
<PAGE> 7
and after the Redemption Date interest (including Special Interest, if any)
ceases to accrue on Senior Notes or portions thereof called for redemption.
6. Mandatory Redemption. Except as contemplated by clause 7
below, the Company shall not be required to make any mandatory redemption,
purchase or sinking fund payments with respect to the Senior Notes prior to the
maturity date.
7. Repurchase at Option of Holder. (a) Upon the occurrence of
a Change of Control, each Holder will have the right to require the Company to
repurchase such Holder's Senior Notes in whole or in part (the "Change of
Control Offer") at a purchase price (the "Change of Control Purchase Price") in
cash equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, and Special Interest, if any, to the Change of
Control Payment Date on the terms described in the Indenture.
Within 30 days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Senior Notes. The Holder
of this Senior Note may elect to have this Senior Note or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Require Purchase" appearing below and tendering this Senior Note
pursuant to the Change of Control Offer. Unless the Company defaults in the
payment of the Change of Control Payment with respect thereto, all Senior Notes
or portions thereof accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest (and Special Interest, if any) from and after the
Change of Control Purchase Date.
(b) Subject to the limitations set forth in the next following
paragraph and the Indenture, if at any time the Company or any Subsidiary
engages in an Asset Sale as result of which the aggregate amount of Excess
Proceeds exceeds $15,000,000, the Company shall within 30 days thereafter, or at
any time after receipt of Excess Proceeds but prior to there being $15,000,000
of Excess Proceeds, the Company may, at its option, make a pro rata offer (an
"Asset Sale Offer") to all Holders of Senior Notes and holders of other Senior
Debt, if and to the extent the Company is required by the instruments governing
such other Senior Debt to make such an offer, to purchase Senior Notes and such
other Senior Debt in an aggregate amount equal to the Excess Proceeds, at a
price in cash (the "Asset Sale Offer Purchase Price") equal to 100% of the
outstanding principal of the Senior Notes plus accrued interest and Special
Interest, if any, to the date of purchase and, in the case of such other Senior
Debt, 100% of the principal amount thereof, plus accrued and unpaid interest, if
any, thereon to the date of purchase. Upon completion of such Asset Sale Offer,
the amount of Excess Proceeds shall be reset to zero and the Company may use any
remaining amount for general corporate purposes.
Within 30 days of the date the amount of Excess Proceeds exceeds
$15,000,000, the Company shall send, or cause to be sent, by first class mail,
postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Senior Notes. The Holder of this Senior Note may elect to have this Senior Note
or a portion hereof in an authorized denomination purchased by completing the
form entitled "Option of Holder to Elect Purchase" appearing below and tendering
this Senior Note
7
<PAGE> 8
pursuant to the Asset Sale Offer. Unless the Company defaults in the payment of
the Asset Sale Offer Purchase Price with respect thereto, all Senior Notes or
portions thereof selected for payment pursuant to the Asset Sale Offer will
cease to accrue interest from and after the Asset Sale Offer Purchase Date.
8. Denominations; Transfer and Exchange. The Senior Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Notes may be registered and Senior
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 (including in certain cases, opinions of
counsel) 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 Senior Note or portion of a Senior Note selected for
redemption, except for the unredeemed portion of any Senior Note being redeemed
in part. Also, it need not exchange or register the transfer of any Senior Notes
for a period of 15 days before a selection of Senior Notes to be redeemed or
during the period between a Record Date and the corresponding Interest Payment
Date.
9. Persons Deemed Owners. The registered Holder of a Senior
Note may be treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. With the consent of the
holders of not less than a majority in aggregate principal amount at Stated
Maturity of the outstanding Senior Notes (including consents obtained in
connection with a tender offer or exchange offer for the Senior Notes), the
Company, the Guarantors and the Trustee may enter into one or more indentures
supplemental to the Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of modifying in any manner the rights of the holders; provided that no such
supplemental indenture will, without the consent of the Holder of each
outstanding Senior Note affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest on, any Senior Note, or reduce the
principal amount thereof (or premium, if any), or the interest thereon that
would be due and payable upon Maturity thereof, or change the place of payment
where, or the coin or currency in which, any Senior Note or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof, (b)
reduce the percentage in principal amount at Stated Maturity of the outstanding
Senior Notes, the consent of whose Holders is required for any such supplemental
indenture or required for any waiver of compliance with certain provisions of
the Indenture, (c) modify the Obligations of the Company to make offers to
purchase Senior Notes upon a Change of Control or from the proceeds of Asset
Sales, (d) subordinate in right of payment, or otherwise subordinate, the Senior
Notes or the Guarantees to any other Indebtedness, (e) amend, supplement or
otherwise modify the provisions of the Indenture relating to Guarantees or (f)
modify any of the provisions of this clause (except to increase any percentage
set forth herein).
11. Defaults and Remedies. Under the Indenture, Events of
Default include in summary form (i) default in the payment of interest on the
Senior Notes when due, continued for 30 days; (ii) default in the payment of
principal of (or premium, if any, on) the Senior Notes when due;
8
<PAGE> 9
(iii) failure to comply with certain of the covenants in the Indenture,
including the Change of Control covenant, the Asset Sale covenant and the
Restrictive Payments covenant; (iv) failure to perform any other covenant of the
Company or any Guarantor in the Indenture, continued for 30 days after written
notice as provided in the Indenture; (v) Indebtedness of the Company or any
Subsidiary is not paid when due within the applicable grace period, or is
accelerated and, in either case, the principal amount of such unpaid
Indebtedness exceeds $10,000,000; (vi) one or more final judgments or orders by
a court of competent jurisdiction are entered against the Company or any
Subsidiary in an uninsured or unindemnified aggregate amount in excess of
$5,000,000 and such judgments or orders are not discharged, waived, appealed,
stayed, satisfied or bonded for a period of 60 consecutive days; (vii) certain
events of bankruptcy, insolvency or reorganization; or (viii) a Guarantee ceases
to be in full force and effect (other than in accordance with the terms of the
Indenture and such Guarantee) or a Guarantor denies or disaffirms its
obligations under its Guarantee.
Holders may not enforce the Indenture or the Senior Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Senior Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount at Stated
Maturity of the Senior Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders. The Holders of a majority
in principal amount at Stated Maturity of the outstanding Senior Notes, by
written notice to the Company and the Trustee, may rescind any declaration of
acceleration and its consequences if the rescission would not conflict with any
judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
12. Defeasance Prior to Maturity or Redemption. The Company,
at its election, shall (a) be deemed to have paid and discharged its debt on the
Senior Notes and the Indenture and Guarantees shall cease to be of further
effect as to all outstanding Senior Notes (except as to (i) rights of
registration of transfer, substitution and exchange of Senior Notes, (ii) the
Company's right of optional redemption, (iii) rights of Holders to receive
payments of principal of, premium, if any, and interest on the Senior Notes (but
not the Change of Control Purchase Price or the Asset Sale Offer Purchase Price)
and any rights of the Holders with respect to such amounts, (iv) the rights,
obligations and immunities of the Trustee under the Indenture, and (v) certain
other specified provisions in the Indenture) or (b) cease to be under any
obligation to comply with certain restrictive covenants that are described in
the Indenture, after the irrevocable deposit by the Company with the Trustee, in
trust for the benefit of the Holders, at any time prior to the Stated Maturity
of the Senior Notes, of (A) money in an amount, (B) U.S. Government Obligations
which through the payment of interest and principal will provide, not later than
one Business Day before the due date of payment in respect of such Senior Notes,
money in an amount, or (C) a combination thereof sufficient to pay and discharge
the principal of, premium, if any on, and interest (including Special Interest,
if any) on, such Senior Notes then outstanding on the dates on which any such
payments are due in accordance with the terms of the Indenture and of such
Senior Notes.
9
<PAGE> 10
13. Trustee Dealings with the Company. Subject to certain
limitations imposed by the Trust Indenture Act, 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. A director, officer, employee,
incorporator or stockholder, of the Company or a Guarantor, as such, shall not
have any liability for any obligations of the Company or the Guarantors under
the Senior Notes, the Indenture, the Guarantees or for any claim based on, in
respect of, or by reason of, such Obligations or their creation. Each Holder by
accepting a Senior Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior Notes.
15. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SENIOR NOTE, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
16. Authentication. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. 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).
18. Additional Rights of Holders of Transfer Restricted Senior
Notes. In addition to the rights provided to Holders of Senior Notes under the
Indenture, Holders of Transferred Restricted Senior Notes (as defined in the
Registration Rights Agreement) shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, between the
Company and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Senior Note Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior 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 Senior Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
10
<PAGE> 11
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Grey Wolf, Inc.
10370 Richmond Avenue
Suite 600
Houston, Texas 77042
Telephone No.: (713) 435-6100
Attention: Chief Financial Officer
Telephone No.: (713) 435-6100
Telecopier No.: (713) 435-6171
11
<PAGE> 12
GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors
(as defined in the Indenture referred to in this Senior Note and each
hereinafter referred to as a "Guarantor," which term includes any successor or
additional Guarantor under the Indenture) have jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment of
the principal (and premium, if any) of and interest, (and Special Interest, if
any), on the Senior Notes, whether at Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer, purchase or
otherwise, (b) the due and punctual payment of interest on the overdue principal
of and interest, (and Special Interest, if any), on the Senior Notes to the
extent lawful, (c) the due and punctual performance of all other Obligations of
the Company and the Guarantors to the Holders under the Indenture and the Senior
Notes and (d) in case of any extension of time of payment or renewal of any
Senior Notes or any of such other Obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise.
Payment on each Senior Note is guaranteed, jointly and severally, by
the Guarantors pursuant to Article 11 of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The Obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor, and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution Obligations under the Indenture, result in the Obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any applicable federal or state law or not otherwise
being void, voidable or unenforceable under any applicable bankruptcy,
reorganization, receivership, liquidation or other similar legislation or legal
principles under any applicable federal law. Each Guarantor that makes a payment
or distribution under a Guarantee shall be entitled to a contribution from each
other Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Guarantor.
Guarantors may be released from their Guarantees upon the terms and
subject to the conditions provided in the Indenture.
<PAGE> 13
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions in the Indenture.
GREY WOLF DRILLING COMPANY
By:/s/ DAVID W. WEHLMANN
---------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
GREY WOLF INTERNATIONAL, INC.
By:/s/ DAVID W. WEHLMANN
---------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
DI ENERGY, INC.
By: /s/ DAVID W. WEHLMANN
---------------------------------------------------
Name: David W. Wehlmann
Title: Sr. Vice President and Chief Financial Officer
MURCO DRILLING CORPORATION
By: /s/ DAVID W. WEHLMANN
---------------------------------------------------
Name: David W. Wehlmann
Title: Secretary
<PAGE> 14
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
- -------------------------------------------------------------------------------
(Insert assignee's Social Senior Note or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
to transfer this Senior Note on the books of the Company or the agent appointed
by the Company to maintain such books. The agent appointed hereby may substitute
another to act for him.
- -------------------------------------------------------------------------------
Date:
--------------------------
Your signature:
----------------------------------
(Sign exactly as your name appears
on the face of
this Senior Note)
Signature Guarantee:
<PAGE> 15
Option of Holder to Elect Purchase
If you want to elect to have this Senior Note purchased by the
Company pursuant to Section 4.7 or 4.9 of the Indenture, check the box below:
Section 4.7 Section 4.9
If you want to elect to have only part of the Senior Note
purchased by the Company pursuant to Section 4.7 or Section 4.9 of the
Indenture, state the amount you elect to have purchased (must be an integral
multiple of $1,000): $__________________
Date: Your Signature:
-----------------------
(Sign exactly as your name appears on
- ---------------------------- the Senior Note)
Social Senior Note or
Tax Identification No.:
-------------
- ----------------
Signature Guarantee:
<PAGE> 16
SCHEDULE A
CHANGES IN PRINCIPAL AMOUNT OF SENIOR NOTE
The following changes in the principal amount of this Global
Note have been recorded:
<TABLE>
<CAPTION>
Amount of decrease Amount of increase Principal Amount of
in in this Global Note Signature of
Principal Amount of Principal Amount of following such authorized officer
Date of Transaction this Global Note this Global Note decrease(or increase) of Trustee
- ------------------- --------------------- -------------------- ---------------------- ------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 4.5
================================================================================
DI INDUSTRIES, INC.
AND
GUARANTORS
$175,000,000
8-7/8% Senior Notes due 2007
________________________
INDENTURE
Dated as of June 27, 1997
________________________
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Trustee
================================================================================
<PAGE> 2
CROSS-REFERENCE
Reconciliation and tie between The Trust Indenture Act as amended, and The
Indenture dated as of June 27,1997.
TIA Indenture
Section Section
------- -------
310(a)(1) . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . 2.07
(b) . . . . . . . . . . . . . . . . 12.06
(c) . . . . . . . . . . . . . . . . 12.06
313(a) . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . 7.06, 12.05
(d) . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . 4.02; 4.20;
12.05
(b) . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . 12.01, 12.02
(c)(2) . . . . . . . . . . . . . . . . 12.01; 12.02
(c)(3) . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . 12.01; 12.02
(f) . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . 4.20; 7.05; 12.02
(c) . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . 10.05
317(a)(1) . . . . . . . . . . . . . . . . 6.03; 6.08
(a)(2) . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . 12.04
1
<PAGE> 3
N.A. Means Not Applicable.
- --------------------------------
Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
2
<PAGE> 4
TABLE OF CONTENTS
Page
----
ARTICLE 1 Definitions and Incorporation by Reference . . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act . . 21
SECTION 1.03 Rules of Construction . . . . . . . . . . . . . . . . 21
ARTICLE 2 The Securities . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . 22
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . . 23
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . 23
SECTION 2.04. Paying Agent To Hold Money in Trust . . . . . . . . . 24
SECTION 2.05. Global Securities . . . . . . . . . . . . . . . . . . 24
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . 24
SECTION 2.07. Holder Lists . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.08. Replacement Securities . . . . . . . . . . . . . . . . 24
SECTION 2.09. Outstanding Securities . . . . . . . . . . . . . . . . 24
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . 24
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.12. Payment of Interest: Interest Rights Preserved . . . . 24
SECTION 2.13. Authorized Denominations . . . . . . . . . . . . . . . 24
SECTION 2.14. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 3 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . 24
SECTION 3.02. Selection of Securities To Be Redeemed . . . . . . . . 24
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . 24
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . . 24
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . . 24
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . . 24
SECTION 3.07. Optional Redemption . . . . . . . . . . . . . . . . . 24
ARTICLE 4 Cpvenants . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.01. Payments of Securities . . . . . . . . . . . . . . . . 24
SECTION 4.02. Commission Reports . . . . . . . . . . . . . . . . . . 24
SECTION 4.03. Limitation on Indebtedness . . . . . .. . . . . . . . 24
SECTION 4.04. Limitation on Subsidiary Indebtedness and
Preferred Stock . . . . . . . . . . . . . . . . . . 24
SECTION 4.05. Limitation on Restricted Payments. . . . . . . . . . . 24
SECTION 4.06. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries . . . . . . . . 24
i
<PAGE> 5
SECTION 4.07. Limitation on Asset Sales . . . . . . . . . . . . . . 24
SECTION 4.08. Limitation on Transactions with
Affiliates . . . . . . . . . . . . . . . . . . . . . 24
SECTION 4.09. Change of Control . . . . . . . . . . . . . . . . . . 24
SECTION 4.10. Limitation on Liens 24
SECTION 4.11. Limitation on Guarantees by Guarantors . . . . . . . 24
SECTION 4.12. Unrestricted Subsidiaries . . . . . . . . . . . . . . 24
SECTION 4.13. Limitation on Sale and Lease-Back Transactions. . . . 24
SECTION 4.14. Limitation on Line of Business . . . . . . . . . . . 24
SECTION 4.15. Maintenance of Office or Agency . . . . . . . . . . . 24
SECTION 4.16. Money for the Security Payments to be Held in Trust . 24
SECTION 4.17. Corporate Existence . . . . . . . . . . . . . . . . . 24
SECTION 4.18. Maintenance of Property . . . . . . . . . . . . . . . 24
SECTION 4.19. Payment of Taxes and Other Claims . . . . . . . . . . 24
SECTION 4.20. Compliance Certificate; Notice of Default
or Event of Default . . . . . . . . . . . . . . . . 24
SECTION 4.21. Further Instruments and Acts . . . . . . . . . . . . 24
SECTION 4.22. Prohibition on Company and Guarantors
Becoming Investment Companies . . . . . . . . . . . 24
SECTION 4.23. Stay, Extension and Usury Laws . . . . . . . . . . . 24
ARTICLE 5 Consolidation, Merger, Conveyance, Lease or Transfer . . . . 24
SECTION 5.01. Consolidation, Merger, Conveyance, Lease
or Transfer . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.02. Officers Certificate and Opinion of Counsel . . . . . 24
SECTION 5.03. Substitution of Surviving Entity . . . . . . . . . . 24
ARTICLE 6 Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . 24
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . 24
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . 24
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . 24
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . 24
SECTION 6.07. Rights of Holders to Receive Payment . . . . . . . . 24
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . 24
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . 24
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . 24
SECTION 6.12. Restoration of Rights and Remedies . . . . . . . . . 24
SECTION 6.13. Rights and Remedies Cumulative . . . . . . . . . . . 24
SECTION 6.14. Delay or Omission Not Waiver . . . . . . . . . . . . 24
ARTICLE 7 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . 24
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . 24
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . 24
ii
<PAGE> 6
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . 24
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . 24
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . 24
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . 24
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . 24
SECTION 7.09. Successor Trustee by Merger . . . . . . . . . . . . . 24
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . 24
SECTION 7.11. Preferential Collection of Claims . . . . . . . . . .
Against Company . . . . . . . . . . . . . . . . . . . 24
ARTICLE 8 Satisfaction and Discharge. . . . . . . . . . . . . . . . . . . 24
SECTION 8.01. Satisfaction and Discharge . . . . . . . . . . . . . 24
SECTION 8.02. Application of Trust Money . . . . . . . . . . . . . 24
SECTION 8.03. Repayment to the Company. . . . . . . . . . . . . . . 24
SECTION 8.04. Reinstatement . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 9 Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.01. Company s Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . 24
SECTION 9.02. Defeasance and Discharge. . . . . . . . . . . . . . . 24
SECTION 9.03. Covenant Defeasance . . . . . . . . . . . . . . . . . 24
SECTION 9.04. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . . 24
SECTION 9.05. Deposited Money and U.S. Government
Obligations to be Held in Trust;
Miscellaneous Provisions . . . . . . . . . . . . . . 24
SECTION 9.06. Repayment to Company. . . . . . . . . . . . . . . . . 24
SECTION 9.07. Reinstatement . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 10 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 10.01. Without Consent of Holders. . . . . . . . . . . . . . 24
SECTION 10.02. With Consent of Holders . . . . . . . . . . . . . . . 24
SECTION 10.03. Effect of Supplemental Indentures . . . . . . . . . . 24
SECTION 10.04. Compliance with Trust Indenture Act . . . . . . . . . 24
SECTION 10.05. Revocation and Effect of Consents and
Waivers . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 10.06. Notation on or Exchange of Securities . . . . . . . . 24
SECTION 10.07. Trustee To Execute Supplemental Indentures . . . . . 24
SECTION 10.08. Payment for Consent . . . . . . . . . . . . . . . . . 24
ARTICLE 11 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.01. Guarantees . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.02. Limitation on Liability . . . . . . . . . . . . . . . 24
SECTION 11.03. Execution and Delivery of Guarantees . . . . . . . . 24
SECTION 11.04. When a Guarantor May Merge, etc. . . . . . . . . . . 24
SECTION 11.05. No Waiver . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.06. Modification . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.07. Release of Guarantor . . . . . . . . . . . . . . . . 24
iii
<PAGE> 7
SECTION 11.08 Execution of Supplemental Indenture for Future
Guarantors . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 12 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12.01. Compliance Certificates and Opinions . . . . . . . . . 24
SECTION 12.02. Form of Documents Delivered to Trustee . . . . . . . . 24
SECTION 12.03. Acts of Holders . . . . . . . . . . . . . . . . . . . 24
SECTION 12.04. Trust Indenture Act Controls . . . . . . . . . . . . . 24
SECTION 12.05. Notices . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12.06. Communication by Holders with Other Holders. . . . . . 24
SECTION 12.07. Rules by Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12.08. Payments on Business Days . . . . . . . . . . . . . . 24
SECTION 12.09. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 24
SECTION 12.10. No Recourse Against Others . . . . . . . . . . . . . . 24
SECTION 12.11. Submission to Jurisdiction; Appointment of Agent
for Service of Process; Waiver of Immunities . . . . . 24
SECTION 12.12. Successors . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 12.13. Multiple Originals . . . . . . . . . . . . . . . . . . 24
SECTION 12.14. Table of Contents; Headings . . . . . . . . . . . . . 24
EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Form of Supplemental Indenture
Schedule 1.01(a) Indebtedness Existing on the Issue Date
Schedule 1.01(b) Investments Existing on the Issue Date
Schedule 1.01(c) Liens Existing on the Issue Date
Schedule 4.04 Subsidiary Indebtedness and Preferred Stock Existing
on the Issue Date
iv
<PAGE> 8
INDENTURE dated as of June 27, 1997, among DI Industries, Inc., a
Texas corporation (the "Company"), certain of the Company's subsidiaries
signatory hereto (each, a "Guarantor", collectively, the "Guarantors") and
Texas Commerce Bank National Association, a national banking association, as
trustee (the "Trustee").
The Company, each Guarantor, jointly and severally, and the Trustee
agree as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company's 8-7/8% Senior Notes Due 2007
(the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a subsidiary of such specified
Person, but excluding Indebtedness which is extinguished, retired or repaid
in connection with such other Person merging with or into or becoming a
subsidiary of such specified Person.
"Act", when used with respect to any Holder, has the meaning set forth
in Section 12.03.
"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and Property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
its Guarantee, of such Guarantor at such date.
"Affiliate" of any specified Person means another 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, however, that beneficial ownership of 10%
or more of the Voting Stock of a Person shall be deemed to be control.
1
<PAGE> 9
"Agent Member" has the meaning specified in Section 2.05(a).
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease or other disposition (including, without limitation, by
way of merger or consolidation or by means of a Sale and Lease-Back
Transaction) by the Company or any Subsidiary to any Person other than the
Company, a Guarantor or a Wholly Owned Subsidiary, in one transaction, or a
series of related transactions, of (i) any Capital Stock of any Subsidiary
(except for directors' qualifying shares or certain minority interests
sold to other Persons solely due to local law requirements that there be
more than one stockholder, but which are not in excess of what is required
for such purpose), or (ii) any other Property or assets of the Company or
any Subsidiary, other than (A) sales of drill-string components and obsolete
or worn out equipment in the ordinary course of business or other assets
that, in the Company's reasonable judgment, are no longer used or useful
in the conduct of the business of the Company and its Subsidiaries), (B)
any drilling contract, charter or other lease of Property or other assets
entered into by the Company or any Subsidiary in the ordinary course of
business, other than any Bargain Purchase Contract, (C) a Restricted
Payment or Restricted Investment permitted under the provisions of
Section 4.05 of this Indenture, (D) a Change of Control, (E) a
consolidation, merger, continuance or the disposition of all or
substantially all of the assets of the Company and the Subsidiaries,
taken as a whole, in compliance with the provisions of Section 5.01 of
this Indenture, (F) any trade or exchange by the Company or any Subsidiary
of one or more drilling rigs for one or more other drilling rigs of like
kind owned or held by another Person, provided that (x) the Fair Value of
the rig or rigs traded or exchanged by the Company or such Subsidiary
(including cash or cash equivalents to be delivered by the Company or such
Subsidiary) is reasonably equivalent to the Fair Value of the drilling rig
or rigs (together with cash or cash equivalents to be received by the
Company or such Subsidiary) or other assets as determined by written
appraisal by a nationally (or industry) recognized investment banking firm
or appraisal firm and (y) such exchange is approved by a majority of the
disinterested directors of the Company. An Asset Sale shall include the
requisition of title to, seizure of or forfeiture of any Property or
assets, or any actual or constructive total loss or an agreed or compromised
total loss of any Property or assets.
"Asset Sale Offer" has the meaning specified in Section 4.07(b).
"Asset Sale Offer Purchase Date" has the meaning specified in
Section 4.07(c).
"Asset Sale Offer Purchase Price" has the meaning specified in
Section 4.07(b).
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, the present value
(discounted at the interest rate borne by the Securities, compounded
annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease (or to the first date on which the
lessee is permitted to terminate such lease without the payment of a
penalty) included in such Sale and Lease-Back Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of any date, with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of
(x) the number of years from such date to
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<PAGE> 10
the date of each scheduled principal payment (including any sinking fund
or mandatory redemption payment requirements) of such debt security
multiplied in each case by (y) the amount of such principal payment by
(ii) the sum of all such principal payments.
"Bank Credit Facility" means the $50,000,000 Amended and
Restated Senior Secured Revolving Credit Agreement dated December 31,
1996, as amended and restated as of April 30, 1997, among the Company
and Drillers, Inc., as co-borrowers, DI International, Inc., as
guarantor, the lending institutions party thereto, Bankers Trust Company,
as agent and administrative agent, and ING (US) Capital Corporation, as co-
agent and documentation agent, as from time to time amended.
"Bargain Purchase Contract" means a drilling contract, charter or
lease that provides for acquisition of Property by the other party to such
agreement during or at the end of the term thereof for less than Fair
Market Value thereof at the time such right to acquire such Property is
granted.
"Board of Directors" means the Board of Directors of the Company or
any Subsidiary, as applicable, or any committee thereof duly authorized to
act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Subsidiary, as
applicable, to have been duly adopted by the Board of Directors and to be
in full force and effect on the date of such certification, and delivered to
the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions are authorized or
obligated by law or executive order or regulation to close in The City of
New York and Houston, Texas and, with respect to any payment of cash or
delivery of securities, the place of such payment or delivery.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to
be capitalized and accounted for as a capital lease on the balance sheet of
such Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares,
interests, partnership interests, participations or other equivalents in
the equity interest (however designated) in such Person and any rights
(other than debt securities convertible into an equity interest), warrants
or options to acquire any equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any
Person, the aggregate consideration received for such Asset Sale by such
Person in the form of cash or cash equivalents (including any amounts of
insurance or other proceeds received in connection with an Asset Sale of
the type described in the last sentence of the definition thereof),
including payments in respect of deferred payment obligations when
received in the form of cash or cash equivalents (except to the extent that
such obligations are financed or sold with recourse to such Person or any
subsidiary thereof).
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<PAGE> 11
"Certificated Security" has the meaning specified in Section
2.01(b).
"Change of Control" means (i) a determination by the Company that
any Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the
Exchange Act) has become the direct or beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of more than 50% of the Voting Stock of
the Company other than Permitted Holders; (ii) the Company is merged with or
into or consolidated with another corporation and, immediately after
giving effect to the merger or consolidation, less than 50% of the
outstanding voting securities entitled to vote generally in the election
of directors or persons who serve similar functions of the surviving or
resulting entity are then beneficially owned (within the meaning of Rule
13d-3 of the Exchange Act) in the aggregate by (x) the stockholders
of the Company immediately prior to such merger or consolidation, or
(y) if the record date has been set to determine the stockholders of the
Company entitled to vote on such merger or consolidation, the stockholders
of the Company as of such a record date; (iii) the Company, either
individually or in conjunction with one or more Subsidiaries, sells,
conveys, transfers or leases, or the Subsidiaries sell, convey, transfer
or lease, all or substantially all of the assets of the Company or the
Company and the Subsidiaries, taken as a whole (either in one
transaction or a series of related transactions), including Capital Stock of
the Subsidiaries, to any Person (other than a Wholly Owned Subsidiary); (iv)
the liquidation or dissolution of the Company; or (v) the first day on
which a majority of the individuals who constitute the Board of Directors of
the Company are not Continuing Directors.
"Change of Control Offer" has the meaning specified in
Section 4.09(a).
"Change of Control Payment Date" has the meaning specified in
Section 4.09(b)(ii).
"Change of Control Purchase Price" has the meaning specified in
Section 4.09(a).
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange
Act, or if at any time after the execution of this instrument, such
Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at such
time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated
Interest Coverage Ratio (the "Transaction Date"), the ratio of (i) the
aggregate amount of EBITDA of the Company and its consolidated Subsidiaries
for the four fiscal quarters for which financial information in respect
thereof is available immediately prior to the applicable Transaction
Date (the "Determination Period") to (ii) the aggregate Consolidated
Interest Expense of the Company and its consolidated Subsidiaries that is
anticipated to accrue during a period consisting of the fiscal quarter in
which the Transaction Date occurs and the three fiscal quarters
immediately subsequent thereto (based upon the pro forma amount and
maturity of, and interest payments in respect of,
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<PAGE> 12
Indebtedness of the Company and its consolidated Subsidiaries expected by
the Company to be outstanding on the Transaction Date), assuming for the
purposes of this measurement the continuation of market interest rates
prevailing on the Transaction Date and base interest rates in respect
of floating interest rate obligations equal to the base interest rates
on such obligations in effect as of the Transaction Date, provided that
if the Company or any of its consolidated Subsidiaries is a party to
any Interest Swap Obligation that would have the effect of changing the
interest rate on any Indebtedness of the Company or any of its consolidated
Subsidiaries for such four-quarter period (or a portion thereof), the
resulting rate shall be used for such four-quarter period or portion
thereof; provided, further, that any Consolidated Interest Expense of the
Company with respect to Indebtedness incurred or retired by the Company or
any of its Subsidiaries during the fiscal quarter in which the Transaction
Date occurs shall be calculated as if such debt was incurred or retired on
the first day of the fiscal quarter in which the Transaction Date occurs;
provided, further, that if the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio would have the effect of
increasing or decreasing EBITDA in the future and if such increase or
decrease is readily quantifiable and is attributable to such transaction,
EBITDA shall be calculated on a pro forma basis as if such transaction had
occurred on the first day of the four fiscal quarters referred to in clause
(i) of this definition, and if, during the same four fiscal quarters, (x)
the Company or any of its consolidated Subsidiaries shall have engaged in
any Asset Sale, EBITDA for such period shall be reduced by an amount equal
to the EBITDA (if positive), or increased by an amount equal to the
EBITDA (if negative), directly attributable to the assets which are the
subject of such Asset Sale for such period calculated on a pro forma basis
as if such Asset Sale and any related retirement of Indebtedness had
occurred on the first day of such period or (y) after the Issue Date, the
Company or any of its consolidated Subsidiaries shall have acquired any
material assets other than in the ordinary course of business, EBITDA
and Consolidated Interest Expense shall be calculated on a pro forma basis
as if such acquisition had occurred on the first day of such period.
"Consolidated Interest Expense" means, with respect to any Person
for any period, without duplication (A) the sum of (i) the aggregate amount
of cash and noncash interest expense (including capitalized interest) of
such Person and its subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness
(including, without limitation, (v) any amortization of debt discount, (w)
net costs associated with Interest Swap Obligations (including any
amortization of discounts), (x) the interest portion of any deferred
payment obligation calculated in accordance with the effective interest
method, (y) all accrued interest and (z) all commissions, discounts and
other fees and charges owed with respect to letters of credit, bankers
acceptances or similar facilities) paid or accrued, or scheduled to be paid
or accrued, during such period; (ii) dividends on Preferred Stock or
Redeemable Stock of such Person (and Preferred Stock or Redeemable Stock
of its subsidiaries if paid to a Person other than such Person or its
subsidiaries) declared and payable in cash; (iii) the portion of any rental
obligation of such Person or its subsidiaries in respect of any Capital
Lease Obligation allocable to interest expense in accordance with GAAP; (iv)
the portion of any rental obligation of such Person or its subsidiaries in
respect of any Sale and Lease-Back Transaction allocable to interest
expense (determined as if such were treated as a Capital Lease Obligation);
and (v) to the extent any debt of any other Person is guaranteed by
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<PAGE> 13
such Person or any of its subsidiaries, the aggregate amount of interest
paid, accrued or scheduled to be paid or accrued, by such other Person
during such period attributable to any such debt, less (B) to the extent
included in (A) above, amortization or write-off of deferred financing
costs of such Person and its subsidiaries during such period and any
charge related or any premium or penalty paid in connection with
redeeming or retiring any Indebtedness of such Person and its subsidiaries
prior to its stated maturity; in the case of both (A) and (B) above,
after elimination of intercompany accounts among such Person and its
subsidiaries and as determined in accordance with GAAP. For purposes
of clause (ii) above, dividend requirements attributable to any Preferred
Stock or Redeemable Stock shall be deemed to be an amount equal to the
amount of dividend requirements on such Preferred Stock or Redeemable
Stock times a fraction, the numerator of which is the amount of such
dividend requirements, and the denominator of which is one minus the
applicable combined federal, state, local and foreign income tax rate of
the Company and its Subsidiaries (expressed as a decimal), on a
consolidated basis, for the fiscal year immediately preceding the date of
the transaction giving rise to the need to calculate Consolidated Interest
Expense.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and
its subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP, provided that there shall be excluded therefrom,
without duplication, (i) any net income of any Unrestricted Subsidiary,
except that the Company's or any Subsidiary's interest in the net income
of such Unrestricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash or cash
equivalents actually distributed by such Unrestricted Subsidiary during
such period to the Company or a Subsidiary as a dividend or other
distribution, (ii) gains and losses, net of taxes, from Asset Sales or
reserves relating thereto, (iii) the net income of any Person that is not a
subsidiary or that is accounted for by the equity method of accounting
which shall be included only to the extent of the amount of dividends or
distributions paid to such Person or its subsidiaries, (iv) items (but not
loss items) classified as extraordinary, unusual or nonrecurring (other
than the tax benefit, if any, of the utilization of net operating loss
carryforwards or alternative minimum tax credits), (v) the net income (but
not net loss) of any Person acquired by such specified Person or any of
its subsidiaries in a pooling-of-interests transaction for any period prior
to the date of such acquisition, (vi) any gain or loss, net of taxes,
realized on the termination of any employee pension benefit plan, (vii)
the net income (but not net loss) of any subsidiary of such specified
Person to the extent that the transfer to that Person of that income is
not at the time permitted, directly or indirectly, by any means
(including by dividend, distribution, advance or loan or otherwise), by
operation of the terms of its charter or any agreement with a Person other
than with such specified Person, instrument held by a Person other
than by such specified Person, judgment, decree, order, statute, law, rule
or governmental regulations applicable to such subsidiary or its
stockholders, except for any dividends or distributions actually paid by
such subsidiary to such Person, and (viii) with regard to a non-Wholly
Owned Subsidiary, any aggregate net income (or loss) in excess of such
Person's or such subsidiary's pro rata share of such non-Wholly Owned
Subsidiary's net income (or loss).
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<PAGE> 14
"Consolidated Net Worth" of any Person means, as of any date,
the sum of the Capital Stock and additional paid-in capital plus
retained earnings (or minus accumulated deficit) of such Person and its
subsidiaries on a consolidated basis at such date, each item determined in
accordance with GAAP, less amounts attributable to Redeemable Stock of such
Person or any of its subsidiaries.
"Continuing Director" means an individual who (i) is a member
of the Board of Directors of the Company and (ii) either (A) was a member
of the Board of Directors of the Company on the Issue Date or (B) whose
nomination for election or election to the Board of Directors of the Company
was approved by vote of at least a majority of the directors then still in
office who were either directors on the Issue Date or whose election or
nomination for election was previously so approved.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be
principally administered, which office at the date of execution of this
Indenture is located at 600 Travis Street, Suite 1150, Houston, Texas 77002.
"Covenant Defeasance" has the meaning specified in Section 9.03.
"Currency Hedge Obligations" means, at any time as to any Person,
the obligations of such Person at such time which were incurred in the
ordinary course of business pursuant to any foreign currency exchange
agreement, option or future contract or other similar agreement or
arrangement designed to protect against or manage such Person's or any of its
subsidiaries exposure to fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition the occurrence of
which is, or after notice or the passage time or both would be, an Event
of Default.
"Defaulted Interest" has the meaning specified in Section 2.12.
"Defeasance" has the meaning specified in Section 9.02.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Determination Period" has the meaning specified under clause (i)
of the definition of Consolidated Interest Coverage Ratio.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense,
(iv) amortization expense, (v) any charge related to any premium or penalty
paid in connection with redeeming or retiring any Indebtedness prior to its
stated maturity, (vi) any other non-cash charges and (vii) to the extent
not otherwise covered by the adjustments contained in the proviso to this
definition, non-recurring charges of approximately $6.1 million
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<PAGE> 15
incurred during 1996 in employment severance costs, exit costs
attributable to its exiting Argentina and Mexico and other non-recurring
charges, all as described in the Company's Form 10-K for the year
ended December 31, 1996 and minus, to the extent reflected in such income
statement, any noncash credits that had the effect of increasing
Consolidated Net Income of such Person for such period; provided that for
purposes of determining EBITDA with respect to the Company, Consolidated
Net Income shall exclude any net income or loss for the year ended December
31, 1996 associated with the Company's Argentine or Mexican divisions.
"Event of Default" has the meaning specified in Section 6.01.
"Excess Proceeds" has the meaning specified in Section 4.07(a).
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to consideration received
or to be received pursuant to any transaction by any Person, the fair
market value of such consideration as determined in good faith by the
Board of Directors of the Company.
"Fair Value" means, with respect to any asset or Property, the
price which could be negotiated in an arm's-length free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is
under undue pressure or compulsion to complete the transaction.
"GAAP" means, at any date, United States generally accepted
accounting principles, consistently applied, as set forth in the opinions
of the Accounting Principles Board of the American Institute of
Certified Public Accountants ("AICPA") and statements of the Financial
Accounting Standards Board, or in such other statements by such other
entity as may be designated by the AICPA, that are applicable to the
circumstances as of the date of determination; provided, however, that all
calculations made for purposes of determining compliance with the provisions
set forth in this Indenture shall utilize GAAP in effect at the Issue
Date.
"Global Security" has the meaning specified in Section 2.01(b).
"Grey Wolf" means Grey Wolf Drilling Company, a Texas corporation.
"Grey Wolf Acquisition" means the agreement to merge Grey Wolf
into Drillers, Inc. pursuant to an Agreement and Plan of Merger dated March 7,
1997, by and among the Company, Drillers, Inc. and Grey Wolf, as such may
be amended to the Issue Date.
"Guarantee" means an unconditional guaranty of the Securities
given by any Subsidiary pursuant to the provisions of Article 11 of this
Indenture.
"Guarantor" means Drillers, Inc., DI International Inc. and DI
Energy Inc., each a Texas corporation and a Subsidiary, and each other
Subsidiary of the Company that is required
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<PAGE> 16
to guarantee the Company's Obligations under the Securities and this
Indenture pursuant to the provisions of Article 11 of this Indenture and
any other Subsidiary of the Company that executes a supplemental indenture
in which such Subsidiary agrees to guarantee the Company's Obligations
under the Securities and this Indenture.
"Holder" means the Person in whose name a Security is registered on
the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, suffer to exist, incur (by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in
respect of such Indebtedness or other obligation or the recording, as
required pursuant to GAAP or otherwise, of any such Indebtedness or
obligation on the balance sheet of such Person (and "incurrence,"
"incurred," "incurrable" and "incurring" shall have meanings correlative to
the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness
shall not be deemed an incurrence of such Indebtedness. Indebtedness
otherwise incurred by a Person before it becomes a Subsidiary shall be
deemed to have been incurred at the time at which it becomes a Subsidiary.
"Indebtedness" as applied to any Person means, at any time, without
duplication, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person
for borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including, without
limitation, any such obligations incurred in connection with
acquisition of Property, assets or businesses, excluding accounts payable
made in the ordinary course of business which are not more than 90
days overdue or which are being contested in good faith and by
appropriate proceedings; (iii) any obligation of such Person for all or
any part of the purchase price of Property or for the cost of Property
constructed or of improvements thereto (including any obligation under or in
connection with any letter of credit related thereto), other than accounts
payable incurred in respect of Property and services purchased in the
ordinary course of business which are no more than 90 days overdue or which
are being contested in good faith and by appropriate proceedings; (iv) any
obligation of such Person upon which interest charges are customarily paid
(other than accounts payable incurred in the ordinary course of business);
(v) any obligation of such Person under conditional sale or other title
retention agreements relating to purchased Property; (vi) any obligation of
such Person issued or assumed as the deferred purchase price of Property
(other than accounts payable incurred in the ordinary course of business
which are no more than 90 days overdue or which are being contested in good
faith and by appropriate proceedings); (vii) any Capital Lease Obligation
or Attributable Indebtedness pursuant to any Sale and Lease-Back
Transaction of such Person; (viii) any obligation of any other Person
secured by (or for which the obligee thereof has an existing right,
contingent or otherwise, to be secured by) any Lien on Property owned or
acquired, whether or not any obligation secured thereby has been assumed,
by such Person; (ix) any obligation of such Person in respect of any
letter of credit supporting any obligation of any other Person; (x)
the maximum fixed repurchase price of any Redeemable Stock of such Person
(or if such Person is a subsidiary, any Preferred Stock of such Person);
(xi) the notional
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<PAGE> 17
amount of any Interest Swap Obligation or Currency Hedge Obligation
of such Person at the time of determination; and (xii) any obligation
which is in economic effect a guarantee, regardless of its
characterization (other than an endorsement in the ordinary course of
business), with respect to any Indebtedness of another Person, to the
extent guaranteed. For purposes of the preceding sentence, the maximum
fixed repurchase price of any Redeemable Stock or subsidiary Preferred
Stock that does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Redeemable Stock or subsidiary
Preferred Stock as if such Redeemable Stock or subsidiary Preferred Stock
were repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; provided, however, that if such
Redeemable Stock or subsidiary Preferred Stock is not then permitted to
be repurchased, the repurchase price shall be the book value of such
Redeemable Stock or subsidiary Preferred Stock. The amount of Indebtedness
of any Person at any date shall be the outstanding balance at such date of
all unconditional obligations as described above and the maximum liability
of any guarantees at such date; provided that for purposes of calculating
the amount of any non-interest bearing or other discount security, such
Indebtedness shall be deemed to be the principal amount thereof that would
be shown on the balance sheet of the issuer dated such date prepared in
accordance with GAAP but that such security shall be deemed to have been
incurred only on the date of the original issuance thereof.
"Indenture" means this Indenture as originally executed or as
it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this Indenture and any
such supplemental indenture, the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this Indenture, and any such
supplemental indenture, respectively.
"Indrillers" means INDRILLERS, L.L.C., a Michigan limited liability
company of which the Company is a member.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities, which date shall be January 1
and July 1 of each year.
"Interest Swap Obligation" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement,
interest rate cap, collar or floor agreement or other similar agreement or
arrangement designed to protect against or manage such Person's or any of
its subsidiaries' exposure to fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct,
indirect or contingent investment in another Person, whether by means
of a share purchase, capital contribution, loan, advance (other than
advances to employees for moving and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business) or similar
credit extension constituting Indebtedness of such other Person, and any
guarantee of Indebtedness of any other Person; provided that the term
Investment shall not include any transaction involving the purchase or
other acquisition (including by way of merger) of Property (including
Capital Stock) by the Company or any Subsidiary in exchange for Capital
Stock (other than Redeemable Stock) of the Company. The amount of any
Person's Investment shall be the original cost of such Investment to such
Person, plus the cost of all additions thereto
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<PAGE> 18
paid by such Person, and minus the amount of any portion of such Investment
repaid to such Person in cash as a repayment of principal or a return of
capital, as the case may be, but without any other adjustments for
increases or decreases in value, or write-ups, writedowns, or write-offs
with respect to such Investment. In determining the amount of any
Investment involving a transfer of any Property or assets other than cash,
such Property or assets shall be valued at its Fair Value at the time of
such transfer as determined in good faith by the board of directors (or
comparable body) of the Person making such transfer. The Company shall be
deemed to make an "Investment" in the amount of the Fair Value of the Assets
of a Subsidiary at the time such Subsidiary is designated an Unrestricted
Subsidiary.
"Issue Date" means the date on which the Securities are first
authenticated and delivered under this Indenture.
"Joint Venture" means any Person (other than a Guarantor) designated
as such by a Board Resolution of the Company and as to which (i) the
Company, any Guarantor or any Joint Venture owns less than 50% of the
Capital Stock of such Person; (ii) no more than 10 unaffiliated Persons
own of record any Capital Stock of such Person; (iii) at all times, each
such Person owns the same proportion of each class of Capital Stock of such
Person outstanding at such time; (iv) no Indebtedness of such Person is
or becomes outstanding other than Non-Recourse Indebtedness; (v) there
exist no consensual encumbrances or restrictions on the ability of such
Person to (x) pay, directly or indirectly, dividends or make any other
distributions in respect of its Capital Stock to the holders of its Capital
Stock or (y) pay any Indebtedness or other obligation owed to the holders of
its Capital Stock or (z) make any Investment in the holders of its Capital
Stock, in each case other than the types of consensual encumbrances or
restrictions that would be permitted under the provisions of Section 4.06 of
this Indenture if such Person were a Subsidiary; and (vi) the business
engaged in by such Person is a Related Business.
"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien
(statutory or other), or preference, priority or other security or
similar agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any agreement to give or grant
a Lien or any lease, conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
"Maturity" means the date on which the principal of a Security
becomes due and payable as provided therein or in this Indenture, whether
at the Stated Maturity or the Change of Control Payment Date or
purchase date established pursuant to the terms of this Indenture for an
Asset Sale Offer or by declaration of acceleration, call for redemption or
otherwise.
"Moody's" means Moody's Investor Service, Inc., or, if Moody's
Investors Service, Inc. shall cease rating the specified debt securities
and such ratings business with respect thereto shall have been
transferred to a successor Person, such successor person; provided that if
Moody's Investors Service, Inc. ceases rating the specified debt securities
and its ratings business with respect thereto shall not have been
transferred to any successor Person or such successor Person is S&P,
then Moody's shall mean any other nationally recognized rating
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<PAGE> 19
agency (other than S&P) that rates the specified debt securities selected
in good faith by the Board of Directors of the Company in a Board
Resolution.
"Net Available" Proceeds means, (a) as to any Asset Sale (other
than a Bargain Purchase Contract), the Cash Proceeds therefrom, net of all
legal and title expenses, commissions and other fees and expenses
incurred, and all Federal, state, foreign, recording and local taxes
payable as a consequence of such Asset Sale, net of all payments made to
any Person other than the Company or a Subsidiary on any Indebtedness which
is secured by such assets, in accordance with the terms of any Lien upon or
with respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Sale, or by applicable law, be
repaid out of the proceeds from such Asset Sale and, as for any Asset
Sale by a Subsidiary, net of the equity interest in such Cash Proceeds of
any holder of Capital Stock of such Subsidiary (other than the Company,
any other Subsidiary or any Affiliate of the Company or any such other
Subsidiary) and (b) as to any Bargain Purchase Contract, an amount equal to
(i) that portion of the rental or other payment stream arising under a
Bargain Purchase Contract that represents an amount in excess of the Fair
Market Value of the rental or other payments with respect to the pertinent
Property or other asset and (ii) the Cash Proceeds from the sale of such
Property or other asset, net of the amount set forth in clause (a) above,
in each case as and when received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of an Unrestricted Subsidiary or a foreign Subsidiary not
constituting a Guarantor as to which (a) neither the Company nor any other
Subsidiary (other than an Unrestricted Subsidiary or a Subsidiary of
such foreign Subsidiary) (i) provides credit support including any
undertaking, agreement or instrument which would constitute
Indebtedness or (ii) is directly or indirectly liable for such Indebtedness
and (b) no default with respect to such Indebtedness (including any
rights which the holders thereof may have to take enforcement action
against an Unrestricted Subsidiary or such foreign Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
of the Company or its other Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"Obligations" means, with respect to any Indebtedness, any
obligation thereunder, including, without limitation, principal, premium
and interest (including post petition interest thereon), penalties,
fees, costs, expenses, indemnifications, reimbursements, damages and other
liabilities.
"Obligors" means the Company and the Guarantors, collectively;
"Obligor" means the Company or any Guarantor.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President, the Chief
Executive Officer, the Chief Operating Officer or a Vice President, and by
the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company or a Subsidiary and delivered to the Trustee, which shall
comply with this Indenture.
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<PAGE> 20
"Opinion of Counsel" means a written opinion from legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, a Guarantor or the Trustee.
"Order" means a written order signed in the name of the Company
by an officer and delivered to the Trustee.
"Paying Agent" has the meaning specified in Section 2.03.
"Permitted Holders" means Norex Industries, Inc., Somerset Capital
Partners, Mike L. Mullen and Roy T. Oliver and their respective Affiliates.
"Permitted Indebtedness" means (a) Indebtedness of the Company under
the Securities; (b) Indebtedness (and any guarantee thereof) under one or
more credit or revolving credit facilities with a bank or syndicate of banks
or financial institutions or other lenders, including, without limitation,
the Bank Credit Facility, as such may be amended, modified, revised,
extended, replaced, or refunded from time to time, in an aggregate principal
amount at any one time outstanding not to exceed $100,000,000, less any
amounts derived from Asset Sales and applied to the required permanent
reduction of Senior Debt (and a permanent reduction of the related
commitment to lend or amount available to be reborrowed in the case of a
revolving credit facility) under such credit facilities as contemplated
by the provisions of Section 4.07 of this Indenture; (c) Indebtedness
of the Company or any Subsidiary under Interest Swap Obligations,
provided that (i) such Interest Swap Obligations are related to payment
obligations on Indebtedness otherwise permitted under the provisions of
Section 4.03 of this Indenture and (ii) the notional principal amount of
such Interest Swap Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligations relate; (d)
Indebtedness of the Company or any Subsidiary under Currency Hedge
Obligations, provided that (i) such Currency Hedge Obligations are related
to payment obligations on Indebtedness otherwise permitted under the
provisions of Section 4.03 of this Indenture or to the foreign currency cash
flows reasonably expected to be generated by the Company and the
Subsidiaries and (ii) the notional principal amount of such Currency
Hedge Obligations does not exceed the principal amount of the
Indebtedness and the amount of the foreign currency cash flows to which
such Currency Hedge Obligations relate; (e) Indebtedness of the Company or
any Subsidiary outstanding on the Issue Date and listed on Schedule 1.01(a)
attached hereto; (f) the Guarantees of the Securities (and any assumption
of the Obligations guaranteed thereby); (g) Indebtedness of the Company or
any Subsidiary in respect of bid performance bonds, surety bonds, appeal
bonds and letters of credit or similar arrangements issued for the
account of the Company or any Subsidiary, in each case in the ordinary
course of business and other than for an obligation for money borrowed; (h)
Indebtedness of the Company to a Guarantor or other Wholly Owned Subsidiary
and Indebtedness of a Guarantor or other Wholly Owned Subsidiary to the
Company or another Guarantor or other Wholly Owned Subsidiary; provided
that upon any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Guarantor ceasing to be a Guarantor
or such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary, as
the case may be, or any other subsequent transfer of any such Indebtedness
(except to the Company or a Guarantor or other Wholly Owned Subsidiary),
such Indebtedness shall be deemed, in each case, to be incurred
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<PAGE> 21
and shall be treated as an incurrence for purposes of Section 4.03 of
this Indenture at the time the Guarantor in question ceased to be a
Guarantor or the Wholly Owned Subsidiary in question ceased to be a
Wholly Owned Subsidiary; (i) Subordinated Indebtedness of the Company to an
Unrestricted Subsidiary for money borrowed; (j) Indebtedness of the
Company in connection with a purchase of the Securities pursuant to a
Change of Control Offer, provided that the aggregate principal amount of
such Indebtedness does not exceed 101% of the aggregate principal amount
at Stated Maturity of the Securities purchased pursuant to such Change of
Control Offer; provided, further, that such Indebtedness (A) has an Average
Life equal to or greater than the remaining Average Life of the Securities
and (B) does not mature prior to one year following the Stated Maturity of
the Securities; (k) Permitted Refinancing Indebtedness; (l) Permitted
Subsidiary Refinancing Indebtedness; and (m) additional Indebtedness in an
aggregate principal amount not in excess of $2,500,000 at any one time
outstanding. So as to avoid duplication in determining the amount of
Permitted Indebtedness under any clause of this definition, guarantees
permitted to be incurred pursuant to this Indenture of, or Obligations
permitted to be incurred pursuant to this Indenture in respect of letters
of credit supporting, Indebtedness otherwise included in the determination of
such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit,
bankers acceptances, time deposits, Eurocurrency deposits and similar
types of Investments routinely offered by a commercial bank organized in
the United States with final maturities of one year or less issued by
commercial banks organized in the United States having capital and
surplus in excess of $300,000,000; (b) commercial paper issued by any
corporation, if such commercial paper has credit ratings of at least "A-1"
or its equivalent by S&P and at least "P-I" or its equivalent by Moody's;
(c) U.S. Government Obligations with a maturity of four years or less; (d)
repurchase obligations for instruments of the type described in clause (c)
with any bank meeting the qualifications specified in clause (a) above; (e)
shares of money market mutual or similar funds having assets in excess of
$100,000,000; (f) payroll advances in the ordinary course of business; (g)
other advances and loans to officers and employees of the Company or
any Subsidiary, so long as the aggregate principal amount of such advances
and loans does not exceed $500,000 at any one time outstanding; (h)
Investments represented by that portion of the proceeds from Asset Sales
that is not required to be Cash Proceeds by Section 4.07 of this
Indenture; (i) Investments made by the Company in Guarantors or in its
other Wholly Owned Subsidiaries (or any Person that will be a Wholly Owned
Subsidiary as a result of such Investment) or by a Subsidiary in the
Company or in one or more Guarantors or other Wholly Owned Subsidiaries (or
any Person that will be a Wholly Owned Subsidiary as a result of such
Investment); (j) Investments in stock, obligations or securities received
in settlement of debts owing to the Company or any 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
Subsidiary, in each case as to debt owing to the Company or any Subsidiary
that arose in the ordinary course of business of the Company or any
such Subsidiary; (k) certificates of deposit, bankers acceptances, time
deposits, Eurocurrency deposits and similar types of Investments routinely
offered by a commercial bank organized in the United States with final
maturities of one year or less and in an aggregate amount not to exceed
$5,000,000 at any one time outstanding with a commercial bank organized in
the United States having capital and surplus
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<PAGE> 22
in excess of $75,000,000; (l) Venezuelan and other foreign bank
deposits and cash equivalents in jurisdictions where the Company or its
Subsidiaries are then actively conducting business; (m) Investments in Grey
Wolf pursuant to the Grey Wolf Acquisition agreement; (n) Interest Swap
Obligations with respect to any floating rate Indebtedness that is permitted
by the terms of this Indenture to be outstanding; (o) Currency Hedge
Obligations, provided that such Currency Hedge Obligations constitute
Permitted Indebtedness permitted by clause (d) of the definition thereof;
(p) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility, worker's compensation and performance and
other similar deposits in the ordinary course of business; and (q)
Investments pursuant to any agreement or obligation of the Company or any
Subsidiary in effect on the Issue Date and listed on a Schedule 1.01(b)
attached hereto.
"Permitted Liens" means (a) Liens in existence on the Issue Date;
(b) Liens created for the benefit of the Securities and/or the Guarantees;
(c) Liens on Property of a Person existing at the time such Person is
merged or consolidated with or into the Company or a Subsidiary (and not
incurred as a result of, or in anticipation of, such transaction), provided
that any such Lien relates solely to such Property; (d) Liens on Property
existing at the time of the acquisition thereof (and not incurred as a
result of, or in anticipation of such transaction), provided that any such
Lien relates solely to such Property; (e) Liens incurred or pledges and
deposits made in connection with worker's compensation, unemployment
insurance and other social security benefits, statutory obligations, bid,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business; (f) Liens imposed by
law or arising by operation of law, including without limitation,
landlords', mechanics', carriers', warehousemen's, materialmen's,
suppliers' and vendors Liens and Liens for master's and crew's wages
and other similar maritime Liens, and incurred in the ordinary course of
business for sums not delinquent or being contested in good faith, if such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made with respect thereof; (g) zoning restrictions,
easements, licenses, covenants, reservations, restrictions on the use
of real property and defects, irregularities and deficiencies in title
to real property that do not, individually or in the aggregate, materially
affect the ability of the Company or any Subsidiary to conduct its
business presently conducted; (h) Liens for taxes or assessments or
other governmental charges or levies not yet due and payable, or the
validity of which is being contested by the Company or a Subsidiary in
good faith and by appropriate proceedings upon stay of execution or
the enforcement thereof and for which adequate reserves in accordance
with GAAP or other appropriate provision has been made; (i) Liens to
secure Indebtedness incurred for the purpose of financing all or a part of
the purchase price or construction cost of Property acquired or constructed
after the Issue Date, provided that (l) the principal amount of
Indebtedness secured by such Liens shall not exceed 100% of the lesser of
cost or Fair Market Value of the Property so acquired, upgraded or
constructed plus transaction costs related thereto, (2) such Liens shall
not encumber any other assets or Property of the Company or any
Subsidiary (other than the proceeds thereof and accessions and upgrades
thereto) and (3) such Liens shall attach to such Property within 120 days
of the date of the completion of the construction or acquisition of such
Property; (j) Liens securing Capital Lease Obligations, provided,
further, that such Liens secure Capital Lease Obligations which, when
combined with (l) the outstanding secured Indebtedness of the Company and its
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<PAGE> 23
Subsidiaries (other than Indebtedness secured by Liens described under
clauses (b) and (i) hereof) and (2) the aggregate principal amount of all
other Capital Lease Obligations of the Company and Subsidiaries, does not
exceed $5,000,000 at any one time outstanding; (k) Liens to secure any
extension, renewal, refinancing or refunding (or successive extensions,
renewals, refinancings or refundings), in whole or in part, of any
Indebtedness secured by Liens referred to in the foregoing clauses (a), (c)
and (d), provided, further, that such Lien does not extend to any other
Property of the Company or any Subsidiary and the principal amount of the
Indebtedness secured by such Lien is not increased; (l) any charter or
lease; (m) leases or subleases of real property to other Persons; (n)
Liens securing Permitted Indebtedness described in clause (b) of the
definition thereof; (o) judgment liens not giving rise to an Event of
Default so long as any appropriate legal proceedings which may have been
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; (p) rights of off-set of banks and other Persons; and (q)
liens in favor of the Company.
"Permitted Refinancing Indebtedness" means Indebtedness of the
Company, incurred in exchange for, or the net proceeds of which are
used to renew, extend, refinance, refund or repurchase, outstanding
Indebtedness of the Company which outstanding Indebtedness was incurred in
accordance with, or is otherwise permitted by, the terms of clauses (a) and
(e) of the definition of "Permitted Indebtedness," provided that (i) if the
Indebtedness being renewed, extended, refinanced, refunded or repurchased is
pari passu with or subordinated in right of payment (without regard to
its being secured) to the Securities, then such new Indebtedness is pari
passu with or subordinated in right of payment (without regard to its being
secured) to, as the case may be, the Securities at least to the same
extent as the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (ii) such new Indebtedness is scheduled to mature later
than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (iii) such new Indebtedness has an Average Life at the time
such Indebtedness is incurred that is greater than the Average Life
of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, and (iv) such new Indebtedness is in aggregate principal amount
(or, if such Indebtedness is issued at a price less than the principal
amount thereof, the aggregate amount of gross proceeds therefrom is) not in
excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased
(or if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof,
then not in excess of the amount of liability in respect thereof
determined in accordance with GAAP) plus the amount of reasonable fees,
expenses and premium, if any, incurred by the Company or such Subsidiary
in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means
Indebtedness of any Subsidiary, incurred in exchange for, or the net
proceeds of which are used to renew, extend, refinance, refund or
repurchase, outstanding Indebtedness of such Subsidiary which outstanding
Indebtedness was incurred in accordance with, or is otherwise permitted by,
the terms of clauses (e) and (f) of the definition of "Permitted
Indebtedness," provided that (i) if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased is pari passu with or
subordinated in right of payment (without regard to its being secured) to the
Guarantee
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<PAGE> 24
of such Subsidiary, then such new Indebtedness is pari passu with or
subordinated in right of payment (without regard to its being secured)
to, as the case may be, the Guarantee of such Subsidiary at least to the
same extent as the Indebtedness being renewed, extended, refinanced
refunded or repurchased, (ii) such new Indebtedness is scheduled to mature
later than the Indebtedness being renewed, extended, refinanced, refunded
or repurchased, (iii) such new Indebtedness has an Average Life at the
time such Indebtedness is incurred that is greater than the Average Life
of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, and (iv) such new Indebtedness is in an aggregate principal
amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds
therefrom is) not in excess of the aggregate principal amount then
outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP) plus the amount of
reasonable fees, expenses and premium, if any, incurred by the Company
or such Subsidiary in connection therewith.
"Person" means any individual, corporation, partnership,
joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or other agency
or political subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means Capital Stock of such Person
of any class or classes (however designated) that ranks prior, as to the
payment of dividends and/or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of at least one other class of such
Person.
"Proceeding" has the meaning specified in Section 12.11(a).
"Process Agent" has the meaning specified in Section 12.11(a).
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, excluding Capital Stock in any other Person.
"Qualified Equity Offering" means an offering of Capital Stock
(other than Redeemable Stock) of the Company for cash, whether pursuant
to an effective registration statement under the Securities Act or
pursuant to an available exemption from registration under the Securities
Act.
"Record Date" means, for the interest payable on any Interest
Payment Date, the date specified in Section 2.12.
"Redeemable Stock" means, with respect to any Person, any
equity security that by its terms or otherwise is required to be
redeemed, or is redeemable at the option of the holder thereof, at any time
prior to one year following the Stated Maturity of the Securities or is
exchangeable into Indebtedness of such Person or any of its subsidiaries.
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<PAGE> 25
"Redemption Date" means, when used with respect to any Security
or part thereof to be redeemed hereunder, the date fixed for redemption of
such Securities pursuant to the terms of the Securities and this Indenture.
"Redemption Price" means, when used with respect to any Security
or part thereof to be redeemed hereunder, the price fixed for redemption
of such Security pursuant to the terms of the Securities and this
Indenture, plus accrued and unpaid interest thereon, if any to the Redemption
Date.
"Registrar" has the meaning specified in Section 2.03.
"Related Business" means the land drilling business and
activities incidental thereto and any business related or ancillary
thereto.
"Replacement Asset" means a Property or asset that, as determined
by the Board of Directors of the Company as evidenced by a Board Resolution,
is used or is useful in a Related Business.
"Responsible Officer" means, when used with respect to the
Trustee, any officer assigned to the Corporate Trust Office, including any
vice president, assistant vice president, assistant secretary or any other
officer of the Trustee to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular
subject.
"Restricted Investment" means any Investment in any Person,
including an Unrestricted Subsidiary or the designation of a Subsidiary as
an Unrestricted Subsidiary, other than a Permitted Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or
make any distribution in respect of, or purchase, redeem, retire or
otherwise acquire for value, any Capital Stock of the Company or any
Affiliate of the Company, or warrants, rights or options to acquire
such Capital Stock, other than (x) dividends payable solely in the Capital
Stock (other than Redeemable Stock) of the Company or such Affiliate, as the
case may be, or in warrants, rights or options to acquire such Capital
Stock and (y) dividends or distributions by a Subsidiary to the Company or
to a Wholly Owned Subsidiary; (ii) make any principal payment on, or
redeem, repurchase, defease (including an in-substance or legal defeasance)
or otherwise acquire or retire for value (including pursuant to mandatory
repurchase covenants), prior to any scheduled principal payment, scheduled
sinking fund payment or other stated maturity, Indebtedness of the
Company or any Subsidiary which is subordinated (whether pursuant to its
terms or by operation of law) in right of payment to the Securities or the
Guarantees, as applicable; or (iii) make any Restricted Investment in any
Person.
"Retired Indebtedness or Stock" has the meaning specified in
Section 4.04.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., or if Standard & Poor 's Ratings Group shall cease rating
the specified debt securities and such ratings ceases with respect thereto
shall have been transferred to a successor Person, such
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<PAGE> 26
successor Person, provided that if Standard & Poor's Ratings Group
ceases rating the specified debt securities and its ratings business
with respect thereto shall not have been transferred to any successor
Person or such successor Person is Moody's, then "S&P" shall mean any
other nationally recognized rating agency selected in good faith by the
Board of Directors of the Company in a Board Resolution.
"Sale and Lease-Back Transaction" means, with respect to any
Person, any direct or indirect arrangement pursuant to which Property is
sold or transferred by such Person or a subsidiary of such Person and is
thereafter leased back from the purchaser or transferee thereof by
such Person or one of its subsidiaries.
"Security" has the meaning stated in the first paragraph of
this Indenture and more particularly means any Security authenticated and
delivered under this Indenture.
"Security Register" has the meaning specified in Section 2.03.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means any Indebtedness incurred by the Company,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is subordinated in right of payment to the Securities,
provided that Senior Debt will not include (a) any liability for federal,
state, local or other taxes owed or owing, (b) any Indebtedness owing to any
Subsidiaries of the Company, (c) any trade payables or (d) any
Indebtedness that is incurred in violation of this Indenture.
"Significant Subsidiary" means a Subsidiary that is a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act.
"Special Record Date" means a date fixed by the Trustee pursuant
to Section 2.12 for the payment of Defaulted Interest.
"Stated Maturity" when used with respect to a Security or any
installment of interest thereon, means the date specified in such
Security as the fixed date on which the principal of such Security or
such installment of interest is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the
Company or any Guarantor that is subordinated in right of payment to
the Securities or the Guarantees, as the case may be, and does not mature
prior to one year following the Stated Maturity of the Securities.
"subsidiary" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding Voting Stock of which is owned, directly
or indirectly, by such Person, or by one or more other subsidiaries or such
Person, or by such Person and one or more other subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity,
more than 50% of the outstanding partnership or similar interest of
which is owned, directly or indirectly, by such Person, or by one or more
other subsidiaries of such Person, or by such
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<PAGE> 27
Person and one or more other subsidiaries of such Person and (iii) any
limited partnership of which such Person or any subsidiary of such Person
is a general partner.
"Subsidiary" means a subsidiary of the Company other than an
Unrestricted Subsidiary; provided that Indrillers shall not be considered a
Subsidiary for purposes of this Indenture.
"Surviving Entity" has the meaning specified in Section 5.01.
"Transaction Date" has the meaning specified within the definition
of "Consolidated Interest Coverage Ratio."
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended, as in force at the date as of which this Indenture was
executed.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become
such pursuant to the applicable provision of this Indenture, and
thereafter Trustee shall mean such successor Trustee.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged; (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of America, which, in
either case under clauses (i) or (ii) above, are not callable or redeemable
at the option of the issuers thereof; or (iii) depository receipts issued
by a bank or trust company as custodian with respect to any such U.S.
Government Obligations or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the
account of the holder of a 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 U.S. Government Obligation
evidenced by such Depository receipt.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means any subsidiary of the Company that
the Company has classified as an Unrestricted Subsidiary and that has not
been reclassified as a Subsidiary pursuant to the terms of this
Indenture.
"Voting Stock" means with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holder
thereof (whether at all times or at the times that such class of Capital
Stock has voting power by reason of the happening of any contingency) to
vote in the election of members of the board of directors or comparable body
of such Person.
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"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
interest 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.
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act. This Indenture is subject to the mandatory provisions of
the TIA which are incorporated by reference in and made a part of this
Indenture. The following TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or
defined by Commission rule have the meanings assigned to them by such
definitions.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and
words in the plural include the singular;
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(6) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision;
(7) provisions apply to successive events and
transactions;
(8) references to agreements and other instruments
include subsequent amendments and waivers but only to the extent
not prohibited by this Indenture; and
(9) unless otherwise expressly provided herein, the
principal amount of any Preferred Stock shall be the greater of
(i) the maximum liquidation value of such Preferred Stock or (ii)
the maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating.
(a) The Securities, with the notation of the Guarantees
endorsed thereon and the Trustee's certificate of authentication thereon,
shall be substantially in the forms of Exhibit A and Exhibit B, each of
which is hereby incorporated in and expressly made a part of this Indenture.
The Securities may have such notations, legends or endorsements stamped,
printed, lithographed or engraved thereon as required by law, stock
exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture.
(b) The Securities shall be issued initially in the form of
one or more permanent global notes in definitive, fully registered form,
without coupons, substantially in the form set forth in Exhibit A hereto
(each a "Global Security"), each such Security containing the legend
relating to Global Securities set forth on the face of the Security as set
forth on Exhibit A hereto. Upon issuance, each such Global Security shall
be duly executed by the Company, with the endorsement of Guarantees therein
executed by the Guarantors, and authenticated by the Trustee as hereinafter
provided and deposited with the Trustee as custodian for the Depositary.
Any Certificated Security that may be issued pursuant to Section 2.06(a)
shall be issued in the form of a note in definitive, fully registered form,
without coupons, substantially in the form set forth in Exhibit B hereto
(each a "Certificated Security"). Upon issuance, any such Certificated
Security shall be duly executed by the Company, with the endorsement of
Guarantees thereon executed by the Guarantors, and authenticated by the
Trustee as hereinafter provided.
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SECTION 2.02. Execution and Authentication. The
aggregate principal amount at Stated Maturity of Securities outstanding
at any time shall not exceed $175,000,000 except as provided in
Section 2.08 hereof. Two executive officers of the Company shall sign
the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form. The Securities shall have
the notation relating to the Guarantees executed by each Guarantor in
the manner provided for in Section 11.03 hereof and endorsed thereon.
If an executive officer of the Company whose signature is
on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
Notwithstanding any other provision hereof, the Trustee
shall authenticate and deliver Notes only upon receipt by the Trustee of an
Officers' Certificate complying with Sections 12.01 and 12.02 hereof an
Opinion of Counsel with respect to satisfaction of all conditions precedent
contained in this Indenture to authentication and delivery of such
Securities.
Upon compliance by the Company with the provisions of the
previous paragraph, the Trustee shall, upon receipt of an Order requesting
such action, authenticate Securities for original issuance in an aggregate
principal amount at Stated Maturity not to exceed $175,000,000 in the form
of the Global Security. Such Order shall specify in the amount of Securities
to be authenticated and the date on which the Securities are to be
authenticated and shall further provide instructions concerning
registration, amounts for each Holder and delivery.
Upon the occurrence of any event specified in Section
2.06(a) hereof and compliance by the Company with the provisions of the
paragraph preceding the immediately preceding paragraph, the Company shall
execute and the Trustee shall authenticate and deliver to each beneficial
owner identified by the Depositary, in exchange for such beneficial owner s
interest in the Global Security, Certificated Securities representing
Securities theretofore represented by the Global Security.
A Security shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of authentication
on the Security. The signature shall be conclusive evidence, and the only
evidence, that the Security has been authenticated under this Indenture.
The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate the Securities.
Unless limited by the terms of such appointment, an authenticating agent
may authenticate Securities whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication
by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange
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(the "Registrar") and an office or agency where Securities may be presented
for payment (the "Paying Agent"). The Registrar shall keep a register of
the Securities (the "Security Register") and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents; provided, however, that so long as Texas Commerce
Bank National Association shall be the Trustee, without the consent of the
Trustee, there shall be no more than one Registrar or Paying Agent. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party
to this Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to
such agent. The Company shall notify the Trustee of the name and address
of any such agent. If the Company fails to maintain a Registrar or Paying
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities. The Company may, upon
written notice to the Trustee, change the designation of the Trustee as
Registrar or Paying Agent and appoint another Person to act as Registrar
for purposes of this Indenture except that, for the purposes of Article
3, Article 8, Article 9 and Sections 4.07 and 4.09, none of the Company,
any Guarantor, any Restricted Subsidiary or any Affiliate of the Company
or of any Guarantor shall act as Paying Agent. If any Person other than
the Trustee acts as Registrar, the Trustee shall have the right at any
time, upon reasonable notice, to inspect or examine the Security
Register and to make such inquiries of the Registrar as the Trustee shall
in its discretion deem necessary or desirable in performing its duties
hereunder.
Upon surrender for registration of transfer of any
Security at an office or agency of the Company designated for such
purpose, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees,
one or more new Securities of any authorized denomination or
denominations, of like tenor and aggregate principal amount, all as
requested by the transferor.
Every Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company, the
Trustee or the Registrar) be duly endorsed, or be accompanied by a duly
executed instrument of transfer in form satisfactory to the Company, the
Trustee and the Registrar, by the Holder thereof or such Holder's attorney
duly authorized in writing.
SECTION 2.04. Paying Agent To Hold Money in Trust.
Prior to each due date of the principal, premium, if any, and interest
on any Security, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium, if any, and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall 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, of or interest on
the Securities and shall notify the Trustee of any default by the Company in
making any such
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payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds disbursed
by the Paying Agent. Upon complying with this Section, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
SECTION 2.05 Global Securities.
(a) So long as a Global Security is registered in the name
of the Depositary or its nominee, beneficial owners, members of, or
participants in, the Depositary ("Agent Members") shall have no rights
under this Indenture with respect to the Global Note held on their behalf by
the Depositary or the Trustee as its custodian, and the Depositary may be
treated by the Company, the Guarantors, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Security for
all purposes. Notwithstanding the foregoing, nothing herein shall (i)
prevent the Company, the Guarantors, the Trustee or any agent of the Company
or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or (ii) impair, as
between the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a Holder of Securities.
(b) The Holder of a Global Security may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that
may hold interests in such Global Securities through Agent Members, to take
any action which a Holder of Notes is entitled to take under this Indenture
or the Notes.
(c) Whenever, as a result of an optional redemption of
Securities by the Company, a Change of Control Offer, an Asset Sale Offer,
or an exchange pursuant to the second sentence of Section 2.06(a) hereof, a
Global Security is redeemed, repurchased or exchanged in part, such Global
Security shall be surrendered by the Holder thereof to the Trustee who
shall cause an adjustment to be made to a Schedule A attached thereto so
that the principal amount at Stated Maturity of such Global Security will
be equal to the portion of such Global Security not redeemed, repurchased
or exchanged and shall thereafter return such Global Security to such
Holder, provided that each such Global Security shall be in a principal
amount at Stated Maturity of $1,000 or an integral multiple thereof.
SECTION 2.06 Transfer and Exchange.
(a) Any Global Security shall be exchanged by the Company
for one or more Certificated Securities, if (x) the Depositary (i) has
notified the Company that it is unwilling or unable to continue as, or
ceases to be, a "Clearing Agency" registered under Section 17A of the
Exchange Act and (ii) a successor to the Depositary registered as a
"Clearing Agency" under Section 17A of the Exchange Act is not able to be
appointed by the Company within 90 days or (y) the Depositary is at any time
unwilling or unable to continue as Depositary and a successor to the
Depositary is not able to be appointed by the Company within 90 days. If
an Event of Default occurs and is continuing, the Company shall, at the
request of the Holder thereof, exchange all or part of any Global Security,
for one or more Certificated Securities, as the case
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may be; provided that the principal amount at Stated Maturity of each
such Certificated Security shall be $1,000 or an integral multiple thereof.
Whenever a Global Security is exchanged as a whole for one or more
Certificated Securities, it shall be surrendered by the Holder thereof
to the Trustee for cancellation. Whenever a Global Security is
exchanged in part for one or more Certificated Securities it shall be
surrendered by the Holder thereof to the Trustee and the Trustee shall
make the appropriate notations to Schedule A thereof pursuant to Section
2.05(c) hereof. All Certificated Securities issued in exchange for a
Global Security or any portion thereof shall be registered in such names,
and delivered, as the Depositary shall instruct the Trustee.
(b) A Holder may transfer a Security only upon the surrender
of such Security for registration of transfer. No such transfer shall be
effected until, and the transferee shall succeed to the rights of a Holder
only upon, final acceptance and registration of the transfer in the
Security Register by the Registrar. When Securities are presented to the
Registrar with a request to register the transfer of, or to exchange, such
Securities, the Registrar shall register the transfer or make such
exchange as requested if its requirements for such transactions and any
applicable requirements hereunder are satisfied. To permit registrations
of transfers and exchanges, the Company shall execute and the Trustee
shall authenticate Certificated Securities at the Registrar's request.
(c) The Company shall not be required to make and the
Registrar need not register transfers or exchanges of (a) Certificated
Securities selected for redemption (except, in the case of
Certificated Securities to be redeemed in part, the portion thereof not to
be redeemed), or (b) any Certificated Security for a period of 15 days
before a selection of Certificated Securities to be redeemed or the
mailing of a notice of a Change of Control Offer pursuant to Section
4.09 hereof or an Asset Sale Offer pursuant to Section 4.07 hereof and
ending on the close of business on the day of such mailing.
(d) No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer of Securities
(other than in respect of exchanges or transfers pursuant to Sections
2.10, 3.06, 407, 4.09 and 10.06).
(e) All Securities issued upon any registration of transfer,
exchange or substitution pursuant to the terms of this Indenture will
evidence the same debt and will be entitled to the same benefits under
this Indenture as the Securities surrendered for such registration of
transfer, exchange or substitution.
(f) Any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book entry system
maintained by the Holder of such Global Security (or its agent), and that
ownership of a beneficial interest in the Securities represented hereby
shall be required to be reflected in book entry form. Transfers of a
Global Security shall be limited to transfers in whole and not in part,
to the Depositary, its successors, and their respective nominees. Interests
of
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beneficial owners in a Global Security may be transferred in accordance with
the rules and procedures of the Depositary (or its successors).
SECTION 2.07. Holder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of Holders. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee,
in writing at least five 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 Holders.
SECTION 2.08. Replacement Securities. If a mutilated
Security is surrendered to the Registrar or if the Holder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial
Code are met and the Holder satisfies any other reasonable requirements
of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of
the Company and the Trustee to protect the Company, the Guarantors,
the Trustee, the Paying Agent, the Registrar and any co-registrar from any
loss which any of them may suffer if a Security is replaced. In case any
such mutilated, destroyed, lost or stolen Security has become or is about
to become due and payable, the Company, in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section
2.08, the Company may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.08 in
lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 2.08 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 2.09. Outstanding Securities. Securities
outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.08, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser, in which event the replacement Security shall cease to be
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outstanding, subject to the provisions of Section 8-405 of the Uniform
Commercial Code. A mutilated Security ceases to be outstanding upon surrender
of such Security and replacement thereof pursuant to Section 2.08.
If the Paying Agent (other than the Company, a Guarantor or
an Affiliate of the Company or a Guarantor) segregates and holds in trust,
in accordance with this Indenture, on a Redemption Date or Maturity date
money sufficient to pay all principal, premium, if any, interest and any
other amounts payable on that date with respect to the Securities (or
portions thereof) to be redeemed or maturing, as the case may be, then on
and after that date such Securities (or such portions thereof) shall
cease to be outstanding and interest on them shall cease to accrue.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, waiver
or consent or any amendment, modification or other change to this
Indenture, Securities held or beneficially owned by the Company or
Guarantor or an Affiliate of the Company or a Guarantor of the Company or
by agents of any of the foregoing shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent or any amendments, modification
or other change to this Indenture, only Securities which a
Responsible Officer knows are so owned shall be so disregarded. Securities
so owned which have been pledged in good faith shall not be disregarded if
the pledgee establishes to the satisfaction of the Trustee such pledgee s
right so to act with respect to the Securities and that the pledgee is not
the Company, a Guarantor or an Affiliate of the Company or of a Guarantor or
any of their agents.
SECTION 2.10. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.
SECTION 2.11. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to
them for registration of transfer, exchange or payment. The Trustee and
no one else shall cancel and destroy (subject to the record retention
requirements of the Exchange Act) all Securities surrendered for
registration of transfer, exchange, payment or cancellation and deliver a
certificate of such destruction to the Company. The Company may not
issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.12 Payment of Interest: Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date, shall be paid to the Person
in whose name such Security is registered at the close of business on
the Record Date for such interest payment, which shall be the June 15 or
December 15 (whether or not a Business Day) immediately preceding such
Interest Payment Date.
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Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Record Date, and, except as
hereinafter provided, such Defaulted Interest and any interest payable on
such Defaulted Interest may be paid by the Company, at its election, as
provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest, and any interest payable on such Defaulted Interest, to the Persons
in whose names the Securities are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on the Securities and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as provided in this clause (a). Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Default Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be sent, first class mail, postage prepaid, to each Holder at
such Holder's address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names the Securities are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant
to the following clause (b).
(b) The Company may make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, on the Securities in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of transfer
of, or in exchange for, or in lieu of, or in substitution for, any other
Security, shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 2.13 Authorized Denominations. The Securities
shall be issuable in denominations of $1,000 and any integral multiple
thereof.
SECTION 2.14. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP"
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numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects
to redeem Securities pursuant to Section 3.07 and paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption
Date, the principal amount of Securities to be redeemed, the Redemption
Price and the Section of this Indenture and the paragraph of the
Securities pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided
for in this Section at least 60 days before the Redemption Date unless
the Trustee consents to a shorter period. Such notice shall be
accompanied by an Officers Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein and in the Securities.
SECTION 3.02. Selection of Securities To Be Redeemed. If less
than all the Securities are to be redeemed at any time, the Trustee shall
select the Securities to be redeemed on a pro rata basis, or by any other
method which the Trustee shall determine to be fair and appropriate and
which complies with any securities exchange and other applicable
requirements, provided that the Trustee may select for redemption in part
only Securities in denominations larger than $1,000. In selecting
Securities to be redeemed pursuant to this Section 3.02, the Trustee shall
make such adjustments, reallocations and eliminations as it shall deem
proper so that the principal amount at Stated Maturity of each Security to
be redeemed shall be $1,000 or an integral multiple thereof, by increasing,
decreasing or eliminating any amount less than $1,000 which would be
allocable to any Holder. If the Notes to be redeemed are Certificated
Securities, the Certificated Securities to be redeemed shall be selected
by the Trustee by prorating, as nearly as may be, or by any other method
which the Trustee shall determine to be fair and appropriate and which
complies with any securities exchange and other applicable requirements,
the principal amount of Certificated Securities to be redeemed among the
Holders of Certificated Securities registered in their respective names.
The Trustee in its discretion may determine the particular Securities (if
there are more than one) registered in the name of any Holder which are to
be redeemed, in whole or in part. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities
called for redemption. The Trustee shall notify the Company promptly of
the Securities or portions of Securities to be redeemed.
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SECTION 3.03. Notice of Redemption. At least 30 days but
not more than 60 days before a date for redemption of Securities, the
Company shall mail a notice of redemption by first-class mail to each
Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if any Global Security is being redeemed in
part, the portion of the principal amount of such Security to be
redeemed and that, after the Redemption Date, the Global Security,
with a notation on Schedule A thereof adjusting the principal
amount thereof to be equal to the unredeemed portion, will be
returned to the Holder thereof;
(6) if any Certificated Security is being redeemed in
part, the portion of the principal amount of such Security to be
redeemed and that, after the Redemption Date, a new Certificated
Security or Certificated Securities in principal amount equal
to the unredeemed portion will be issued;
(7) if fewer than all the outstanding Securities are
to be redeemed, the identification and principal amounts of the
particular Securities to be redeemed;
(8) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making
such payment pursuant to the terms of this Indenture, interest on
Securities (or portion thereof) called for redemption ceases to
accrue on and after the redemption date;
(9) 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 Securities;
(10) the paragraph of the Securities and the Section
of the Indenture pursuant to which the Securities are being called
for redemption; and
(11) any other information necessary to enable
Holders to comply with the notice of redemption.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense. In
such event, the Company shall provide the
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Trustee with the information required by this Section at least 45 days
before the redemption date unless the Trustee consents to a shorter period.
SECTION 3.04. Effect of Notice of Redemption. Once
notice of redemption is mailed, Securities called for redemption become
due and payable on the Redemption Date and at the Redemption Price stated
in the notice. Upon surrender to the Paying Agent, such Securities shall
be paid at the Redemption Price stated in the notice, plus accrued and
unpaid interest to the Redemption Date. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the Redemption Price of and accrued and
unpaid interest on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which have been
delivered by the Company to the Trustee for cancellation.
So long as the Company complies with the preceding
paragraph and the other provisions of this Article 3, interest on the
Securities to be redeemed on the applicable Redemption Date shall cease
to accrue from and after such date and such Securities or portions thereof
shall be deemed not to be entitled to any benefit under this Indenture
except to receive payment of the Redemption Price on the Redemption Date.
If any Security called for redemption shall not be so paid upon
surrender for redemption, then, from Redemption Date until such principal
is paid, interest shall be paid on the unpaid principal and, to the
extent permitted by law, on any accrued but unpaid interest thereon, in
each case at the rate prescribed therefor by this Indenture and such
Securities.
SECTION 3.06 Securities Redeemed in Part. Upon
surrender and cancellation of a Certificated Security that is redeemed
in part, the Company shall issue and the Trustee shall authenticate and
deliver to the surrendering Holder (at the Company's expense) a new
Certificated Security equal in principal amount to the unredeemed portion
of the Certificated Security surrendered and canceled, provided that each
such Certificated Security shall be in a principal amount at Stated
Maturity of $1,000 or an integral multiple thereof.
Upon surrender of a Global Security that is redeemed in
part, the Paying Agent shall forward such Global Security to the Trustee
who shall make a notation on Schedule A thereof to reduce the principal
amount of such Global Security to an amount equal to the unredeemed portion
of such Global Note, as provided in Section 2.05 hereof.
SECTION 3.07 Optional Redemption.
(a) Except as set forth in subsection (b) of this
Section 3.07, the Company shall not have the option to redeem the
Securities pursuant to this Section 3.07 prior to July 1, 2002. On or
after such date, the Company shall have the option to redeem the
Securities, in whole or in part upon not less than 30 days' nor more than
60 days' notice, at the Redemption
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Prices (expressed as percentages of principal amount at Stated Maturity),
if redeemed during the twelve month period beginning July 1 of the years
indicated below, in each case, together with any interest accrued and
unpaid to the Redemption Date:
Year Percentage
---- ----------
2002 . . . . . . . . . . . . . . . . . . . . . . . . 104.4375%
2003 . . . . . . . . . . . . . . . . . . . . . . . . 102.9580%
2004 . . . . . . . . . . . . . . . . . . . . . . . . 101.4792%
2005 and thereafter . . . . . . . . . . . . . . . . 100.0000%
(b) Notwithstanding the foregoing, at any time
during the first 36 months after the Issue Date, the Company may, at its
option, redeem up to a maximum of 30% of the aggregate principal amount at
Stated Maturity of the Securities with the net cash proceeds of one or more
Qualified Equity Offerings at a Redemption Price equal to 108.875% of
the principal amount thereof, plus accrued and unpaid interest thereon to
the Redemption Date; provided that at least $120,000,000 aggregate
principal amount at Stated Maturity of the Securities shall remain
outstanding immediately after the occurrence of any such redemption; and
provided, further, that each such redemption shall occur within 90 days of
the closing of such Qualified Equity Offering.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of, premium, if any, on and interest on the
Securities on the dates and in the manner provided in the Securities and in
this Indenture. Principal, premium and interest shall be considered paid
on the date due if on or before 10:00 a.m., Houston time, on such date
the Trustee or a Paying Agent, other than the Company or a Guarantor, or
an Affiliate of the Company or a Guarantor, holds in accordance with
this Indenture money sufficient to pay all principal, premium and interest
then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture.
The Company shall pay interest on overdue principal at
the rate specified therefor in the Securities plus 1% per annum, and it
shall pay interest on overdue installments of interest (without regard to
any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. Commission Reports. So long as any
Securities are outstanding, whether or not the Company is subject to Section
13(a) or 15(d) of the Exchange Act, or any successor provision thereto, the
Company shall file with the Commission the annual reports, quarterly
reports and other documents which the Company would have been required to
file with the Commission pursuant to such Section 13(a) or 15(d) or any
successor provision thereto if the
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<PAGE> 41
Company were subject thereto, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates")
by which the Company would have been required to file them. The Company
shall also (whether or not it is required to file reports with the
Commission), within 30 days of each Required Filing Date, (i) transmit by
mail to all Holders of Securities, as their names and addresses appear in the
Security Register, without cost to such Holders or Persons, and (ii) file
with the Trustee, copies of the annual reports, quarterly reports and other
documents (without exhibits) which the Company has filed or would have filed
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act,
any successor provisions thereto or this Section 4.02. The Company shall
not be required to file any report, document or other information with the
Commission if the Commission does not permit such filing.
SECTION 4.03. Limitation on Indebtedness. The Company
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, incur any Indebtedness (including Acquired Indebtedness)
unless, after giving pro forma effect to the incurrence of such
Indebtedness, the Consolidated Interest Coverage Ratio for the
Determination Period would be at least 2.0 to 1.0 if such Indebtedness is
incurred prior to July 1, 1998 and at least 2.25 to 1.0 if such
Indebtedness is incurred thereafter. Notwithstanding the foregoing, the
Company or any Subsidiary may incur Permitted Indebtedness. Any
Indebtedness of a Person existing at the time at which such Person becomes
a Subsidiary (whether by merger, consolidation, acquisition or otherwise)
shall be deemed incurred by such Subsidiary at the time at which it becomes a
Subsidiary.
SECTION 4.04. Limitation on Subsidiary Indebtedness and
Preferred Stock . The Company will not permit any Subsidiary to, directly
or indirectly, incur any Indebtedness or issue any Preferred Stock except:
(i) Indebtedness or Preferred Stock issued to and held by the
Company, a Guarantor or a Wholly Owned Subsidiary, so long as any transfer
of such Indebtedness or Preferred Stock to a Person other than the
Company, Guarantor or a Wholly Owned Subsidiary will be deemed to
constitute an incurrence of such Indebtedness or Preferred Stock by the
issuer thereof as of the date of such transfer;
(ii) Acquired Indebtedness or Preferred Stock of a Subsidiary
issued and outstanding prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness or Preferred Stock issued
in connection with or in anticipation of such acquisition);
(iii) Indebtedness or Preferred Stock outstanding on the Issue
Date and listed on Schedule 4.04 attached hereto;
(iv) Indebtedness described in clauses (b), (c), (d), (e), (f),
(g) and (h) under the definition of "Permitted Indebtedness";
(v) Permitted Subsidiary Refinancing Indebtedness of such
Subsidiary;
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(vi) Indebtedness or Preferred Stock issued in exchange for, or
the proceeds of which are used to refinance, repurchase or redeem,
Indebtedness or Preferred Stock described in clauses (i) and (iii) of this
Section (the "Retired Indebtedness or Stock"), provided that the
Indebtedness or the Preferred Stock so issued has (A) a principal amount
or liquidation value, as the case may be, not in excess of the principal
amount or liquidation value of the Retired Indebtedness or Stock plus
related expenses for redemption and issuance, (B) a final redemption date
later than the stated maturity or final redemption date (if any) of the
Retired Indebtedness or Stock and (C) an Average Life at the time of
issuance of such Indebtedness or Preferred Stock that is greater than the
Average Life of the Retired Indebtedness or Stock;
(vii) Indebtedness of a Subsidiary which represents the
assumption by such Subsidiary of Indebtedness of another Subsidiary in
connection with a merger of such Subsidiaries, provided that no
Subsidiary or any successor (by way of merger) thereto existing on the
Issue Date shall assume or otherwise become responsible for any
Indebtedness of an entity which is not a Subsidiary on the Issue Date,
except to the extent that a Subsidiary would be permitted to incur such
Indebtedness under this Section; and
(viii) Non-Recourse Indebtedness incurred by a foreign Subsidiary
not constituting a Guarantor.
SECTION 4.05. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any
of its Subsidiaries to, make any Restricted Payment, unless at the time of
and after giving effect to the proposed Restricted Payment, (i) no Default
shall have occurred and be continuing (or would result therefrom), (ii)
the Company could incur at least $1.00 of additional Indebtedness under
the tests described in the first sentence of Section 4.03 of this
Indenture and (iii) the aggregate amount of all Restricted Payments
declared or made on or after the Issue Date by the Company or any
Subsidiary shall not exceed the sum of (A) 50% (or if such Consolidated Net
Income shall be a deficit, minus 100% of such deficit) of the aggregate
Consolidated Net Income accrued during the period beginning on the first
day of the fiscal quarter in which the Issue Date falls and ending on the
last day of the fiscal quarter ending immediately prior to the date of
such proposed Restricted Payment, minus 100% of the amount of any
writedowns, write-offs and other negative extraordinary charges not
otherwise reflected in Consolidated Net Income during such period, plus (B)
an amount equal to the aggregate net cash proceeds received by the
Company, subsequent to the Issue Date, from the issuance or sale (other
than to a Subsidiary) of shares of its Capital Stock (excluding Redeemable
Stock, but including Capital Stock issued upon the exercise of options,
warrants or rights to purchase Capital Stock (other than Redeemable
Stock) of the Company) and the liability (expressed as a positive number)
as expressed on the face of a balance sheet in accordance with GAAP in
respect of any Indebtedness of the Company or any of its
Subsidiaries, or the carrying value of Redeemable Stock, which has been
converted into, exchanged for or satisfied by the issuance of shares of
Capital Stock (other than Redeemable Stock) of the Company, subsequent to
the Issue Date, plus (C) 100% of the net reduction in Restricted
Investments, subsequent to the Issue Date, in any Person, resulting from
payments of interest on Indebtedness, dividends,
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<PAGE> 43
repayments of loans or advances, or other transfers of Property (but
only to the extent such interest, dividends, repayments or other transfers
of Property are not included in the calculation of Consolidated Net Income),
in each case to the Company or any Subsidiary from any Person (including,
without limitation, from Unrestricted Subsidiaries) or from redesignations
of Unrestricted Subsidiaries as Subsidiaries (valued in each case as
provided in the definition of "Investments"), not to exceed in the case of
any Person the amount of Restricted Investments previously made by the
Company or any Subsidiary in such Person and in each such case which was
treated as a Restricted Payment.
(b) The foregoing provisions will not prevent
(i) the payment of any dividend on Capital Stock of any class within 60
days after the date of its declaration if at the date of declaration such
payment would be permitted by this Indenture; (ii) any repurchase or
redemption of Capital Stock or Subordinated Indebtedness of the Company or
a Subsidiary made by exchange for Capital Stock of the Company (other than
Redeemable Stock), or out of the net cash proceeds from the substantially
concurrent issuance or sale (other than to a Subsidiary) of Capital Stock
of the Company (other than Redeemable Stock), provided that the net cash
proceeds from such sale are excluded from computations under Section
4.05(a)(iii)(B) above to the extent that such proceeds are applied to
purchase or redeem such Capital Stock or Subordinated Indebtedness;
(iii) so long as no Default shall have occurred and be continuing or
should occur as a consequence thereof, any repurchase or redemption of
Subordinated Indebtedness of the Company or a Subsidiary solely in exchange
for, or out of the net cash proceeds from the substantially concurrent
sale of, new Subordinated Indebtedness of the Company or a Subsidiary,
so long as such Subordinated Indebtedness is permitted under Section
4.03 of this Indenture and (1) is subordinated to the Securities at least to
the same extent as the Subordinated Indebtedness so exchanged, purchased or
redeemed, (2) has a stated maturity later than the stated maturity of the
Subordinated Indebtedness so exchanged, purchased or redeemed and (3) has
an Average Life at the time incurred that is greater than the
remaining Average Life of the Subordinated Indebtedness so exchanged,
purchased or redeemed; (iv) Investments in any Joint Ventures,
foreign Subsidiaries not constituting Guarantors and Indrillers in an
aggregate amount not to exceed $10,000,000 and (v) redemptions of the
Company's Series A Preferred Stock issued and outstanding on the Issue
Date for an aggregate redemption price of not more than $1,000,000.
Notwithstanding the foregoing, the amount available for Investments in
Joint Ventures and foreign Subsidiaries pursuant to clause (iv) of the
preceding sentence may be increased by the aggregate amount received by the
Company and its Subsidiaries from a Joint Venture or a foreign Subsidiary on
or before such date resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances or other transfers of
Property made to such Joint Venture or foreign Subsidiary (but only to
the extent such interest dividends, repayments or other transfers of
Property are not included in the calculation of Consolidated Net Income).
Restricted Payments permitted to be made as described in the first
sentence of this Section 4.05(b) will be excluded in calculating the
amount of Restricted Payments thereafter, except that any such Restricted
Payments permitted to be made pursuant to clause (iv) will be included in
calculating the amount of Restricted Payments made pursuant to such clause
(iv) thereafter.
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(c) For purposes of this Section 4.05, if a particular
Restricted Payment involves a non- cash payment, including a distribution
of assets, then such Restricted Payment shall be deemed to be an amount
equal to the cash portion of such Restricted Payment, if any, plus an
amount equal to the Fair Market Value of the non-cash portion of such
Restricted Payment.
SECTION 4.06. Limitation on Dividends and
Other Payment Restrictions Affecting Subsidiaries. The Company will not,
and will not permit any Subsidiary, directly or indirectly, to create,
enter into any agreement with any Person or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of
any kind which by its terms restricts the ability of any Subsidiary to (a)
pay dividends, in cash or otherwise, or make any other distributions on
its Capital Stock to the Company or any Subsidiary, (b) pay any
Indebtedness owed to the Company or any Subsidiary, (c) make loans or
advances to the Company or any Subsidiary or (d) transfer any of its
Property or assets to the Company or any Subsidiary except any encumbrance
or restriction contained in any agreement or instrument:
(i) existing on the Issue Date;
(ii) relating to any Property or assets acquired after the Issue
Date, so long as such encumbrance or restriction relates only to the
Property or assets so acquired and is not and was not created in
anticipation of such acquisition;
(iii) relating to any Acquired Indebtedness of any Subsidiary at
the date on which such Subsidiary was acquired by the Company or any
Subsidiary (other than Indebtedness incurred in anticipation of such
acquisition);
(iv) effecting a refinancing of Indebtedness incurred pursuant to
an agreement referred to in the foregoing clauses (i) through (iii), so
long as the encumbrances and restrictions contained in any such
refinancing agreement are no more restrictive than the encumbrances and
restrictions contained in such agreements;
(v) constituting customary provisions restricting subletting or
assignment of any lease of the Company or any Subsidiary or provisions
in license agreements or similar agreements that restrict the assignment
of such agreement or any rights thereunder;
(vi) constituting restrictions on the sale or other
disposition of any Property securing Indebtedness as a result of a
Permitted Lien on such Property; or
(vii) constituting any temporary encumbrance or restriction with
respect to a Subsidiary pursuant to an agreement that has been entered into
for the sale or disposition of all or substantially all of the
Capital Stock of, or Property and assets of, such Subsidiary.
SECTION 4.07. Limitation on Asset Sales.
The Company will not engage in, and will not permit
any Subsidiary to engage in, any Asset Sale unless (a) except in the case
of (i) an Asset Sale resulting from the requisition of title to, seizure
or forfeiture of any Property or assets or any actual or constructive
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total loss or an agreed or compromised total loss or (ii) a Bargain
Purchase Contract, the Company or such Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the Property; (b) at least 75% of such consideration
consists of Cash Proceeds (or the assumption of Indebtedness of the
Company or such Subsidiary relating to the Capital Stock or Property or
asset that was the subject of such Asset Sale and the unconditional release
of the Company or such Subsidiary from such Indebtedness); (c) after giving
effect to such Asset Sale, the total non-cash consideration held by the
Company from all such Asset Sales does not exceed $10,000,000; and (d)
the Company delivers to the Trustee an Officers' Certificate certifying
that such Asset Sale complies with clauses (a), (b) and (c). The Company or
such Subsidiary, as the case may be, may apply the Net Available Proceeds
from each Asset Sale (x) to the acquisition of one or more Replacement
Assets, or (y) to repurchase or repay Senior Debt (with a permanent
reduction of availability in the case of revolving credit
borrowings); provided that such acquisition or such repurchase or
repayment shall be made within 365 days after the consummation of the
relevant Asset Sale. Any Net Available Proceeds from any Asset Sale
that are not used to so acquire Replacement Assets or to repurchase or
repay Senior Debt within 365 days after consummation of the relevant Asset
Sale constitute "Excess Proceeds".
(b) When the aggregate amount of Excess Proceeds
exceeds $15,000,000, the Company shall within 30 days thereafter, or at
any time after receipt of Excess Proceeds but prior to there being
$15,000,000 of Excess Proceeds, the Company may, at its option, make a pro
rata offer (an "Asset Sale Offer") to purchase from all holders an aggregate
principal amount of Securities equal to the Excess Proceeds, at a price in
cash (the "Asset Sale Offer Purchase Price") equal to 100% of the
outstanding principal amount at Stated Maturity thereof plus accrued
interest, if any, to the Asset Sale Purchase Date, in accordance with the
procedures set forth in Section 4.07(c).
(c) Within 30 days of the date that the amount of
Excess Proceeds exceeds $15,000,000, the Company, or the Trustee at the
request and expense of the Company, shall send to each Holder by first
class mail, postage prepaid, a notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made
pursuant to this Section 4.07 and that all Securities properly
tendered will be accepted for payment, subject to proration in the
event that the amount of Excess Proceeds is less than the aggregate
Asset Sale Offer Purchase Price of all Securities properly tendered
pursuant to the Asset Sale Offer;
(ii) the Asset Sale Offer Purchase Price, the
amount of Excess Proceeds that are available to be applied to
purchase tendered Securities, and the date Securities are to be
purchased pursuant to the Asset Sale Offer (the "Asset Sale Offer
Purchase Date"), which date shall be a date no earlier than 30 days
and not later than 40 days subsequent to the date such notice is
mailed;
(iii) that any Securities or portions thereof
not properly tendered or accepted for payment will continue to
accrue interest;
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(iv) that, unless the Company defaults in the
payment of the Asset Sale Offer Purchase Price with respect
thereto, all Securities or portions thereof accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest
from and after the Asset Sale Offer Purchase Date;
(v) that any Holder electing to have any
Securities or portions thereof purchased pursuant to the Asset
Sale Offer will be required to surrender such Securities, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of such Securities completed, to the Paying Agent at the
address specified in the notice, prior to the close of business on
the third Business Day preceding the Asset Sale Offer Purchase Date;
(vi) that any Holder shall be entitled to
withdraw such election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the
Asset Sale Offer Purchase Date, a telegram, telex, facsimile
transmission or letter, setting forth the name of the Holder, the
principal amount of Securities delivered for purchase, and a
statement that such Holder is withdrawing such Holder's election
to have such Securities or portions thereof purchased pursuant to
the Asset Sale Offer;
(vii) that any Holder electing to have
Securities purchased pursuant to the Asset Sale Offer must specify
the principal amount at Stated Maturity that is being tendered for
purchase, which principal amount at Stated Maturity must be $1,000
or an integral multiple thereof;
(viii) if Certificated Securities have been
issued pursuant to Section 2.06(a), that any Holder of Certificated
Securities whose Certificated Securities are being purchased only
in part will be issued new Certificated Securities equal in
principal amount at Stated Maturity to the unpurchased portion of
the Certificated Security or Securities surrendered, which
unpurchased portion will be equal in principal amount at Stated
Maturity to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the
Holder of a Global Security that is being purchased in part,
such Global Security with a notation on Schedule A thereof
adjusting the principal amount at Stated Maturity thereof to be
equal to the unpurchased portion of such Global Security; and
(x) the instructions and any other information
necessary to enable any Holder to tender Securities and to have such
Securities purchased, or to withdraw such tender, pursuant to this
Section 4.07.
(d) If the aggregate Asset Sale Offer Purchase Price
of the Securities surrendered by Holders exceeds the amount of Excess
Proceeds as indicated in the notice required by Section 4.07(c) hereof, the
Trustee shall select the Securities to be purchased on a pro rata basis
based on the principal amount of the Securities tendered, with such
adjustments as
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may be deemed appropriate by the Trustee and to comply with any
securities exchange and other applicable requirements, so that only
Securities in denominations of $1,000 or integral multiples thereof
shall be purchased.
(e) On or before the Asset Sale Offer Purchase Date,
the Company shall (i) accept for payment any Securities or portions thereof
properly tendered and selected for purchase pursuant to the Asset Sale and
Section 4.07(d) hereof; (ii) irrevocably deposit with the Paying Agent, by
10:00 a.m., New York City time, on such date, in immediately available
funds, an amount equal to the Asset Sale Offer Purchase Price in respect of
all Securities or portions thereof so accepted; and (iii) deliver, or
cause to be delivered, to the Trustee the Securities so accepted together
with an Officers' Certificate listing the Securities or portions thereof
tendered to the Company and accepted for payment. The Paying Agent shall
promptly send by first class mail, postage prepaid, to each Holder of
Securities or portions thereof so accepted for payment, payment in an
amount equal to the Asset Sale Offer Purchase Price for such Securities or
portions thereof. The Company shall publicly announce the results of the
Asset Sale Offer on or as soon as practicable after the Asset Sale Offer
Purchase Date. For purposes of this Section 4.07, the Trustee shall act as
the Paying Agent.
(f) Upon surrender and cancellation of a
Certificated Security that is purchased in part, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Security a new Certificated
Security equal in principal amount to the unpurchased portion of such
surrendered Certificated Security; provided that each such new Certificated
Security shall be in a principal amount at Stated Maturity of $1,000 or an
integral multiple thereof.
Upon surrender of a Global Security that is purchased in part
pursuant to an Asset Sale Offer, the Paying Agent shall forward such
Global Security to the Trustee who shall make a notation on Schedule A
thereof to reduce the principal amount of such Global Security to an amount
equal to the unpurchased portion of such Global Security, as provided in
Section 2.05 hereof.
(g) Upon completion of an Asset Sale Offer (including
payment of the Asset Sale Offer Purchase Price for accepted Securities),
any surplus Excess Proceeds that were subject to such offer shall cease to
be Excess Proceeds, the amount of Excess Proceeds shall be reset to zero and
the Company may use any remaining amount for general corporate purposes.
(h) The Company shall comply with any applicable
tender offer rules (including, without limitation, any applicable
requirements of Rule 14e-1 under the Exchange Act) in the event that an
Asset Sale Offer is required under the circumstances described herein.
SECTION 4.08. Limitation on Transactions with Affiliates.
(a) Subsequent to the Issue Date, the Company will not, and will not
permit any Subsidiary to, directly or indirectly, enter into or permit to
exist any transaction or series of related transaction (including, but
not limited to, the purchase, sale or exchange of Property, the making
of any Investment, the giving of any guarantee or the rendering of any
service with any Affiliate of
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the Company, other than transactions among the Company and any Guarantors
or any Wholly Owned Subsidiaries) unless (i) such transaction or series of
related transactions is on terms no less favorable to the Company or such
Subsidiary than those that could be obtained in a comparable arm's length
transaction with a Person that is not such an Affiliate and (ii) (A) with
respect to a transaction or series of related transactions that has a Fair
Market Value in excess of $2,000,000 but less than $5,000,000, the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (i)
above; or (B) with respect to a transaction or series of related
transactions that has a Fair Market Value equal to or in excess of
$5,000,000, the transaction or series of related transactions is
approved by a majority of the Board of Directors of the Company
(including a majority of the disinterested directors), which approval is
set forth in a Board Resolution certifying that such transaction or series
of transactions complies with clause (i) above.
(b) The foregoing provisions shall not be applicable
to (i) reasonable and customary compensation, indemnification and other
benefits paid or made available to an officer, director or employee of the
Company or a Subsidiary for services rendered in such person's capacity
as an officer, director or employee (including reimbursement or
advancement of reasonable out-of-pocket expenses and provisions of
directors and officers liability insurance) or (ii) the making of
any Restricted Payment otherwise permitted by this Indenture.
SECTION 4.09. Change of Control.
(a) Upon the occurrence of a Change of Control,
each Holder will have the right to require the Company to repurchase all
of such Holder's Securities in whole or in part (the "Change of Control
Offer") at a purchase price (the "Change of Control Purchase Price") in
cash equal to 101% of the aggregate principal amount at Stated Maturity
thereof, plus accrued and unpaid interest thereon, if any, to the Change of
Control Payment Date on the terms described below.
(b) Within 30 days following any Change of Control,
the Company or the Trustee (at the expense of the Company) will mail a
notice to each Holder and to the Trustee stating,
(i) that a Change of Control has occurred and
a Change of Control Offer is being made pursuant to this Section
4.09, and that, although Holders are not required to tender
their Securities, all Securities that are timely tendered will be
accepted for payment;
(ii) the Change of Control Purchase Price and
the repurchase date, which will be no earlier than 30 days and no
later than 60 days after the date such notice is mailed (the
"Change of Control Payment Date");
(iii) that any Security or portion thereof
accepted for payment pursuant to the Change of Control Offer (and
duly paid for on the Change of Control Payment Date) will cease
to accrue interest after the Change of Control Payment Date;
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(iv) that any Security or portion thereof not
properly tendered will continue to accrue interest;
(v) that any Holder electing to have any
Securities or portions thereof purchased pursuant to a Change of
Control Offer will be required to surrender such Securities, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of such Securities completed, to the Paying Agent at the
address specified in the notice, prior to the close of business
on the third Business day preceding the Change of Control Date;
(vi) that any Holder shall be entitled to
withdraw such election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter, setting forth the name of the Holder, the
principal amount of Securities delivered for purchase, and a
statement that such Holder is withdrawing such Holder's election
to have such Securities or portions thereof purchased pursuant to
the Change of Control Offer;
(vii) that any Holder electing to have
Securities purchased pursuant to the Change of Control Offer must
specify the principal amount at Stated Maturity that is being
tendered for purchase, which principal amount at Stated Maturity
must be $1,000 or an integral multiple thereof;
(viii) if Certificated Securities have been
issued pursuant to Section 2.06(a), that any Holder of
Certificated Securities whose Certificated Notes are being
purchased only in part will be issued new Certificated Securities
equal in principal amount at Stated Maturity to the unpurchased
portion of the Certificated Security or Securities surrendered,
which unpurchased portion will be equal in principal amount at
Stated Maturity to $1,000 or an integral multiple thereof;
(ix) that the Trustee will return to the
Holder of a Global Security that is being purchased in part, such
Security with a notation on Schedule A thereof adjusting the
principal amount at Stated Maturity thereof to be equal to the
unpurchased portion of such Global Security;
(x) the instructions and any other information
necessary to enable any Holder to accept a Change of Control Offer
or effect withdrawal of such acceptance; and
(xi) the instructions and any other
information necessary to enable Holders to tender their Securities
and have such Securities purchased pursuant to the Change of Control
Offer.
(c) On or before the Change of Control Payment Date,
the Company shall (i) accept for payment any Securities or portions
thereof properly tendered pursuant to the Change of Control Offer;
(ii) irrevocably deposit with the Paying Agent, by 10:00 a.m., New
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York City time, on such date, in immediately available funds, an amount
equal to the Change of Control Purchase Price in respect of all
Securities or portions thereof so accepted, including interest, if
applicable; and (iii) deliver, or cause to be delivered, to the Trustee the
Securities so accepted together with an Officers' Certificate listing the
Securities or portions thereof tendered to the Company and accepted for
payment. The Paying Agent shall promptly send by first class mail, postage
prepaid, to each Holder of Securities or portions thereof so accepted for
payment, payment in an amount equal to the Change of Control Purchase Price
for such Securities or portions 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. For purposes of
this Section 4.09, the Trustee shall act as the Paying Agent.
(d) Upon surrender and cancellation of a Certificated
Security that is purchased in part pursuant to the Change of Control Offer,
the Company shall promptly issue and the Trustee shall authenticate and
deliver to the surrendering Holder of such Certificated Security, a new
Certificated Note equal in principal amount at Stated Maturity to the
unpurchased portion of such surrendered Certificated Note; provided that
each such new Certificated Security shall be in a principal amount of
$1,000 at Stated Maturity or an integral multiple thereof.
Upon surrender of a Global Security that is purchased in part
pursuant to a Change of Control Offer, the Paying Agent shall forward
such Global Security to the Trustee who shall make a notation on
Schedule A thereof to reduce the principal amount at Stated Maturity of
such Global Note to an amount equal to the unpurchased portion of such
Global Security, as provided in Section 2.05 hereof.
(e) The Company will 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 repurchases
all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company will comply with any
applicable tender offer rules (including, without limitation, any
applicable requirements of Rule 14e-1 under the Exchange Act) in the event
that the Change of Control Offer is triggered under the circumstances
described herein.
SECTION 4.10. Limitation on Liens. The Company will
not, and will not permit any Subsidiary to, directly or indirectly,
create, affirm, incur, assume or suffer to exist any Liens of any kind other
than Permitted Liens on or with respect to any Property or assets of the
Company or such Subsidiary or any interest therein or any income or
profits therefrom, whether owned at the Issue Date or thereafter
acquired, without effectively providing that the Securities shall be
secured equally and ratably with (or prior to) the Indebtedness so secured
for so long as such obligations are so secured.
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SECTION 4.11. Limitation on Guarantees by Guarantors.
The Company will not permit any Guarantor to guarantee the payment of
any Subordinated Indebtedness of the Company unless such guarantee shall
be subordinated to such Guarantor s Guarantee at least to the same
extent as such Subordinated Indebtedness is subordinated to the
Securities; provided that this covenant will not be applicable to any
guarantee of any Guarantor that (i) existed at the time at which such
Person became a Subsidiary of the Company and (ii) was not incurred in
connection with, or in contemplation of, such Person becoming a
Subsidiary of the Company.
SECTION 4.12 Unrestricted Subsidiaries
(a) The Company may designate a subsidiary (including
a newly formed or newly acquired subsidiary) of the Company or any of
its Subsidiaries as an Unrestricted Subsidiary; provided that (i)
immediately after giving effect to the transaction, the Company could
incur $1.00 of additional Indebtedness pursuant to the first sentence
of Section 4.03 and (ii) such designation is at the time permitted
under Section 4.05. Notwithstanding any provisions of this covenant
all subsidiaries of an Unrestricted Subsidiary will be Unrestricted
Subsidiaries.
(b) The Company will not, and will not permit any
of its Subsidiaries to, take any action or enter into any transaction or
series of transactions that would result in a Person (other than a newly
formed subsidiary having no outstanding Indebtedness (other than
Indebtedness to the Company or a Subsidiary) at the date of
determination) becoming a Subsidiary (whether through an acquisition,
the redesignation of an Unrestricted Subsidiary or otherwise) unless,
after giving effect to such action, transaction or series of
transactions on a pro forma basis, (i) the Company could incur at least
$1.00 of additional Indebtedness pursuant to the first sentence of
Section 4.03 and (ii) no Default or Event of Default would occur.
(c) Subject to Sections 4.12(a) and (b), an
Unrestricted Subsidiary may be redesignated as a Subsidiary. The
designation of a subsidiary as an Unrestricted Subsidiary or the
designation of an Unrestricted Subsidiary as a Subsidiary in compliance
with this Section 4.12 shall be made by the Board of Directors pursuant
to a Board Resolution delivered to the Trustee and shall be effective as
of the date specified in such Board Resolution, which shall not be prior
to the date such Board Resolution is delivered to the Trustee. Any
Unrestricted Subsidiary shall become a Subsidiary if it incurs any
Indebtedness other than Non-Recourse Indebtedness. If at any time
Indebtedness of an Unrestricted Subsidiary which was Non-Recourse
Indebtedness no longer so qualifies, such Indebtedness shall be deemed to
have been incurred when such Non-Recourse Indebtedness becomes Indebtedness.
SECTION 4.13 Limitation on Sale and Lease-Back
Transactions. The Company will not, and will not permit any Subsidiary
to, directly or indirectly, enter into, assume, guarantee or otherwise
become liable with respect to any Sale and Lease-Back Transaction unless (i)
the proceeds from such Sale and Lease-Back Transaction are at least equal
to the Fair Market Value of such Property being transferred and (ii) the
Company or
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such Subsidiary would have been permitted to enter into such transaction
under the provisions of Sections 4.03, 4.04 and 4.10.
SECTION 4.14 Limitation on Line of Business. None
of the Company or any of its Subsidiaries will directly or indirectly
engage to any substantial extent in any line or lines of business activity
other than a Related Business.
SECTION 4.15. Maintenance of Office or Agency. The
Company shall maintain in The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. Unless otherwise designated by the
Company by written notice to the Trustee such office or agency shall be
the office of the Trustee's agent, Texas Commerce Trust Company of New
York, which is located at 55 Water Street, North Building, Room 234,
Windows 20 and 21, New York, New York 10041, Attention: Vice President,
Global Trust Services. 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, and
the Company hereby appoints the Trustee its agent to receive all
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or
more other offices or agencies (in or outside of The City of New York)
where the Securities may be presented or surrendered for any or all of such
purposes, and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in The City of
New York, for such purposes. The Company shall give prompt written notice
to the Trustee of any such designation and any change in the location of any
such other office or agency.
SECTION 4.16. Money for the Security Payments to be Held
in Trust. If the Company, any Subsidiary of the Company or any of their
respective Affiliates shall at any time act as Paying Agent with respect to
the Securities, such Paying Agent shall, on or before each due date of
the principal of (and premium, if any) or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto money sufficient to pay the principal (and premium, if
any) or interest so becoming due until such money shall be paid to such
Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents
with respect to the Securities, it shall, prior to or on each due date of
the principal of (and premium, if any) or interest on any of the
Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to
be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying
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Agent is the Trustee) the Paying Agent shall promptly notify the Trustee of
the Company's action or failure so to act.
SECTION 4.17. Corporate Existence. The Company
will, and will cause each of its Subsidiaries to, preserve and keep
in full force and effect its corporate existence in accordance with
applicable law, except as permitted in Sections 5.01 and 5.02;
provided, however, that the Company may terminate the corporate existence
of any Subsidiary if, in the good faith judgment of the Board of Directors
of the Company, such termination is desirable in the conduct of the
business of the Company and its Subsidiaries and is not disadvantageous
in any material respect to the Holders of the Securities.
SECTION 4.18 Maintenance of Property. The Company shall
cause all Property used in the conduct of its business or the business
of any of its Subsidiaries to be maintained and kept in good condition,
repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as, in the judgment of the Company, may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section
4.18 shall prevent the Company from discontinuing the operation or
maintenance of any of such Property if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or the
business of any of its Subsidiaries and not disadvantageous in any material
respect to the Holders of the Securities.
SECTION 4.19. Payment of Taxes and Other Claims. The
Company shall pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any
of its Subsidiaries and (b) all material lawful claims for labor, materials
and supplies which, if unpaid, might by law become a Lien upon the
Property or assets of the Company or any of its Subsidiaries; provided that
the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made.
SECTION 4.20 Compliance Certificate; Notice of Default or Event of Default.
(a) The Company shall deliver to the Trustee within
120 days after the end of each fiscal year of the Company ending after
the date hereof, an Officers' Certificate (which shall be signed by
officers satisfying the requirements of Section 314 of the Trust Indenture
Act) stating whether or not, to the best knowledge of such officers, the
Company has complied with all conditions and covenants under this
Indenture, and, if the Company shall be in Default, specifying all such
Defaults and the nature thereof of which such officer may have knowledge.
(b) The year-end financial statements delivered
pursuant to Section 4.02 above shall be accompanied by a written statement
of the Company's independent public
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accountants (who shall be a firm of established national reputation
reasonably satisfactory to the Trustee) that in making the examination
necessary for certification of such financial statements nothing has come
to their attention which would lead them to believe that the Company or any
of its Subsidiaries has violated the provisions of Section 4.01, 4.03,
4.04, 4.05, 4.07, 4.09 or 4.17 hereof or of Article 5 of this Indenture 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, and it being further understood that
such statement may not be provided to the extent contrary to the then
current recommendations of the accountants governing body.
(c) The Company will, so long as any of the
Securities are outstanding, deliver to the Trustee, within 5 days of any
Officer becoming aware of (i) any Default or Event of Default or (ii) any
event of default under any other mortgage, indenture or instrument
referred to in Section 6.01(e), an Officers' Certificate specifying such
Default, Event of Default or other event of default and what action the
Company or applicable Subsidiary is taking or proposes to take with respect
thereto.
SECTION 4.21. Further Instruments and Acts. Upon request
of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 4.22. Prohibition on Company and Guarantors
Becoming Investment Companies. None of the Company or the Guarantors shall
become an investment company as defined in the Investment Company Act of
1940, as amended.
SECTION 4.23. Stay, Extension and Usury Laws. The
Company and each of the Guarantors covenant (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 of 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 and each of the Guarantors (to the extent that
it may lawfully do so) hereby expressly waive 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.
ARTICLE 5
Consolidation, Merger, Conveyance, Lease or Transfer
SECTION 5.01. Consolidation, Merger, Conveyance, Lease or Transfer.
(a) The Company will not, in any transaction or series
of transactions, consolidate with or merge into any other Person (other than
a merger of a Subsidiary into the Company in which the Company is the
continuing corporation), or continue in any new
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jurisdiction, or sell, convey, assign, transfer, lease or otherwise dispose
of all or substantially all of the Property and assets of the Company and
the Subsidiaries, taken as a whole, to any Person, unless
(i) either (A) the Company shall be the
continuing corporation or (B) the corporation (if other
than the Company) formed by such consolidation or into
which the Company is merged, or the Person which acquires,
by sale, assignment, conveyance, transfer, lease or
disposition, all or substantially all of the Property and
assets of the Company and the Subsidiaries, taken as a
whole (such corporation or Person, the Surviving Entity
), shall be a corporation organized and validly existing
under the laws of the United States of America, any
political subdivision thereof or any state thereof or the
District of Columbia, and shall expressly assume, by a
supplemental indenture, the due and punctual payment of the
principal of (and premium, if any) and interest on all the
Securities and the performance of the Company s covenants
and obligations under this Indenture;
(ii) immediately before and after giving effect
to such transaction or series of transactions on a pro
forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series
of transactions), no Event of Default or Default shall
have occurred and be continuing or would result therefrom;
(iii) immediately after giving effect to
such transaction or series of transactions on a pro
forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series
of transactions), the Company (or the Surviving Entity if
the Company is not continuing) shall have a Consolidated
Net Worth equal to or greater than the Consolidated Net
Worth of the Company immediately prior to such transactions;
and
(iv) immediately after giving effect to any
such transaction or series of transactions on a pro
forma basis as if such transaction or series of
transactions had occurred on the first day of the
Determination Period, the Company (or the Surviving Entity
if the Company is not continuing) would be permitted
to incur $1.00 of additional Indebtedness pursuant to
the provisions of the first sentence of Section 4.03.
(b) The provision of Section 5.01(a)(iv) above
shall not apply to any merger or consolidation into or with, or any
such transfer of all or substantially all of the Property and assets of the
Company and the Subsidiaries taken as a whole into, the Company.
SECTION 5.02. Officers' Certificate and Opinion of
Counsel In connection with any consolidation, merger, continuance,
transfer of assets or other transactions contemplated by Section 5.01,
the Company shall deliver, or cause to be delivered, to the
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Trustee, in form and substance reasonably satisfactory to the Trustee,
an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, continuance, sale, assignment, conveyance or
transfer and the supplemental indenture in respect thereto comply with the
provisions of this Indenture and that all conditions precedent in this
Indenture relating to such transactions have been complied with.
SECTION 5.03. Substitution of Surviving Entity
Upon any transaction or series of transactions that are of the type
described in, and are effected in accordance with, this Article 5, the
Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture and
the Securities with the same effect as if such Surviving Entity had been
named as the Company in this Indenture; and when a Surviving Person duly
assumes all of the obligations and covenants of the Company pursuant to
this Indenture and the Securities, except in the case of a lease, the
predecessor Person shall be relieved of all such obligations.
If such Surviving Entity shall have succeeded to and been
substituted for the Company, such Surviving Entity may cause to be signed,,
and may issue either in its own name or in the name of the Company prior to
such succession any or all of the Securities delivered to the Trustee; and,
upon the order of such Surviving Entity, instead of the Company, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of
the Company to the Trustee for authentication, and any Securities which
such Surviving Entity thereafter shall cause to be signed and delivered to
the Trustee for that purpose (in each instance with endorsements of
Guarantees thereon by the Guarantors). All of the Securities so issued
and so endorsed shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued
and endorsed in accordance with the terms of this Indenture and the
Guarantee as though all of such Securities had been issued and endorsed at
the date of the execution hereof.
In case of any such consolidation, merger, continuance,
sale, transfer, conveyance or other disposal, such changes in phraseology
and form (but not in substance) may be made in the Securities
thereafter to be issued or the Guarantees to be endorsed thereon as may be
appropriate.
For all purposes of this Indenture and the Securities,
Subsidiaries of any Surviving Entity will, upon such transaction or series
of transactions, become Subsidiaries or Unrestricted Subsidiaries as
provided pursuant to this Indenture and all Indebtedness, and all Liens
on Property or assets, of the Surviving Entity and its Subsidiaries
immediately prior to such transaction or series of transactions shall be
deemed to have been incurred upon such transaction or series of transactions.
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ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. Whenever used herein, an
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of interest on any
Security pursuant to this Indenture when the same becomes due and
payable, and the continuance of such Default for a period of 30
days;
(b) default in the payment of principal of (or
premium, if any, on) any Security when the same becomes due and
payable, whether upon Maturity, upon optional redemption,
required repurchase (including pursuant to a Change of Control
Offer or an Asset Sale Offer) or otherwise or the failure to make
an offer to purchase any such Security as required pursuant to the
provisions of the Securities and this Indenture;
(c) the Company fails to comply with any of its
covenants or agreements contained in Sections 4.03, 4.04, 4.05,
4.07, 4.09, 4.13 and 5.01 of this Indenture;
(d) the Company defaults in the performance, or
breach, of any covenant or warranty of the Company in this
Indenture (other than a covenant or warranty addressed in clause
(a), (b) or (c) above) and continuance of such Default or breach
for a period of 30 days after written notice thereof has been
given to the Company by the Trustee or to the Company and the
Trustee by Holders of at least 25% of the aggregate principal
amount at Stated Maturity of the outstanding Securities;
(e) Indebtedness of the Company or any Subsidiary is
not paid when due within the applicable grace period, if any, or
is accelerated by the holders thereof and, in either case, the
principal amount of such unpaid or accelerated Indebtedness exceeds
$10,000,000;
(f) the entry by a court of competent
jurisdiction of one or more final judgments against the Company
or any Subsidiary in an uninsured or unindemnified aggregate
amount in excess of $5,000,000 which is not discharged, waived,
appealed, stayed, bonded or satisfied for a period of 60 consecutive
days;
(g) the entry by a court having jurisdiction in the
premises of (i) a decree or order for relief in respect of the
Company or any Significant Subsidiary in an involuntary case or
proceeding under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or (ii) a decree or
order adjudging the Company or any Significant
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Subsidiary a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company or any
Significant Subsidiary under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency, or similar law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or any Significant
Subsidiary or of any substantial part of the Property or assets of
the Company or any Significant Subsidiary, or ordering the winding
up or liquidation of the affairs of the Company or any
Significant Subsidiary, and the continuance of any such decree
or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days;
(h) (i) the commencement by the Company or any
Significant Subsidiary of a voluntary case or proceeding under
U.S. bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state or foreign bankruptcy, insolvency
or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent; or (ii) the consent by the
Company or any Significant Subsidiary to the entry of a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state, or foreign bankruptcy, insolvency
or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company or any
Significant Subsidiary; or (iii) the filing by the Company or any
Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state
or foreign bankruptcy, insolvency or other similar law; or (iv)
the consent by the Company or any Significant Subsidiary to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the
Property or assets of the Company or any Significant Subsidiary
or of any substantial part of the Property or assets of the Company
or any Significant Subsidiary, or the making by the Company or any
Significant Subsidiary of an assignment for the benefit of
creditors; or (v) the admission by the Company or any Significant
Subsidiary in writing of its inability to pay its debts generally
as they become due; or (vi) the taking of corporate action by
the Company or any Significant Subsidiary in furtherance of any such
action; or
(i) any Guarantee shall for any reason cease to be,
or be asserted by the Company or any Guarantor, as applicable,
not to be, in full force and effect (except pursuant to the
release of any such Guarantee in accordance with the provisions
of this Indenture).
SECTION 6.02. Acceleration. If an Event of Default
(other than an Event of Default described in clause (g) or (h) of Section
6.01) occurs and shall be continuing, then in each and every case the
Trustee or the Holders of not less than 25% of the outstanding
aggregate principal amount at Stated Maturity of the Securities may declare
the principal amount at Stated
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Maturity of the Securities to be due and payable immediately by a notice
in writing to the Company (and to the Trustee if given by Holders of such
Securities), and upon any such declaration the principal amount at Stated
Maturity of, premium, if any, on, any accrued and unpaid interest on, and any
other amounts payable in respect of, the Securities then outstanding will
become and be immediately due and payable. If any Event of Default
specified in clause (g) or (h) of Section 6.01 occurs, the principal
amount at Stated Maturity of, premium, if any, and any accrued and unpaid
interest on, and any other amount payable in respect of, the Securities
then outstanding shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of such
Securities. In the event of a declaration of acceleration because an
Event of Default set forth in Section 6.01(e) above has occurred and
is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if the event of default triggering such Event of
Default pursuant to Section 6.01(e) shall be remedied or cured or waived
by the holders of the relevant Indebtedness within 30 days after such event
of default; provided that no judgment or decree for the payment of the money
due on the Securities has been obtained by the Trustee as provided in this
Indenture.
After any such acceleration, but before a judgment or
decree based on acceleration, the Holders of a majority in aggregate
principal amount at Stated Maturity of the Securities at the time
outstanding may rescind and annul such acceleration if
(a) the Company or any Guarantor has paid or deposited
with the Trustee a sum sufficient to pay
(i) all money paid or advanced by the
Trustee hereunder and the reasonable compensation,
expenses, disbursement and advances of the Trustee, its
agents and counsel,
(ii) all overdue installments of interest on
any other amounts due in respect of all Securities;
(iii) the principal of (and premium, if any, on)
any Securities that have become due otherwise than by
such declaration of acceleration and interest thereon at
the rate or rates prescribed therefor in the Securities and
this Indenture; and
(iv) to the extent that payment of such
interest is lawful, interest upon Defaulted Interest at
the rate or rates prescribed therefor in the Securities
and this Indenture;
(b) all Events of Default, other than the nonpayment
of principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided
in Section 6.04;
(c) the annulment of such acceleration would not
conflict with any judgment or decree of a court of competent
jurisdiction; and
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(d) the Company has delivered an Officers' Certificate
to the Trustee to the effect of clauses (b) and (c) of this
sentence.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal (and premium, if any) of or interest on,
and any other amounts then due in respect of, the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of
a majority in principal amount at Stated Maturity of the Securities then
outstanding by notice to the Trustee may waive an existing Default and its
consequences except (i) a Default in the payment of the principal of or
interest on a Security or (ii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder
affected. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. Control by Majority. The Holders of a
majority in principal amount at Stated Maturity of the Securities then
outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any
trust or power conferred on the Trustee. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Holders, it being understood that the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudiced to such Holders, or would involve
the Trustee in personal liability; provided that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with
such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. No Holder of any
Securities shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee
written notice of a continuing Event of Default with respect to the
Securities;
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(ii) the Holders of at least 25% in aggregate principal
amount at Stated Maturity of the Securities then outstanding have
made written request, and such Holder or Holders have offered
reasonable indemnity, to the Trustee to institute such proceeding as
trustee; and
(iii) the Trustee has failed to institute such
proceeding, and has not received from the Holders of a majority
in aggregate principal amount at Stated Maturity of the
Securities then outstanding a direction inconsistent with such
request, within 60 days after such notice, request and offer.
A Holder may not use this Indenture to prejudice the rights
of another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities, 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 6.08. Collection Suit by Trustee. If an Event
of Default specified in Section 6.01(a) or (b) occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an
express trust against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the
amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The
Trustee shall be entitled and empowered, without regard to whether the
Trustee or any Holder shall have made any demand or performed any other
act pursuant to the provisions of this Article and without regard to
whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise, by intervention in any
proceedings relative to the Company or any Obligor upon the Securities,
or to the creditors or Property or assets of the Company, any Guarantor
or any other Obligor or otherwise, to take any and all actions authorized
under the Trust Indenture Act in order to have claims of the Holders and
the Trustee allowed in any such proceeding. In particular, the
Trustee shall be entitled and empowered in such instances:
(a) to file and prove a claim or claims for the whole
amount of principal (and premium, if any), interest and any other amounts
owing and unpaid in respect of the Securities, and to file such other papers
or documents as may be necessary or advisable in order to have the claims
of the Trustee (including all amounts owing to the Trustee and each
predecessor Trustee pursuant to Section 7.07 hereof) and of the Holders
allowed in any judicial proceedings relative to the Company or other
obligor upon the Securities, or to the creditors or property of the Company,
any Guarantor, or any such other Obligor,
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(b) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of the Securities in any
election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other
Property or assets payable or deliverable on any such claims, and to
distribute all amounts received with respect to the claims of the Holders
and of the Trustee on their behalf; and any trustee, receiver, or
liquidator, custodian or other similar official is hereby authorized by
each of the Holders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to cover
all amounts owing to the Trustee and each predecessor Trustee pursuant
to Section 7.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder in
any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee shall be held
to represent all the Holders of the Securities, and it shall not be
necessary to make any Holders of the Securities parties to any such
proceedings.
SECTION 6.10. Priorities. If the Trustee collects any
money or property pursuant to this Article 6, it shall pay out the money or
property in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable
on the Securities for principal (premium, if any) and interest,
respectively; and
THIRD: to the Company or the Guarantors or to such
other party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for
any payment to Holders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Holder and the Trustee
a notice that states the record date, the payment date and amount to be
paid. The Trustee may mail such notice in the name and at the expense of
the Company.
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
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omitted by it as 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, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee,
a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount at Stated Maturity of the Securities.
SECTION 6.12 Restoration of Rights and Remedies. If
the Trustee or any Holder of Securities has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, the Trustee and the Holders shall, subject to any determination in
such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has
been instituted.
SECTION 6.13 Rights and Remedies Cumulative. Except as
otherwise provided in Section 2.08 hereof, no right or remedy conferred
herein, upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14 Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security to exercise any
right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 6 or by
law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their
exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default:
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(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, 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 liability for
its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(1) this subsection does not limit the effect of subsection
(b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to subsections (a), (b) and (c) of this
Section.
(e) 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.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section and to the
provisions of the Trust Indenture Act.
SECTION 7.02. Rights of Trustee.
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(a) Subject to the provisions of Section 7.01(a)
hereof, the Trustee may rely on 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. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that the
Trustee's conduct does not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating
to this Indenture and the Securities shall be full and complete
authorization and protection from liability in respect to any action
taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) Prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, Officer's Certificate, or other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in aggregate principal amount
of the Securities then outstanding; provided that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if advanced by the Trustee,
shall be repaid by the Company upon demand.
(g) The Trustee shall not be required to give any
bond or surety in respect of the performance of its powers and duties
hereunder.
(h) The Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants, conditions,
or agreements on the part of the Company, except as otherwise set forth
herein, but the Trustee may require of the Company full information and
advice as to the performance of the covenants, conditions and agreements
contained herein and shall be entitled in connection herewith to examine
the books, records and premises of the Company.
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(i) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.01(a) or
(b), or (ii) any other event of which the Trustee has "actual knowledge"
and which event, with the giving of notice or the passage of time or both,
would constitute an Event of Default under this Indenture, the Trustee
shall not be deemed to have notice of any Default or Event of Default
unless specifically notified in writing of such event by the Company or
the Holders of not less than 25% in aggregate principal amount at
Stated Maturity of the Securities then outstanding; provided that the
Trustee shall comply with the "automatic stay" provisions contained in
the U.S. bankruptcy laws, if applicable; and as used herein, the term
"actual knowledge" means the actual fact or statement of knowing by a
Responsible Officer, without any duty to make any investigation with regard
thereto.
SECTION 7.03. Individual Rights of Trustee. The Trustee
in its individual or any other capacity may become the owner or pledgee
of Securities and may otherwise deal with the Company or its Affiliates
with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not
be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and
it shall not be responsible for any statement of the Company in this
Indenture or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and
is continuing and if it is known to the Trustee, the Trustee shall mail to
each Holder notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment of principal of (or premium, if any) or
interest on any Security (including payments pursuant to the mandatory
repurchase provisions of such Security, if any), the Trustee may withhold
the notice if and so long as the Trustee in good faith determines that
withholding the notice is in the interests of Holders.
SECTION 7.06. Reports by Trustee to Holders. As
promptly as practicable after May 15 beginning with the May 15 following
the date of this Indenture, and in any event prior to August 15 in each
year, the Trustee shall mail to each Holder a brief report dated as of
such date that complies with TIA Section 313(a) if and to the extent
required by TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to
Holders shall be filed with the Commission and each stock exchange (if
any) on which the Securities are listed. The Company agrees to notify
promptly the Trustee whenever the Securities become listed on any stock
exchange and of any delisting thereof.
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SECTION 7.07. Compensation and Indemnity. The Company
shall pay to the Trustee promptly upon request from time to time the
compensation for its services as agreed to by the Trustee and the Company.
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 out-of-pocket expenses incurred
or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Company shall
indemnify the Trustee against any and all loss, liability or reasonable
expense (including reasonable attorneys' fees) incurred by it in connection
with the acceptance and administration of this trust and the
performance of its duties hereunder. 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 may have separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense
or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad
faith. The Company need not pay for any settlement made by the Trustee
without the Company's consent, such consent not to be unreasonably withheld.
To secure the Company's payment obligations in this
Section, the Trustee shall have a Lien prior to the Securities on all
money or property held or collected by the Trustee other than money or
property held in trust to pay principal of and interest on particular
Securities.
The Company's payment obligations pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section
6.01(g) or (h) with respect to the Company, the expenses are
intended to constitute expenses of administration under any applicable
bankruptcy laws.
SECTION 7.08. Replacement of Trustee. The Trustee may
resign at any time by so notifying the Company. The Holders of a majority
in principal amount at Stated Maturity of the Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. If
at any time:
(i) the Trustee shall fail to comply with
Section 310(b) of the Trust Indenture Act after written request
thereof by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, unless the Trustees
duty to resign is stayed in accordance with the provisions of TIA
Section 310(b); or
(ii) the Trustee shall cease to be eligible
under Section 7.10 hereof and shall fail to resign after written
request therefor by the Company or by any Holder; or
(iii) the Trustee shall become incapable of
acting or a decree or order for relief by a court having
jurisdiction in the premises shall have been entered in respect of
the Trustee in an involuntary case under the United States
bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or
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similar law, or a decree or order by a court having jurisdiction
in the premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Trustee or of its Property
and assets or affairs, or any public officer shall take charge
or control of the Trustee or of its Property and assets or
affairs for the purpose of rehabilitation, conservation,
winding-up or liquidation; or
(iv) the Trustee shall commence a voluntary
case under the United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or similar law or shall consent to the
appointment of or taking possession by a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or of its Property and assets or
affairs, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its
debts generally as they become due, or shall take corporate action
in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to the Securities, or (ii) subject to Section
6.11 hereof, any Holder who has been a bona fide Holder of a Note for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee for the
Securities.
If the Trustee resigns, is removed by the Company or
by the Holders of a majority in principal amount at Stated Maturity of
the Securities and such Holders do not reasonably promptly appoint a
successor Trustee, or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Company shall promptly appoint 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. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, subject to the Lien provided for in Section 7.07.
If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring
Trustee or the Holders of 10% in principal amount at Stated Maturity of the
Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant
to this Section, the Company's obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by
merger, conversion or consolidation to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor trustee,
and deliver such Securities so authenticated; and in case at that time any
of the Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and
in all such cases such certificates shall have the full force which it
is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Trustee shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the
Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE 8
Satisfaction and Discharge
SECTION 8.01 Satisfaction and Discharge. This
Indenture shall upon the request of the Company cease to be of further
effect (except as to surviving rights of registration of transfer or
exchange of Securities herein expressly provided for, the Company's
obligations under Sections 7.07 and 8.04 hereof, and the Company's, the
Trustee's and the Paying Agent s obligations under Section 8.03 hereof)
and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(a) either
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(i) all Securities therefore authenticated
and delivered (other than (A) Securities which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.08 and (B) Securities for whose payment
money has been deposited in trust with the Trustee or any
Paying Agent and thereafter paid to the Company or discharged from
such trust) have been delivered to the Trustee for cancellation; or
(ii) all such Securities not theretofore
delivered to the Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year, or
(C) are to be called for redemption
within one year under irrevocable arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company, in the case of clause (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust for such purpose money or U.S.
Government Obligations in an amount sufficient (as certified by an
independent public accountant designated by the Company) to pay
and discharge the entire indebtedness of such Securities not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any, on) and interest, if any, to the
date of such deposit (in the case of Securities which have become
due and payable) or the Stated Maturity or Redemption Date, as the
case may be;
(b) the Company has paid or caused to be paid all
other sums then due and payable hereunder by the Company;
(c) no Default or Event of Default with respect to
the Securities shall have occurred and be continuing on the date of such
deposit and after giving effect to such deposit; and
(d) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the Company s obligations in Sections 2.03, 2.04, 2.06, 2.08,
2.11, 7.07, 7.08, 8.02, 8.03 and 8.04, and the Trustee s and Paying
Agent s obligations in Section 8.03 shall survive until the
Securities are no longer outstanding. Thereafter, only the Company s
obligations in Sections 7.07, 8.03 and 8.04 and the Trustee s and Paying
Agent s obligations in Section 8.03 shall survive.
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In order to have money available on a payment date to
pay principal (and premium, if any, on) or interest on the Securities, the
U.S. Government Obligations shall be payable as to principal (and
premium, if any) or interest at least one Business Day before such
payment date in such amounts as will provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer s option.
SECTION 8.02 Application of Trust Money. All money
deposited with the Trustee pursuant to Section 8.01 shall be held in
trust and, at the written direction of the Company, be invested prior to
maturity in U.S. Government Obligations, and applied by the Trustee in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for the payment of which money has been
deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
SECTION 8.03 Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the
Company upon written request any excess money or securities held by them at
any time.
The Trustee and the Paying Agent shall pay to the Company
upon written request any money held by them for the payment of principal
or interest that remains unclaimed for two years after the date upon
which such payment shall have become due; provided that the Company shall
have either caused notice of such payment to be mailed to each
Securityholder entitled thereto no less than 30 days prior to such
repayment or within such period shall have published such notice in a
financial newspaper of widespread circulation published in The City of New
York, including, without limitation, The Wall Street Journal. After payment
to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property
law designates another Person, and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
SECTION 8.04 Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with Section 8.01 by
reason of any legal proceeding or by reason of any order or judgment of
any court of governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company s and Guarantors obligations
under this Indenture, the Securities and the Guarantees shall be
revived and reinstated as though no deposit has occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted
to apply all such money or U.S. Government Obligations in accordance with
Section 8.02; provided, however, that if the Company or the Guarantors have
made any payment of interest on or principal of any Securities because of
the reinstatement of their Obligations, the Company or such Guarantors
shall be subrogated to the rights of the Holders of such Securities to
receive
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such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 9
Defeasance
SECTION 9.01 Company's Option to Effect Defeasance or
Covenant Defeasance. The Company may elect, at its option, at any time,
to have Section 9.02 or Section 9.03 hereof applied to the outstanding
Securities (in whole and not in part) upon compliance with the conditions
set forth below in this Article 9, such election to be evidenced by a Board
Resolution delivered to the Trustee.
SECTION 9.02 Defeasance and Discharge. Upon the Company's
exercise of its option to have this Section 9.02 applied to the
outstanding Securities (in whole and not in part), the Company shall be
deemed to have been discharged from its Obligations with respect to such
Securities as provided in this Section 9.02 on and after the date on
which the conditions set forth in Section 9.04 hereof are satisfied
(hereinafter called "Defeasance"). For this purpose, Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and the Company and the
Guarantors shall be deemed to have satisfied all of their other
obligations under such Securities, this Indenture and the Guarantees
(and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder:
(a) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 9.04 hereof and
as more fully set forth in Section 9.04, payments in respect of the
principal of and any premium and interest on such Securities when payments
are due,
(b) the Company's obligations with respect to such
Securities under Sections 2.06, 2.08, 2.10, 4.15, 4.16 and 4.17 hereof,
(c) the rights, powers, trusts, duties and
immunities of the Trustee under this Indenture,
(d) Article 3 hereof, and
(e) this Article 9.
Subject to compliance with this Article 9, the Company may
exercise its option to have this Section 9.02 applied to the outstanding
Securities notwithstanding the prior exercise of its option to have Section
9.03 hereof applied to such Securities.
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SECTION 9.03 Covenant Defeasance. Upon the Company's
exercise of its option to have this Section 9.03 applied to the
outstanding Securities (in whole and not in part), (i) the Company and
the Guarantors shall be released from their respective obligations under
Sections 5.01 and 5.02, Sections 4.02 through 4.14, inclusive, Sections
4.18, 4.19 and 4.21 and any covenant added to this Indenture subsequent to
the Issue Date pursuant to Section 10.01 hereof, and (ii) the occurrence
of any event specified in Section 6.01(c) or 6.01(d) hereof, with
respect to any of Section 5.01 and 5.02, Sections 4.03 through 4.14,
inclusive, Sections 4.18, 4.19 and 4.21, and any covenant added to this
Indenture subsequent to the Issue Date pursuant to Section 10.01 hereof,
shall be deemed not to be or result in an Event of Default, in each case
with respect to such Securities as provided in this Section 9.03 on and
after the date on which the conditions set forth in Section 9.04 hereof
are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, Covenant Defeasance means that, with respect to such Securities,
the Company and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
6.01(c) and 6.01(d) hereof), whether directly or indirectly by reason of
any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provisions herein or in any
other document; but the remainder of this Indenture, the Guarantees and such
Securities shall be unaffected thereby.
SECTION 9.04 Conditions to Defeasance or Covenant
Defeasance. The following shall be the conditions to the application of
Section 9.03 or Section 9.04 hereof to the outstanding Securities:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to the benefits of the Holders of such Securities,
(i) money in an amount, or (ii) U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one Business Day
before the due date of any payment, money in an amount, or (iii) a
combination thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge the
principal of (premium, if any on) and any installment of interest on such
Securities on the Stated Maturity thereof, in accordance with the terms
of this Indenture and such Securities.
(b) In the event of an election to have Section 9.02
hereof apply to the outstanding Securities, the Company shall have
delivered to the Trustee an Opinion of Counsel stating 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 United States federal income tax law, in
either case (i) or (ii) to the effect that, and based thereon such opinion
shall confirm that, the Holders of such Securities will not recognize gain
or loss for United States federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to United States federal income tax in the
same amount, in the same manner and at the same times as would be the case
if such deposit, Defeasance and discharge were not to occur.
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(c) In the event of an election to have Section 9.03
hereof apply to the outstanding Securities, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities will not recognize gain or loss for United States
federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to United States federal income tax in the same amount, in the same
manner and at the same times as would be the case if such deposit, Covenant
Defeasance and discharge were not to occur.
(d) No Default or Event of Default with respect to the
outstanding Securities shall have occurred and be continuing at the time of
such deposit after giving effect thereto or and no Default or Event of
Default under Section 6.01(g) or 6.01(h) shall have occurred at any time on
or prior to the 91st day after the date of such deposit and be continuing
on such 91st day (it being understood that this condition shall not be
deemed satisfied until after such 91st day).
(e) Such Defeasance or Covenant Defeasance shall
not cause the Trustee to have a conflicting interest within the meaning
of the Trust Indenture Act (assuming for the purpose of this clause (e)
that all Securities are in default within the meaning of such Act).
(f) Such Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company or the Guarantor is a party or
by which it is bound.
(g) Such Defeasance or Covenant Defeasance shall not
result in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of 1940, as
amended, unless such trust shall be registered under such Act or exempt from
registration thereunder.
(h) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant Defeasance
have been complied with.
SECTION 9.05 Deposited Money and U.S. Government
Obligations to be Held in Trust; Miscellaneous Provisions. Subject to
Section 9.06 hereof, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee pursuant to
Section 9.04 hereof in respect of the outstanding Securities shall be held
in trust and applied by the Trustee, in accordance with the provisions of
such Securities and this Indenture, to the payment, either directly or
through any such Paying Agent as the Trustee may determine, to the Holders
of such Securities, of all sums due and to become due thereon in respect
of principal and any premium and interest, but money so held in trust
need not be segregated upon other funds except to the extent required by
law. The Company shall pay and indemnity the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 9.04 hereof or the principal and
interest received in
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respect thereof other than any such tax, fee or other charge which by
law is for the account of the Holders of outstanding Securities.
Anything in this Article 9 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon
Company Order any money or U.S. Government Obligations held by it as
provided in Section 9.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the
amount thereof that would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to the
outstanding Securities.
SECTION 9.06 Repayment to Company. 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,
if any, on any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest, if any, have 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 Security shall
thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Company as trustee thereof,
shall thereupon cease; provided 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 9.07 Reinstatement. If the Trustee or Paying
Agent is unable to apply any money in accordance with this Article 9 with
respect to any Notes by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations under this Indenture, the Guarantees and
such Securities from which the Company or the Guarantors have been
discharged or released pursuant to Section 9.02 or 9.03 hereof shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article 9 with respect to such Securities, until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 9.05 hereof with respect to such Securities in
accordance with this Article 9; provided that if the Company or any
Guarantor makes any payment of principal of, premium, if any, or
interest on any such Security following such reinstatement of its
obligations, the Company or such Guarantor, as the case may be, shall be
subrogated to the Holders of such Securities to receive such payment from the
money so held in trust.
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ARTICLE 10
Amendments
SECTION 10.01. Without Consent of Holders.
(a) The Company, the Guarantors and the Trustee may at
any time and from time to time, without notice to or consent of any
Holder, enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(i) to evidence the succession of another
Person to the Company and the Guarantors and the
assumption by such successor of the covenants and
Obligations of the Company under this Indenture and
contained in the Securities and the Guarantors contained in
this Indenture and the Guarantees;
(ii) to add to the covenants of the Company,
for the benefit of the Holders, or to surrender any
right or power conferred upon the Company or the
Guarantors by this Indenture;
(iii) to add any additional Events of Default;
(iv) to provide for uncertificated Securities
in addition to or in place of certificated Securities;
(v) to evidence and provide for the
acceptance of appointment under this Indenture by the
successor Trustee;
(vi) to secure the Securities and/or the
Guarantees;
(vii) to cure any ambiguity, to correct or
supplement any provision in this Indenture which may be
inconsistent with any other provision therein or to add
any other provisions with respect to matters or questions
arising under this Indenture, provided that such actions
will not adversely affect the interests of the Holders in
any material respect; or
(viii) to add or release any Guarantor pursuant
to the terms of this Indenture.
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SECTION 10.02. With Consent of Holders. With the
consent of the Holders of at least a majority of the principal amount
at Stated Maturity of the outstanding Securities (including consents
obtained in connection with a tender offer or an exchange offer for the
Securities), by Act delivered to the Company, the Guarantors and the
Trustee, the Company, the Guarantors and the Trustee may enter into one
or more indentures supplemental hereto for the purpose of adding any
provisions to or changing or eliminating any of the provisions of this
Indenture or modifying the rights of the Holders of the Securities,
provided that no such supplemental indenture, without the consent of the
Holder of each outstanding Security affected thereby, will:
(a) change the Stated Maturity of the principal of,
or any installment of interest on, any Security, or reduce the principal
amount thereof (or any premium, if any), or the interest thereon, that
would be due and payable upon Maturity thereof, or change the place of
payment where, or in the coin or currency in which, any Security or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof; or
(b) reduce the percentage in principal amount at Stated
Maturity of the outstanding Securities, the consent of whose Holders is
required for any such supplemental indenture or required for any waiver of
compliance with the provisions of this Indenture; or
(c) modify any of the provisions of Section 6.04
hereof, except to increase the percentage set forth therein or to provide
that certain other provisions of this Indenture cannot be amended or waived
without the consent of the Holder of each outstanding Security affected
thereby; or
(d) subordinate in right of payment, or otherwise
subordinate, the Securities or the Guarantees to any other Indebtedness; or
(e) modify any provision of this Indenture relating to
the obligations of the Company to make offers to purchase Securities upon a
Change of Control or from the proceeds of an Asset Sale; or
(f) modify any of the provisions of this Section 10.02
except to increase any percentage set forth herein or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holders of each outstanding Security affected
thereby; or
(g) amend, supplement or otherwise modify the
provisions of this Indenture relating to the Guarantees.
It shall not be necessary for any Act of Holders under
this Section 10.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
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SECTION 10.03 Effect of Supplemental Indentures. Upon
the execution of any supplemental indenture under this Article 10, this
Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. After a
supplemental indenture becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give
such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 10.04. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall comply with the
Trust Indenture Act as then in effect.
SECTION 10.05. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a
Holder of a Security shall bind the Holder and every subsequent Holder of
that Security or portion of the Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent or waiver
is not made on the Security. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Security or portion of
the Security if the Trustee receives the notice of revocation before the
date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or
waiver becomes effective upon the execution of a supplemental
indenture containing such amendment or waiver by the Trustee.
(b) The Company may, but shall not be obligated to, fix
a record date for the purpose of determining the Holders entitled to give
their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is
fixed, then notwithstanding the immediately preceding subsection, those
Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 10.06. Notation on or Exchange of Securities. If
an amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment.
SECTION 10.07. Trustee To Execute Supplemental
Indentures. The Trustee shall execute any supplemental indenture
authorized pursuant to this Article 10 if such supplemental indenture
does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may, but shall not be required to,
execute such supplemental
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indenture. In executing any supplemental indenture, the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and to
receive, and (subject to Section 7.01 hereof) shall be fully protected in
relying upon, an Officers' Certificate (which need only cover the matters
set forth in clause (a) below) and an Opinion of Counsel provided by the
Company stating that:
(a) such supplemental indenture is authorized or
permitted by this Indenture and that all conditions precedent to the
execution, delivery and performance of such supplemental indenture have been
satisfied:
(b) the Company and the Guarantors have all necessary
corporate power and authority to execute and deliver the supplemental
indenture and that the execution, delivery and performance of such
supplemental indenture has been duly authorized by all necessary
corporate action of the Company and the Guarantors;
(c) the execution, delivery and performance of the
supplemental indenture do not conflict with, or result in the breach of
or constitute a default under any of the terms, conditions or provisions
of (i) this Indenture, (ii) the charter documents and by-laws of the Company
or any Guarantor, or (iii) any material agreement or instrument to which the
Company or any Guarantor is subject and of which such counsel is aware;
(d) to the knowledge of legal counsel writing such
Opinion of Counsel, the execution, delivery and performance of the
supplemental indenture do not conflict with, or result in the breach of any
of the terms, conditions or provisions of (i) any law or regulation
applicable to the company or any Guarantor, or (ii) any material
order, writ, injunction or decree of any court or governmental
instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and
validly executed and delivered by the Company and the Guarantors, and the
Indenture together with such supplemental indenture constitutes a legal,
valid and binding obligations of the Company and the Guarantors
enforceable against the Company and the Guarantors, as applicable, in
accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors rights generally and general equitable principles;
and
(f) the Indenture together with such amendment or
supplement complies with the Trust Indenture Act.
SECTION 10.08. Payment for Consent. Neither the Company
nor any Affiliate of the Company shall, directly or indirectly, pay or cause
to be paid any consideration, whether by way of interest, fee or otherwise,
to any Holder for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid to all Holders that so
consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
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ARTICLE 11
Guarantees
SECTION 11.01. Guarantees.
(a) For good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, each of the Guarantors,
together with each Subsidiary of the Company which in accordance with
Section 11.08 is required in the future to guarantee the Obligations of the
Company and the Guarantors under the Securities, the Guarantees and this
Indenture upon execution of a supplemental indenture, hereby jointly and
severally and irrevocably and unconditionally guarantees to the Trustee and
to each Holder of a Security authenticated and delivered by the Trustee
irrespective of the validity or enforceability of this Indenture or the
Securities or the Obligations of the Company and the Guarantors under this
Indenture, that: (i) the principal of, premium, if any, and any
interest, on the Securities (including, without limitation, any interest
that accrues after the filing of a proceeding of the type described in
Sections 6.01(g) and (h)) and any fees, expenses and other amounts owing
under this Indenture will be duly and punctually paid in full when due,
whether at Stated Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise, and
interest on the overdue principal and (to the extent permitted by law)
interest, if any, on the Securities and any other amounts due in respect
of the Securities, and all other Obligations of the Company and the
Guarantors to the Holders of the Securities under this Indenture and the
Securities, whether now or hereafter existing, will be promptly paid in
full or performed, all strictly in accordance with the terms hereof and of
the Securities; and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other Obligations, the same will
be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at Stated Maturity, by acceleration,
call for redemption, upon Change of Control Offer, Asset Sale Offer,
purchase or otherwise. If payment is not made when due of any amount so
guaranteed for whatever reason, each Guarantor shall be jointly and severally
obligated to pay the same individually whether or not such failure to pay
has become an Event of Default which could cause acceleration pursuant to
Section 6.02. Each Guarantor agrees that this is a guarantee of payment
and not a guarantee of collection. An Event of Default under this
Indenture or the Securities shall constitute an Event of Default under
this Guarantee, and shall entitle the Holders to accelerate the
Obligations of each Guarantor hereunder in the same manner and to the
same extent as the Obligations of the Company. This Guarantee is
intended to be superior to or pari passu in right of payment with all
Indebtedness of the Guarantors and each Guarantor s Obligations are
independent of any Obligation of the Company or any other Guarantor.
(b) Each Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations under
this Indenture or the Securities and also waives notice of protest for
nonpayment. Each Guarantor waives notice of any default under the
Securities or the Obligations. The Obligations of each Guarantor hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or
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any other agreement or otherwise; (b) any extension or renewal of any
thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the
Trustee for the Obligations or any of them; (e) the failure of any
Holder or the Trustee to exercise any right or remedy against any
other guarantor of the Obligations; or (f) any change in the ownership of
such Guarantor.
(c) The Obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for
any reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations of the
Company or otherwise. Without limiting the generality of the
foregoing, the Obligations of each Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver
or modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations of the Company, or by any
other act or thing or omission or delay to do any other act or thing which
may or might in any manner or to any extent vary the risk of such Guarantor
or would otherwise operate as a discharge of such Guarantor as a matter of
law or equity.
(d) Each Guarantor further agrees that its
Guarantee herein shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of principal of,
premium, if any, on or interest on any Obligation of the Company is
rescinded or must otherwise be restored by any Holder or the Trustee upon
the bankruptcy or reorganization of the Company or otherwise.
(e) In furtherance of the foregoing and not in
limitation of any other right which any Holder or the Trustee has at law or
in equity against any Guarantor by virtue hereof, upon the failure of the
Company to pay the principal of, premium, if any, on or interest on any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any
other Obligation, each Guarantor hereby promises to and will, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders or the Trustee an amount equal to the sum of
(i) the unpaid amount of such Obligations, (ii) accrued and unpaid interest
on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders and the
Trustee.
(f) Until such time as the Securities and the
other Obligations of the Company guaranteed hereby have been satisfied in
full, each Guarantor hereby irrevocably waives any claim or other rights
that it may now or hereafter acquire against the Company or any other
Guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under this Guarantee,
including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right
to participate in any claim or remedy of the Holders or the Trustee against
the Company or any
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other Guarantor or any security, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the
Company or any other Guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right. If any amount shall be paid to
such Guarantor in violation of the preceding sentence at any time prior to
the later of the payments in full of the Securities and all other amounts
payable under this Indenture, this Guarantee and the Stated Maturity of the
Notes, such amount shall be held in trust for the benefit of the
Holders and the Trustee and shall forthwith be paid to the Trustee to be
credited and applied to the Notes and all other amounts payable under this
Guarantee, whether matured or unmatured, in accordance with the terms of
this Indenture, or to be held as security for any Obligations or other
amounts payable under this Guarantee thereafter arising.
(g) Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and that the waiver set forth in this Section 11.01 is
knowingly made in contemplation of such benefits. Each Guarantor further
agrees that, as between it, on the one hand, and the Holders and the
Trustee, on the other hand, (x) subject to this Article 11, the
maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 for the purposes of this Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby, and (y) in the event of any
acceleration of such Obligations guaranteed hereby as provided in Article
6, such Obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of this Guarantee.
(h) A Guarantor that makes a distribution or payment
under a Guarantee shall be entitled to contribution from each other
Guarantor in a pro rata amount based on the Adjusted Net Assets of each
such other Guarantor for all payments, damages and expenses incurred
by that Guarantor in discharging the Company s obligations with respect
to the Securities and this Indenture or any other Guarantor with respect to
its Guarantee, so long as the exercise of such right does not impair the
rights of the Holders of the Securities under the Guarantees.
(i) Each Guarantor also agrees to pay any and
all costs and expenses (including reasonable attorneys' fees) incurred by
the Trustee or any Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or
provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Obligations guaranteed hereunder by any
Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Indenture, as it relates to such Guarantor, void,
voidable or unenforceable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. To effectuate the foregoing intention, the Obligations
of each Guarantor shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the Obligations of such
other Guarantor under its Guarantee or pursuant to its contribution
Obligations hereunder, result in the Obligations of such Guarantor under its
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Guarantee not constituting a fraudulent conveyance or fraudulent transfer
under federal, state or foreign law. Each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in a pro rata amount based on
the Adjusted Net Assets of each Guarantor.
SECTION 11.03 Execution and Delivery of Guarantees. To
further evidence its Guarantee set forth in Section 11.01 hereof, each
Guarantor hereby agrees that notation of such Guarantee shall be endorsed
on each Security authenticated and delivered by the Trustee and executed
by either manual or facsimile signature of an authorized officer of such
Guarantor. Each Guarantor hereby agrees that its Guarantee set forth in
Section 11.01 hereof shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Guarantee. If an
officer of a Guarantor whose signature is on this Indenture or a Security
no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such
Security shall be valid nevertheless. The delivery of any Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of any Guarantee set forth in this Indenture on behalf of the
Guarantor.
SECTION 11.04 When a Guarantor May Merge, etc. No
Guarantor shall consolidate with or merge with or into (whether or not
such Guarantor is the surviving person) another corporation, Person or
entity whether or not affiliated with such Guarantor (but excluding any
consolidation, amalgamation or merger if the surviving corporation is no
longer a Subsidiary) unless (i) subject to the provisions of Section 11.07
hereof, the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) assumes all the Obligations of
such Guarantor pursuant to a supplemental indenture in form reasonably
satisfactory to the Trustee under the Securities and this Indenture and
(ii) immediately after giving effect to such transaction, no Default or
Event of Default exists. In connection with any such consolidation or
merger, the Trustee shall be entitled to receive an Officers' Certificate
and an Opinion of Counsel stating that such consolidation or merger is
permitted by this Section 11.04.
SECTION 11.05. No Waiver. Neither a failure nor a delay
on the part of either the Trustee or the Holders in exercising any right,
power or privilege under this Article 11 shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other
or further exercise of any right, power or privilege. The rights,
remedies and benefits of the Trustee and the Holders herein expressly
specified are cumulative and not exclusive of any other rights, remedies
or benefits which either may have under this Article 11 at law, in equity,
by statute or otherwise.
SECTION 11.06. Modification. No modification, amendment
or waiver of any provision of this Article 11, nor the consent to any
departure by any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Trustee, and then
such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.
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SECTION 11.07. Release of Guarantor. Upon the sale or
other transfer of all of the Capital Stock of a Guarantor to any Person that
is not an Affiliate of the Company in compliance with the terms of this
Indenture (including, without limitation, Section 4.07 hereof) and in a
transaction that does not result in a Default or an Event of Default being
in existence or continuing immediately thereafter, such Guarantor shall be
deemed automatically and unconditionally released and discharged from all
obligations under this Indenture without any further action required on the
part of the Trustee or any Holder; provided that the Net Available Proceeds
of such sale or other disposition are applied in accordance with Section
4.07 of this Indenture as if such sale or disposition were an Asset Sale
and in accordance with the applicable provisions of this Indenture. The
Trustee shall deliver at the expense of the Company an appropriate
instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion
of Counsel certifying as to the compliance with this Section 11.07 and
the other applicable provisions of this Indenture.
SECTION 11.08. Execution of Supplemental Indentures for
Future Guarantors. Any Wholly Owned Subsidiary that is a domestic
Subsidiary or any other Subsidiary that guarantees any Indebtedness of an
Obligor is required to become a Guarantor and the Company shall cause
each such Subsidiary to promptly execute and deliver to the Trustee a
supplemental indenture in the form of Exhibit C hereto pursuant to which such
Subsidiary shall become a Guarantor under this Article 11 and shall
guarantee the Obligations of the Company under the Securities and this
Indenture. Concurrently with the execution and delivery of such
supplemental indenture, the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium, fraudulent
conveyance or transfer and other similar laws relating to creditors' rights
generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Guarantee of such Guarantor is a legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, and as to any such other matters
as the Trustee may reasonably request.
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ARTICLE 12
Miscellaneous
SECTION 12.01. Compliance Certificates and Opinions.
Upon any application or request by the Company or the Guarantors to the
Trustee to take any action under any provision of this Indenture, the
Company and the Guarantors, as applicable, shall furnish to the Trustee, to
the extent required by the TIA or this Indenture, (i) an Officers'
Certificate stating that all conditions precedent, if any, provided for in
this Indenture (including any covenant, compliance with which constitutes a
condition precedent) relating to the proposed action have been complied
with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which
the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture
shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 12.02. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some matters
and one or more other such Persons as to other matters, and any such Person
may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company or any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the
matters upon which his certificate or
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opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, and may state that it is so based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or such Guarantor
stating that the information with respect to such factual matters is in the
possession of the Company or such Guarantor, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate of
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 12.03. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by a specified percentage of Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
specified percentage of Holders in person or by agents duly appointed in
writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are received by
the Trustee and, where it is hereby expressly required, to the Company and
the Guarantors. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to
Sections 7.01 and 7.02) conclusive in favor of the Trustee, the Company and
the Guarantors, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of authority. The fact
and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient, including the execution of
such instrument or writing without more.
(c) The ownership, principal amount and serial numbers of
Securities held by any Person, and the date of holding the same, shall be
proved by the Security Register.
(d) If the Company shall solicit from the Holders of
Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, by or
pursuant to Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Such record date shall be
the record date specified in or pursuant to such Board Resolution, which
shall be a date not earlier than the
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date 30 days prior to the first solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such
record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such
record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(e) Except to the extent otherwise expressly provided in this
Indenture, any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of
such principal amount.
SECTION 12.04. Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by
Sections 310 to 318, inclusive, of the Trust Indenture Act, the required
provision shall control. If any provision of this Indenture modifies or
excludes any provision of the TIA that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 12.05. Notices. Any notice or communication
shall be in writing and delivered in person, or sent by registered or
certified mail, by air courier guaranteeing overnight delivery or by fax
(promptly confirmed by telephone) and addressed as follows:
if to the Company or any Guarantor:
DI Industries, Inc.
10370 Richmond Avenue
Suite 600
Houston, Texas 77042
Attn: Chief Financial Officer
Phone: (281) 435-6100
Fax: (281) 435-6171
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if to the Trustee:
Texas Commerce Bank National Association
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Corporate Trust Division
Phone: (713) 216-5811
Fax: (713) 216-5476
with a copy to the Trustees Dallas Payment Office:
Texas Commerce Bank National Association
1201 Main Street
Dallas, Texas 75202
Attn: Corporate Trust Services
The Company, the Guarantors or the Trustee by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed to a Holder shall be
sent to the Holder by first class mail, postage prepaid, at the Holder's
address as it appears in the Security Register and shall be given if so
sent within the time prescribed. Failure to mail a notice or communications
to a Holder or any default in it shall not affect its sufficiency with
respect to other Holders. If a notice or communication is mailed or faxed
to the Company, the Guarantors, the Trustee or a Holder in the manner
provided above, it is duly given, whether or not the addressee receives it
but shall not be effective unless in the case of the Company, the
Guarantors or the Trustee actually received. In case by reason of the
suspension of regular mail service or by reason or any other cause it
shall be impracticable to give notice by mail to Holders, then such
notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 12.06. Communication by Holders with Other
Holders. Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).
SECTION 12.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or a
meeting of Holders. The Registrar and the Paying Agent may make
reasonable rules for their functions.
SECTION 12.08. Payments on Business Days. If a payment
hereunder is scheduled to be made on a date that is not a Business Day,
payment shall be made on the next succeeding day that is a Business Day,
and no interest shall accrue with respect to that payment during the
intervening period. If a regular Record Date is not a Business Day, such
Record Date shall not be affected.
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SECTION 12.09. GOVERNING LAW. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 12.10. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company or any Guarantor
shall not have any liability for any obligations of the Company or a
Guarantor under the Securities, the Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release
all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 12.11 Submission to Jurisdiction; Appointment
of Agent for Service of Process; Waiver of Immunities.
(a) The Company and each Guarantor hereby
irrevocably, to the fullest extent it may do so under applicable law,
submits to the jurisdiction of any New York State or federal court sitting
in the Borough of Manhattan, The City of New York and to the courts of
its own corporate domicile with respect to all actions brought against it as
a defendant in respect of any suit, action or proceeding or arbitral award
arising out or relating to this Indenture, the Securities or any
transaction contemplated hereby or thereby (a "Proceeding"), and
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts, to the fullest extent it may do so under applicable law. The
Company and each Guarantor irrevocably waives, to the fullest extent it may
do so under applicable law, trial by jury and any objection which it may now
or hereafter have to the laying of the venue of any such Proceeding brought
in any such court and any claim that any such Proceeding brought in any
such court has been brought in an inconvenient forum. The Company and each
Guarantor acknowledges that it has, by separate written instrument,
irrevocably appointed CT Corporation System (the "Process Agent"), with
an office at 1633 Broadway, New York, New York 10019, as its authorized
agent to receive on behalf of the Company and each Guarantor and its
property service of copies of the summons and complaint and any other
process which may be served in any Proceeding, and that the Process Agent
has accepted such appointment. If for any reason such Process Agent shall
cease to be such agent for service of process, the Company and each
Guarantor shall forthwith appoint a new agent of recognized standing for
service of process in the State of New York, United States and deliver to
the Trustee a copy of the new agent's acceptance of that appointment within
30 days. Nothing herein shall affect the right of the Trustee, any
Paying Agent or any Holder to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against the Company or the Guarantors in any other court of competent
jurisdiction.
(b) Service may be made by delivering by hand a copy
of such process to the Company or the Guarantors, as the case may be, in
care of the Process Agent at the address
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specified above. The Company and the Guarantors hereby irrevocably
authorize and direct the Process Agent to accept such service on their
behalf. Failure of the Process Agent to give notice to the Company or
the Guarantors or failure of the Company or the Guarantors to receive notice
of such service of process shall not affect in any way the validity of such
service on the Process Agent or the Company or the Guarantors. As an
alternative method of service, the Company and the Guarantors also
irrevocably consent to the service of any and all process in any such
proceeding by the delivery by hand of copies of such process to the
Company or the Guarantors, as the case may be, at the applicable address
specified in Section 12.05 hereof or at the address most recently furnished
in writing by the Company or the Guarantors to the Trustee. The Company and
the Guarantors covenant and agree that they shall take any and all
reasonable action, including the execution and filing of any and all
documents, that may be necessary to continue the designation of the
Process Agent specified above in full force and effect during the term of
the Securities, and to cause the Process Agent to continue to act as such.
(c) The Company and the Guarantors irrevocably agree
that, in any Proceedings anywhere (whether for an injunction, specific
performance or otherwise), no immunity (to the extent that it may at any
time exist, whether on the grounds of sovereignty or otherwise) from
such Proceedings, from attachment (whether in aid of execution, before
judgment or otherwise) of their assets or from execution of judgment
shall be claimed by them or on their behalf or with respect to their assets,
except to the extent required by applicable law, any such immunity being
irrevocably waived, to the fullest extent permitted by applicable law.
The Company and the Guarantors irrevocably agree that, where permitted by
applicable law, they and their assets are, and shall be, subject to
such Proceedings, attachment or execution in respect of their obligations
under this Indenture or the Securities.
SECTION 12.12. Successors. All agreements of the
Company in this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 12.13. Multiple Originals. The parties may
sign any number of copies of this Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture. This Indenture may be
executed in any number of counterparts, each of which shall be deemed an
original, but all such counterparts shall together constitute but one and
the same instrument.
SECTION 12.14. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only,
are not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture
to be duly executed as of the date first above written.
COMPANY:
DI INDUSTRIES, INC.
By: /s/ T. Scott O'Keefe
Name: T. Scott O'Keefe
Title: Senior Vice President, Chief
Financial Officer & Secretary
GUARANTORS:
DRILLERS, INC.
By: /s/ T. Scott O'Keefe
Name: T. Scott O'Keefe
Title: Senior Vice President, Chief
Financial Officer & Secretary
DI INTERNATIONAL, INC.
By: /s/ T. Scott O'Keefe
Name: T. Scott O'Keefe
Title: Senior Vice President, Chief
Financial Officer & Secretary
DI ENERGY, INC.
By: /s/ T. Scott O'Keefe
Name: T. Scott O'Keefe
Title: Senior Vice President, Chief
Financial Officer & Secretary
<PAGE> 92
TRUSTEE:
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By: /s/ Mauri J. Cowen
Name: Mauri J. Cowen
Title: Vice President and Trust Officer
<PAGE> 93
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
DI INDUSTRIES, INC.
No. _______ 8-7/8% SENIOR NOTE DUE 2007 CUSIP No. 232909 AA 9
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC" OR THE
"DEPOSITARY"), NEW YORK, NEW YORK, TO DI INDUSTRIES, INC. (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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.06 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES IN DEFINITIVE, FULLY
REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE COMPANY THAT
IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITARY FOR THIS GLOBAL SECURITY OR
IF AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY" REGISTERED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND A SUCCESSOR DEPOSITARY IS NOT
APPOINTED BY THE COMPANY WITHIN 90 DAYS OF SUCH NOTICE OR (B) AN EVENT OF
DEFAULT (AS HEREINAFTER DEFINED) HAS OCCURRED AND IS CONTINUING WITH RESPECT TO
THE SECURITIES.
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DI INDUSTRIES, INC., a Texas corporation, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum indicated on Schedule A hereof,
on July 1, 2007.
Interest Payment Dates: January 1 and July 1, commencing January 1, 1998.
Record Dates: June 15 and December 15.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth in this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
IN WITNESS WHEREOF, DI INDUSTRIES, INC. has caused this instrument to be
duly executed under its corporate seal.
Dated:
DI INDUSTRIES, INC.
By:
-------------------------------------
Name:
Title:
[Corporate Seal]
By:
-------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By:
--------------------------------
Authorized Signatory
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<PAGE> 95
[FORM OF REVERSE SIDE OF SECURITY]
8-7/8% SENIOR NOTE DUE 2007
1. Interest
DI Industries, Inc., a Texas corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on January 1 and July 1 of each year (an "Interest
Payment Date") commencing on January 1, 1998, until the principal amount is
paid or made available for payment. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the Issue Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Securities (except Defaulted
Interest) to the Persons who are registered Holders of Securities at the close
of business on the June 15 or December 15 immediately preceding the Interest
Payment Date even if Securities are canceled after the Record Date and on or
before the Interest Payment Date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal,
premium, if any, and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. Payments in
respect of the Securities represented by a Global Security (including
principal, premium, if any, and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the Depositary, but,
at the option of the Company, interest may be paid by check mailed to the
registered Holders at their registered addresses.
3. Paying Agent and Registrar
Initially, Texas Commerce Bank National Association, a national banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. In certain situations, the Company or any of its Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June 27,
1997 (as such
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<PAGE> 96
may be amended from time to time, the "Indenture"), among the Company, the
corporations acting as guarantors and named therein (the "Guarantors") and
Texas Commerce Bank National Association, as trustee (the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, duties and
immunities thereunder of the Company, the Guarantors, the Trustee and each
Holder of the Securities and the terms upon which the Securities are, and are
to be, authenticated and delivered. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C. Section Section 77aaa-77bbbb) as in
effect on the date of the Indenture (the "Act"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in the Indenture.
The Securities are subject to all such terms, and Holders are referred to the
Indenture and the Act for a statement of those terms.
The Securities are limited to $175,000,000 aggregate principal amount at
Stated Maturity at any one time outstanding (subject to Section 2.08 of the
Indenture). This Security is one of the Securities referred to in the
Indenture. The Indenture imposes certain limitations on the incurrence of
additional Indebtedness by the Company and its Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its
Subsidiaries and the redemption of Subordinated Indebtedness of the Company and
its Subsidiaries; Investments; sales of assets and Subsidiary Capital Stock;
certain transactions with Affiliates of the Company and the right of the
Company and its Subsidiaries to engage in unrelated lines of business.
5. Optional Redemption
Except as provided in the next paragraph, the Securities are not
redeemable prior to July 1, 2002. At any time on or after July 1, 2002, the
Securities are redeemable at the option of the Company, in whole or in part, on
not less than 30 nor more than 60 days' notice, at the following Redemption
Prices (expressed as percentages of principal amount at Stated Maturity), if
redeemed during the 12 months beginning July 1 of the years indicated below,
plus accrued and unpaid interest (if any) thereon to the Redemption Date:
<TABLE>
<CAPTION>
Redemption
Year Price
----------- -------------
<S> <C>
2002 .......................... 104.4375%
2003 .......................... 102.9580%
2004 .......................... 101.4792%
2005 and thereafter ............. 100.0000%
</TABLE>
Notwithstanding the foregoing, on and prior to July 1, 2000, the Company
may redeem up to 30% of the aggregate principal amount of the Securities
originally outstanding at a redemption price of 108.875% of the principal
amount at Stated Maturity thereof, plus accrued and unpaid interest (if any)
thereon to the Redemption Date, with the net proceeds of one or
4
<PAGE> 97
more Qualified Equity Offerings of the Company; provided that at least
$120,000,000 aggregate principal amount at Stated Maturity of the Securities
shall remain outstanding immediately after the occurrence of any such
redemption; and provided, further, that such redemption shall occur not later
than 90 days after the date of the closing of any such Qualified Equity
Offering. The redemption shall be made in accordance with procedures set forth
in the Indenture.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, postage prepaid,
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at his address as it appears in the
Security Register. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If less than all of
the Securities are to be redeemed at any time, the Securities to be redeemed
will be chosen by the Trustee in accordance with the Indenture. If any
Security is redeemed subsequent to a Record Date with respect to any Interest
Payment Date specified above and on or prior to such Interest Payment Date,
then any accrued interest will be paid on such Interest Payment Date to the
Holder of the Security at the close of business on such Record Date. If money
sufficient to pay the Redemption Price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent on or before the Redemption Date and certain
other conditions are satisfied, on and after such date interest ceases to
accrue on such Securities (or such portions thereof) called for redemption.
7. Change of Control
Upon the occurrence of a Change of Control, each Holder of Securities
shall have the right to require the Company to purchase such Holder's
Securities, in whole or in part in a principal amount at Stated Maturity that
is an integral multiple of $1,000, pursuant to a Change of Control Offer, at a
purchase price in cash equal to 101% of the principal amount at Stated Maturity
thereof on any Change of Control Payment Date, plus accrued and unpaid
interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company shall
send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Securities. The Holder
of this Security may elect to have this Security or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below and tendering this Security pursuant
to the Change of Control Offer. Unless the Company defaults in the payment of
the Change of Control Purchase Price with respect thereto, all Securities or
portions thereof accepted for payment pursuant to the Change of Control Offer
will cease to accrue interest from and after the Change of Control Payment
Date.
5
<PAGE> 98
8. Repurchase at the Option of Holders upon Asset Sale
Subject to the limitations set forth in the next following paragraph, if
at any time the Company or any Subsidiary engages in any Asset Sale, as a
result of which the aggregate amount of Excess Proceeds exceeds $15,000,000,
the Company shall, within 30 calendar days of the date the amount of Excess
Proceeds exceeds $15,000,000, or at any time after receipt of Excess Proceeds
but prior to there being $15,000,000 of Excess Proceeds, the Company may, at
its option, use the then-existing Excess Proceeds to make an offer to purchase
from all Holders, on a pro rata basis, Securities in an aggregate principal
amount at Stated Maturity equal to the maximum principal amount that may be
purchased out of the then-existing Excess Proceeds, at a purchase price in cash
equal to 100% of the principal amount at Stated Maturity thereof, plus accrued
and unpaid interest, if any, to the Asset Sale Offer Purchase Date. Upon
completion of an Asset Sale Offer (including payment of the Asset Sale Offer
Purchase Price for accepted Securities), any surplus Excess Proceeds that were
the subject of such offer shall cease to be Excess Proceeds, and the Company
may then use such amounts for general corporate purposes.
Within 30 calendar days of the date the amount of Excess Proceeds exceeds
$15,000,000, the Company shall send, or cause to be sent, by first class mail,
postage prepaid, a notice regarding the Asset Sale Offer to each Holder of
Securities. The Holder of this Security may elect to have this Security or a
portion hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below and tendering
this Security pursuant to the Asset Sale Offer. Unless the Company defaults in
the payment of the Asset Sale Offer Purchase Price with respect thereto, all
Securities or portions thereof selected for payment pursuant to the Asset Sale
Offer will cease to accrue interest from and after the Asset Sale Offer
Purchase Date.
9. The Global Security
So long as this Global Security is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under the Indenture with respect to this
Global Security held on their behalf by the Depositary or the Trustee as its
custodian, and the Depositary may be treated by the Company, the Guarantors,
the Trustee and any agent of the Company, the Guarantors or the Trustee as the
absolute owner of this Global Security for all purposes. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Guarantors, the
Trustee or any agent of the Company, the Guarantors or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (ii) impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
Holder of Securities.
The Holder of this Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder of Securities is entitled to take under the Indenture or the Securities.
Whenever, as a result of an optional redemption of Securities by the
Company, a
6
<PAGE> 99
Change of Control Offer, an Asset Sale Offer or an exchange for Certificated
Securities, this Global Security is redeemed, repurchased or exchanged or
substituted in part, this Global Security shall be surrendered by the Holder
thereof to the Trustee who shall cause an adjustment to be made to Schedule A
hereof so that the principal amount of this Global Security will be equal to
the portion not redeemed, repurchased or exchanged and shall thereafter return
this Global Security to such Holder; provided that this Global Security shall
be in a principal amount at Stated Maturity of $1,000 or an integral multiple
of $1,000.
10. Transfer and Exchange
The Holder of this Global Security shall, by its acceptance of this Global
Security, agree that transfers of beneficial interests in this Global Security
may be effected only through a book entry system maintained by such Holder (or
its agent), and that ownership of a beneficial interest in the Securities
represented thereby shall be required to be reflected in book entry form.
Transfers of this Global Security shall be limited to transfers in whole,
and not in part, to the Depositary, its successors and their respective
nominees. Interests of beneficial owners in this Global Security may be
transferred in accordance with the rules and procedures of the Depositary (or
its successors).
This Global Security will be exchanged by the Company for one or more
Certificated Securities if (a) the Depositary (i) has notified the Company that
it is unwilling or unable to continue as, or ceases to be, a "Clearing Agency"
registered under Section 17A of the Exchange Act and (ii) a successor to the
Depositary registered as a "Clearing Agency" under Section 17A of the Exchange
Act is not appointed by the Company within 90 calendar days or (b) the
Depositary is at any time unwilling or unable to continue as Depositary and a
successor to the Depositary is not able to be appointed by the Company within
90 calendar days. If an Event of Default occurs and is continuing, the Company
shall, at the request of the Holder hereof, exchange all or a part of this
Global Security for one or more Certificated Securities; provided that the
principal amount at Stated Maturity of each of such Certificated Securities and
this Global Security, after such exchange, shall be $1,000 or an integral
multiple thereof. Whenever this Global Security is exchanged as a whole for
one or more Certificated Securities, it shall be surrendered by the Holder to
the Trustee for cancellation. Whenever this Global Security is exchanged in
part for one or more Certificated Securities, it shall be surrendered by the
Holder to the Trustee and the Trustee shall make the appropriate notations
thereon pursuant to Section 2.05 of the Indenture. Interests in this Global
Security may not be exchanged for Certificated Securities other than as provided
in this paragraph.
7
<PAGE> 100
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate some
or all of its Obligations and the Guarantors' Obligations under the Securities,
the Guarantees and the Indenture if the Company deposits with the Trustee money
or U.S. Government Obligations for the payment of principal, premium and
interest on the Securities to redemption or Maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in outstanding principal amount at Stated
Maturity of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a majority
in outstanding principal amount at Stated Maturity outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder, the Company, the Guarantors and the Trustee may
amend the Indenture or the Securities (a) to evidence the succession of another
Person to the Company and the Guarantors and the assumption by such successor
of the covenants and Obligations of the Company under the Indenture and
contained in the Securities and of the Guarantors contained in the Indenture
and the Guarantees, (b) to add to the covenants of the Company, for the benefit
of the Holders, or to surrender any right or power conferred upon the Company
or the Guarantors by the Indenture, (c) to add any additional Events of
Default, (d) to provide for uncertificated Securities in addition to or in
place of Certificated Securities, (e) to evidence and provide for the
acceptance of appointment under the Indenture by the successor Trustee, (f) to
secure the Securities and/or the Guarantees, (g) to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be inconsistent
with any other provision therein or to add any other provision with respect to
matters or questions arising under the Indenture, provided that such actions
will not adversely affect the interests of the Holders in any material respect
or (h) to add or release any Guarantor pursuant to the terms of the Indenture.
Certain provisions of the Securities and the Indenture may not be amended or
waived without the consent of each Holder affected thereby.
15. Defaults and Remedies
Under the Indenture, Events of Default include in summary form (i) default
in the payment
8
<PAGE> 101
of principal of (or premium, if any, on) the Securities when due; (iii)
failure to comply with certain of the covenants in the Indenture, including the
Change of Control covenant, the Asset Sale covenant and the Restrictive Payments
covenant; (iv) failure to perform any other covenant of the Company or any
Guarantor in the Indenture, continued for 30 days after written notice as
provided in the Indenture; (v) Indebtedness of the Company or any Subsidiary is
not paid when due within the applicable grace period, or is accelerated and, in
either case, the principal amount of such unpaid Indebtedness exceeds
$10,000,000; (vi) one or more final judgments or orders by a court of competent
jurisdiction are entered against the Company or any Subsidiary in an uninsured
or unindemnified aggregate amount in excess of $5,000,000 and such judgments or
orders are not discharged, waived, appealed, stayed, satisfied or bonded for a
period of 60 consecutive days; (vii) certain events of bankruptcy, insolvency or
reorganization; or (viii) a Guarantee ceases to be in full force and effect
(other than in accordance with the terms of the Indenture and such Guarantee) or
a Guarantor denies or disaffirms its obligations under its Guarantee.
Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the
Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount at Stated
Maturity of the Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders. The Holders of a
majority in principal amount at Stated Maturity of the outstanding Securities,
by written notice to the Company and the Trustee, may rescind any declaration
of acceleration and its consequences if the rescission would not conflict with
any judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
any Guarantor shall not have any liability for any obligations of the Company
or a Guarantor under the Securities, the Guarantees or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
9
<PAGE> 102
18. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
19. 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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. 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 Securities and has directed the Trustee to 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 Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of this
Security.
10
<PAGE> 103
SECURITY GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors (as
defined in the Indenture referred to in this Security and each hereinafter
referred to as a "Guarantor," which term includes any successor or additional
Guarantor under the Indenture) have jointly and severally, irrevocably and
unconditionally guaranteed (a) the due and punctual payment of the principal
(and premium, if any) of and interest on the Securities, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest on the Securities, if any, to
the extent lawful, (c) the due and punctual performance of all other
Obligations of the Company and the Guarantors to the Holders under the
Indenture and the Notes and (d) in case of any extension of time of payment or
renewal of any Securities or any of such other Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer, purchase or
otherwise. Capitalized terms used herein shall have the same meanings assigned
to them in the Indenture unless otherwise indicated.
Payment on each Security is guaranteed jointly and severally, by the
Guarantors pursuant to Article 11 of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The Obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor, and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution Obligations under the Indenture, result in the Obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law or not otherwise being void,
voidable or unenforceable under any similar other bankruptcy, receivership,
insolvency, liquidation or other similar legislation or legal principles under
applicable foreign law. Each Guarantor that makes a payment or distribution
under a Guarantee shall be entitled to a contribution from each other Company
in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their Guarantees upon the
terms and subject to the conditions provided in the Indenture.
11
<PAGE> 104
The Guarantee shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the Trustee and the Holders and, in
the event of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof and in the Indenture.
DRILLERS, INC.
By:
--------------------------------------
DI INTERNATIONAL, INC.
By:
---------------------------------------
DI ENERGY, INC.
By:
---------------------------------------
12
<PAGE> 105
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint _______________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Dated: Your Signature:
---------------- -----------------------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
- -----------------------------
Signature must be guaranteed
- --------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar program.
1
<PAGE> 106
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 or Section 4.09 of the Indenture, check the
appropriate box:
Section 4.07 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.07 or Section 4.09 of the Indenture, state the
amount in principal amount (must be an integral of $1,000): $_______________
Dated: Your Signature:
----------------- -----------------------------------------
(Sign exactly as your name appears on
the other side of this Security.)
Signature Guarantee:
--------------------------------
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar program.
2
<PAGE> 107
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN PRINCIPAL AMOUNT
The initial principal amount at Maturity of this Global Security shall be
$175,000,000. The following increases or decreases in this Global Security
have been made:
<TABLE>
<CAPTION>
Signature of
Total Principal authorized
amount of this signatory of
Date of Amount of decrease Amount of increase Global Security Trustee or
Increase/ in Principal in Principal Amount following such Securities
Decrease Amount at Maturity at Maturity Decrease/ Increase Custodian
- -------- -------------------- -------------------- -------------------- -------------
<S> <C> <C> <C> <C>
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
_____________ _____________ _____________ _____________ _____________
</TABLE>
3
<PAGE> 108
EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
DI INDUSTRIES, INC.
No._______ 8-7/8% SENIOR NOTE DUE 2007 CUSIP No. 232909 AA 9
DI INDUSTRIES, INC., a Texas corporation, hereby promises to pay to
_________________, or registered assigns, the principal sum of _______________
on July 1, 2007.
Interest Payment Dates: January 1 and July 1, commencing January 1, 1998.
Record Dates: June 15 and December 15.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth in this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purposes.
IN WITNESS WHEREOF, DI INDUSTRIES, INC. has caused this instrument to be
duly executed under its corporate seal.
Dated:
----------------------
DI INDUSTRIES, INC.
By:
--------------------------------
Name:
Title:
[Corporate Seal]
By:
--------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By:
----------------------------------
Authorized Signatory
1
<PAGE> 109
[FORM OF REVERSE SIDE OF SECURITY]
8-7/8% Senior Note Due 2007
1. Interest
DI Industries, Inc., a Texas corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above. The Company will
pay interest semiannually on January 1 and July 1 of each year (an "Interest
Payment Date") commencing on January 1, 1998, until the principal amount is
paid or made available for payment. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the Issue Date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Securities (except Defaulted
Interest) to the Persons who are registered Holders of Securities at the
close of business on the June 15 or December 15 immediately preceding the
Interest Payment Date even if Securities are canceled after the Record Date
and on or before the Interest Payment Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company
will pay principal, premium, if any, and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company, but, at the option of the
Company, interest may be paid by check mailed to the registered Holders at
their registered addresses.
3. Paying Agent and Registrar
Initially, Texas Commerce Bank National Association, a national banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. In certain circumstances, the Company or any of its
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
27, 1997 (as such may be amended from time to time, the "Indenture"), among
the Company, the corporations acting as guarantors and named therein (the
"Guarantors") and the Texas Commerce Bank National Association, as trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which
2
<PAGE> 110
Indenture reference is hereby made for a statement of the respective rights,
duties and immunities thereunder of the Company, the Guarantors, the Trustee and
each Holder of the Securities and the terms upon which the Securities are, and
are to be, authenticated and delivered. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. Section Section 77aaa-77bbbb) as
in effect on the date of the Indenture (the "Act"). Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture and the Act for a statement of those terms.
The Securities are limited to $175,000,000 aggregate principal amount
at Stated Maturity at any one time outstanding (subject to Section 2.08 of
the Indenture). This Security is one of the Securities referred to in the
Indenture. The Indenture imposes certain limitations on the incurrence of
additional Indebtedness by the Company and its Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its
Subsidiaries and the redemption of Subordinated Indebtedness of the Company
and its Subsidiaries; Investments; sales of assets and Subsidiary Capital
Stock; certain transactions with Affiliates of the Company and the right of
the Company and its Subsidiaries to engage in unrelated lines of business.
5. Optional Redemption
Except as provided in the next paragraph, the Securities are not
redeemable prior to July 1, 2002. At any time on or after July 1, 2002, the
Securities are redeemable at the option of the Company, in whole or in part,
on not less than 30 nor more than 60 days' notice, at the following
Redemption Prices (expressed as percentages of principal amount at Stated
Maturity), if redeemed during the 12 months beginning July 1 of the years
indicated below, plus accrued and unpaid interest (if any) thereon to the
Redemption Date:
<TABLE>
<CAPTION>
Redemption
Year Price
---------------------- ----------
<S> <C>
2002 .................................... 104.4375%
2003 .................................... 102.9580%
2004 .................................... 101.4792%
2005 and thereafter ..................... 100.0000%
</TABLE>
Notwithstanding the foregoing, on and prior to July 1, 2000, the
Company may redeem up to 30% of the aggregate principal amount at Stated
Maturity of the Securities originally outstanding at a redemption price of
108.875% of the principal amount at Stated Maturity thereof, plus accrued
and unpaid interest (if any) thereon to the Redemption Date, with the net
proceeds of one or more Qualified Equity Offerings of the Company; provided
that at least $120,000,000 aggregate principal amount of the Securities shall
remain outstanding immediately after the occurrence of any such redemption; and
provided, further, that such redemption shall occur not later than 90 days
after the date of the closing of any such Qualified Equity Offering. The
redemption shall be made in accordance with procedures set forth in the
Indenture.
3
<PAGE> 111
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption
Date to each Holder of Securities to be redeemed at his address as it
appears in the Security Register. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If
less than all of the Securities are to be redeemed at any time, the
Securities to be redeemed will be chosen by the Trustee in accordance with
the Indenture. If any Security is redeemed subsequent to a Record Date with
respect to any Interest Payment Date specified above and on or prior to such
Interest Payment Date, then any accrued interest will be paid on such
Interest Payment Date to the Holder of the Security at the close of business
on such Record Date. If money sufficient to pay the Redemption Price of and
accrued interest on all Securities (or portions thereof) to be redeemed on
the Redemption Date is deposited with the Paying Agent on or before the
Redemption Date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Change of Control
Upon the occurrence of a Change of Control, each Holder of Securities
shall have the right to require the Company to purchase such Holder's
Securities, in whole or in part in a principal amount at Stated Maturity
that is an integral multiple of $1,000, pursuant to a Change of Control
Offer, at a purchase price in cash equal to 101% of the principal amount at
Stated Maturity thereof on any Change of Control Payment Date, plus accrued
and unpaid interest, if any, to the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Securities.
The Holder of this Security may elect to have this Security or a portion
hereof in an authorized denomination purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below and tendering
this Security pursuant to the Change of Control Offer. Unless the Company
defaults in the payment of the Change of Control Purchase Price with respect
thereto, all Securities or portions thereof accepted for payment pursuant to
the Change of Control Offer will cease to accrue interest from and after the
Change of Control Payment Date.
8. Repurchase at the Option of Holders upon Asset Sale.
Subject to the limitations set forth in the next following paragraph,
if at any time the Company or any Subsidiary engages in any Asset Sale, as a
result of which the aggregate amount of Excess Proceeds exceeds $15,000,000,
the Company shall, within 30 calendar days of the date the amount of Excess
Proceeds exceeds $15,000,000, or at any time after receipt of Excess
Proceeds but prior to there being $15,000,000 of Excess Proceeds, the
Company may, at its option, use the then-existing Excess Proceeds to make an
offer to purchase from all Holders, on a pro rata basis,
4
<PAGE> 112
Securities in an aggregate principal amount equal to the maximum principal
amount that may be purchased out of the then-existing Excess Proceeds, at a
purchase price in cash equal to 100% of the principal amount at Stated Maturity
thereof, plus accrued and unpaid interest, if any, to the Asset Sale Offer
Purchase Date. Upon completion of an Asset Sale Offer (including payment of the
Asset Sale Offer Purchase Price for accepted Securities), any surplus Excess
Proceeds that were the subject of such offer shall cease to be Excess Proceeds,
and the Company may then use such amounts for general corporate purposes.
Within 30 calendar days of the date the amount of Excess Proceeds
exceeds $15,000,000, the Company shall send, or cause to be sent, by first
class mail, postage prepaid, a notice regarding the Asset Sale Offer to each
Holder of Securities. The Holder of this Security may elect to have this
Security or a portion hereof in an authorized denomination purchased by
completing the form entitled "Option of Holder to Elect Purchase" appearing
below and tendering this Security pursuant to the Asset Sale Offer. Unless
the Company defaults in the payment of the Asset Sale Offer Purchase Price
with respect thereto, all Securities or portions thereof selected for
payment pursuant to the Asset Sale Offer will cease to accrue interest from
and after the Asset Sale Offer Purchase Date.
9. Transfer and Exchange
A Holder may transfer a Security only upon the surrender of such
Security for registration of transfer. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only
upon, final acceptance and registration of the transfer in the Security
Register by the Registrar. When Securities are presented to the Registrar
with a request to register the transfer of, or to exchange, such Securities,
the Registrar shall register the transfer or make such exchange as requested
if its requirements for such transactions and any applicable requirements
hereunder are satisfied.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer of Securities.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
5
<PAGE> 113
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its Obligations and the Guarantors' Obligations under the
Securities, the Guarantees and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of
principal, premium and interest on the Securities to redemption or Maturity,
as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in outstanding principal amount at Stated
Maturity of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a
majority in outstanding principal amount at Stated Maturity outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company, the Guarantors and the
Trustee may amend the Indenture or the Securities (a) to evidence the
succession of another Person to the Company and the Guarantors and the
assumption by such successor of the covenants and Obligations of the Company
under the Indenture and contained in the Securities and of the Guarantors
contained in the Indenture and the Guarantees, (b) to add to the covenants
of the Company, for the benefit of the Holders, or to surrender any right or
power conferred upon the Company or the Guarantors by the Indenture, (c) to
add any additional Events of Default, (d) to provide for uncertificated
Securities in addition to or in place of certificated Securities, (e) to
evidence and provide for the acceptance of appointment under the Indenture
by the successor Trustee, (f) to secure the Securities and/or the
Guarantees, (g) to cure any ambiguity, to correct or supplement any
provision in the Indenture which may be inconsistent with any other
provision therein or to add any other provision with respect to matters or
questions arising under the Indenture, provided that such actions will not
adversely affect the interests of the Holders in any material respect or (h)
to add or release any Guarantor pursuant to the terms of the Indenture.
Certain provisions of the Securities and the Indenture may not be amended or
waived without the consent of each Holder affected thereby.
6
<PAGE> 114
14. Defaults and Remedies
Under the Indenture, Events of Default include in summary form (i)
default in the payment of interest on the Securities when due, continued for
30 days; (ii) default in the payment of principal of (or premium, if any,
on) the Securities when due; (iii) failure to comply with certain of the
covenants in the Indenture, including the Change of Control covenant, the
Asset Sale covenant and the Restrictive Payments covenant; (iv) failure to
perform any other covenant of the Company or any Guarantor in the Indenture,
continued for 30 days after written notice as provided in the Indenture; (v)
Indebtedness of the Company or any Subsidiary is not paid when due within
the applicable grace period, or is accelerated and, in either case, the
principal amount of such unpaid Indebtedness exceeds $10,000,000; (vi) one
or more final judgments or orders by a court of competent jurisdiction are
entered against the Company or any Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 and such judgments or
orders are not discharged, waived, appealed, stayed, satisfied or bonded for
a period of 60 consecutive days; (vii) certain events of bankruptcy,
insolvency or reorganization; or (viii) a Guarantee ceases to be in full
force and effect (other than in accordance with the terms of the Indenture
and such Guarantee) or a Guarantor denies or disaffirms its obligations
under its Guarantee.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount at
Stated Maturity of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders notice of any
continuing Default (except a Default in payment of principal or interest) if
it determines that withholding notice is in the interest of the Holders.
The Holders of a majority in principal amount at Stated Maturity of the
outstanding Securities, by written notice to the Company and the Trustee,
may rescind any declaration of acceleration and its consequences if the
rescission would not conflict with any judgment or decree, and if all Events
of Default have been cured or waived except nonpayment of principal and
interest that has become due solely because of the acceleration.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.
7
<PAGE> 115
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the
Company or a Guarantor under the Securities, the Guarantees or the Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Holder waives and releases
all such liability. The waiver and release are part of the consideration
for the issue of the Securities.
17. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE
LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. 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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. 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 Securities and has directed the Trustee to 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 Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of
this Security.
8
<PAGE> 116
SECURITY GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors
(as defined in the Indenture referred to in this Security and each
hereinafter referred to as a "Guarantor," which term includes any successor
or additional Guarantor under the Indenture) have jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual payment
of the principal (and premium, if any) of and interest on the Securities,
whether at Stated Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise, (b) the
due and punctual payment of interest on the overdue principal of and
interest on the Securities, if any, to the extent lawful, (c) the due and
punctual performance of all other Obligations of the Company and the
Guarantors to the Holders under the Indenture and the Notes and (d) in case
of any extension of time of payment or renewal of any Securities or any of
such other Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration, call for redemption, upon a Change of
Control Offer, Asset Sale Offer, purchase or otherwise. Capitalized terms
used herein shall have the same meanings assigned to them in the Indenture
unless otherwise indicated.
Payment on each Security is guaranteed jointly and severally, by the
Guarantors pursuant to Article 11 of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent
and fixed liabilities of such Guarantor, and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the Obligations of such other Guarantor under its Guarantee or
pursuant to its contribution Obligations under the Indenture, result in the
Obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent conveyance or fraudulent transfer under
federal or state law or not otherwise being void, voidable or unenforceable
under any similar other bankruptcy, receivership, insolvency, liquidation or
other similar legislation or legal principles under applicable foreign law.
Each Guarantor that makes a payment or distribution under a Guarantee shall
be entitled to a contribution from each other Company in a pro rata amount
based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their Guarantees upon
the terms and subject to the conditions provided in the Indenture.
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<PAGE> 117
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders
and, in the event of any transfer or assignment of rights by any Holder or
the Trustee, the rights and privileges herein conferred upon that party
shall automatically extend to and be vested in such transferee or assignee,
all subject to the terms and conditions hereof and in the Indenture.
DRILLERS, INC.
By:
----------------------------------
DI INTERNATIONAL, INC.
By:
----------------------------------
DI ENERGY, INC.
By:
----------------------------------
10
<PAGE> 118
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint _________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Dated: Your Signature:
---------------- -----------------------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
- -------------------------------
Signature must be guaranteed
- --------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar
program.
11
<PAGE> 119
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 or Section 4.09 of the Indenture, check the
appropriate box:
Section 4.07 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.07 or Section 4.09 of the Indenture, state the
amount in principal amount (must be an integral of $1,000): $_______________
Dated: Your Signature:
--------------- ------------------------------------------
(Sign exactly as your name appears on
the other side of this Security.)
Signature Guarantee:
------------------------------
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar
program.
12
<PAGE> 120
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among [GUARANTOR] (the "New Guarantor"), a subsidiary of DI
Industries, Inc. (or its successor), a Texas corporation (the "Company"), DI
INDUSTRIES, INC., the Guarantors (the "Existing Guarantors") under the
Indenture referred to below, and Texas Commerce Bank National Association, a
national banking association, as trustee under the Indenture referred to below
(the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to the Trustee
an Indenture (as such may be amended from time to time, the "Indenture"), dated
as of June 27, 1997, providing for the issuance of an aggregate principal
amount of $175,000,000 of 8-7/8% Senior Notes due 2007 (the "Securities");
WHEREAS Section 11.08 of the Indenture provides that the Company is
required to cause the New Guarantor to execute and deliver to the Trustee a
supplemental indenture pursuant to which the New Guarantor shall jointly and
severally and unconditionally and irrevocably guarantee all of the Company's
Obligations under the Securities and the Indenture pursuant to a Guarantee
contained in the Indenture on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 10.01 of the Indenture, the Trustee, the
Company and Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Definitions. (a) Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as otherwise
herein expressly provided or unless the context otherwise requires: (i) the
terms and expressions used herein shall have the same meanings as corresponding
terms and expressions used in the Indenture; and (ii) the words "herein,"
"hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and
severally and unconditionally and irrevocably, with all other Guarantors, to
guarantee the
1
<PAGE> 121
Company's Obligations under the Securities and the Indenture on the terms and
subject to the conditions set forth in Article 11 of the Indenture and to be
bound by all other applicable provisions of the Indenture. From and after the
date hereof, the New Guarantor shall be a Guarantor for all purposes under the
Indenture and the Securities.
3. Ratification of Indenture; Supplemental Indentures Part of Indenture.
Except as expressly amended hereby, the Indenture is in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall remain
in full force and effect. This Supplemental Indenture shall form a part of the
Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. Trustee Makes No Representation. The Trustee makes no representation as
to the validity or sufficiency of this Supplemental Indenture.
6. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR]
By:
-------------------------------------------
Name:
Title:
DI INDUSTRIES, INC.
By:
-------------------------------------------
Name:
Title:
[ALL EXISTING GUARANTORS]
By:
-------------------------------------------
Name:
Title:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
By:
-------------------------------------------
Name:
Title:
2
<PAGE> 122
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
March 31, 1998, among (i) MURCO DRILLING CORPORATION, a Delaware corporation
(the "NEW GUARANTOR"), a subsidiary of GREY WOLF, INC. (formerly "DI Industries,
Inc."), a Texas corporation (the "COMPANY"), (ii) the Company, (iii) the
Guarantors (the "EXISTING GUARANTORS") under the Indenture referred to below,
and (iv) CHASE BANK OF TEXAS NATIONAL ASSOCIATION (formerly "Texas Commerce Bank
National Association"), a national banking association, as trustee under the
Indenture referred to below (the "TRUSTEE").
W I T N E S S E T H:
WHEREAS the Company has heretofore executed and deliver to the Trustee
an Indenture (as such may be amended from time to time, the "INDENTURE"), dated
as of June 27, 1997, providing for the issuance of an aggregate principal amount
of $175,000,000 of 8-7/8% Senior Notes due 2007 (the "SECURITIES");
WHEREAS Section 11.08 of the Indenture provides that the Company is
required to cause the New Guarantor to execute and deliver to the Trustee a
supplemental indenture pursuant to which the New Guarantor shall jointly and
severally and unconditionally and irrevocably guarantee all of the Company's
Obligations under the Securities and the Indenture pursuant to a Guarantee
contained in the Indenture on the terms and conditions set forth herein; and
WHEREAS pursuant to Section 10.01 of the Indenture, the Trustee, the
Company and Existing Guarantors are authorized to execute and deliver this
Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the New
Guarantor, the Company, the Existing Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
1. Definitions. (a) Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expression used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
<PAGE> 123
2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and
severally and unconditionally and irrevocable, with all other Guarantors, to
guarantee the Company's Obligations under the Securities and the Indenture on
the terms and subject to the conditions set forth in Article 11 of the Indenture
and to be bound by all other applicable provisions of the Indenture. From and
after the date hereof, the New Guarantor shall be a Guarantor for all purposes
under the Indenture and the Securities.
3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all of the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
5. Trustee Makes No Representation. The Trustee makes no representation
as to the validity or sufficiency of this Supplemental Indenture.
6. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
7. Effect of Headings. The Section headings herein are for convenience
only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
MURCO DRILLING CORPORATION
By: /s/ DAVID W. WEHLMANN
------------------------------------------------------
Name: David W. Wehlmann
Title: Secretary
GREY WOLF, INC.
By: /s/ DAVID W. WEHLMANN
------------------------------------------------------
Name: David W. Wehlmann
Title: Senior Vice President and Chief Financial Officer
2
<PAGE> 124
GREY WOLF DRILLING COMPANY
DI INTERNATIONAL, INC.
DI ENERGY, INC.
By: /s/ DAVID W. WEHLMANN
-------------------------------------------------------
Name: David W. Wehlmann
Title:Senior Vice President and Chief Financial Officer of
each of the above Guarantors
CHASE BANK OF TEXAS NATIONAL ASSOCIATION,
as Trustee
By: /s/ MAURI J. COWEN
-------------------------------------------------------
Name: Mauri J. Cowen
Title: Vice President and Trust Officer
3
<PAGE> 125
================================================================================
GREY WOLF, INC.,
THE GUARANTORS PARTIES HERETO
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
as Trustee
-------------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of May 8, 1998
to
INDENTURE
Dated as of June 27, 1997
-------------------------
8-7/8% Senior Notes due 2007
================================================================================
<PAGE> 126
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of May 8, 1998, is by and among Grey Wolf, Inc., a Texas corporation
formerly known as DI Industries, Inc. (the "Company"), the guarantors parties
hereto (the "Guarantors"), and Chase Bank of Texas, National Association,
formerly known as Texas Commerce Bank National Association, as trustee (the
"Trustee"). All terms not defined herein shall have the meanings assigned to
them in the Indenture defined below, as such Indenture is amended by this
Supplemental Indenture.
RECITALS
A. The Company, the Guarantors (other than Murco Drilling
Corporation) and the Trustee entered into an indenture, dated as of June 27,
1997 (the "Indenture"), relating to $175,000,000 of the Company's 8-7/8% Senior
Notes due 2007 (the "Securities").
B. Murco Drilling Corporation became a Guarantor under the
Indenture pursuant to the Supplemental Indenture dated as of March 31, 1998.
C. The Company, the Guarantors and the Trustee desire to enter
into a new indenture (the "Series B Indenture"), relating to $75,000,000 of
8-7/8% Senior Notes due 2007 to be issued by the Company (the "Series B
Notes").
D. Pursuant to Section 10.02 of the Indenture, the Company
desires to amend the Indenture to permit the execution and delivery of the
Series B Indenture by the Guarantors and the issuance of guarantees of the
Series B Notes.
E. Pursuant to Section 10.01(a)(vii) of the Indenture, the
Company desires to amend the Indenture to cure an ambiguity therein caused by
clerical error.
F. All conditions precedent provided for in the Indenture
relating to this Supplemental Indenture have been complied with.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, the Company,
the Guarantors and the Trustee mutually covenant and agree for the equal and
proportionate benefit of all Holders of the Securities as follows:
ARTICLE ONE
Amendment of Indenture
Section 1.1 Amendment to Definition of "Consolidated Interest
Expense" in Section 1.01 of the Indenture. The last sentence of the definition
of the term "Consolidated Interest Expense" in Section 1.01 of the Indenture is
hereby amended by deleting the words "the numerator of which is the amount of
such dividend requirements," and substituting in lieu thereof the words "the
numerator of which is one,".
-1-
<PAGE> 127
Section 1.2 Amendment to Definition of "Permitted Indebtedness" in
Section 1.01 of the Indenture. Clause (f) of the definition of the term
"Permitted Indebtedness" in Section 1.01 of the Indenture is hereby amended by
deleting the existing clause (f) and substituting in lieu thereof the
following:
"(f) (1) the Guarantees of the Securities (and any assumption
of the Obligations guaranteed thereby) and (2) Indebtedness of a
Guarantor constituting a guarantee of Indebtedness of the Company
incurred in compliance with Section 4.03 of this Indenture (and any
assumption of the Obligations guaranteed thereby);".
ARTICLE TWO
Miscellaneous Provisions
Section 2.1 Counterparts. This Supplemental Indenture may be signed
in counterparts and by the different parties hereto in separate counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same instrument.
Section 2.2 Severability. In case any provision in this Supplemental
Indenture 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 2.3 Headings. The headings of the Articles and Sections of
this Supplemental Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
Section 2.4 Successors. All agreements of the Company and the
Guarantors in this Supplemental Indenture shall bind their respective
successors. All agreements of the Trustee in this Supplemental Indenture shall
bind its successors.
Section 2.5 Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 2.6 Effect of Supplemental Indenture. Except as amended by
this Supplemental Indenture, the terms and provisions of the Indenture shall
remain in full force and effect.
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Section 2.7 Trustee. The Trustee accepts the modifications of trusts
referenced in the Indenture and effected by this Supplemental Indenture.
Without limiting the generality of the foregoing, the Trustee assumes no
responsibility for the correctness of the recitals herein contained, which
shall be taken as the statements of the Company and the Guarantors, and the
Trustee shall not be responsible or accountable in any way whatsoever for or
with respect to the validity or execution or sufficiency of this Supplemental
Indenture, and the Trustee makes no representation with respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this Supplemental
Indenture as of the date first above written.
GREY WOLF, INC.
By: /s/ DAVID W. WEHLMANN
-------------------------------
Name: David W. Wehlmann
Title: Senior Vice President and
Chief Financial Officer
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Trustee
By: /s/ MAURI J. COWEN
-------------------------------
Name: Mauri J. Cowen
Title: Vice President and Trust
Officer
GUARANTORS:
GREY WOLF DRILLING COMPANY
GREY WOLF INTERNATIONAL, INC.
DI ENERGY, INC.
MURCO DRILLING CORPORATION
By: /s/ DAVID W. WEHLMANN
-------------------------------
Name: David W. Wehlmann
Title: Secretary
Of each of the above
Guarantors
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