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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 6, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PARKER DRILLING COMPANY
(and certain subsidiaries identified in footnote (*) below)
(Exact name of registrant as specified in its charter)
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DELAWARE 1381 73-0618660
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
JAMES J. DAVIS
SENIOR VICE PRESIDENT -- FINANCE AND
8 EAST THIRD STREET CHIEF FINANCIAL OFFICER
TULSA, OKLAHOMA 74103 8 EAST THIRD STREET
(918) 585-8221 TULSA, OKLAHOMA 74103
(Address, including zip code, and (918) 585-8221
telephone number, including area code, (Name, address, including zip code, and
of registrants' principal executive offices) telephone number, including area code,
of agent for service)
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Copies to:
T. MARK KELLY
VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
1001 FANNIN
HOUSTON, TEXAS 77002-6760
(713) 758-4592
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable following the effectiveness of this Registration
Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
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9.75% Senior Notes due 2006.. $300,000,000 100% $300,000,000 $90,909.09
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Guarantees (2)............... -- -- -- --
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Guarantees by subsidiaries of the Registrant of the payment of the principal
and interest on the 9.75% Senior Notes due 2006. Pursuant to Rule 457(n), no
additional fee is required.
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(*) The following subsidiaries of Parker Drilling Company are co-registrants and
are incorporated in the states and have the I.R.S. Employer Identification
Numbers indicated: (i) Parker Drilling Company of Oklahoma, Inc., an
Oklahoma corporation (73-0798949); (ii) Parker Technology, Inc., an Oklahoma
corporation (75-1246599); (iii) Parker Drilling Company International
Limited, a Nevada corporation (73-1046414); (iv) Choctaw International Rig
Corporation, a Nevada corporation (73-1046415); (v) Parker Drilling Company
Limited, a Nevada corporation (73-1284516); (vi) Parker Drilling Company of
Alaska Limited, an Alaska corporation (73-1130696); (vii) Parker Drilling
Company of New Guinea, an Oklahoma corporation (73-1331670); (viii) Parker
Drilling Company of North America, Inc., a Nevada corporation (73-1506381);
(ix) Parker Drilling U.S.A. Limited, a Nevada corporation (73-1030215); (x)
Vance Systems Engineering, Inc., a Texas corporation (75-1282282); (xi) DGH,
Inc., a Texas corporation (75-1726918); (xii) Mallard Bay Drilling, Inc., a
Louisiana corporation (73-1096861); (xiii) Quail Tools, Inc., a Louisiana
corporation (72-1125260); (xiv) Bay Drilling Corporation, a Louisiana
corporation (72-0490201); and (xv) AWI Drilling & Workover, Inc., a
Louisiana corporation (72-1087222).
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PARKER DRILLING COMPANY
CROSS REFERENCE SHEET
BETWEEN ITEMS IN PART I OF THE REGISTRATION STATEMENT
(FORM S-4) AND PROSPECTUS PURSUANT TO ITEM 501(B)
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ITEM OF FORM S-4 LOCATION IN PROSPECTUS
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A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus................ Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus.................................... Inside Front Cover Page of Prospectus;
Available Information; Incorporation of
Certain Documents by Reference; Table
of Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information......................... Outside Front Cover Page of Prospectus;
Prospectus Summary; Risk Factors
4. Terms of the Transaction........................ Outside Front Cover Page of Prospectus;
Prospectus Summary; Risk Factors; The
Private Placement and Use of Proceeds;
The Exchange Offer; Description of
Notes; Transfer Restrictions on Old
Notes; Plan of Distribution
5. Pro Forma Financial Information................. Incorporation of Certain Documents by
Reference; Unaudited Pro Forma Combined
Financial Statements
6. Material Contracts with the Company Being
Acquired...................................... *
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to be
Underwriters.................................. *
8. Interests of Named Experts and Counsel.......... *
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................... *
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3 Registrants..... Available Information; Incorporation of
Certain Documents by Reference;
Prospectus Summary; Risk Factors;
Private Placement; Use of Proceeds;
Capitalization; Unaudited Pro Forma
Combined Financial Statements; Selected
Consolidated Financial Information
11. Incorporation of Certain Information by
Reference..................................... Incorporation of Certain Documents by
Reference
12. Information with Respect to S-2 or S-3
Registrants................................... *
13. Incorporation of Certain Information by
Reference..................................... *
14. Information with Respect to Registrants other
than S-2 or S-3 Registrants................... *
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ITEM OF FORM S-4 LOCATION IN PROSPECTUS
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C. INFORMATION ABOUT THE COMPANY
BEING ACQUIRED
15. Information with Respect to S-3 Companies....... *
16. Information with Respect to S-2 or S-3
Companies..................................... *
17. Information with Respect to Companies other than
S-2 or S-3 Companies.......................... *
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or
Authorizations are to be Solicited............ *
19. Information if Proxies, Consents or
Authorizations are not to be Solicited in an
Exchange Offer................................ *
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* Not applicable or answer is negative.
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* INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A *
* REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR *
* SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH *
* OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR *
* QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
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SUBJECT TO COMPLETION, DATED JANUARY 6, 1997
PROSPECTUS
PARKER DRILLING COMPANY
LOGO
OFFER TO EXCHANGE
9.75% SENIOR NOTES DUE 2006, SERIES B
FOR ALL OUTSTANDING 9.75% SENIOR NOTES DUE 2006, SERIES A
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME,
ON FEBRUARY , 1997, UNLESS EXTENDED
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Parker Drilling Company, a Delaware corporation (the "Company"), hereby
offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying letter of transmittal (the "Letter of
Transmittal," and together with this Prospectus, the "Exchange Offer"), to
exchange $1,000 principal amount of its 9.75% Senior Notes due 2006, Series B
(the "Exchange Notes"), which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), pursuant to a Registration Statement
(as defined herein) of which this Prospectus constitutes a part, for each $1,000
principal amount of its outstanding 9.75% Senior Notes due 2006, Series A (the
"Old Notes"), of which $300,000,000 principal amount is outstanding. The form
and terms of the Exchange Notes are identical in all material respects to the
form and terms of the Old Notes except for certain transfer restrictions and
registration rights relating to the Old Notes. The Exchange Notes will evidence
the same debt as the Old Notes and will be issued under and be entitled to the
benefits of the Indenture (as defined herein). The Exchange Notes and the Old
Notes are collectively referred to herein as the "Notes."
The Notes will be senior unsecured obligations of the Company, ranking pari
passu in right of payment with all senior Indebtedness (as defined) of the
Company and senior to all future Subordinated Indebtedness (as defined) of the
Company. The Notes will be unconditionally guaranteed (the "Subsidiary
Guarantees") on a senior unsecured basis by the Company's principal operating
subsidiaries (the "Subsidiary Guarantors"), and the Subsidiary Guarantees will
rank pari passu in right of payment with all senior Indebtedness of the
Subsidiary Guarantors and senior to all future Subordinated Indebtedness of the
Subsidiary Guarantors. The Subsidiary Guarantees may be released under certain
circumstances. The Notes and Subsidiary Guarantees will be effectively
subordinated to secured Indebtedness of the Company and the Subsidiary
Guarantors, respectively, including any Indebtedness under the Senior Credit
Facility (as defined), which is secured by liens on substantially all of the
assets of the Company and the Subsidiary Guarantors. At August 31, 1996, pro
forma for the Acquisitions and the related financings, the Notes and the
Subsidiary Guarantees would have been effectively subordinated to $106.6 million
of secured Indebtedness (excluding letters of credit) of the Company and the
Subsidiary Guarantors. The indenture governing the Notes (the "Indenture") will
permit the Company and its subsidiaries to incur additional Indebtedness in the
future, subject to certain limitations.
The Company will accept for exchange any and all Old Notes that are validly
tendered on or prior to 5:00 p.m., New York City time, on the date the Exchange
Offer expires, which will be February , 1997, unless the Exchange Offer is
extended. See "The Exchange Offer -- Expiration Date; Extensions; Amendment."
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York
City time, on the business day prior to the Expiration Date (as defined herein),
unless previously accepted for exchange. The Exchange Offer is not conditioned
upon any minimum principal amount of Old Notes being tendered for exchange.
However, the Exchange Offer is subject to certain conditions which may be waived
by the Company and to the terms and provisions of the Registration Rights
Agreement (as defined herein). Old Notes may be tendered only in denominations
of $1,000 principal amount and integral multiples thereof. The Company has
agreed to pay the expenses of the Exchange Offer. See "The Exchange Offer."
(Cover continued on next page)
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SEE "RISK FACTORS" BEGINNING ON PAGE 10 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN EVALUATING AN
INVESTMENT IN THE NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is January 6, 1997
<PAGE> 5
The Exchange Notes will bear interest at the rate of 9.75% per annum,
payable semi-annually on May 15 and November 15 of each year, commencing May 15,
1997. Holders of Exchange Notes of record on May 1, 1997 will receive interest
on May 15, 1997 from the date of issuance of the Exchange Notes, plus an amount
equal to the accrued interest on the Old Notes from the date of issuance of the
Old Notes, November 12, 1996, to the date of exchange thereof. Interest on the
Old Notes accepted for exchange will cease to accrue upon issuance of the
Exchange Notes.
The Old Notes were sold by the Company on November 12, 1996 to the Initial
Purchasers (as defined herein) in a transaction not registered under the
Securities Act in reliance upon Section 4(2) of the Securities Act. The Old
Notes were thereupon offered and sold by the Initial Purchasers only to
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act) and to a limited number of institutional "accredited investors" (as defined
in Rule 501(a)(1),(2),(3) or (7) under the Securities Act), each of whom agreed
to comply with certain transfer restrictions and other conditions. Accordingly,
the Old Notes may not be offered, resold or otherwise transferred unless
registered under the Securities Act or unless an applicable exemption from the
registration requirements of the Securities Act is available. The Exchange Notes
are being offered hereunder in order to satisfy the obligations of the Company
under the Registration Rights Agreement entered into with the Initial Purchasers
in connection with the offering of the Old Notes. See "The Exchange Offer" and
"Description of Notes -- Registration Rights; Liquidated Damages."
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission" or "SEC") to third parties, including
Exxon Capital Holdings Corporation, SEC No-Action Letter (available April 13,
1989), Morgan Stanley & Co. Inc., SEC No-Action Letter (available June 5, 1991)
(the "Morgan Stanley Letter") and Mary Kay Cosmetics, Inc., SEC No-Action Letter
(available June 5, 1991), the Company believes that the Exchange Notes issued
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by the respective holders thereof (other than a "Restricted Holder,"
being (i) a broker-dealer who purchased Old Notes exchanged for such Exchange
Notes directly from the Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act or (ii) a person that is an
affiliate of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are acquired
in the ordinary course of such holder's business and such holder is not
participating in, and has no arrangement with any person to participate in, the
distribution (within the meaning of the Securities Act) of such Exchange Notes.
Eligible holders wishing to accept the Exchange Offer must represent to the
Company that such conditions have been met. Holders who tender Old Notes in the
Exchange Offer with the intention to participate in a distribution of the
Exchange Notes may not rely upon the Morgan Stanley Letter or similar no-action
letters. See "The Exchange Offer -- General." Each broker-dealer that receives
Exchange Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. A broker-dealer that delivers such a prospectus to
purchasers in connection with such resales will be subject to certain of the
civil liability provisions under the Securities Act and will be bound by the
provisions of the Registration Rights Agreement (including certain
indemnification rights and obligations). This Prospectus, as it may be amended
or supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that it will make
this Prospectus and any amendment or supplement to this Prospectus available to
any broker-dealer for use in connection with any such resale for a period of up
to 180 days after consummation of the Exchange Offer. See "Plan of
Distribution."
The Company will not receive any proceeds from the Exchange Offer.
The Exchange Notes will constitute a new issue of securities with no
established trading market, and there can be no assurance as to the liquidity of
any markets that may develop for the Exchange Notes or as to the ability of or
price at which the holders of Exchange Notes would be able to sell their
Exchange Notes. Future trading prices of the Exchange Notes will depend on many
factors, including, among others, prevailing interest rates, the Company's
operating results and the market for similar securities. The Company does not
intend to apply for listing of the Exchange Notes on any securities exchange.
Jefferies & Company, Inc. and
ii
<PAGE> 6
ING Baring (U.S.) Securities, Inc. (together, the "Initial Purchasers") have
informed the Company that they currently intend to make a market for the
Exchange Notes. However, they are not so obligated, and any such market making
may be discontinued at any time without notice. Accordingly, no assurance can be
given that an active public or other market will develop for the Exchange Notes
or as to the liquidity of or the trading market for the Exchange Notes.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
TABLE OF CONTENTS
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Available Information.............................................. iii
Disclosure Regarding Forward Looking Statements.................... iv
Incorporation of Certain Documents by Reference.................... iv
Prospectus Summary................................................. 1
Risk Factors....................................................... 10
The Company........................................................ 15
Private Placement.................................................. 17
Use of Proceeds.................................................... 17
Capitalization..................................................... 18
Unaudited Pro Forma Combined Financial Information................. 19
Selected Consolidated Financial Information........................ 24
The Exchange Offer................................................. 27
Description of Senior Credit Facility.............................. 34
Description of Notes............................................... 34
Plan of Distribution............................................... 63
Transfer Restrictions on Old Notes................................. 64
Legal Matters...................................................... 65
Experts............................................................ 65
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
Seven World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such materials can be obtained by mail from the Public Reference
Section of the Commission, at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such reports, proxy and information
statements and other information can also be inspected and copied at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. In
addition, the Commission maintains a site on the World Wide Web that contains
reports, proxy and information statements and other information filed
electronically by the Company with the Commission which can be accessed over the
Internet at http://www.sec.gov. While any Notes remain outstanding, the Company
will make available, upon request, to any holder and any prospective purchaser
of Notes, the information required pursuant to Rule 144A(d)(4) under the
Securities Act during any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act. Any such request should be directed to the
Secretary of the Company, 8 East Third Street, Tulsa, Oklahoma 74103.
iii
<PAGE> 7
This Prospectus constitutes part of a registration statement on Form S-4
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus omits certain of the information set forth in
the Registration Statement. Reference is hereby made to the Registration
Statement and to the exhibits relating thereto for further information with
respect to the Company and the securities offered hereby. Statements contained
herein concerning the provisions of contracts or other documents are not
necessarily complete, and each such statement is qualified in its entirety by
reference to the copy of the applicable contract or other document filed with
the Commission. Copies of the Registration Statement and the exhibits thereto
are on file at the offices of the Commission and may be obtained upon payment of
the fee prescribed by the Commission, or may be examined without charge at the
public reference facilities of the Commission described above.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical facts included in this
Prospectus, including, without limitation, statements regarding the Company's
financial position, business strategy, budgets, and plans and objectives of
management for future operations, are forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from the Company's expectations ("Cautionary Statements") are
disclosed under "Risk Factors" and elsewhere in this Prospectus, including,
without limitation, in conjunction with the forward-looking statements included
in this Prospectus. All subsequent written and oral forward-looking statements
attributable to the Company, or persons acting on its behalf, are expressly
qualified in their entirety by the Cautionary Statements.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
pursuant to the Exchange Act (File No. 1-7573) and are incorporated herein by
reference:
(1) the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1996;
(2) the Company's Current Reports on Form 8-K filed September 19,
October 17 and November 25, 1996 ; and.
(3) the Company's Current Reports on Form 8-K/A filed October 24 and
January 6, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
thereof. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has been
delivered, upon the written or oral request of such person, a copy of any or all
of the information that has been incorporated by reference in this Prospectus
(not including exhibits to the information that is incorporated by reference
herein unless such exhibits are specifically incorporated by reference in such
information). Requests for such copies should be directed to the Secretary of
the Company at 8 East Third Street, Tulsa, Oklahoma, 74103. In order to ensure
timely delivery of such documents prior to the Expiration Date, any request
should be made by January , 1997.
iv
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE EXCHANGE AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH TOGETHER, NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
NEITHER THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL, OR BOTH
TOGETHER, CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
v
<PAGE> 9
SUMMARY
The following summary is qualified in its entirety by and should be read in
conjunction with the more detailed information and financial statements,
including the notes thereto, incorporated by reference into this Prospectus. As
used herein, unless the context otherwise requires, the terms the "Company" and
"Parker" refer to Parker Drilling Company and its consolidated subsidiaries.
Investors should carefully consider the information set forth under "Risk
Factors."
THE COMPANY
Parker historically has been a leading provider of land contract drilling
services on a worldwide basis to major, independent and foreign national oil
companies, with an internationally recognized expertise in deep and difficult
drilling and drilling in remote locations. As a result of its recent acquisition
of Mallard Bay Drilling, Inc. ("Mallard"), Parker has diversified its
capabilities beyond land-based drilling services, giving the Company a leading
presence in the Gulf of Mexico barge drilling and workover markets and the
Nigerian barge drilling market. Parker also recently completed the acquisition
of Quail Tools, Inc. ("Quail"), a company that provides specialized rental
equipment for drilling, workover, completion and recompletion operations in the
offshore Gulf of Mexico and Gulf Coast markets. The acquisition of Quail (the
"Quail Acquisition") adds a complementary rental tool business to the Company's
contract drilling operations, diversifying the Company's land and offshore
operations outside of its core drilling business and providing additional
opportunities for international expansion.
The Company's operations now consist of (i) barge drilling and workover,
(ii) land drilling, (iii) platform drilling and (iv) rental tools.
BARGE DRILLING AND WORKOVER
The Company's barge drilling and workover operations are concentrated in
the shallow coastal waters, also known as "transition zones," of the Gulf of
Mexico and Nigeria, where conventional jack-up rigs typically are unable to
operate.
DOMESTIC. The Company is the second-largest drilling contractor in the Gulf
of Mexico barge market, with 15 drilling barges and 15 workover barges, most of
which have been upgraded or refurbished since 1990. The barge market in the
transition zones of the Gulf of Mexico has undergone significant attrition and
consolidation in recent years, with the number of drilling rigs declining from
over 120 in the early 1980s to approximately 54 today, and the number of
competitors decreasing over the same period from more than 30 to only two
significant contractors. Drilling and workover activity has been increasing in
the Gulf of Mexico transition zones, spurred by the increased use of 3-D seismic
technology that has resulted in the identification of previously undiscovered
drilling prospects and the settlement of a dispute between the state of
Louisiana and Texaco, the region's largest leaseholder. For the year ended
December 31, 1995, Mallard's deep drilling barge rigs averaged 75% utilization
and had an average dayrate of $12,880, as compared to 82% utilization and an
average dayrate of $13,328 for the first nine months of 1996. Currently, 100% of
Mallard's deep drilling barge rigs are in operation at an average dayrate of
$15,466.
The Company is the largest barge workover contractor in the Gulf of Mexico,
with 15 rigs in its fleet. Management believes this sector of its business
offers opportunities for substantial improvement for the following reasons: (i)
oil and gas companies have recently made lease acquisitions, gathering 3-D
seismic data and exploratory drilling into a higher priority than workover
activity, and management expects workover activity to increase on a relative
basis, (ii) the shallow coastal water area of Louisiana has been an active
exploration area for a number of years and has a substantial number of producing
wells that require periodic workover, and (iii) the Company has five stacked
workover barges and therefore has the fleet capacity, upon refurbishment, to
benefit from increases in utilization and dayrates as demand improves. In June
1996, Mallard entered into an exclusive one-year alliance agreement with Texaco
to provide barge rig completion and workover services in the shallow coastal
waters of the Gulf of Mexico. The barge workover business complements the
Company's land and barge drilling businesses due to substantial customer overlap
and serves
1
<PAGE> 10
to lessen the Company's dependence on drilling activity by increasing the
Company's operations in the production phase of an oil and gas well. For the
year ended December 31, 1995, Mallard's barge workover rigs averaged 66%
utilization and had an average dayrate of $8,066 as compared to 68% utilization
and an average dayrate of $7,497 for the first nine months of 1996. Currently,
50% of Mallard's barge workover rigs are operating at an average dayrate of
$7,770.
INTERNATIONAL. The Company's international barge fleet is concentrated in
the transition zones of Nigeria, where it is the leading barge drilling
contractor. The Company is currently operating three deep drilling barges under
long-term contracts for affiliates of Shell and Chevron at an average dayrate of
$25,498. A fourth barge rig is currently being upgraded to commence operations
under a two-year contract in January 1997 for an affiliate of Chevron at an
initial dayrate of $26,535. The Company anticipates that 3-D seismic technology
will stimulate increases in demand for drilling in a number of other foreign
transition zones, including those of Venezuela, Indonesia, Tunisia, Mexico and
the Caspian Sea.
LAND DRILLING
Since its inception in 1934, Parker has provided land drilling services
throughout the United States and in 46 foreign countries, making it one of the
most geographically diverse land drilling contractors in the world. Parker
specializes in the drilling of deep and difficult wells and wells in remote and
harsh locations. The Company has a total of 69 land rigs, including six rigs
acquired in the acquisition of Mallard (the "Mallard Acquisition"). A total of
52 rigs currently are located in 13 foreign countries (including 23 helicopter-
transportable rigs) and 17 rigs are located in the United States. Parker's
international land drilling operations are focused primarily in South America
and the Asia Pacific region, where Parker specializes in drilling that requires
equipment specially designed to be transported by helicopter or all-terrain
vehicles into remote areas such as jungles, mountainsides or desert locations.
Management believes Parker is the dominant operator in the heli-rig market, with
an estimated 75% worldwide market share. Parker traditionally has been a pioneer
in "frontier areas" and is currently working in China, Russia, Kazakstan and
Vietnam.
PLATFORM DRILLING
The Company operates six platform rigs and one shallow water workover
jackup rig which were acquired as part of the Mallard Acquisition. Three
platform rigs and the jackup rig are located in the Gulf of Mexico; two platform
rigs are located in Peru; and one platform rig is located in Thailand. One
platform rig in the Gulf of Mexico has been refurbished to incorporate a modular
self-erecting system that significantly improves the efficiency of rigging up
and rigging down on platforms. Management believes that the incorporation of
this self-erecting system on its other platform rigs could result in increased
demand for its platform rigs both in the Gulf of Mexico and internationally.
RENTAL TOOLS
As a result of the Quail Acquisition, the Company is a provider of premium
rental tools used in difficult well drilling, production and workover, primarily
to companies operating in the Gulf of Mexico and the Gulf Coast regions. The
Company's rental tools include a full line of drill pipe, drill collars, tubing,
high- and low-pressure blowout preventers and manifolds, casing scrapers and
cement and junk mills. Quail has recently entered into a contract with a major
oil company to be its preferred provider of rental tools to the onshore and
offshore Texas markets, which management believes will substantially expand its
existing operations. Management also believes that its international drilling
operations will enable the Company to expand the rental tool business
internationally as well as incorporate rental services as part of integrated
drilling or project management contracts.
THE MALLARD AND QUAIL ACQUISITIONS
On November 12, 1996, Parker acquired Mallard and certain related
operations from Energy Ventures, Inc. ("EVI"). The consideration for the Mallard
Acquisition was $338 million, consisting of $313 million in cash, subject to
adjustment for changes in Mallard's net assets prior to closing, and $25 million
in shares of the
2
<PAGE> 11
Company's Series D convertible preferred stock (the "Convertible Preferred
Stock"). The adjustments for changes in Mallard's net assets prior to closing
resulted in a reduced cash consideration of $306.9 million. The adjustments
consisted of a $1.7 million increase in Mallard's net assets and a $7.8 million
reduction to reimburse the Company for the cost of upgrading Rig No. 74. The
shares of convertible preferred stock were automatically converted into
3,056,600 shares of the Company's common stock upon approval by the stockholders
of the Company of an increase in the number of authorized shares of common stock
on December 18, 1996.
On November 12, 1996, Parker acquired all of the stock of Quail for $65
million in cash.
The Mallard Acquisition and the Quail Acquisition diversify the Company's
operations, which management believes will reduce the Company's earnings
volatility, and will provide Parker with an entrance into two particularly high
growth segments of the oil service industry. Additionally, management believes
that Parker, Mallard and Quail will each benefit from the following synergies:
(i) existing customer relationships and an expanded customer base; (ii)
increased utilization of equipment and inventory; and (iii) sharing of drilling
technology, expertise and personnel. The Company's management also believes that
there are significant opportunities to expand Mallard's and Quail's operations
into international markets where Parker has established operations, experience
and customer relationships. Finally, the Company may be able to use its net
operating loss carryforwards, currently $142 million, to reduce U.S. taxes
resulting from Mallard's and Quail's earnings.
THE PRIVATE PLACEMENT AND USE OF PROCEEDS
The Old Notes were sold by the Company on November 12, 1996 to the Initial
Purchasers and were thereupon offered and sold by the Initial Purchasers only to
certain qualified buyers. The $289.0 million net proceeds received by the
Company in connection with the sale of the Old Notes together with borrowings of
$100 million under the Senior Credit Facility were used to finance the cash
portion of the purchase price for the Mallard Acquisition and Quail Acquisition
and certain related expenses. See "Private Placement" and "Capitalization."
THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $300,000,000 principal
amount of Exchange Notes for up to $300,000,000 principal amount of Old Notes.
The form and terms of the Exchange Notes are identical in all material respects
to the form and terms of the Old Notes except that the Exchange Notes have been
registered under the Securities Act and will not contain certain transfer
restrictions and hence are not entitled to the benefits of the Registration
Rights Agreement relating to the contingent increases in the interest rate
provided for pursuant thereto. The Exchange Notes will evidence the same debt as
the Old Notes and will be issued under and be entitled to the benefits of the
Indenture governing the Old Notes. See "Description of the Notes."
The Exchange Offer......... Each $1,000 principal amount of Exchange Notes will
be issued in exchange for each $1,000 principal
amount of outstanding Old Notes. As of the date
hereof, $300,000,000 principal amount of Old
Notes are issued and outstanding. The Company
will issue the Exchange Notes to tendering
holders of Old Notes on or promptly after the
Expiration Date.
Resale..................... The Company believes that the Exchange Notes issued
pursuant to the Exchange Offer generally will be
freely transferable by the holders thereof
without registration or any prospectus delivery
requirement under the Securities Act, except for
certain Restricted Holders who may be required to
deliver copies of this Prospectus in connection
with any resale of the Exchange Notes issued in
exchange for such Old
3
<PAGE> 12
Notes. See "The Exchange Offer -- General" and
"Plan of Distribution."
Expiration Date............ 5:00 p.m., New York City time, on February ,
1997, unless the Exchange Offer is extended, in
which case the term "Expiration Date" means the
latest date to which the Exchange Offer is
extended. See "The Exchange Offer -- Expiration
Date; Extensions; Amendments."
Interest on the Notes...... The Exchange Notes will bear interest payable
semi-annually on May 15 and November 15 of each
year, commencing May 15, 1997. Holders of
Exchange Notes of record on May 1, 1997 will
receive interest on May 15, 1997 from the date of
issuance of the Exchange Notes, plus an amount
equal to the accrued interest on the Old Notes
from the date of issuance of the Old Notes,
November 12, 1996, to the date of exchange
thereof. Consequently, assuming the Exchange
Offer is consummated prior to the record date in
respect of the May 15, 1997 interest payment for
the Old Notes, holders who exchange their Old
Notes for Exchange Notes will receive the same
interest payment on May 15, 1997 that they would
have received had they not accepted the Exchange
Offer. Interest on the Old Notes accepted for
exchange will cease to accrue upon issuance of
the Exchange Notes. See "The Exchange
Offer -- Interest on the Exchange Notes."
Procedures for Tendering
Old Notes.................. Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver such
Letter of Transmittal, or such facsimile,
together with the Old Notes to be exchanged and
any other required documentation to the Exchange
Agent at the address set forth herein and therein
or effect a tender of Old Notes pursuant to the
procedures for book-entry transfer as provided
for herein. See "The Exchange Offer -- Procedures
for Tendering."
Special Procedures for
Beneficial Holders......... Any beneficial holder whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and who wishes to tender in the Exchange Offer
should contact such registered holder promptly
and instruct such registered holder to tender on
the beneficial holder's behalf. If such
beneficial holder wishes to tender directly, such
beneficial holder must, prior to completing and
executing the Letter of Transmittal and
delivering the Old Notes, either make appropriate
arrangements to register ownership of the Old
Notes in such holder's name or obtain a properly
completed bond power from the registered holder.
The transfer of record ownership may take
considerable time. See "The Exchange
Offer -- Procedures for Tendering."
Guaranteed Delivery
Procedures............... Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes
and a properly completed Letter of Transmittal or
any other documents required by the Letter of
Transmittal to the Exchange Agent prior to the
Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely
basis, may tender their
4
<PAGE> 13
Old Notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Withdrawal Rights.......... Tenders of Old Notes may be withdrawn at any time
prior to 5:00 p.m., New York City time, on the
business day prior to the Expiration Date, unless
previously accepted for exchange. See "The
Exchange Offer -- Withdrawal of Tenders."
Termination of the Exchange
Offer.................... The Company may terminate the Exchange Offer if it
determines that the Exchange Offer violates any
applicable law or interpretation of the staff of
the SEC. Holders of Old Notes will have certain
rights against the Company under the Registration
Rights Agreement should the Company fail to
consummate the Exchange Offer. See "The Exchange
Offer -- Termination" and "Description of the
Notes -- Registration Rights; Liquidated
Damages."
Acceptance of Old Notes and
Delivery of Exchange
Notes.................... Subject to certain conditions (as summarized above
in "Termination of the Exchange Offer" and
described more fully in "The Exchange
Offer -- Termination"), the Company will accept
for exchange any and all Old Notes which are
properly tendered in the Exchange Offer prior to
5:00 p.m., New York City time, on the Expiration
Date. The Exchange Notes issued pursuant to the
Exchange Offer will be delivered promptly
following the Expiration Date. See "The Exchange
Offer -- General."
Exchange Agent............. Texas Commerce Bank National Association is serving
as exchange agent (the "Exchange Agent") in
connection with the Exchange Offer. The mailing
address of the Exchange Agent is: Texas Commerce
Bank National Association, Attention: Frank
Ivins -- Registered Bond Events -- Personal &
Confidential, P.O. Box 2320, Dallas TX
75221-2320. Hand deliveries and deliveries by
overnight courier should be addressed to Texas
Commerce Bank National Association, Attention:
Frank Ivins -- Registered Bond Events -- Personal
& Confidential, 1201 Main Street, 18th Floor,
Dallas TX 75202. For information with respect to
the Exchange Offer, the telephone number for the
Exchange Agent is (800) 275-2048 and the
facsimile number for the Exchange Agent is (214)
672-5746. See "The Exchange Offer -- Exchange
Agent."
Use of Proceeds............ There will be no cash proceeds payable to the
Company from the issuance of the Exchange Notes
pursuant to the Exchange Offer. See "Use of
Proceeds." For a discussion of the use of the net
proceeds received by the Company from the sale of
the Old Notes, see "Private Placement."
5
<PAGE> 14
TERMS OF THE NOTES
Notes Outstanding............. $300 million principal amount of 9 3/4% Senior
Notes due 2006.
Maturity Date................. November 15, 2006.
Interest Rate and Payment
Dates......................... The Notes will bear interest at a rate of
9 3/4% per annum. Interest on the Notes will
accrue from the date of issuance thereof and
will be payable semi-annually on November 15
and May 15 of each year, commencing May 15,
1997.
Optional Redemption........... The Notes will be redeemable at the option of
the Company, in whole or in part, at any time
on or after November 15, 2001, at the
redemption prices set forth herein, together
with accrued and unpaid interest to the date of
redemption. In the event the Company
consummates a Public Equity Offering on or
prior to November 15, 1999, the Company may at
its option use all or a portion of the proceeds
from such offering to redeem up to $105.0
million principal amount of the Notes at a
redemption price equal to 109.75% of the
aggregate principal amount thereof, together
with accrued and unpaid interest to the date of
redemption, provided that at least $195.0
million in aggregate principal amount of Notes
remain outstanding immediately after such
redemption. See "Description of
Notes -- Optional Redemption."
Change of Control............. Upon the occurrence of a Change of Control,
each holder of Notes will have the right to
require the Company to purchase all or a
portion of such holder's Notes at a price equal
to 101% of the aggregate principal amount
thereof, together with accrued and unpaid
interest to the date of purchase. See
"Description of Notes -- Repurchase at the
Option of Holders -- Change of Control."
Guarantees.................... The Notes will be unconditionally guaranteed on
a senior unsecured basis by each of the
Company's principal operating subsidiaries, and
such Subsidiary Guarantees will rank pari passu
in right of payment with all senior
indebtedness of the Subsidiary Guarantors and
senior to all future subordinated indebtedness
of the Subsidiary Guarantors. The Subsidiary
Guarantees may be released under certain
circumstances. See "Description of
Notes -- Subsidiary Guarantees."
Ranking....................... The Notes will be senior unsecured obligations
of the Company, ranking pari passu in right of
payment with all senior indebtedness of the
Company and senior to all subordinated
indebtedness of the Company. The Notes and the
Subsidiary Guarantees will be effectively
subordinated to secured indebtedness of the
Company and the Subsidiary Guarantors,
respectively, including any indebtedness under
the Senior Credit Facility (as defined), which
will be secured by liens on substantially all
of the assets of the Company and the Subsidiary
Guarantors. At August 31, 1996, pro forma for
the Mallard Acquisition and the Quail
Acquisition and the related financings, the
Notes and the Subsidiary Guarantees would have
been effectively subordinated to $106.6 million
of secured indebtedness (excluding letters of
credit) of the Company and the Subsidiary
Guarantors. Subject to certain limitations, the
Company and its Subsidiaries may incur
additional indebtedness in the
6
<PAGE> 15
future. See "Description of Senior Credit
Facility" and "Description of
Notes -- General."
Certain Covenants............. The Indenture relating to the Notes contains
certain covenants, including covenants that
limit: (i) indebtedness; (ii) restricted
payments; (iii) issuances and sales of capital
stock of restricted subsidiaries; (iv)
sale/leaseback transactions; (v) transactions
with affiliates; (vi) liens; (vii) asset sales;
(viii) dividends and other payment restrictions
affecting restricted subsidiaries; (ix) conduct
of business; and (x) mergers, consolidations or
sales of assets. See "Description of
Notes -- Certain Covenants."
Transfer Restrictions......... The Old Notes were not registered under the
Securities Act and unless so registered may not
be offered or sold except pursuant to an
exemption from, or in a transaction not subject
to, the registration requirements of the
Securities Act. See "Transfer Restrictions on
the Old Notes".
Exchange Offer................ Pursuant to a registration rights agreement
(the "Registration Rights Agreement") by and
among the Company, the Subsidiary Guarantors
and the Initial Purchasers, the Company agreed
to (i) file a registration statement with the
Commission (the "Exchange Offer Registration
Statement") with respect to an offer to
exchange the Notes (the "Exchange Offer") for
senior debt securities of the Company with
terms substantially identical to the Notes (the
"New Notes") (except that the New Notes
generally will not contain terms with respect
to transfer restrictions) within 60 days after
the date of original issuance of the Notes and
(ii) use its best efforts to cause such
registration statement to become effective
under the Securities Act within 120 days after
such issue date. The Registration Statement of
which this Prospectus is a part constitutes
such Exchange Offer Registration Statement. In
the event that applicable law or
interpretations of the staff of the Commission
do not permit the Company to effect the
Exchange Offer, or if certain holders of the
Notes notify the Company that they are not
permitted to participate in, or would not
receive freely tradeable Notes pursuant to, the
Exchange Offer, the Company will use its best
efforts to cause to become effective a
registration statement (the "Shelf Registration
Statement") with respect to the resale of the
Notes and to keep the Shelf Registration
Statement effective until three years after the
date of original issuance of the Notes. The
interest rate on the Old Notes is subject to
increase under certain circumstances if the
Company is not in compliance with its
obligations under the Registration Rights
Agreement. See "Description of
Notes -- Registration Rights; Liquidated
Damages."
RISK FACTORS
The Exchange Notes involves certain risks that a potential investor should
carefully evaluate prior to making an investment. See "Risk Factors."
7
<PAGE> 16
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA
The following table presents for the periods indicated certain historical
financial data for Parker and certain pro forma combined financial data for the
Company. The following information should be read together with "Unaudited Pro
Forma Combined Financial Statements," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the historical financial
statements of Parker, Mallard and Quail, including the notes thereto, included
elsewhere or incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
PARKER HISTORICAL
----------------------------------
PRO FORMA
YEAR ENDED AUGUST 31, YEAR ENDED
---------------------------------- AUGUST 31,
1994 1995 1996 1996(1)
-------- -------- -------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues........................................ $152,424 $157,371 $156,652 $277,022
Operating expenses:
Drilling and other................................ 121,295 118,060 112,766 189,718
Depreciation, depletion and amortization ......... 23,246 23,745 23,061 45,933
General and administrative........................ 17,018 17,063 19,428 19,428
Provision for reduction in carrying value of
certain assets(2)............................... 19,718 -- -- --
-------- -------- -------- --------
Total operating expenses..................... 181,277 158,868 155,255 255,079
Operating income (loss)............................... (28,853) (1,497) 1,397 21,943
Interest income (expense), net........................ 1,150 1,184 1,507 (37,537)
Other income(3)....................................... 784 7,413 5,663 6,554
-------- -------- -------- --------
Income (loss) before income taxes..................... (26,919) 7,100 8,567 (9,040)
Income tax expense.................................... 1,887 3,184 4,514 6,877
-------- -------- -------- --------
Net income (loss)..................................... $(28,806) $ 3,916 $ 4,053 $(15,917)
======== ======== ======== ========
OTHER FINANCIAL DATA (UNAUDITED):
EBITDA(4)........................................... $ 14,111 $ 22,248 $ 24,458 $ 68,374
Capital expenditures:
Maintenance....................................... 5,444 5,133 6,646 14,863(5)
Other............................................. 29,320 16,407 24,190 54,134
Ratio of EBITDA to net interest expense(6).......... n/a n/a n/a 1.8x
</TABLE>
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1996
-----------------------------
ACTUAL PRO FORMA(1)
-------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and other short-term investments.............. $ 77,985 $ 83,877
Property, plant and equipment, net................................... 124,177 381,310
Total assets......................................................... 275,959 729,570
Total debt........................................................... 3,378 404,289
Total stockholders' equity(7)........................................ 244,048 269,048
</TABLE>
- ---------------
(1) The Pro Forma data includes pro forma adjustments to reflect the Mallard
Acquisition and the Quail Acquisition and related financings.
(2) In fiscal year 1994, Parker reorganized its domestic land drilling and
manufacturing operations and made the decision to dispose of certain
drilling equipment, inventories and other properties. Accordingly, Parker
removed 16 mechanical rigs from its domestic fleet and recorded a $19.7
million provision for the reduction in carrying value of certain assets.
(3) Other income for the years ended August 31, 1995 and 1996 includes $6.4
million and $5.4 million, respectively, of gains on the sale of assets.
(4) EBITDA represents operating income (loss) before depreciation, depletion and
amortization and provision for reduction in carrying value of certain
assets, plus, for pro forma purposes, gains on sales of rental property and
equipment for Quail. EBITDA is frequently used by securities analysts and is
presented here to provide additional information about the Company's
operations. EBITDA is not a measurement presented in accordance with
generally accepted accounting principles. EBITDA should not be considered in
isolation or as a substitute for net income, cash flow provided by operating
activities or other income or cash flow data prepared in accordance with
generally accepted accounting principles or as a measure of a company's
profitability or liquidity.
(5) Does not include maintenance capital expenditures for two rigs (Rig Nos. 72
and 73) acquired by Mallard in August 1996 or Rig No. 74, which was cold
stacked during fiscal 1996. Management expects annual maintenance capital
expenditures for these three rigs to be approximately $1.5 million in the
aggregate. In addition, management expects annual maintenance capital
expenditures, on a going forward basis, to be approximately $20.5 million.
(6) Exclude non-cash amortization of original issue discount and debt issuance
costs of $1.6 million.
(7) Includes the shares of common stock issued upon conversion of the shares of
Convertible Preferred Stock issued in the Mallard Acquisition. Such shares
of Convertible Preferred Stock were automatically converted into shares of
common stock in December 1996 upon approval by the stockholders of the
Company of an increase in the number of authorized shares of common stock.
8
<PAGE> 17
BARGE RIG ACTIVITY DATA
<TABLE>
<CAPTION>
NINE
MONTHS
YEAR ENDED DECEMBER 31, ENDED
--------------------------------------------------- SEPTEMBER 30,
1991 1992 1993 1994 1995 1996 CURRENT(1)
------- ------- ------- ------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE FOR PERIOD:
Domestic barge deep drilling
Rigs available for
service(2)................ 7.0 7.0 7.0 7.0 7.0 7.0 7.0
Utilization rate of rigs
available for
service(3)................ 61% 71% 83% 73% 75% 82% 100%
Dayrate..................... $ 8,652 $ 8,713 $ 9,606 $13,537 $ 12,880 $13,328 $15,466
Cold stacked rigs(2)(4)..... 1.0 1.0 1.0 1.0 2.0 2.0 4.0
Domestic barge intermediate
drilling
Rigs available for
service(2)................ 2.0 3.7 5.0 5.0 5.0 5.0 5.0
Utilization rate of rigs
available for
service(3)................ 69% 57% 77% 65% 74% 83% 100%
Dayrate..................... $ 6,520 $ 7,015 $ 7,671 $10,432 $ 10,143 $10,165 $11,420
Cold stacked rigs(2)........ 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Domestic barge workover and
shallow drilling
Rigs available for
service(2)................ 8.2 8.9 10.0 9.0 7.3 8.8 10.0
Utilization rate of rigs
available for
service(3)................ 75% 66% 66% 48% 66% 68% 50%
Dayrate..................... $ 6,174 $ 6,301 $ 6,742 $ 8,181 $ 8,066 $ 7,497 $ 7,770
Cold stacked rigs(2)(5)..... 3.0 8.9 12.0 13.0 12.6 9.2 5.0
International barge drilling
Rigs available for
service(2)................ 0.3 1.0 1.0 1.0 1.0 1.3 3.0
Utilization rate of rigs
available for
service(3)................ 95% 100% 57% 46% 89% 99% 100%
Dayrate..................... $23,493 $21,659 $22,049 $23,531 $ 25,141 $25,490 $25,498
Cold stacked rigs(2)(4)..... 0.7 0.0 0.0 0.0 0.0 0.0 1.0
</TABLE>
LAND RIG ACTIVITY DATA
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
--------------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Utilization of international land rigs(6)................ 52% 40% 56% 54% 55%
Utilization of domestic land rigs(6)(7).................. 40% 41% 45% 46% 56%
</TABLE>
- ---------------
(1) As of December 20, 1996.
(2) The number of rigs is determined by calculating the number of days each rig
was in Mallard's fleet, e.g. a Mallard rig under contract or available for
contract for an entire year is 1.0 "rigs available for service" and a
Mallard rig cold stacked for one quarter is 0.25 "cold stacked rigs." "Rigs
available for service" includes rigs currently under contract or available
for contract. "Cold stacked rigs" includes all rigs that are stacked and
would require significant refurbishment before being placed into service.
(3) Barge rig utilization rates are based on a weighted average basis assuming
365 days availability for all of its rigs available for service. Rigs
acquired or disposed of have been treated as added to or removed from the
rig fleet as of the date of acquisition or disposal. Rigs that are in
operation or fully or partially staffed and on a revenue-producing standby
status are considered to be utilized. Rigs under contract that generate
revenues during moves between locations or during
mobilization/demobilization are also considered to be utilized.
(4) Mallard acquired two cold stacked deep drilling barges in mid-1995 and a
third cold stacked deep drilling barge, Rig No. 74, at the beginning of
1996. Rig No. 74 is currently in a shipyard in the Gulf of Mexico undergoing
modification and upgrade in connection with its deployment to Nigeria.
(5) Mallard has removed a total of six stacked barge workover rigs from its
fleet since the beginning of 1995 and has refurbished and activated two such
rigs during this period.
(6) Parker calculates its land rig utilization rates on a weighted average basis
assuming 365 days availability for all of its rigs. Rigs retired, disposed
of or reclassified as assets held for sale have been treated as removed from
the rig fleet as of the last day of each fiscal period, except as described
in footnote (8) below. Rigs that are in operation or fully or partially
staffed and on a revenue-producing standby status are considered to be
utilized. Rigs under contract that generate revenues during moves between
locations or during mobilization/demobilization are also considered to be
utilized.
(7) Domestic utilization for the fiscal years ended August 31, 1992, 1993, 1994
and 1995 has been adjusted to reflect the removal of 16 domestic mechanical
rigs in August 1994 and the sale of an additional 22 such rigs in August
1996. Including these 38 domestic rigs during such periods, historical
domestic utilization was as follows: 1992 -- 13%, 1993 -- 14%, 1994 -- 15%,
and 1995 -- 21%.
9
<PAGE> 18
RISK FACTORS
The following risk factors, as well as the other information set forth in
this Prospectus, should be carefully evaluated prior to making an investment in
the Exchange Notes.
INDUSTRY CONDITIONS; IMPACT ON COMPANY'S OPERATING RESULTS
The Company's revenues and earnings are affected directly by the worldwide
level of oil and gas exploration and development activity. The level of such
activity is affected by many factors over which the Company has no control,
including, among others, the market prices of oil and gas, the volatility of
such prices, the levels of production by, and other activities of, the
Organization of Petroleum Exporting Countries and other oil and gas producers,
governmental regulation and trade restrictions, worldwide economic activity,
political stability in major oil producing areas, the development of alternate
energy sources and the long-term effect of worldwide energy conservation
measures. Since the early 1980s, the contract drilling business has been
severely impacted by the decline and continued instability in the prices of oil
and natural gas. Substantial uncertainty exists as to the future level of oil
and gas drilling activity. A material decline in natural gas or crude oil prices
could have a material adverse effect on the demand for, and sales of, the
Company's services.
INCURRENCE OF SUBSTANTIAL INDEBTEDNESS
At August 31, 1996, pro forma for the sale of the Notes, borrowings under
the Senior Credit Facility and the Mallard and Quail Acquisitions, the Company
would have $404.3 million in total indebtedness, compared with total actual
indebtedness of $3.4 million at such date. The Company historically has operated
at substantially lower levels of debt than will be outstanding after giving
effect to the foregoing transactions. The Company's level of indebtedness will
have several important effects on its future operations, including, without
limitation, (i) a substantial portion of the Company's cash flow from operations
must be dedicated to the payment of interest and principal on its indebtedness,
(ii) the Company's leveraged position will substantially increase its
vulnerability to adverse changes in general economic and industry conditions, as
well as to competitive pressure, and (iii) the Company's ability to obtain
additional financing for working capital, capital expenditures, acquisitions,
general corporate and other purposes may be limited. The Company's ability to
meet its debt service obligations and to reduce its total indebtedness will be
dependent upon the Company's future performance, which will be subject to
general economic conditions, industry cycles and financial, business and other
factors affecting the operations of the Company, many of which are beyond its
control. There can be no assurance that the Company's business will continue to
generate cash flow at or above current levels. If the Company is unable to
generate sufficient cash flow from operations in the future to service its debt,
it may be required, among other things, to seek additional financing in the debt
or equity markets, to refinance or restructure all or a portion of its
indebtedness, including the Notes, or to sell selected assets or reduce or delay
planned capital expenditures. There can be no assurance that any such measures
would be sufficient to enable the Company to service its debt.
RISKS OF INTERNATIONAL OPERATIONS
A major portion of Parker's operations are conducted in international
markets, including South America, the Asia Pacific region and West Africa. In
addition to the risks inherent in the drilling business, the Company's
international operations are subject to certain political, economic and other
uncertainties, including, among others, risks of war and civil disturbances,
expropriation, nationalization, termination of existing contracts, taxation
policies, foreign exchange restrictions and fluctuations and other risks arising
out of foreign governmental sovereignty over certain areas in which the Company
conducts operations. Although the Company seeks to protect against some of these
risks through insurance, insurance is not available for all types of risks or
for all areas in which the Company operates. To the extent insurance is
available for a particular risk, there can be no assurance that such insurance
will be sufficient to cover all losses that could be incurred with respect to a
particular covered risk. Losses from these factors could be material in those
countries where the Company has a significant concentration of assets.
10
<PAGE> 19
The Company's Nigerian operations are subject to certain risks relating to
political instability in Nigeria and the possibility of the promulgation of
legislation or regulations by the United States that, if adopted, could restrict
the ability of Mallard and its customers to engage in trade with and invest in
Nigeria. Since beginning operations in 1991, Mallard has not been materially
affected by political instability in Nigeria, but other rig contractors have in
recent years experienced work stoppages and delays relating to civil unrest in
Nigeria. In addition, although no legislation materially restricting United
States trade with or investment in Nigeria has been enacted to date, legislation
was introduced in the 104th Congress, which recently adjourned, that would have
restricted future trade with and investment in Nigeria. Further, the Clinton
Administration reportedly has considered imposing economic sanctions that would
restrict trade with or investments by U.S. persons in Nigeria, and consulted
with other governments about the possibility of imposing such sanctions on a
multilateral basis. If any such restrictions were to be adopted as a result of
legislative or administrative action, the Company's contract drilling operations
in Nigeria might have to be terminated or materially curtailed. In addition to
reducing or eliminating a source of revenue and income, the Company could be
required to redeploy its rigs out of Nigeria. The costs of such redeployment
might not be reimbursable, and such costs, together with the lost revenues
resulting from a termination of its Nigerian operations, could have a material
adverse effect on the Company. Revenues and operating income attributable to the
Company's Nigerian operations on a pro forma basis for the year ended August 31,
1996 were $26.7 million and $8.2 million, respectively.
EFFECTIVE SUBORDINATION
Concurrently with the sale of the Old Notes, the Company established a
Senior Credit Facility pursuant to which it has term borrowings of $100 million.
In addition, the Company has the ability to borrow up to $45 million on a
revolving credit basis under the Senior Credit Facility, subject to borrowing
base limitations. The Senior Credit Facility is secured by liens on
substantially all of the assets of the Company and the Subsidiary Guarantors.
Accordingly, the lenders under the Senior Credit Facility have claims with
respect to the assets constituting collateral for any indebtedness thereunder
that will be satisfied prior to the unsecured claims of holders of the Notes.
See "Description of Senior Credit Facility." In the event of a default on the
Notes or a bankruptcy, liquidation or reorganization of the Company, such assets
will be available to satisfy obligations with respect to the indebtedness
secured thereby before any payment therefrom could be made on the Notes. Thus,
the Notes and the Subsidiary Guarantees are effectively subordinated to claims
of the lenders under the Senior Credit Facility to the extent of such pledged
collateral. At August 31, 1996, pro forma for the Acquisitions and the related
financings, the Notes and the Subsidiary Guarantees were effectively
subordinated to $106.6 million of secured indebtedness (excluding letters of
credit) of the Company and the Subsidiary Guarantors.
OPERATING HAZARDS; UNINSURED RISKS
The Company's drilling operations are subject to various hazards inherent
in the drilling of oil and gas wells, including blowouts, reservoir damage, loss
of well control, cratering, and oil and gas well fires. Such events can result
in personal injury or death, severe damage to or destruction of equipment and
facilities, suspension of operations, and substantial damage to surrounding
areas and the property of others. The Company's offshore operations also are
subject to hazards inherent in marine operations, such as capsizings,
groundings, collisions, damage from weather, sea damage or unsound location. For
example, one of Mallard's rigs operating offshore Nigeria recently was damaged
during normal operations and will require approximately six weeks to complete
repairs. Generally, the Company obtains indemnification from its customers by
contract for certain of these risks. To the extent not transferred to customers
by contract, the Company seeks protection against such risks through insurance.
However, potential liabilities associated with oilfield casualties or losses
could arise in risk categories where no insurance has been purchased, where
claims exceed the applicable insurance coverage, or where indemnification is not
available or satisfied. The occurrence of events that are not fully insured or
the failure of a customer to meet its indemnification obligations could have a
material adverse effect on the Company. In addition, there can be no assurance
that insurance will be available or, even if available, that insurance premiums
or other costs will not rise sharply in the future.
11
<PAGE> 20
RISKS ASSOCIATED WITH ACQUISITIONS
The Mallard Acquisition and the Quail Acquisition each will require the
Company to integrate and manage businesses that are related to, but
substantially different from, Parkers's traditional land based drilling
business. No assurance can be given that the Company will be successful in
managing and incorporating such businesses into its existing operations or that
such activities will not require a disproportionate amount of management's
attention. The Company's failure to successfully incorporate the acquired
businesses into its existing operations, or the occurrence of unexpected costs
or liabilities in the acquired businesses, could have a material adverse effect
on the Company.
COMPETITION
The contract drilling industry is a highly competitive and cyclical
business characterized by high capital and maintenance costs. Drilling contracts
are generally awarded on a competitive bid basis and, while an operator may
consider factors such as quality of service and type and location of equipment
as well as the ability to provide ancillary services, price is generally the
primary factor in determining which contractor is awarded a job. The Company
believes that the market for drilling contracts will continue to be highly
competitive for the foreseeable future, particularly in land drilling markets
where there continues to be a worldwide oversupply of drilling rigs. Certain of
the Company's competitors have greater financial resources than the Company,
which may enable them to better withstand industry downturns, to compete more
effectively on the basis of price, to build new rigs or to acquire existing
rigs. There can be no assurance that the Company will be able to compete
successfully against its competitors in the future.
RISK OF UPGRADE AND REFURBISHMENT PROJECTS
The Company has plans to make significant expenditures to upgrade and
refurbish certain of its rigs. These projects are subject to the risks of delay
or cost overruns inherent in large refurbishment projects, including shortages
of materials or skilled labor, unforeseen engineering problems, work stoppages,
weather interference, unanticipated cost increases, nonavailability of necessary
equipment and inability to obtain any of the requisite permits or approvals.
Significant delays could also have a material adverse effect on the Company's
marketing plans for such rigs and could jeopardize the contracts under which the
Company plans to operate such rigs.
GOVERNMENTAL REGULATION AND ENVIRONMENTAL MATTERS
Many aspects of the Company's operations are affected by domestic and
foreign political developments and are subject to numerous domestic and foreign
governmental regulations that may relate directly or indirectly to the contract
drilling industry, including environmental and safety matters. Some of the
Company's activities take place in or near ecologically sensitive areas, such as
wetlands, beaches and inland waterways. Numerous federal and state environmental
laws regulate drilling activities and impose liability for causing pollution in
inland, coastal and offshore waters. In addition, the regulations applicable to
the Company's operations include certain regulations that control the discharge
of materials into the environment or require remediation of contamination under
certain circumstances. For example, the Company may be liable for damages and
costs incurred in connection with oil spills for which it is legally
responsible. Certain environmental laws and regulations impose "strict
liability," rendering a person liable without regard to negligence or fault on
the part of such person. Such environmental laws and regulations may expose the
Company to liability for the conduct of, or conditions caused by, others, or for
acts of the Company that were in compliance with all applicable laws at the time
such acts were performed.
The Company has made and will continue to make expenditures to comply with
environmental and safety requirements. Because the requirements imposed by such
laws and regulations are subject to change, the Company is unable to predict the
ultimate cost of compliance with such requirements. The modification of existing
foreign or domestic laws or regulations or the adoption of new laws or
regulations curtailing exploratory or development drilling for oil and gas for
economic, political, environmental or other reasons could have a material
adverse effect on the Company by limiting drilling opportunities.
12
<PAGE> 21
RESTRICTIONS IMPOSED BY LENDERS
The Senior Credit Facility and the Indenture contain a number of covenants
that will restrict the ability of the Company to dispose of assets, merge or
consolidate with another entity, incur additional indebtedness, create liens,
make capital expenditures or other investments or acquisitions and otherwise
restrict corporate activities. The Senior Credit Facility also contains
requirements that the Company maintain certain financial ratios and may restrict
the Company from prepaying the Company's other indebtedness (including the
Notes). The ability of the Company to comply with such provisions may be
affected by events that are beyond the Company's control. The breach of any of
these covenants could result in a default under the Senior Credit Facility and
the Indenture. In addition, as a result of these covenants, the ability of the
Company to respond to changing business and economic conditions and to secure
additional financing, if needed, may be significantly restricted, and the
Company may be prevented from engaging in transactions that might otherwise be
considered beneficial to the Company. See "Description of Senior Credit
Facility" and "Description of Notes."
FRAUDULENT CONVEYANCE
Various fraudulent conveyance laws enacted for the protection of creditors
may apply to the Subsidiary Guarantors' issuance of the Subsidiary Guarantees.
To the extent that a court were to find that (x) a Subsidiary Guarantee was
incurred by a Subsidiary Guarantor with intent to hinder, delay or defraud any
present or future creditor or the Subsidiary Guarantor contemplated insolvency
with a design to prefer one or more creditors to the exclusion in whole or in
part of others or (y) a Subsidiary Guarantor did not receive fair consideration
or reasonably equivalent value for issuing its Subsidiary Guarantee and such
Subsidiary Guarantor (i) was insolvent, (ii) was rendered insolvent by reason of
the issuance of such Subsidiary Guarantee, (iii) was engaged or about to engage
in a business or transaction for which the remaining assets of such Subsidiary
Guarantor constituted unreasonably small capital to carry on its business or
(iv) intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they matured, the court could avoid or subordinate
such Subsidiary Guarantee in favor of the Subsidiary Guarantor's creditors.
Among other things, a legal challenge of a Subsidiary Guarantee on fraudulent
conveyance grounds may focus on the benefits, if any, realized by the Subsidiary
Guarantor as a result of the Company's issuance of the Notes. The Indenture will
contain a savings clause, which generally will limit the obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee to the maximum amount as
will, after giving effect to all of the liabilities of such Subsidiary
Guarantor, result in such obligations not constituting a fraudulent conveyance.
To the extent a Subsidiary Guarantee of any Subsidiary Guarantor was avoided or
limited as a fraudulent conveyance or held unenforceable for any other reason,
holders of the Notes would cease to have any claim against such Subsidiary
Guarantor and would be creditors solely of the Company and any Subsidiary
Guarantor whose Subsidiary Guarantee was not avoided or held unenforceable. In
such event, the claims of the holders of the Notes against the issuer of an
invalid Subsidiary Guarantee would be subject to the prior payment of all
liabilities (including trade payables) of such Subsidiary Guarantor. There can
be no assurance that, after providing for all prior claims, there would be
sufficient assets to satisfy the claims of the holders of the Notes relating to
any avoided portions of any of the Subsidiary Guarantees.
The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the law applied in any such proceeding. Generally, however,
a Subsidiary Guarantor may be considered insolvent if the sum of its debts,
including contingent liabilities, was greater than the fair marketable value of
all of its assets at a fair valuation or if the present fair marketable value of
its assets was less than the amount that would be required to pay its probable
liability on its existing debts, including contingent liabilities, as they
become absolute and mature. The terms of the Subsidiary Guarantees will provide
that, for purposes of such limitations and the applicable fraudulent conveyance
laws, any indebtedness of a Subsidiary Guarantor incurred from time to time
pursuant to the Senior Credit Facility and secured by a perfected Lien on the
assets of such Subsidiary Guarantor (assuming, for purposes of such
determination, that the incurrence of any such indebtedness and the granting of
any such security interest did not violate any such fraudulent conveyance laws)
shall be deemed, to the extent of the value of the assets subject to such Lien,
to have been incurred prior to the incurrence by such Subsidiary Guarantor of
liability under its Subsidiary Guarantee.
13
<PAGE> 22
Based upon financial and other information, the Company and the Subsidiary
Guarantors believe that the Subsidiary Guarantees were incurred for proper
purposes and in good faith and that the Company and each Subsidiary Guarantor is
solvent and will continue to be solvent after issuing its Subsidiary Guarantee,
will have sufficient capital for carrying on its business after such issuance
and will be able to pay its debts as they mature. There can be no assurance,
however, that a court passing on such standards would agree with the Company.
See "Description of Notes -- Subsidiary Guarantees."
ABSENCE OF A PUBLIC MARKET FOR THE NOTES
The Exchange Notes will constitute a new issue of securities with no
established trading market. The Company does not intend to apply for listing of
the Exchange Notes on any securities exchange or to seek the admission thereof
to trading in the National Association of Securities Dealers Automated Quotation
System. The Initial Purchasers have informed the Company that they currently
intend to make a market in the Notes. However, they are not so obligated, and
any such market making may be discontinued at any time without notice. In
addition, any such market making activity will be subject to the limits imposed
by the Securities Act and the Exchange Act and may be limited during the
Exchange Offer or the pendency of the Shelf Registration Statement. See
"Description of Notes -- Registration Rights; Liquidated Damages." Accordingly,
no assurance can be given that an active public or other market will develop for
the Exchange Notes or as to the liquidity of or the trading market for the
Exchange Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
Untendered Old Notes not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain subject to the existing restrictions upon transfer of
such Old Notes. See "Transfer Restrictions on Old Notes." Because the Company
anticipates that most holders of Old Notes will elect to exchange such Old Notes
for Exchange Notes due to the general lack of restrictions on the resale of
Exchange Notes under the Securities Act, the Company anticipates that the
liquidity of the market for any Old Notes remaining after the consummation of
the Exchange Offer may be substantially limited. Additionally, holders (other
than Restricted Holders) of any Old Notes not tendered in the Exchange Offer
prior to the Expiration Date will not be entitled to require the Company to file
the Shelf Registration Statement and the stated interest rate on such Old Notes
will remain at its initial level of 9.75%.
14
<PAGE> 23
THE COMPANY
Parker historically has been a leading provider of land contract drilling
services on a worldwide basis to major, independent and foreign national oil
companies, with an internationally recognized expertise in deep and difficult
drilling and drilling in remote locations. As a result of the Mallard
Acquisition, Parker has diversified its capabilities beyond land-based drilling
services, giving the Company a leading presence in the Gulf of Mexico barge
drilling and workover markets and the Nigerian barge drilling market. Parker
also recently completed the acquisition of Quail, a company that provides
specialized rental equipment for drilling, workover, completion and recompletion
operations in the offshore Gulf of Mexico and Gulf Coast markets. The Quail
Acquisition adds a complementary rental tool business to the Company's contract
drilling operations, diversifying the Company's land and offshore operations
outside of its core drilling business and providing additional opportunities for
international expansion.
The Company's operations now consist of (i) barge drilling and workover,
(ii) land drilling, (iii) platform drilling and (iv) rental tools.
BARGE DRILLING AND WORKOVER
The Company's barge drilling and workover operations are concentrated in
the shallow coastal waters, also known as "transition zones," of the Gulf of
Mexico and Nigeria, where conventional jack-up rigs typically are unable to
operate.
DOMESTIC. The Company is the second-largest drilling contractor in the Gulf
of Mexico barge market, with 15 drilling barges and 15 workover barges, most of
which have been upgraded or refurbished since 1990. The barge market in the
transition zones of the Gulf of Mexico has undergone significant attrition and
consolidation in recent years, with the number of drilling rigs declining from
over 120 in the early 1980s to approximately 54 today, and the number of
competitors decreasing over the same period from more than 30 to only two
significant contractors. Drilling and workover activity has been increasing in
the Gulf of Mexico transition zones, spurred by the increased use of 3-D seismic
technology that has resulted in the identification of previously undiscovered
drilling prospects and the settlement of a dispute between the state of
Louisiana and Texaco, the region's largest leaseholder. For the year ended
December 31, 1995, Mallard's deep drilling barge rigs averaged 75% utilization
and had an average dayrate of $12,880, as compared to 82% utilization and an
average dayrate of $13,328 for the first nine months of 1996. Currently, 100% of
Mallard's deep drilling barge rigs are in operation at an average dayrate of
$15,466.
The Company is the largest barge workover contractor in the Gulf of Mexico,
with 15 rigs in its fleet. Management believes this sector of its business
offers opportunities for substantial improvement for the following reasons: (i)
oil and gas companies have recently made lease acquisitions, gathering 3-D
seismic data and exploratory drilling into a higher priority than workover
activity, and management expects workover activity to increase on a relative
basis, (ii) the shallow coastal water area of Louisiana has been an active
exploration area for a number of years and has a substantial number of producing
wells that require periodic workover, and (iii) the Company has five stacked
workover barges and therefore has the fleet capacity, upon refurbishment, to
benefit from increases in utilization and dayrates as demand improves. In June
1996, Mallard entered into an exclusive one-year alliance agreement with Texaco
to provide barge rig completion and workover services in the shallow coastal
waters of the Gulf of Mexico. The barge workover business complements the
Company's land and barge drilling businesses due to substantial customer overlap
and serves to lessen the Company's dependence on drilling activity by increasing
the Company's operations in the production phase of an oil and gas well. For the
year ended December 31, 1995, Mallard's barge workover rigs averaged 66%
utilization and had an average dayrate of $8,066 as compared to 68% utilization
and an average dayrate of $7,497 for the first nine months of 1996. Currently,
50% of Mallard's barge workover rigs are operating at an average dayrate of
$7,770.
INTERNATIONAL. The Company's international barge fleet is concentrated in
the transition zones of Nigeria, where it is the leading barge drilling
contractor. The Company is currently operating three deep drilling barges under
long-term contracts for affiliates of Shell and Chevron at an average dayrate of
$25,498. A fourth barge rig is currently being upgraded to commence operations
under a two-year contract in
15
<PAGE> 24
January 1997 for an affiliate of Chevron at an initial dayrate of $26,535. The
Company anticipates that 3-D seismic technology will stimulate increases in
demand for drilling in a number of other foreign transition zones, including
those of Venezuela, Indonesia, Tunisia, Mexico and the Caspian Sea.
LAND DRILLING
Since its inception in 1934, Parker has provided land drilling services
throughout the United States and in 46 foreign countries, making it one of the
most geographically diverse land drilling contractors in the world. Parker
specializes in the drilling of deep and difficult wells and wells in remote and
harsh locations. The Company has a total of 69 land rigs, including six rigs
acquired in the Mallard Acquisition. A total of 52 rigs currently are located in
13 foreign countries (including 23 helicopter-transportable rigs) and 17 rigs
are located in the United States. Parker's international land drilling
operations are focused primarily in South America and the Asia Pacific region,
where Parker specializes in drilling that requires equipment specially designed
to be transported by helicopter or all-terrain vehicles into remote areas such
as jungles, mountainsides or desert locations. Management believes Parker is the
dominant operator in the heli-rig market, with an estimated 75% worldwide market
share. Parker traditionally has been a pioneer in "frontier areas" and is
currently working in China, Russia, Kazakstan and Vietnam.
PLATFORM DRILLING
The Company operates six platform rigs and one shallow water workover
jackup rig which were acquired as part of the Mallard Acquisition. Three
platform rigs and the jackup rig are located in the Gulf of Mexico; two platform
rigs are located in Peru; and one platform rig is located in Thailand. One
platform rig in the Gulf of Mexico has been refurbished to incorporate a modular
self-erecting system that significantly improves the efficiency of rigging up
and rigging down on platforms. Management believes that the incorporation of
this self-erecting system on its other platform rigs could result in increased
demand for its platform rigs both in the Gulf of Mexico and internationally.
RENTAL TOOLS
As a result of the Quail Acquisition, the Company is a provider of premium
rental tools used in difficult well drilling, production and workover, primarily
to companies operating in the Gulf of Mexico and the Gulf Coast regions. The
Company's rental tools include a full line of drill pipe, drill collars, tubing,
high- and low-pressure blowout preventers and manifolds, casing scrapers and
cement and junk mills. Quail has recently entered into a contract with a major
oil company to be its preferred provider of rental tools to the onshore and
offshore Texas markets, which management believes will substantially expand its
existing operations. Management also believes that its international drilling
operations will enable the Company to expand the rental tool business
internationally as well as incorporate rental services as part of integrated
drilling or project management contracts.
THE MALLARD AND QUAIL ACQUISITIONS
On November 12, 1996, Parker acquired Mallard and certain related
operations from EVI. The consideration for the Mallard Acquisition was $338
million, consisting of $313 million in cash, subject to adjustment for changes
in Mallard's net assets prior to closing, and $25 million in shares of the
Company's Series D convertible preferred stock (the "Convertible Preferred
Stock"). The adjustments for changes in Mallard's net assets prior to closing
resulted in a reduced cash consideration of $306.9 million. The adjustments
consisted of a $1.7 million increase in Mallard's net assets and a $7.8 million
reduction to reimburse the Company for the cost of upgrading Rig No. 74. The
shares of convertible preferred stock were automatically converted into
3,056,600 shares of the Company's common stock upon approval by the stockholders
of the Company of an increase in the number of authorized shares of common stock
on December 18, 1996.
On November 12, 1996, Parker acquired all of the stock of Quail for $65
million in cash.
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<PAGE> 25
The Mallard Acquisition and the Quail Acquisition diversify the Company's
operations, which management believes will reduce the Company's earnings
volatility, and will provide Parker with an entrance into two particularly high
growth segments of the oil service industry. Additionally, management believes
that Parker, Mallard and Quail will each benefit from the following synergies:
(i) existing customer relationships and an expanded customer base; (ii)
increased utilization of equipment and inventory; and (iii) sharing of drilling
technology, expertise and personnel. The Company's management also believes that
there are significant opportunities to expand Mallard's and Quail's operations
into international markets where Parker has established operations, experience
and customer relationships. Finally, the Company may be able to use its net
operating loss carryforwards, currently $142 million, to reduce U.S. taxes
resulting from Mallard's and Quail's earnings.
PRIVATE PLACEMENT
On November 12, 1996, the Company completed the private sale to the Initial
Purchasers of $300,000,000 principal amount of the Old Notes at a price of
96.34% of the principal amount thereof in a transaction not registered under the
Securities Act in reliance upon Section 4(2) of the Securities Act. The Initial
Purchasers thereupon offered and resold the Old Notes only to qualified
institutional buyers and a limited number of institutional accredited investors
at an initial price to such purchasers of 99.215% of the principal amount
thereof. The $289.0 million net proceeds received by the Company in connection
with the sale of the Old Notes, together with borrowings of $100 million under
the Senior Credit Facility, were used to finance the cash portion of the
purchase price for the Mallard Acquisition and the Quail Acquisition and certain
related expenses.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as contemplated in this Prospectus, the Company will receive in exchange a like
principal amount of Old Notes, the terms of which are identical in all material
respects to the Exchange Notes. The Old Notes surrendered in exchange for the
Exchange Notes will be retired and canceled and cannot be reissued. Accordingly,
issuance of the Exchange Notes will not result in any change in capitalization
of the Company.
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<PAGE> 26
CAPITALIZATION
The following table sets forth as of August 31, 1996 the actual cash,
short-term debt and capitalization of Parker and the cash, short-term debt and
capitalization of the Company as adjusted to give effect to (i) the Mallard
Acquisition, (ii) the Quail Acquisition, (iii) the sale of the Old Notes and the
application of the net proceeds therefrom, (iv) the incurrence of $100 million
in term debt under the Senior Credit Facility and (v) the issuance of
Convertible Preferred Stock in connection with the Mallard Acquisition and the
automatic conversion of such shares into common stock in December 1996. This
table should be read in conjunction with the Unaudited Pro Forma Combined
Financial Statements, Management's Discussion and Analysis of Financial
Condition and Results of Operations and Parker's Consolidated Financial
Statements, including the notes thereto, included elsewhere or incorporated by
reference in this Offering Circular.
<TABLE>
<CAPTION>
AT AUGUST 31, 1996
-----------------------
ACTUAL AS ADJUSTED
-------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash, cash equivalents and other short-term investments............... $ 77,985 $ 83,877
======== ========
Current portion of long-term debt..................................... $ 584 $ 12,850
======== ========
Long-term debt:
Senior Credit Facility(1)........................................... $ -- $ 90,000
Senior Notes due 2006(2)............................................ -- 297,645
Existing debt....................................................... 2,794 3,794
-------- --------
Total long-term debt........................................ 2,794 391,439
-------- --------
Stockholders' equity:
Common Stock, $0.16 2/3 par value; 120,000,000 shares authorized;
65,327,088 shares outstanding and 68,383,688 shares outstanding,
as adjusted(3)................................................... 10,888 11,397
Additional paid-in capital.......................................... 254,955 279,446
Retained earnings (deficit)......................................... (20,338) (20,338)
Other............................................................... (1,457) (1,457)
-------- --------
Total stockholders' equity.................................. 244,048 269,048
-------- --------
Total capitalization...................................... $246,842 $660,487
======== ========
</TABLE>
- ---------------
(1) The Company has maximum availability of $45 million under the revolving
credit portion of the Senior Credit Facility, subject to borrowing base
limitations. A portion of the revolving credit facility may be used to
support letters of credit, approximately $10 million of which are
anticipated to be outstanding upon consummation of the Acquisitions. See
"Description of Senior Credit Facility."
(2)Reflects $2.4 million of original issue discount.
(3)On December 18, 1996, the shareholders of Parker approved an increase in the
number of authorized shares of common stock from 70,000,000 to 120,000,000.
Upon this approval, the Convertible Preferred Stock issued to EVI as partial
consideration for the Mallard Acquisition automatically converted into
3,056,600 shares of common stock.
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<PAGE> 27
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial information is derived
from the historical financial statements of Parker, Mallard and Quail,
incorporated by reference herein, and certain assumptions deemed appropriate by
the Company. The Unaudited Pro Forma Combined Statement of Operations for the
year ended August 31, 1996 reflects (i) the Mallard Acquisition, (ii) the Quail
Acquisition, (iii) the acquisition by Mallard of two drilling barges from Noble
Drilling Corporation ("Noble") in August 1996, (iv) the issuance of the Notes
and the application of the net proceeds therefrom, (v) borrowings of $100
million in term loans under the Senior Credit Facility, and (vi) the issuance of
$25 million in shares of convertible preferred stock, and the subsequent
conversion of such shares into 3,056,600 shares of common stock in December
1996, as if such transactions had occurred on September 1, 1995. The Unaudited
Pro Forma Combined Balance Sheet as of August 31, 1996 reflects such
transactions as if they had occurred on August 31, 1996. Such unaudited pro
forma combined information combines (i) the audited operating results and
balance sheet data for Parker for the twelve months ended and as of August 31,
1996; (ii) the unaudited operating results and balance sheet data of Mallard for
the twelve months ended and as of September 30, 1996; and (iii) the unaudited
operating results and balance sheet data of Quail for the twelve months ended
and as of August 31, 1996. The unaudited pro forma combined financial
information should be read in conjunction with the notes thereto and the
historical financial statements of the Parker, Mallard and Quail, including the
notes thereto, incorporated by reference herein.
The pro forma adjustments to give effect to the various events described
above are based upon currently available information and upon certain
assumptions that management believes are reasonable. The historical operating
results of Mallard included in the Unaudited Pro Forma Combined Financial
Statements do not reflect any allocation of general corporate, accounting, tax,
legal and other administrative costs incurred by its parent corporation. See
Note 1 of the notes to the historical financial statements of Mallard included
elsewhere herein. Management does not believe that it will be required to incur
any significant amount of additional general and administrative expense in
connection with the incorporation of Mallard's operations. The Acquisitions have
been accounted for by the Company under the purchase method of accounting and
the assets and liabilities of Mallard and Quail were recorded at their estimated
fair market values at the date of acquisition. The adjustments included in the
Unaudited Pro Forma Combined Financial Statements reflect the Company's
preliminary determination of these adjustments based upon available information.
There can be no assurance that the actual adjustments will not vary
significantly from the estimated adjustments reflected in the unaudited pro
forma combined financial information.
The unaudited pro forma combined financial information does not purport to
be indicative of the financial position or results of operations that would
actually have occurred if the transactions described had occurred as presented
in such statements or that may be obtained in the future. In addition, future
results may vary significantly from the results reflected in such statements due
to general economic conditions, oil and gas commodity prices, the demand and
prices for contract drilling services and rental tools, increases in the number
of rigs available for service, the Company's ability to successfully integrate
the operations of Mallard and Quail with its current business and several other
factors, many of which are beyond the Company's control. See "Risk Factors."
19
<PAGE> 28
PARKER DRILLING COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AUGUST 31, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF
-----------------------------------------
AUGUST 31, SEPTEMBER 30, AUGUST 31,
1996 1996 1996
---------- ------------- ----------
PARKER MALLARD QUAIL ADJUSTMENTS(1) PRO FORMA
---------- ------------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 61,738 $ 1,547 $ 287 $ 385,845(a) $ 67,630
(381,500)(b)
(287)(b)
Other short-term investments......................... 16,247 -- 533 (533)(b) 16,247
Accounts and notes receivable........................ 33,675 23,491 2,838 (1,500)(b) 58,504
Rig materials and supplies........................... 10,735 4,664 -- (1,500)(b) 13,899
Other current assets................................. 3,653 12,013 149 15,815
-------- -------- ------- --------- --------
Total current assets........................... 126,048 41,715 3,807 525 172,095
Property, plant and equipment:
Drilling equipment................................... 423,023 164,183 -- 65,667(b,c) 652,873
Rental equipment..................................... -- -- 21,311 (2,324)(b,c) 18,987
Buildings, land and improvements..................... 14,871 1,455 2,684 19,010
Other................................................ 19,153 2,164 1,993 23,310
Construction in progress............................. 18,844 -- -- 18,844
-------- -------- ------- --------- --------
475,891 167,802 25,988 63,343 733,024
Less accumulated depreciation, depletion and
amortization....................................... 351,714 27,333 16,324 (43,657)(c) 351,714
-------- -------- ------- --------- --------
Net property, plant and equipment.................... 124,177 140,469 9,664 107,000 381,310
Intangibles resulting from business acquisitions....... -- 1,578 -- 137,847(b) 137,847
(1,578)(b)
Other noncurrent assets................................ 25,734 2,154 3,863 11,800(a) 38,318
(5,233)(b)
-------- -------- ------- --------- --------
Total assets................................... $275,959 $ 185,916 $ 17,334 $ 250,361 $729,570
======== ======== ======= ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.................... $ 584 $ 2,266 $ -- $ 10,000(a) $ 12,850
Accounts payable..................................... 9,415 9,961 183 19,559
Accrued liabilities.................................. 6,911 9,327 169 7,645(b) 24,052
Accrued income taxes................................. 6,217 -- -- 6,217
-------- -------- ------- --------- --------
Total current liabilities...................... 23,127 21,554 352 17,645 62,678
Long-term debt......................................... 2,794 1,000 -- 387,645(a) 391,439
Deferred income taxes.................................. -- 14,134 -- (14,134)(b) --
Other long-term liabilities............................ 5,990 415 -- 6,405
Stockholders' equity:
Common stock......................................... 10,888 -- 13 496(b) 11,397
Capital in excess of par value....................... 254,955 123,125 9 (98,643)(b) 279,446
Retained earnings (accumulated deficit).............. (20,338) 25,688 16,959 (42,647)(b) (20,338)
Other................................................ (1,457) -- 1 (1)(b) (1,457)
-------- -------- ------- --------- --------
Total stockholders' equity..................... 244,048 148,813 16,982 (140,795) 269,048
-------- -------- ------- --------- --------
Total liabilities and stockholders' equity..... $275,959 $ 185,916 $ 17,334 $ 250,361 $729,570
======== ======== ======= ========= ========
</TABLE>
20
<PAGE> 29
PARKER DRILLING COMPANY AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE VALUES)
<TABLE>
<CAPTION>
12 MONTHS ENDED
---------------------------------------
AUGUST 31, SEPTEMBER 30, AUGUST 31,
1996 1996 1996
---------- ------------- ----------
PARKER MALLARD QUAIL ADJUSTMENTS(1) PRO FORMA
---------- ------------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C>
Revenues:
Drilling contracts.............................. $ 145,160 $87,293 $ -- $ 15,648(d) $ 248,101
Rental.......................................... -- -- 17,429 17,429
Other........................................... 11,492 -- -- 11,492
---------- ------- ------- -------- ----------
Total revenues.......................... 156,652 87,293 17,429 15,648 277,022
Operating expenses:
Drilling........................................ 100,942 51,392 -- 8,414(d) 172,289
(153)(e)
11,694(g)
Rental.......................................... -- -- 1,767 3,838(g) 5,605
Other........................................... 11,824 -- -- 11,824
Depreciation, depletion and amortization........ 23,061 11,833 2,789 3,703(c) 45,933
4,547(f)
General and administrative...................... 19,428 11,694 3,838 (15,532)(g) 19,428
---------- ------- ------- -------- ----------
Total operating expenses................ 155,255 74,919 8,394 16,511 255,079
Operating income.................................. 1,397 12,374 9,035 (863) 21,943
Other income (expense):
Interest expense................................ (135) (483) -- (37,000)(h) (39,179)
(1,561)(j)
Interest income................................. 1,642 -- 165 (165)(i) 1,642
Other........................................... 5,663 312 999 (420)(i) 6,554
---------- ------- ------- -------- ----------
Total other income (expense)............ 7,170 (171) 1,164 (39,146) (30,983)
Income (loss) before income taxes................. 8,567 12,203 10,199 (40,009) (9,040)
---------- ------- ------- -------- ----------
Income tax expense (benefit)...................... 4,514 4,899 -- (3,318)(k) 6,877
782(d)
---------- ------- ------- -------- ----------
Net income (loss)................................. $ 4,053 $ 7,304 $ 10,199 $(37,473) $ (15,917)
========== ======= ======= ======== ==========
Earnings (loss) per share, primary and fully
diluted......................................... $ 0.07 $ (0.26)
========== ==========
Weighted average shares outstanding (fully
diluted)........................................ 57,466,183 60,522,783
========== ==========
Ratio of earnings to fixed charges................ n/a(l)
</TABLE>
21
<PAGE> 30
PARKER DRILLING COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 PRO FORMA ADJUSTMENTS
(a) To record $100 million of term debt under the Senior Credit Facility,
with payments due semi-annually beginning May 1997, $297.6 million of Senior
Notes due 2006, net of $2.4 million of original issue discount, and debt
issuance costs of $11.8 million.
(b) To record the estimated purchase price allocation to the assets and
liabilities purchased from Mallard and Quail. Details of the purchase price
allocation are as follows (in thousands):
<TABLE>
<CAPTION>
MALLARD QUAIL TOTAL
-------- ------- --------
<S> <C> <C> <C>
PURCHASE PRICE
Cash................................................ $313,000 $65,000 $378,000
Common Stock(1)..................................... 25,000 -- 25,000
Fees and expenses................................... 2,500 1,000 3,500
-------- ------- --------
Total..................................... $340,500 $66,000 $406,500
======== ======= ========
PURCHASE PRICE ALLOCATION
Increase in property and equipment.................. 93,000 14,000 107,000
Adjust certain assets and liabilities:
Accounts receivable............................... (1,500) -- (1,500)
Inventory......................................... (1,500) -- (1,500)
Other noncurrent assets........................... (1,370) -- (1,370)
Accrued liabilities............................... (7,645) -- (7,645)
Eliminate stockholders' equity...................... 148,813 16,982 165,795
Eliminate assets/liabilities that are not a part of
the Acquisitions:
Cash and cash equivalents......................... -- (287) (287)
Other short-term investments...................... -- (533) (533)
Other noncurrent assets -- marketable
securities..................................... -- (3,863) (3,863)
Intangible assets................................. (1,578) -- (1,578)
Deferred income taxes............................. 14,134 -- 14,134
Cost in excess of net assets acquired............... 98,146 39,701 137,847
-------- ------- --------
$340,500 $66,000 $406,500
======== ======= ========
</TABLE>
- ---------------
(1) In December 1996, the Convertible Preferred Stock was converted into
3,056,600 shares of Common Stock, par value $0.16 2/3 per share.
(c) To adjust depreciation expense on assets acquired using the allocated
purchase price and to eliminate historical accumulated depreciation
(Mallard -- $27.3 million, Quail -- $16.3 million) on these assets. Depreciation
was calculated over 17 1/2 years for drilling rigs and seven years for tool
rental equipment using 5% salvage on both.
(d) To record the estimated historical results of operations for two barge
rigs acquired by Mallard from Noble on August 21, 1996. The two rigs are working
under a long-term contract in Nigeria at dayrates of $26,215 and $22,000,
respectively. Estimated historical results of operations were derived from the
contractual dayrates on the two rigs, estimated operating costs based on a
similar Mallard barge rig operating in Nigeria and the related Nigerian taxes.
(e) Eliminates expenses associated with Iranian operations not purchased.
(f) Amortization of excess cost over fair value of net assets acquired
over 30 years.
22
<PAGE> 31
(g) Reclassify the general and administrative expense of Mallard and Quail
to drilling expense and rental expense, respectively.
(h) To record interest expense related to $100 million term debt under the
Senior Credit Facility, assuming a rate of 7.75%, and $300 million of principal
amount of Senior Notes at a rate of 9.75%.
(i) Eliminate interest and investment income on Quail cash and investments
not acquired.
(j) Amortization of original issue discount and debt issuance costs over
the ten-year term of the Notes and the six-year term of the term loan portion of
the Senior Credit Facility.
(k) Eliminate U.S. federal income taxes allocated to Mallard by its former
parent as a result of the Company's significant net operating loss ("NOL")
carryforwards for U.S. federal income tax purposes. Also as a result of the
Company's NOL carryforwards no U.S. federal income taxes have been added for
Quail, which prior to the Quail Acquisition was an S corporation for U.S.
federal income tax purposes.
(l) For the purposes of these calculations, earnings consist of income
(loss) before income taxes plus interest expense, and fixed charges consist of
interest expense. For the 12 months ended August 31, 1996 (historical), the
Company's Pro Forma earnings were inadequate to cover fixed charges by $9.0
million.
23
<PAGE> 32
SELECTED CONSOLIDATED FINANCIAL INFORMATION
PARKER
The historical financial data presented in the table below for and at the
end of each of the fiscal years in the five-year period ended August 31, 1996
are derived from the consolidated statements of Parker audited by Coopers &
Lybrand L.L.P., independent accountants. The data presented below should be read
in conjunction with Parker's Consolidated Financial Statements, including the
notes thereto, and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------------------------------------
1992 1993 1994 1995 1996
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Drilling contracts........................ $116,082 $ 96,719 $147,480 $153,075 $145,160
Other..................................... 7,250 4,082 4,944 4,296 11,492
-------- -------- -------- -------- --------
Total revenues.................... 123,332 100,801 152,424 157,371 156,652
Operating expenses:
Drilling.................................. 74,196 69,237 114,732 113,132 100,942
Other..................................... 8,007 5,951 6,563 4,928 11,824
Depreciation, depletion and
amortization........................... 23,182 23,376 23,246 23,745 23,061
General and administrative................ 15,753 14,617 17,018 17,063 19,428
Provision for reduction in carrying value
of certain assets(1)................... 19,257 -- 19,718 -- --
-------- -------- -------- -------- --------
Total operating expenses.......... 140,395 113,181 181,277 158,868 155,255
-------- -------- -------- -------- --------
Operating income (loss)..................... (17,063) (12,380) (28,853) (1,497) 1,397
Other income (expense):
Interest income (expense), net............ 1,592 1,676 1,150 1,184 1,507
Minority interest......................... 596 149 (135) (227) --
Other(2).................................. 6,504 (469) 919 7,640 5,663
-------- -------- -------- -------- --------
Total other income................ 8,692 1,356 1,934 8,597 7,170
-------- -------- -------- -------- --------
Income (loss) before income taxes........... (8,371) (11,024) (26,919) 7,100 8,567
Income tax expense (benefit)................ 2,795 (337) 1,887 3,184 4,514
-------- -------- -------- -------- --------
Net income (loss)................. $(11,166) $(10,687) $(28,806) $ 3,916 $ 4,053
======== ======== ======== ======== ========
OTHER FINANCIAL DATA (UNAUDITED):
EBITDA(3)................................... $ 25,376 $ 10,996 $ 14,111 $ 22,248 $ 24,458
Ratio of earnings to fixed charges(4)....... n/a n/a n/a 81.7x 64.5x
Capital expenditures:
Maintenance............................... 4,036 3,552 5,444 5,133 6,646
Other..................................... 23,931 15,165 29,320 16,407 24,190
BALANCE SHEET DATA (END OF PERIOD):
Cash, cash equivalents and other short-term
investments............................... $ 37,319 $ 43,989 $ 14,471 $ 22,124 $ 77,985
Property, plant and equipment, net.......... 145,750 139,326 127,178 122,258 124,177
Total assets................................ 245,869 236,342 209,348 216,959 275,959
Total debt.................................. 932 -- -- 2,037 3,378
Total stockholders' equity.................. 210,181 207,679 180,583 186,920 244,048
</TABLE>
- ---------------
(1) In fiscal 1992, management evaluated Parker's assets and operations with the
intent of reducing future operating costs and disposing of non-performing
assets. Accordingly, Parker removed 14 rigs from its domestic fleet and two
rigs from its international fleet and recorded a $19.3 million provision for
reduction in carrying value of certain assets. In fiscal 1994, Parker
reorganized its domestic land drilling and manufacturing operations and made
the decision to dispose of certain drilling equipment inventories and other
properties. Accordingly, Parker removed 16 rigs from its domestic fleet and
recorded a $19.7 million provision for reduction in carrying value of
certain assets.
(2) Other income for the year ended August 31, 1992 included a $4.0 million gain
on settlement and $2.6 million of gains on the sales of assets. Other income
for the years ended August 31, 1995 and 1996 included $6.4 million and $5.4
million, respectively, of gains on the sales of assets.
(3) EBITDA represents operating income (loss) before depreciation, depletion and
amortization and provision for reduction in carrying value of certain
assets. EBITDA is frequently used by securities analysts and is presented
here to provide additional information about the Company's operations.
EBITDA is not a measurement presented in accordance with generally accepted
accounting principles. EBITDA should not be considered in isolation or as a
substitute for net income, cash flow provided by operating activities or
other income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's profitability
or liquidity.
(4) For purposes of these calculations, earnings consist of income (loss) before
income taxes plus interest expense and fixed charges consist of interest
expense. Earnings were not sufficient during 1992, 1993 and 1994 to cover
fixed charges. The deficiencies were: 1992 -- $8.4 million, 1993 -- $11.0
million and 1994 -- $26.9 million.
24
<PAGE> 33
MALLARD
The following selected historical statement of operations data reflects the
operations of the Mallard Bay Drilling division of EVI for each of the three
years ended December 31, 1995, and the nine-month periods ended September 30,
1995 and 1996. The data for the nine months ended September 30, 1996 is not
necessarily indicative of results that may be expected for the full year. The
data for the nine-month periods ended September 30, 1995 and 1996 is unaudited
and subject to normal year-end, recurring adjustments. This information should
be read in conjunction with Mallard's Combined Financial Statements, including
the notes thereto, incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------- -------------------
1993 1994 1995 1995 1996
------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................. $74,379 $ 63,252 $ 79,912 $59,540 $ 66,921
Costs and expenses:
Cost of sales......................... 55,201 41,236 57,063 42,279 48,441
Selling, general and
administrative(1)................... 7,381 6,185 8,374 5,448 8,768
------- -------- -------- ------- --------
Operating income......................... 11,797 15,831(2) 14,475 11,813 9,712
Other income (expense):
Interest income (expense), net........ 112 (162) (339) (152) (296)
Other income (expense), net........... 216 266 (107) (311) 108
Income before income taxes............... 12,125 15,935 14,029 11,350 9,524
Provision for income taxes............... 4,268 5,601 5,320 4,247 3,799
------- -------- -------- ------- --------
Net income............................... $ 7,857 $ 10,334 $ 8,709 $ 7,103 $ 5,725
======= ======== ======== ======= ========
OTHER FINANCIAL DATA (UNAUDITED):
EBITDA(3)................................ $16,178 $ 20,702 $ 22,852 $17,436 $ 18,791
Capital expenditures:
Maintenance........................... 1,350 3,581 2,856 4,776 7,637
Other................................. 3,118 8,157 20,042 5,822 13,778
</TABLE>
- ---------------
(1) The historical operating results of Mallard do not reflect any allocation of
general corporate, accounting, tax, legal and other administrative costs
incurred by its parent corporation in that such costs are not considered to
be direct costs relating to the operations of Mallard or variable costs
based on the operations of Mallard.
(2) Operating income in 1994 included an insurance settlement with respect to
the termination of its contract with the National Iranian Oil Company
("NIOC") which increased operating income by $4.8 million and was reduced by
operating losses of $2.6 million relating to the Iranian operation for 1994.
(3) EBITDA represents operating income (loss) before depreciation, depletion and
amortization. EBITDA is frequently used by securities analysts and is
presented here to provide additional information about Mallard's operations.
EBITDA is not a measurement presented in accordance with generally accepted
accounting principles. EBITDA should not be considered in isolation or as a
substitute for net income, cash flow provided by operating activities or
other income or cash flow data prepared in accordance with generally
accepted accounting principles or as a measure of a company's profitability
or liquidity.
25
<PAGE> 34
QUAIL
The following selected historical financial data for Quail for each of the
three years ended December 31, 1995, and the unaudited financial information for
the eight-month periods ended August 31, 1995 and 1996, are derived from Quail's
historical financial statements. The data for the eight months ended August 31,
1996 is not necessarily indicative of results that may be expected for the full
year. The financial information for the eight-month periods ended August 31,
1995 and 1996 is unaudited and is subject to normal year-end, recurring
adjustments. This information should be read in conjunction with Quail's
historical financial statements, including the notes thereto, incorporated by
reference in this Prospectus.
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED DECEMBER 31, ENDED AUGUST 31,
----------------------------- -----------------
1993 1994 1995 1995 1996
------- ------- ------- ------ -------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Equipment rental revenues..................... $10,457 $10,838 $13,883 $8,283 $11,829
Expenses:
Cost of rentals............................. 1,725 1,137 1,348 814 1,234
Selling, general and administrative
expenses................................. 3,351 3,356 3,342 2,050 2,546
Depreciation................................ 1,644 1,769 2,188 1,200 1,800
------- ------- ------- ------ -------
6,720 6,262 6,878 4,064 5,580
------- ------- ------- ------ -------
Operating income.............................. 3,737 4,576 7,005 4,219 6,249
------- ------- ------- ------ -------
Other income:
Gain on sales of property and equipment..... 65 387 458 203 243
Other investment income (1)................. 499 713 320 298 531
Other....................................... 4 8 61 7 59
------- ------- ------- ------ -------
568 1,108 839 508 833
------- ------- ------- ------ -------
Net earnings(2)..................... $ 4,305 $ 5,684 $ 7,844 $4,727 $ 7,082
======= ======= ======= ====== =======
OTHER FINANCIAL DATA:
EBITDA(3)..................................... $ 5,446 $ 6,732 $ 9,651 $5,622 $ 8,292
Capital expenditures.......................... 2,415 2,458 3,160 1,746 3,745
</TABLE>
- ---------------
(1) Parker did not acquire any of Quail's investment assets in the Quail
Acquisition.
(2) During the periods presented, Quail has been classified as an S corporation
for federal income tax purposes and, therefore, no provision for income
taxes is reflected in Quail's financial statements.
(3) EBITDA represents operating income (loss) before depreciation, depletion and
amortization plus gains on sales of property and equipment. EBITDA is
frequently used by securities analysts and is presented here to provide
additional information about Quail's operations. EBITDA is not a measurement
presented in accordance with generally accepted accounting principles.
EBITDA should not be considered in isolation or as a substitute for net
income, cash flow provided by operating activities or other income or cash
flow data prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability or liquidity.
26
<PAGE> 35
THE EXCHANGE OFFER
GENERAL
In connection with the sale of the Old Notes, the purchasers thereof became
entitled to the benefits of certain registration rights under the Registration
Rights Agreement. The Exchange Notes are being offered hereunder in order to
satisfy the obligations of the Company under the Registration Rights Agreement.
See "Description of Notes -- Registration Rights; Liquidated Damages."
For each $1,000 principal amount of Old Notes surrendered to the Company
pursuant to the Exchange Offer, the holder of such Old Notes will receive $1,000
principal amount of Exchange Notes. Upon the terms and subject to the conditions
set forth in this Prospectus and in the accompanying Letter of Transmittal, the
Company will accept all Old Notes properly tendered prior to 5:00 p.m., New York
City time, on the Expiration Date. Holders may tender some or all of their Old
Notes pursuant to the Exchange Offer in integral multiples of $1,000 principal
amount.
Under existing interpretations of the staff of the SEC, including Exxon
Capital Holdings Corporation, SEC No-Action Letter (available April 13, 1989),
the Morgan Stanley Letter and Mary Kay Cosmetics, Inc., SEC No-Action Letter
(available June 5, 1991), the Company believes that the Exchange Notes would in
general be freely transferable after the Exchange Offer without further
registration under the Securities Act by the respective holders thereof (other
than a "Restricted Holder," being (i) a broker-dealer who purchased Old Notes
exchanged for such Exchange Notes directly from the Company to resell pursuant
to Rule 144A or any other available exemption under the Securities Act or (ii) a
person that is an affiliate of the Company within the meaning of Rule 405 under
the Securities Act), without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such holder's business and such holder is not
participating in, and has no arrangement with any person to participate in, the
distribution (within the meaning of the Securities Act) of such Exchange Notes.
Eligible holders wishing to accept the Exchange Offer must represent to the
Company that such conditions have been met. Any holder of Old Notes who tenders
in the Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes could not rely on the interpretation by the staff of the SEC
enunciated in the Morgan Stanley Letter and similar no-action letters, and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
Each holder of Old Notes who wishes to exchange Old Notes for Exchange
Notes in the Exchange Offer will be required to make certain representations,
including that (i) it is neither an affiliate of the Company nor a broker-dealer
tendering Old Notes acquired directly from the Company for its own account, (ii)
any Exchange Notes to be received by it are being acquired in the ordinary
course of its business and (iii) it is not participating in, and it has no
arrangement with any person to participate in, the distribution (within the
meaning of the Securities Act) of the Exchange Notes. In addition, in connection
with any resales of Exchange Notes, any broker-dealer (a "Participating
Broker-Dealer") who acquired Old Notes for its own account as a result of
market-making activities or other trading activities must acknowledge that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes. The staff of the SEC has
taken the position in no-action letters issued to third parties including
Shearman & Sterling, SEC No-Action Letter (available July 2, 1993), that
Participating Broker-Dealers may fulfill their prospectus delivery requirements
with respect to the Exchange Notes (other than a resale of an unsold allotment
from the original sale of Old Notes) with this Prospectus, as it may be amended
or supplemented from time to time. Under the Registration Rights Agreement, the
Company is required to allow Participating Broker-Dealers to use this
Prospectus, as it may be amended or supplemented from time to time, in
connection with the resale of such Exchange Notes. See "Plan of Distribution."
The Exchange Offer shall be deemed to have been consummated upon the
earlier to occur of (i) the Company having exchanged Exchange Notes for all
outstanding Old Notes (other than Old Notes held by a Restricted Holder)
pursuant to the Exchange Offer and (ii) the Company having exchanged, pursuant
to the Exchange Offer, Exchange Notes for all Old Notes that have been tendered
and not withdrawn on the date that is 30 days following the commencement of the
Exchange Offer. In such event, holders of Old Notes
27
<PAGE> 36
seeking liquidity in their investment would have to rely on exemptions to
registration requirements under the securities laws, including the Securities
Act.
As of the date of this Prospectus, $300,000,000 principal amount of Old
Notes are issued and outstanding. In connection with the issuance of the Old
Notes, the Company arranged for the Old Notes to be eligible for trading in the
Private Offering, Resale and Trading through Automated Linkages (PORTAL) Market,
the National Association of Securities Dealers' screen based, automated market
trading of securities eligible for resale under Rule 144A.
The Company shall be deemed to have accepted for exchange validly tendered
Old Notes when, as and if the Company has given oral or written notice thereof
to the Exchange Agent. See "-- Exchange Agent." The Exchange Agent will act as
agent for the tendering holders of Old Notes for the purpose of receiving
Exchange Notes from the Company and delivering Exchange Notes to such holders.
If any tendered Old Notes are not accepted for exchange because of an invalid
tender or the occurrence of certain other events set forth herein, certificates
for any such unaccepted Old Notes will be returned, without expense, to the
tendering holder thereof as promptly as practicable after the Expiration Date.
Holders of Old Notes who tender in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes, in connection with the Exchange Offer. See
"-- Fees and Expenses."
This Prospectus, together with the accompanying Letter of Transmittal, is
being sent to all registered holders as of the date of this Prospectus.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean February , 1997 unless the Company,
in its sole discretion, extends the Exchange Offer, in which case the term
"Expiration Date" shall mean the latest date to which the Exchange Offer is
extended. In order to extend the Expiration Date, the Company will notify the
Exchange Agent of any extension by oral or written notice and will mail to the
record holders of Old Notes an announcement thereof, each prior to 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Such announcement may state that the Company is extending the
Exchange Offer for a specified period of time. The Company reserves the right
(i) to delay acceptance of any Old Notes, to extend the Exchange Offer or to
terminate the Exchange Offer and to refuse to accept Old Notes not previously
accepted, if any of the conditions set forth herein under "-- Termination" shall
have occurred and shall not have been waived by the Company (if permitted to be
waived by the Company), by giving oral or written notice of such delay,
extension or termination to the Exchange Agent, and (ii) to amend the terms of
the Exchange Offer in any manner deemed by it to be advantageous to the holders
of the Old Notes. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof. If the Exchange Offer is amended in a manner determined by the Company
to constitute a material change, the Company will promptly disclose such
amendment in a manner reasonably calculated to inform the holders of the Old
Notes of such amendment. Without limiting the manner in which the Company may
choose to make public announcements of any delay in acceptance, extension,
termination or amendment of the Exchange Offer, the Company shall have no
obligation to publish, advertise, or otherwise communicate any such public
announcement, other than by making a timely release to the Dow Jones News
Service.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will bear interest payable semi-annually on May 15 and
November 15 of each year, commencing May 15, 1997. Holders of Exchange Notes of
record on November 1, 1996 will receive interest on May 15, 1997 from the date
of issuance of the Exchange Notes, plus an amount equal to the accrued interest
on the Old Notes from the date of issuance of the Old Notes, November 12, 1996,
to the date of exchange thereof. Consequently, assuming the Exchange Offer is
consummated prior to the record date in respect of the May 15, 1997 interest
payment for the Old Notes, holders who exchange their Old Notes for
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<PAGE> 37
Exchange Notes will receive the same interest payment on May 15, 1997 that they
would have received had they not accepted the Exchange Offer. Interest on the
Old Notes accepted for exchange will cease to accrue upon issuance of the
Exchange Notes.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Old
Notes and any other required documents, to the Exchange Agent prior to 5:00
p.m., New York City time, on the Expiration Date. The tender by a holder of Old
Notes will constitute an agreement between such holder and the Company in
accordance with the terms and subject to the conditions set forth herein and in
the Letter of Transmittal. Delivery of all documents must be made to the
Exchange Agent at its address set forth herein. Holders may also request that
their respective brokers, dealers, commercial banks, trust companies or nominees
effect such tender for such holders. The method of delivery of Old Notes and the
Letter of Transmittal and all other required documents to the Exchange Agent is
at the election and risk of the holders. Instead of delivery by mail, it is
recommended that holders use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. No Letter of
Transmittal or Old Notes should be sent to the Company. Only a holder of Old
Notes may tender such Old Notes in the Exchange Offer. The term "holder" with
respect to the Exchange Offer means any person in whose name Old Notes are
registered on the books of the Company or any other person who has obtained a
properly completed stock power from the registered holder.
Any beneficial holder whose Old Notes are registered in the name of such
holder's broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact such registered holder promptly and instruct
such registered holder to tender on behalf of the registered holder. If such
beneficial holder wishes to tender directly, such beneficial holder must, prior
to completing and executing the Letter of Transmittal and delivering his Old
Notes, either make appropriate arrangements to register ownership of the Old
Notes in such holder's name or obtain a properly completed bond power from the
registered holder. The transfer of record ownership may take considerable time.
If the Letter of Transmittal is signed by the record holder(s) of the Old Notes
tendered thereby, the signature must correspond with the name(s) written on the
face of the Old Notes without alteration, enlargement or any change whatsoever.
If the Letter of Transmittal is signed by a participant in DTC, the signature
must correspond with the name as it appears on the security position listing as
the holder of the Old Notes. Signatures on a Letter of Transmittal or a notice
of withdrawal, as the case may be, must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution")
unless the Old Notes tendered pursuant thereto are tendered (i) by a registered
holder (or by a participant in DTC whose name appears on a security position
listing as the owner) who has not completed the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
and the Exchange Notes are being issued directly to such registered holder (or
deposited into the participant's account at DTC) or (ii) for the account of an
Eligible Institution. If the Letter of Transmittal is signed by a person other
than the registered holder of any Old Notes listed therein, such Old Notes must
be endorsed or accompanied by appropriate bond powers which authorize such
person to tender the Old Notes on behalf of the registered holder, in either
case signed as the name of the registered holder or holders appears on the Old
Notes. If the Letter of Transmittal or any Old Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
A tender will be deemed to have been received as of the date when the
tendering holder's duly signed Letter of Transmittal accompanied by Old Notes
(or a timely confirmation received of a book-entry transfer of Old Notes into
the Exchange Agent's account at DTC) or a Notice of Guaranteed Delivery from an
29
<PAGE> 38
Eligible Institution is received by the Exchange Agent. Issuances of Exchange
Notes in exchange for Old Notes tendered pursuant to a Notice of Guaranteed
Delivery by an Eligible Institution will be made only against delivery of the
Letter of Transmittal (and any other required documents) and the tendered Old
Notes (or a timely confirmation received of a book-entry transfer of Old Notes
into the Exchange Agent's account at DTC) with the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Old Notes will be determined
by the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old Notes
not properly tendered or any Old Notes the Company's acceptance of which would,
in the opinion of the Company or its counsel, be unlawful. The Company also
reserves the absolute right to waive any conditions of the Exchange Offer or
defects or irregularities in tender as to particular Old Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions in the Letter of Transmittal) shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as the Company shall determine.
Neither the Company, the Exchange Agent nor any other person shall be under any
duty to give notification of defects or irregularities with respect to tenders
of Old Notes nor shall any of them incur any liability for failure to give such
notification. Tenders of Old Notes will not be deemed to have been made until
such irregularities have been cured or waived. Any Old Notes received by the
Exchange Agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned without cost by
the Exchange Agent to the tendering holder of such Old Notes unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date. In addition, the Company reserves the right in its sole
discretion to (i) purchase or make offers for any Old Notes that remain
outstanding subsequent to the Expiration Date, or, as set forth under
"-- Termination," to terminate the Exchange Offer and (ii) to the extent
permitted by applicable law, purchase Old Notes in the open market, in privately
negotiated transactions or otherwise. The terms of any such purchases or offers
may differ from the terms of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will establish an account with respect to the Old Notes
at DTC within two business days after the date of this Prospectus, and any
financial institution which is a participant in DTC may make book-entry delivery
of the Old Notes by causing DTC to transfer such Old Notes into the Exchange
Agent's account in accordance with DTC's procedure for such transfer. Although
delivery of Old Notes may be effected through book-entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal, with any required
signature guarantees and any other required documents, must in any case be
transmitted to and received by the Exchange Agent on or prior to the Expiration
Date at one of its addresses set forth below under "-- Exchange Agent", or the
guaranteed delivery procedure described below must be complied with. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. All
references in this Prospectus to deposit or delivery of Old Notes shall be
deemed to include DTC's book-entry delivery method.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and whose Old Notes are not
immediately available or who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date, or who cannot complete the procedure for book-entry transfer on
a timely basis, may effect a tender if: (i) the tender is made by or through an
Eligible Institution; (ii) prior to the Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder of the Old Notes, the
registration number or numbers of such Old Notes (if applicable), and the total
principal amount of Old Notes tendered, stating that the tender is being made
thereby and guaranteeing that, within five business days after the Expiration
Date, the Letter of Transmittal, together with the Old Notes in proper form for
transfer (or a confirmation of a book-entry transfer into the Exchange Agent's
account at DTC) and any other documents required by the Letter of Transmittal,
will be
30
<PAGE> 39
deposited by the Eligible Institution with the Exchange Agent; and (iii) such
properly completed and executed Letter of Transmittal, together with the
certificate(s) representing all tendered Old Notes in proper form for transfer
(or a confirmation of such a book-entry transfer) and all other documents
required by the Letter of Transmittal are received by the Exchange Agent within
five business days after the Expiration Date.
TERMS AND CONDITIONS OF THE LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, certain terms and
conditions which are summarized below and are part of the Exchange Offer.
Each holder who participates in the Exchange Offer will be required to
represent that any Exchange Notes received by it will be acquired in the
ordinary course of its business, that such holder is not participating in, and
has no arrangement with any person to participate in, the distribution (within
the meaning of the Securities Act) of the Exchange Notes, and that such holder
is not a Restricted Holder.
Old Notes tendered in exchange for Exchange Notes (or a timely confirmation
of a book-entry transfer of such Old Notes into the Exchange Agent's account at
DTC) must be received by the Exchange Agent, with the Letter of Transmittal and
any other required documents, by the Expiration Date or within the time periods
set forth above pursuant to a Notice of Guaranteed Delivery from an Eligible
Institution. Each holder tendering the Old Notes for exchange sells, assigns and
transfers the Old Notes to the Exchange Agent, as agent of the Company, and
irrevocably constitutes and appoints the Exchange Agent as the holder's agent
and attorney-in-fact to cause the Old Notes to be transferred and exchanged. The
holder warrants that it has full power and authority to tender, exchange, sell,
assign and transfer the Old Notes and to acquire the Exchange Notes issuable
upon the exchange of such tendered Old Notes, that the Exchange Agent, as agent
of the Company, will acquire good and unencumbered title to the tendered Old
Notes, free and clear of all liens, restrictions, charges and encumbrances, and
that the Old Notes tendered for exchange are not subject to any adverse claims
when accepted by the Exchange Agent, as agent of the Company. The holder also
warrants and agrees that it will, upon request, execute and deliver any
additional documents deemed by the Company or the Exchange Agent to be necessary
or desirable to complete the exchange, sale, assignment and transfer of the Old
Notes. All authority conferred or agreed to be conferred in the Letter of
Transmittal by the holder will survive the death, incapacity or dissolution of
the holder and any obligation of the holder shall be binding upon the heirs,
personal representatives, successors and assigns of such holder.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the business day prior to
the Expiration Date, unless previously accepted for exchange. To withdraw a
tender of Old Notes in the Exchange Offer, a written or facsimile transmission
notice of withdrawal must be received by the Exchange Agent at its address set
forth herein prior to 5:00 p.m., New York City time, on the business day prior
to the Expiration Date and prior to acceptance for exchange thereof by the
Company. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify
the Old Notes to be withdrawn (including, if applicable, the registration number
or numbers and total principal amount of such Old Notes), (iii) be signed by the
Depositor in the same manner as the original signature on the Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
permit the Trustee with respect to the Old Notes to register the transfer of
such Old Notes into the name of the Depositor withdrawing the tender, (iv)
specify the name in which any such Old Notes are to be registered, if different
from that of the Depositor and (v) if applicable because the Old Notes have been
tendered pursuant to the book-entry procedures, specify the name and number of
the participant's account at DTC to be credited, if different than that of the
Depositor. All questions as to the validity, form and eligibility (including
time of receipt) of such withdrawal notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
Exchange Offer and no Exchange Notes will be issued with respect thereto unless
the Old Notes so withdrawn are validly retendered. Any Old Notes which have been
tendered but which are not accepted for exchange will be returned to the holder
thereof without
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<PAGE> 40
cost to such holder as soon as practicable after withdrawal, rejection of tender
or termination of the Exchange Offer. Properly withdrawn Old Notes may be
retendered by following one of the procedures described above under
"-- Procedures for Tendering" at any time prior to the Expiration Date.
TERMINATION
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange any Old Notes not theretofore accepted for
exchange, and may terminate the Exchange Offer if it determines that the
Exchange Offer violates any applicable law or interpretation of the staff of the
SEC.
If the Company determines that it may terminate the Exchange Offer, as set
forth above, the Company may (i) refuse to accept any Old Notes and return any
Old Notes that have been tendered to the holders thereof, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the Expiration of the
Exchange Offer, subject to the rights of such holders of tendered Old Notes to
withdraw their tendered Old Notes or (iii) waive such termination event with
respect to the Exchange Offer and accept all properly tendered Old Notes that
have not been withdrawn. If such waiver constitutes a material change in the
Exchange Offer, the Company will disclose such change by means of a supplement
to this Prospectus that will be distributed to each registered holder of Old
Notes, and the Company will extend the Exchange Offer for a period of five to
ten business days, depending upon the significance of the waiver and the manner
of disclosure to the registered holders of the Old Notes, if the Exchange Offer
would otherwise expire during such period. Holders of Old Notes will have
certain rights against the Company under the Registration Rights Agreement
should the Company fail to consummate the Exchange Offer.
EXCHANGE AGENT
Texas Commerce Bank National Association has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance and requests
for additional copies of this Prospectus or of the Letter of Transmittal should
be directed to the Exchange Agent addressed as follows:
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Courier:
Texas Commerce Bank National Texas Commerce Bank National
Association Association
ATTN: Frank Ivins -- Registered Bond ATTN: Frank Ivins -- Registered Bond
Events -- Personal & Confidential Events -- Personal & Confidential
P.O. Box 2320 1201 Main Street, 18th Floor
Dallas, TX 75221-2320 Dallas, TX 75202
Facsimile Transmission: (214) 672-5746
Confirm by Telephone: (800) 275-2048
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders pursuant to the Exchange Offer will be
borne by the Company. The principal solicitation for tenders pursuant to the
Exchange Offer is being made by mail. Additional solicitations may be made by
officers and regular employees of the Company and its affiliates in person, by
telegraph or telephone. The Company will not make any payments to brokers,
dealers or other persons soliciting acceptances of the Exchange Offer. The
Company, however, will pay the Exchange Agent reasonable and customary fees for
its services and will reimburse the Exchange Agent for its reasonable out-
of-pocket expenses in connection therewith. The Company may also pay brokerage
houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus,
Letters of Transmittal and related documents to the beneficial owners of the Old
Notes and in handling or forwarding tenders for exchange.
The other expenses incurred in connection with the Exchange Offer,
including fees and expenses of the Exchange Agent and Trustee and accounting and
legal fees, will be paid by the Company. The Company will
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<PAGE> 41
pay all transfer taxes, if any, applicable to the exchange of Old Notes pursuant
to the Exchange Offer. If, however, Exchange Notes or Old Notes not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered, or if tendered Old Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
Exchange Offer, then the amount of any such transfer taxes (whether imposed on
the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption therefrom
is not submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
ACCOUNTING TREATMENT
No gain or loss for accounting purposes will be recognized by the Company
upon the consummation of the Exchange Offer. The expenses of the Exchange Offer
will be amortized by the Company over the term of the Exchange Notes under
generally accepted accounting principles.
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<PAGE> 42
DESCRIPTION OF SENIOR CREDIT FACILITY
The Company has established the Senior Credit Facility with ING and a
syndicate of financial institutions (the "Lenders"), which consists of a $100
million term loan and a $45 million revolving credit facility. The proceeds of
the term loan were used to pay a portion of the costs of the Acquisitions. The
term loan bears interest, at the option of the Company, at prime to prime plus
0.50% or at 1.75% to 2.25% above the one-, two-, three-and six-month
reserve-adjusted LIBOR rate, depending on the Company's Debt-to-Capital Ratio
(as defined), and matures on November 30, 2002. The interest rates will increase
to the extent Liquidated Damages are payable on the Old Notes. Installments of
principal and interest are payable quarterly in an amount that provides for the
retirement of $10 million in fiscal 1997, $14 million in fiscal 1998, $12
million in each of fiscal 1999 through 2002, with a final payment of $28 million
due at maturity. The term loan will have no prepayment penalty, will be
guaranteed by the principal subsidiaries of Parker and will be secured by
substantially all of the assets of the Company and the assets and stock of the
Subsidiary Guarantors. The term loan contains customary representations and
warranties and will restrict the Company's ability to, among other things, incur
indebtedness, merge or sell assets, pay dividends or other distributions, make
investments and capital expenditures, and engage in transactions with
affiliates. The term loan also requires the Company to maintain a consolidated
current ratio of not less than 1 to 1, maintain a consolidated Cash Flow
Coverage Ratio (as defined therein) of 1.25 to 1 prior to March 1, 1998 and 1.4
to 1 thereafter, and maintain a consolidated Debt-to-Capital Ratio (as defined
therein) of not greater than 65% prior to September 1, 1998 and not greater than
60% thereafter.
The revolving credit facility will be used for general corporate purposes,
including capital expenditures for rig refurbishments and upgrades, working
capital and standby letters of credit. Availability under the revolving credit
facility will be subject to certain borrowing base limitations based on eligible
accounts receivable. All advances to the Company under the revolving credit
facility will bear interest, at the option of the Company, at prime to prime
plus 0.50% or at 1.75% to 2.25% above the one-, two-, three- and six-month
reserve-adjusted LIBOR rate, depending on the percentage of the credit used. The
revolving credit facility will also be guaranteed by the principal subsidiaries
of Parker, will be secured by substantially all of the assets of the Company and
the stock and assets of the Subsidiary Guarantors, and will contain
substantially the same representations, warranties and covenants as are
contained in the term loan. The revolving credit facility matures on December
31, 1998.
The Company is obligated to pay the Lenders certain fees, including (i) an
arrangement fee of 1.25% of the term loan facility upon closing of the term loan
facility, (ii) a commitment fee equal to 0.375% per annum on the average daily
unadvanced portion of the commitment on the revolving credit facility, (iii) an
arrangement fee equal to 1.125% of the revolving credit facility at closing, and
(iv) certain fees for issuance of letters of credit.
DESCRIPTION OF NOTES
GENERAL
The Exchange Notes will be issued, and the Old Notes were issued, pursuant
to the Indenture between the Company and Texas Commerce Bank National
Association, as trustee (the "Trustee"), dated November 12, 1996. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the Trust Indenture Act for a statement
thereof. The following summary of certain provisions of the Indenture does not
purport to be complete and is qualified in its entirety by reference to the
Indenture, including the definitions therein of certain terms used below, which
is incorporated herein by reference. The Indenture and the Registration Rights
Agreement are exhibits to the Registration Statement. The definitions of certain
terms used in the following summary are set forth below under "-- Certain
Definitions."
As used below in this "Description of Notes," the "Company" means Parker
Drilling Company, but not any of its Subsidiaries.
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<PAGE> 43
The Notes will rank senior in right of payment to all Subordinated
Indebtedness of the Company issued in the future, if any. The Notes will rank
pari passu in right of payment with all senior Indebtedness of the Company,
including borrowings under the Senior Credit Facility. However, the Notes will
be unsecured obligations of the Company and the borrowings under the Senior
Credit Facility will be secured by Liens on substantially all of the assets of
the Company and its Subsidiaries. As a result, the Indebtedness under the Senior
Credit Facility will effectively rank senior to the Notes to the extent of the
security therefor. The Notes will be unconditionally guaranteed on a senior
unsecured basis by the Subsidiary Guarantors. See "-- Subsidiary Guarantees."
As of the date of the Indenture, all of the Company's Significant
Subsidiaries will be Restricted Subsidiaries. However, certain of the Company's
other Subsidiaries will be designated as Unrestricted Subsidiaries at the time
the Indenture is executed. At August 31, 1996, such Unrestricted Subsidiaries
had total assets of approximately $14.3 million. In addition, subject to the
requirements of the Indenture, the Company will be able to designate other
current or future Subsidiaries as Unrestricted Subsidiaries. Unrestricted
Subsidiaries will not be subject to the restrictive covenants set forth in the
Indenture.
Any Old Notes that remain outstanding after the completion of the Exchange
Offer, together with the Exchange Notes issued in connection with the Exchange
Offer, will be treated as a single class of securities under the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The Notes will be limited in aggregate principal amount to $300 million and
will mature on November 15, 2006. Interest on the Notes will accrue at the rate
of 9 3/4% per annum and will be payable semi-annually in arrears on November 15
and May 15 commencing on May 15, 1997, to Holders of record on the immediately
preceding November 1 and May 1. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of original issuance. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months. The Company will be obligated to
pay Liquidated Damages on the Old Notes if it fails to satisfy certain
provisions of the Registration Rights Agreement. See "-- Registration Rights;
Liquidated Damages." Principal, premium, if any, and interest and Liquidated
Damages on the Notes will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York or in the case
of Notes not in book-entry form, at the option of the Company, payment of
interest and Liquidated Damages may be made by check mailed to the Holders of
the Notes at their respective addresses set forth in the register of Holders of
Notes; provided that all payments with respect to Notes in book-entry form, and
with respect to Notes in certificated form, the Holders of which have given wire
transfer instructions to the Company, will be required to be made by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof. See "-- Book-Entry, Delivery and Form." Until otherwise designated by
the Company, the Company's office or agency in New York will be the office of
the Trustee maintained for such purpose. The Notes will be issued in
denominations of $1,000 and integral multiples thereof.
OPTIONAL REDEMPTION
The Notes will not be redeemable at the Company's option prior to November
15, 2001. Thereafter, the Notes will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon
to the applicable redemption date, if redeemed during the twelve-month period
beginning on November 15, of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
----------------------------------------------------------------- --------
<S> <C>
2001............................................................. 104.875%
2002............................................................. 103.250%
2003............................................................. 101.625%
2004 and thereafter.............................................. 100.000%
</TABLE>
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<PAGE> 44
Notwithstanding the foregoing, at any time on or prior to November 15,
1999, the Company may redeem up to an aggregate of $105.0 million principal
amount of Notes at a redemption price of 109.75% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages thereon to the
redemption date, with the net proceeds of a Public Equity Offering; provided
that at least $195.0 million in aggregate principal amount of Notes remain
outstanding immediately after the occurrence of such redemption; and, provided,
further, that such redemption shall occur within 60 days of the date of the
closing of such Public Equity Offering.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee on a pro rata basis, by lot or
by such method as the Trustee shall deem fair and appropriate; provided that no
Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall
be mailed by first class mail at least 30 but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the redemption date, interest
ceases to accrue on Notes or portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "-- Repurchase at the Option of Holders,"
the Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
SUBSIDIARY GUARANTEES
Each of the Company's Significant Subsidiaries (other than any Exempt
Foreign Subsidiary, as designated by the Company) on the Issue Date and each
other Restricted Subsidiary that provides a guarantee under the Senior Credit
Facility will become a Subsidiary Guarantor under the Indenture. Each Subsidiary
Guarantor will unconditionally guarantee on a senior basis, jointly and
severally, the full and prompt performance of the Company's obligations under
the Indenture and the Notes, including the payment of principal and interest on
the Notes. The obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee will be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Subsidiary Guarantor and
after giving effect to any collections from or payments made by or on behalf of
any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under the Indenture, result in the obligations of such
Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law. The
terms of the Subsidiary Guarantees will provide that, for purposes of such
limitations and the applicable fraudulent conveyance laws, any indebtedness of a
Subsidiary Guarantor incurred from time to time pursuant to the Senior Credit
Facility and secured by a perfected Lien on the assets of such Subsidiary
Guarantor (assuming, for purposes of such determination, that the incurrence of
any such indebtedness and the granting of any such security interest did not
violate any such fraudulent conveyance laws) shall be deemed, to the extent of
the value of the assets subject to such Lien, to have been incurred prior to the
incurrence by such Subsidiary Guarantor of liability under its Subsidiary
Guarantee. See "Risk Factors -- Fraudulent Conveyance."
The Indenture will provide that no Subsidiary Guarantor may consolidate
with or merge with or into (whether or not such Subsidiary Guarantor is the
surviving Person) another Person (other than the Company or another Subsidiary
Guarantor), whether or not affiliated with such Subsidiary Guarantor, unless (i)
subject to the provisions of the following paragraph, the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) shall execute a Subsidiary Guarantee and deliver an Opinion of
Counsel in accordance with the terms of the Indenture; (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists; (iii)
such Subsidiary Guarantor, or any Person formed by or surviving any such
consolidation or merger, would have Consolidated Net Worth (immediately after
giving
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effect to such transaction), equal to or greater than the Consolidated Net Worth
of such Subsidiary Guarantor immediately preceding the transaction; (iv) the
Company would be permitted by virtue of the Company's pro forma Fixed Charge
Coverage Ratio, immediately after giving effect to such transaction, to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the covenant described above under the caption
"-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred
Stock"; and (v) such transaction does not violate any of the covenants described
under "-- Certain Covenants."
The Indenture will provide that in the event of (i) the designation of any
Subsidiary Guarantor as an Unrestricted Subsidiary or (ii) a sale or other
disposition of all or substantially all of the properties or assets of any
Subsidiary Guarantor to a third party or an Unrestricted Subsidiary, by way of
merger, consolidation or otherwise, or a sale or other disposition of all of the
capital stock of any Subsidiary Guarantor, in either case, in a transaction or
manner that does not violate any of the covenants in the Indenture, then such
Subsidiary Guarantor (in the event of such a designation or a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Subsidiary Guarantor) or the Person acquiring the property
(in the event of a sale or other disposition of all or substantially all of the
properties or assets of such Subsidiary Guarantor) will be released from and
relieved of any obligations under its Subsidiary Guarantee, provided that any
Net Proceeds of such sale or other disposition are applied in accordance with
the covenant described under the caption "-- Repurchase at the Option of
Holders -- Asset Sales," and provided, further, however, that any such
termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests that secure, any other
Indebtedness of the Company or its Restricted Subsidiaries shall also terminate
upon such release, sale or disposition.
The Indenture will provide that (a) if the Company or any of its Restricted
Subsidiaries shall, after the Issue Date, (i) transfer or cause to be
transferred, any assets, businesses, divisions, real property or equipment
having an aggregate fair market or book value in excess of $1 million to any
Restricted Subsidiary that is not a Subsidiary Guarantor or (ii) make any
Investment having an aggregate fair market or book value in excess of $1 million
in any Restricted Subsidiary that is not a Subsidiary Guarantor, or (b) if,
after the Issue Date, any Restricted Subsidiary that is not a Subsidiary
Guarantor shall own any assets or properties having an aggregate fair market or
book value in excess of $1 million, then the Company shall cause such Restricted
Subsidiary (other than any Exempt Foreign Subsidiary) to execute a Subsidiary
Guarantee and deliver an opinion of counsel, in accordance with the terms of the
Indenture. In addition, the Company shall not permit any of its Restricted
Subsidiaries, other than a Subsidiary Guarantor, directly or indirectly, to (i)
incur, guarantee or secure through the granting of Liens the payment of any
Indebtedness of the Company or (ii) pledge any intercompany notes representing
obligations of any of its Restricted Subsidiaries to secure the payment of any
Indebtedness of the Company, in each case, unless the Company shall cause such
Restricted Subsidiary to execute a Subsidiary Guarantee and deliver an opinion
of counsel in advance in accordance with the terms of the Indenture.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
Upon the occurrence of a Change of Control, each Holder of Notes will have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes on a Business Day (the
"Change of Control Payment Date") not more than 60 nor less than 30 days
following such Change of Control, pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company will mail
a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase all of the Notes
then outstanding pursuant to the procedures required by the Indenture and
described in such notice. The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the
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<PAGE> 46
Notes as a result of a Change of Control. The Change of Control Offer is
required to remain open for at least 20 Business Days and until the close of
business on the fifth Business Day prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted, together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent will promptly mail or otherwise deliver to each
Holder of Notes so tendered the Change of Control Payment for such Notes, and
the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each such
new Note will be in a principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
The Change of Control provisions described above will be applicable whether
or not any other provisions of the Indenture are applicable. Except as described
above with respect to a Change of Control, the Indenture does not contain
provisions that permit the Holders of the Notes to require that the Company
repurchase or redeem the Notes in the event of a takeover, recapitalization or
similar transaction.
The occurrence of a Change of Control may result in a default under the
Senior Credit Facility and give the Lenders the right to require the Company to
repay all Indebtedness outstanding thereunder. There can be no assurance that
the Company will have available funds sufficient to repay all Indebtedness owing
under the Senior Credit Facility or to fund the purchase of the Notes upon a
Change of Control. In the event a Change of Control occurs at a time when the
Company does not have available funds sufficient to pay for all of the Notes
delivered by Holders seeking to accept the Company's repurchase offer, an Event
of Default would occur under the Indenture.
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 the Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any person (as such term is used in Section 13(d)(3) of the
Exchange Act); (ii) the Company consolidates with or merges into another Person
or any Person consolidates with, or merges into, the Company, in any such event
pursuant to a transaction in which the outstanding voting stock of the Company
is changed into or exchanged for cash, securities or other property, other than
any such transaction where (a) the outstanding voting stock of the Company is
changed into or exchanged for voting stock of the surviving or resulting Person
that is Qualified Capital Stock and (b) the holders of the voting stock of the
Company immediately prior to such transaction own, directly or indirectly, not
less than a majority of the voting stock of the surviving or resulting Person
immediately after such transaction; (iii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iv) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any person (as defined above) becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than 50% of the voting stock of the
Company; or (v) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors. For purposes of this
definition, any transfer of an equity interest of an entity that was formed for
the purpose of acquiring voting stock of the Company will be deemed to be a
transfer of such portion of such voting stock as corresponds to the portion of
the equity of such entity that has been so transferred.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of the Indenture or (ii) was
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nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.
The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of the assets of the Company and its Subsidiaries taken as a whole. Although
there is a developing body of case law interpreting the phrase "substantially
all," there is no precise established definition of the phrase under applicable
law. Accordingly, the ability of a Holder of Notes to require the Company to
repurchase such Notes as a result of a sale, lease, transfer, conveyance or
other disposition of less than all of the assets of the Company and its
Subsidiaries taken as a whole to another Person or group may be uncertain.
Asset Sales
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, engage in an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are Subordinated Indebtedness or
otherwise by their terms subordinated to the Notes or the Subsidiary Guarantees)
that are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary from
further liability and (y) any notes or other obligations received by the Company
or any such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash within 180 days of closing such
Asset Sale (to the extent of the cash received), shall be deemed to be cash for
purposes of this provision.
Within 365 days after the receipt of any Net Proceeds from any Asset Sale,
the Company may (i) apply all or any of the Net Proceeds therefrom to repay
Indebtedness (other than Subordinated Indebtedness) of the Company or any
Restricted Subsidiary, provided, in each case, that the related loan commitment
of any revolving credit facility or other borrowing (if any) is thereby
permanently reduced by the amount of such Indebtedness so repaid, or (ii) invest
all or any part of the Net Proceeds thereof in properties and other capital
assets that replace the properties or other capital assets that were the subject
of such Asset Sale or in other properties or other capital assets that will be
used in the business of the Company and its Restricted Subsidiaries. Pending the
final application of any such Net Proceeds, the Company may temporarily reduce
borrowings under any revolving credit facility or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph will be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds equals or exceeds $15 million, the
Company will be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
The Company will not permit any Restricted Subsidiary to enter into or
suffer to exist any agreement that would place any restriction of any kind
(other than pursuant to law or regulation) on the ability of the Company to make
an Asset Sale Offer following any Asset Sale. The Company will comply with Rule
14e-1
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under the Exchange Act, and any other securities laws and regulations
thereunder, if applicable, in the event that an Asset Sale occurs and the
Company is required to purchase Notes as described above.
CERTAIN COVENANTS
Restricted Payments
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or
pay any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders of the Company's
Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company or dividends or distributions payable to the Company or any Wholly Owned
Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Company or any Affiliate
of the Company (other than (A) any such Equity Interests owned by the Company or
any Wholly Owned Restricted Subsidiary of the Company that is a Subsidiary
Guarantor and (B) Employee Stock Repurchases); (iii) make any principal payment
on, or purchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness, except in accordance with the mandatory redemption or
repayment provisions set forth in the original documentation governing such
Indebtedness; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of the covenant described below under the
caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock";
and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after the Issue Date (excluding Restricted Payments permitted by clauses
(x) and (y) the next succeeding paragraph, but including the Restricted
Payment permitted by clause (z) of the next succeeding paragraph), is less
than the sum of (i) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the Issue Date to the end of the Company's
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate Net Equity Proceeds (A) received
by the Company from the issue or sale, subsequent to the Issue Date, of
Qualified Capital Stock of the Company or (B) of any other Equity Interests
or debt securities of the Company that have been issued subsequent to the
Issue Date and that have been converted into such Qualified Capital Stock
(other than any Qualified Capital Stock sold to a Restricted Subsidiary of
the Company or issued upon conversion of the Convertible Preferred Stock),
plus (iii) to the extent not otherwise included in Consolidated Net Income,
the net reduction in Investments in Unrestricted Subsidiaries resulting
from dividends, repayments of loans or advances, or other transfers of
assets, in each case to the Company or a Restricted Subsidiary after the
Issue Date from any Unrestricted Subsidiary or from the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary (valued as provided
below), plus (iv) $15 million.
The foregoing provisions will not prohibit any of the following: (w) the
payment of any dividend within 60 days after the date of declaration thereof, if
at said date of declaration such payment would have complied
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with the provisions of the Indenture; (x) the redemption, repurchase, retirement
or other acquisition of any Equity Interests of the Company in exchange for, or
out of the Net Equity Proceeds of, the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of Qualified Capital Stock of the
Company (other than any Disqualified Stock); provided that the amount of any
such Net Equity Proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph; (y) the defeasance, redemption or repurchase of
Subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness or the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of Qualified Capital Stock of
the Company; provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other acquisition
shall be excluded from clause (c)(ii) of the preceding paragraph; and (z) the
redemption of the Convertible Preferred Stock, if required, and payment of any
accrued dividends thereon pursuant to the terms thereof as in effect on the
Issue Date.
For purposes of the foregoing provisions, the amount of any Restricted
Payment (other than cash) shall be the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this "Restricted
Payments" covenant were computed, which calculations may be based upon the
Company's latest available financial statements.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would be permitted by the provisions
of this "Restricted Payments" covenant and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. For purposes of
making such determination, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid in cash prior to such
designation) in the Restricted Subsidiary so designated will be deemed to be
Restricted Payments at the time of such designation and will reduce the amount
available for Restricted Payments under paragraph (c) of this covenant. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the Fair Market Value of such Investments at the time of such
designation.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness but excluding any Permitted
Indebtedness) and that the Company will not issue any Disqualified Stock and
will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that the Company may incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock, and any
Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness),
if the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 2.0 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
The Indenture will also provide that neither the Company nor any Subsidiary
Guarantor will, directly or indirectly, in any event incur any Indebtedness that
by its terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of the Company or such Subsidiary
Guarantor, as the case may be, unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Notes or the Subsidiary Guarantee of such Subsidiary
Guarantor, as the case may be, to the same extent and in the same manner as such
Indebtedness is
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subordinated pursuant to subordination provisions that are most favorable to the
holders of any other Indebtedness of the Company or such Subsidiary Guarantor,
as the case may be.
Liens
The Indenture will provide that the Company will not, and will not permit
any Restricted Subsidiary to, directly or indirectly, create, incur, assume,
affirm or suffer to exist or become effective any Lien of any kind, except for
Permitted Liens, upon any of their respective property or assets, whether now
owned or acquired after the Issue Date, or any income, profits or proceeds
therefrom, to secure (a) any Indebtedness of the Company or such Restricted
Subsidiary (if it is not also a Subsidiary Guarantor), unless prior to, or
contemporaneously therewith, the Notes are equally and ratably secured, or (b)
any Indebtedness of any Subsidiary Guarantor, unless prior to, or
contemporaneously therewith, the Subsidiary Guarantees are equally and ratably
secured; provided, however, that if such Indebtedness is expressly subordinated
to the Notes or the Subsidiary Guarantees, the Lien securing such Indebtedness
will be subordinated and junior to the Lien securing the Notes or the Subsidiary
Guarantees, as the case may be, with the same relative priority as such
Indebtedness has with respect to the Notes or the Subsidiary Guarantees. The
foregoing covenant will not apply to any Lien securing Acquired Indebtedness,
provided that any such Lien extends only to the property or assets that were
subject to such Lien prior to the related acquisition by the Company or such
Restricted Subsidiary and was not created, incurred or assumed in contemplation
of such transaction. The incurrence of additional secured Indebtedness by the
Company and its Restricted Subsidiaries is subject to further limitations on the
incurrence of Indebtedness as described under "-- Incurrence of Indebtedness and
Issuance of Preferred Stock."
Sale-and-Leaseback Transactions
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, enter into any sale-and-leaseback
transaction; provided that the Company or any Restricted Subsidiary, as
applicable, may enter into a sale-and-leaseback transaction if (i) the Company
could have (a) incurred Indebtedness in an amount equal to the Attributable
Indebtedness relating to such sale-and-leaseback transaction pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph of the
covenant described above under the caption "-- Incurrence of Additional
Indebtedness and Issuance of Preferred Stock" and (b) incurred a Lien to secure
such Indebtedness pursuant to the covenant described above under the caption
"-- Liens," (ii) the gross cash proceeds of such sale-and-leaseback transaction
are at least equal to the fair market value (as determined in good faith by the
Board of Directors and set forth in an Officers' Certificate delivered to the
Trustee) of the property that is the subject of such sale-and-leaseback
transaction and (iii) the transfer of assets in such sale-and-leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales."
Transactions with Affiliates
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, (a) sell, lease, transfer or otherwise
dispose of any of its properties, assets or securities to, (b) purchase or lease
any property, assets or securities from, (c) make any Investment in, or (d)
enter into or suffer to exist any other transaction or series of related
transactions with, or for the benefit of, any Affiliate of the Company unless
(i) such transaction or series of transactions is on terms that are no less
favorable to the Company or such Restricted Subsidiary, as the case may be, than
those that would be available in a comparable arm's length transaction with an
unrelated third party, (ii) with respect to any one transaction or series of
related transactions involving aggregate payments in excess of $1 million, the
Company delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (i) above,
and (iii) with respect to a transaction or series of related transactions
involving payments in excess of $5 million, the Company delivers an Officers'
Certificate to the Trustee certifying that (A) such transaction or series of
related transactions complies with clause (i) above and (B) such transaction or
series of related transactions has been approved by a majority of the
Disinterested Directors of the
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Company; provided, however, that the foregoing restriction shall not apply to
(u) any arrangements in effect on the Issue Date, (v) transactions between or
among the Company and its Wholly Owned Restricted Subsidiaries, (w) loans or
advances to officers, directors and employees of the Company or any Restricted
Subsidiary made in the ordinary course of business and consistent with past
practices of the Company and its Restricted Subsidiaries in an aggregate amount
not to exceed $1 million outstanding at any one time, (x) indemnities of
officers, directors and employees of the Company or any Restricted Subsidiary
permitted by bylaw or statutory provisions, (y) the payment of reasonable and
customary regular fees to directors of the Company or any of its Restricted
Subsidiaries who are not employees of the Company or any Affiliate and (z) the
Company's employee compensation and other benefit arrangements.
Issuances and Sales of Capital Stock of Wholly Owned Subsidiaries
The Indenture will provide that the Company (i) will not, and will not
permit any Wholly Owned Restricted Subsidiary of the Company to, transfer,
convey, sell, or otherwise dispose of any Capital Stock of any Wholly Owned
Restricted Subsidiary of the Company to any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company), unless (a) such transfer,
conveyance, sale, or other disposition is of all the Capital Stock of such
Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from such
transfer, conveyance, sale, or other disposition are applied in accordance with
the covenant described above under the caption "-- Repurchase at the Option of
Holders -- Asset Sales," and (ii) will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests to any Person
other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company; except, in the case of both clauses (i) and (ii) above, with respect to
dispositions or issuances by a Wholly Owned Restricted Subsidiary of the Company
as contemplated in clauses (i) and (ii) of the definition of "Wholly Owned
Restricted Subsidiary."
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indenture will provide that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (i)(a) pay dividends
or make any other distributions to the Company or any of its Restricted
Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest
or participation in, or measured by, its profits, or (b) pay any indebtedness
owed to the Company or any of its Restricted Subsidiaries, (ii) make loans or
advances to the Company or any of its Restricted Subsidiaries or (iii) transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (r) Existing Indebtedness as in effect on the date of the Indenture,
(s) the Senior Credit Facility as in effect as of the date of the Indenture, and
any amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Senior
Credit Facility as in effect on the date of the Indenture, (t) the Indenture and
the Notes, (u) applicable law, (v) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of the Indenture to
be incurred, (w) by reason of customary nonassignment provisions in leases
entered into in the ordinary course of business and customary provisions in
other agreements that restrict assignment of such agreements or rights
thereunder, (x) customary restrictions contained in asset sale agreements
limiting the transfer of such assets pending the closing of such sale, (y)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii) above
on the property so acquired, or (z) Permitted Refinancing Indebtedness with
respect to any indebtedness referred to in clauses (r), (t) and (v) above,
provided that the restrictions
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contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced.
Merger, Consolidation or Sale of Assets
The Indenture will provide that the Company may not consolidate or merge
with or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
Person unless (i) the Company is the surviving corporation or the Person formed
by or surviving any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of the Company under the Notes and the Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (iii) except in the
case of a merger of the Company with or into a Wholly Owned Subsidiary of the
Company, immediately after such transaction no Default or Event of Default
exists; and (iv) except in the case of a merger of the Company with or into a
Wholly Owned Subsidiary of the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption "-- Incurrence
of Indebtedness and Issuance of Preferred Stock."
Business Activities
The Indenture will provide that the Company will not, and will not permit
any Restricted Subsidiary to, engage in any business other than (i) the Drilling
Business, (ii) such other businesses as the Company or its Restricted
Subsidiaries are engaged in on the Issue Date and (iii) such other business
activities as are reasonably related or incidental thereto.
REPORTS
The Indenture will provide that, whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the Company
will furnish to the Holders of Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the consolidated financial condition
and results of operations of the Company and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all information that would be required to be contained in a
filing with the Commission on Form 8-K if the Company were required to file such
Form. In addition, whether or not required by the rules and regulations of the
Commission, the Company will file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities analysts
and prospective investors upon request. In addition, the Company and the
Subsidiary Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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EVENTS OF DEFAULT AND REMEDIES
The Indenture will provide that each of the following constitutes an Event
of Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes; (ii) default in payment when due
of the principal of or premium, if any, on the Notes; (iii) failure by the
Company to comply with the provisions described under the caption "-- Repurchase
at the Option of Holders" or "-- Certain Covenants -- Merger, Consolidation or
Sale of Assets"; (iv) failure by the Company for 45 days after notice to comply
with any of its other agreements in the Indenture or the Notes; (v) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (A) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (B) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $7.5 million or more; (vi) failure by the Company or
any of its Subsidiaries to pay final judgments aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed for a period of 60
days; (vii) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect (except pursuant to the release of any Subsidiary
Guarantee in accordance with the Indenture); and (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries that constitute a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, with respect to the Company, any
Restricted Subsidiary that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company,
as such, shall have any liability for any obligations of the Company under the
Notes, the Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
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LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of the
obligations of itself and the Subsidiary Guarantors discharged with respect to
the outstanding Notes ("Legal Defeasance") except for (i) the rights of Holders
of outstanding Notes to receive payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages on such Notes when such
payments are due from the trust referred to below, (ii) the Company's
obligations with respect to the Notes concerning issuing temporary Notes,
registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payment and money for security payments
held in trust, (iii) the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's obligations in connection therewith and (iv) the
Legal Defeasance provisions of the Indenture. In addition, the Company may, at
its option and at any time, elect to have the obligations of the Company
released with respect to certain covenants that are described in the Indenture
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, bankruptcy, receivership, rehabilitation and insolvency
events) described under the caption "-- Events of Default and Remedies" will no
longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest and Liquidated Damages on
the outstanding Notes on the stated maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes are
being defeased to maturity or to a particular redemption date; (ii) in the case
of Legal Defeasance, the Company shall have delivered to the Trustee an opinion
of counsel in the United States reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of the Indenture, there
has been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion of counsel shall confirm that,
the Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred; (iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred; (iv) no Default or Event
of Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) or insofar as Events of Default from bankruptcy
or insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance
will not result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than the Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (vi) the Company must have delivered to the Trustee an
opinion of counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or others; and (viii) the Company must deliver to the Trustee an
Officers' Certificate and an opinion of counsel, which, taken together, state
that all conditions precedent provided for relating to the Legal Defeasance or
the Covenant Defeasance have been complied with.
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TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and any existing default or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for Notes).
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting Holder): (i) reduce the
principal amount of Notes whose Holders must consent to an amendment, supplement
or waiver; (ii) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other than
provisions relating to the covenants described above under the caption
"-- Repurchase at the Option of Holders"); (iii) reduce the rate of or change
the time for payment of interest on any Note; (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted from such acceleration); (v) make any Note payable
in money other than that stated in the Notes; (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of principal of or premium, if any, or
interest on the Notes; (vii) waive a redemption payment with respect to any Note
(other than a payment required by one of the covenants described above under the
caption "-- Repurchase at the Option of Holders"); (viii) alter the ranking of
the Notes relative to other Indebtedness of the Company; or (ix) make any change
in the foregoing amendment and waiver provisions. In addition, without the
consent of Holders of not less than 66 2/3% in aggregate principal amount of the
Notes then outstanding, no such amendment, supplement or waiver may amend,
change or modify the obligation of the Company to make and consummate a Change
of Control Offer in the event of a Change of Control or make and consummate an
Asset Sale Offer with respect to any Asset Sale or modify any of the provisions
or definitions with respect thereto.
Notwithstanding the foregoing, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of Notes in the case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder, to secure the Notes
pursuant to the requirements of the "Liens" covenant or otherwise or to comply
with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions;
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however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue or resign.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee,
subject to certain exceptions. The Indenture provides that in case an Event of
Default shall occur (which shall not be cured), the Trustee will be required, in
the exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any Holder of Notes, unless such Holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
GOVERNING LAW
The Indenture, the Notes and the Subsidiary Guarantees will provide that
they will be governed by the laws of the State of New York.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth in the next paragraph, the Exchange Notes will be
issued in the form of one or more fully registered global Notes (collectively,
the "Global Note"). The Global Note will be deposited with, or on behalf of, The
Depository Trust Company (the "Depository") and registered in the name of Cede &
Co., as nominee of the Depository (such nominee being referred to herein as the
"Global Note Holder").
Notes (i) originally purchased by or transferred to "foreign purchasers" or
Accredited Investors who are not Qualified Institutional Buyers or (ii) held by
Qualified Institutional Buyers who elect to take physical delivery of their
certificates instead of holding their interests through the Global Note (and
which are thus ineligible to trade through the Depository) (collectively
referred to herein as the "Non-Global Purchasers") will be issued in registered
certificated form ("Certificated Securities"). Upon the transfer to a Qualified
Institutional Buyer of any Certificated Security initially issued to a
Non-Global Purchaser, such Certificated Security will, unless the transferee
requests otherwise or the Global Note has previously been exchanged in whole for
Certificated Securities as described below, be exchanged for an interest in the
Global Note.
The Depository is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the "Participants"
or the "Depository's Participants") and to facilitate the clearance and
settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants. The Depository's
Participants include securities brokers and dealers (including the Initial
Purchasers), banks and trust companies, clearing corporations and certain other
organizations. Access to the Depository's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
"Indirect Participants" or the "Depository's Indirect Participants") that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly. Persons who are not Participants may beneficially own securities
held by or on behalf of the Depository only thorough the Depository's
Participants or the Depository's Indirect Participants.
The Company expects that pursuant to procedures established by the
Depository (i) upon deposit of the Global Note, the Depository will credit the
accounts of Participants designated by the Initial Purchasers with portions of
the principal amount of the Global Note and (ii) ownership of the Notes
evidenced by the Global Note will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by the Depository
(with respect to the interests of the Depository's Participants), the
Depository's Participants and the Depository's Indirect Participants.
Prospective purchasers are advised that the laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to transfer Notes evidenced by the Global
Note will be limited to such extent. For certain other restrictions on the
transferability of the Notes, see "Notice to Investors."
So long as the Global Note Holder is the registered owner of any Notes, the
Global Note Holder will be considered the sole Holder under the Indenture of any
Notes evidenced by the Global Note. Beneficial owners of Notes evidenced by the
Global Note will not be considered the owners or Holders thereof under the
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Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Company nor the Trustee will have any responsibility or liability for any aspect
of the records of the Depository or for maintaining, supervising or reviewing
any records of the Depository relating to the Notes.
Payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on any Notes registered in the name of the Global
Note Holder on the applicable record date will be made by the Company through
the paying agent to or at the direction of the Global Note Holder in its
capacity as the registered Holder under the Indenture. Under the terms of the
Indenture, the Company and the Trustee may treat the persons in whose names
Notes, including the Global Note, are registered as the owners thereof for the
purpose of receiving such payments. Consequently, neither the Company nor the
Trustee has or will have any responsibility or liability for the payment of such
amounts to beneficial owners of Notes. The Company believes, however, that it is
currently the policy of the Depository to immediately credit the accounts of the
relevant Participants with such payments, in amounts proportionate to their
respective holdings of beneficial interests in the relevant security as shown on
the records of the Depository. Payments by the Depository's Participants and the
Depository's Indirect Participants to the beneficial owners of Notes will be
governed by standing instructions and customary practice and will be the
responsibility of the Depository's Participants or the Depository's Indirect
Participants.
As long as the Notes are represented by a Global Note, the Depository's
nominee will be the Holder of the Notes and therefore will be the only entity
that can exercise a right to repurchase the Notes. See "-- Certain Covenants"
and "-- Repurchase at the Option of Holders." Notice by Participants or Indirect
Participants or by owners of beneficial interests in a Global Note held through
such Participants or Indirect Participants of the exercise of the option to
elect repurchase of beneficial interests in Notes represented by Global Note
must be transmitted to the Depository in accordance with its procedures on a
form required by the Depository and provided to Participants. In order to ensure
that the Depository's nominee will timely exercise a right to repurchase with
respect to a particular Note, the beneficial owner of such Note must instruct
the broker or other Participant or Indirect Participant through which it holds
an interest in such Note to notify the Depository of its desire to exercise a
right to repurchase. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other Participant or Indirect Participant through which it
holds an interest in a Note in order to ascertain the cut-off time by which such
an instruction must be given in order for timely notice to be delivered to the
Depository. The Company will not be liable for any delay in delivery to the
paying agent of notices of the exercise of any option to elect repurchase.
If (i) the Company notifies the Trustee in writing that the Depository is
no longer willing or able to act as a depository and the Company is unable to
locate a qualified successor within 90 days or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes in
the form of Certificated Securities under the Indenture, then, upon surrender by
the Global Note Holder of its Global Note, Notes in such form will be issued to
each person that the Global Note Holder and the Depository identify as being the
beneficial owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depository in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depository for all purposes.
Same-Day Settlement and Payment
The Indenture will require that payments in respect of the Notes
represented by the Global Note (including principal, premium, if any, interest
and Liquidated Damages, if any) be made by wire transfer of immediately
available funds to the accounts specified by the Global Note Holder. With
respect to Certificated Securities, the Company will make all payments of
principal, premium, if any, interest and Liquidated Damages, if any, by wire
transfer of immediately available funds to the accounts specified by the Holders
thereof or, if no such account is specified, by mailing a check to each such
Holder's registered address. The
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Notes represented by the Global Note are expected to be eligible to trade in the
PORTAL Market and to trade in the Depository's Same-Day Funds Settlement System,
and any permitted secondary market trading activity in such Notes will,
therefore, be required by the Depository to be settled in immediately available
funds. The Company expects that secondary trading in the Certificated Securities
will also be settled in immediately available funds.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Pursuant to the Registration Rights Agreement, the Company agreed to file
with the Commission the Exchange Offer Registration Statement on the appropriate
form under the Securities Act with respect to the Exchange Notes. Upon the
effectiveness of the Exchange Offer Registration Statement, the Company will
offer to the Holders of Transfer Restricted Securities pursuant to the Exchange
Offer who are able to make certain representations the opportunity to exchange
their Transfer Restricted Securities for Exchange Notes. Under existing SEC
interpretations, the Transfer Restricted Securities would, in general, be freely
transferable after the Exchange Offer without further registration under the
Securities Act; provided, however, that in the case of broker-dealers
participating in the Exchange Offer, a prospectus meeting the requirements of
the Securities Act will be delivered upon resale by such broker-dealers in
connection with resales of the New Notes. If (i) the Company is not required to
file the Exchange Offer Registration Statement or permitted to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
Commission policy or (ii) any Holder of Transfer Restricted Securities notifies
the Company within the specified time period that (A) it is prohibited by law or
Commission policy from participating in the Exchange Offer or (B) that it 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 not appropriate or available for such resales or
(C) that it is a broker-dealer and owns Old Notes acquired directly from the
Company or an affiliate of the Company, the Company will file with the
Commission a Shelf Registration Statement to cover resales of the Old Notes by
the Holders thereof who satisfy certain conditions relating to the provision of
information in connection with the Shelf Registration Statement. The Company
will use its best efforts to cause the applicable registration statement to be
declared effective as promptly as possible by the Commission. For purposes of
the foregoing, "Transfer Restricted Securities" means each Note until (i) the
date on which such Note has been exchanged by a person other than a
broker-dealer for an Exchange Note in the Exchange Offer, (ii) following the
exchange by a broker-dealer in the Exchange Offer of a Note for an Exchange
Note, the date on which such Exchange Note is sold to a purchaser who receives
from such broker-dealer on or prior to the date of such sale a copy of the
prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Note has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iv) the
date on which such Note is distributed to the public pursuant to Rule 144 under
the Securities Act.
The Registration Rights Agreement provides that: (i) the Company will file
an Exchange Offer Registration Statement with the Commission on or prior to 60
days after the Issue Date, (ii) the Company will use its best efforts to have
the Exchange Offer Registration Statement declared effective by the Commission
on or prior to 120 days after the Issue Date, (iii) unless the Exchange Offer
would not be permitted by applicable law or Commission policy, the Company will
commence the Exchange Offer and use its best efforts to issue on or prior to 30
business days after the date on which the Exchange Offer Registration Statement
was declared effective by the Commission, Exchange Notes in exchange for all Old
Notes tendered prior thereto in the Exchange Offer and (iv) if obligated to file
the Shelf Registration Statement, the Company will use its best efforts to file
the Shelf Registration Statement with the Commission on or prior to 30 days
after such filing obligation arises (and in any event within 90 days after the
Issue Date) and to cause the Shelf Registration to be declared effective by the
Commission on or prior to 90 days after such obligation arises. If (a) the
Company fails to file any of the Registration Statements required by the
Registration Rights Agreement on or before the date specified for such filing,
(b) any of such Registration Statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"), (c) the Company fails to consummate the Exchange
Offer within 30 business days of the Effectiveness Target Date with respect to
the Exchange Offer Registration Statement, or (d) the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective but
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thereafter ceases to be effective or usable in connection with the Exchange
Offer or resales of Transfer Restricted Securities, as the case may be, during
the periods specified in the Registration Rights Agreement (each such event
referred to in clauses (a) through (d) above a "Registration Default"), then the
interest rate on the Transfer Restricted Securities, with respect to the first
90-day period immediately following the occurrence of such Registration Default
will increase ("Liquidated Damages") by 0.50% per annum and will increase by an
additional 0.50% per annum with respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of 2% per annum with respect to all Registration Defaults. All accrued
Liquidated Damages will be paid by the Company on each Damages Payment Date to
the Global Note Holder by wire transfer of immediately available funds and to
Holders of Certificated Securities by wire transfer to the accounts specified by
them or by mailing checks to their registered addresses if no such accounts have
been specified. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease.
Each holder of Old Notes who wishes to exchange such Notes for Exchange
Notes in the Exchange Offer will be required to make certain representations,
including representations that (i) any Exchange Notes to be received by it will
be acquired in the ordinary course of business, (ii) it is not participating in,
and it has no arrangement with any person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Notes and (iii) it is
neither an affiliate of the Company, as defined in Rule 405 of the Securities
Act, nor a broker-dealer tendering notes acquired directly from the Company for
its own account. If the holder is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Old Notes that were acquired as a
result of market-making activities or other trading activities, it will be
required to acknowledge that it will deliver a prospectus in connection with any
resale of such Exchange Notes. The Company has agreed, for a period of 180 days
after consummation of the Exchange Offer, to make available a prospectus meeting
the requirements of the Securities Act to any such broker-dealer for use in
connection with any resale of any Exchange Notes acquired in the Exchange Offer.
Holders of Notes will also be required to deliver information to be used in
connection with the Shelf Registration Statement and to provide comments on the
Shelf Registration Statement within the time periods set forth in the
Registration Rights Agreement in order to have their Notes included in the Shelf
Registration Statement and benefit from the provisions regarding Liquidated
Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Acquired Indebtedness" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition to any Person other than the Company or any of its Restricted
Subsidiaries (including, without limitation, by means of a sale-and-leaseback
transaction or a merger or consolidation) (collectively, for purposes of this
definition, a "transfer"), directly or indirectly, in one or a series of related
transactions, of (a) any Capital Stock of any Restricted Subsidiary held by the
Company or any other Restricted Subsidiary, (b) all or substantially all of the
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properties and assets of any division or line of business of the Company or any
of its Restricted Subsidiaries, (c) any Event of Loss or (d) any other
properties or assets of the Company or any of its Restricted Subsidiaries other
than transfers of cash, Cash Equivalents, accounts receivable, or properties or
assets in the ordinary course of business; provided that the sale, lease,
conveyance or other disposition of all or substantially all of the properties or
assets of the Company and its Restricted Subsidiaries, taken as a whole, will be
governed by the provisions of the Indenture described above under the caption
"-- Repurchase at the Option of Holders -- Change of Control" and/or the
provisions described above under the caption "-- Certain Covenants -- Merger,
Consolidation or Sale of Assets" and not by the provisions of the "Asset Sales"
covenant. For the purposes of this definition, the term "Asset Sale" also shall
not include any of the following: (i) any transfer of properties or assets to an
Unrestricted Subsidiary, if such transfer is permitted under the "Restricted
Payments" covenant described above; (ii) sales of damaged, worn-out or obsolete
equipment or assets that, in the Company's reasonable judgment, are either (A)
no longer used or (B) no longer useful in the business of the Company or its
Restricted Subsidiaries; (iii) any lease of any property entered into in the
ordinary course of business and with respect to which the Company or any
Restricted Subsidiary is the lessor, except any such lease that provides for the
acquisition of such property by the lessee during or at the end of the term
thereof for an amount that is less than the fair market value thereof at the
time the right to acquire such property is granted; (iv) any trade or exchange
by the Company or any Restricted Subsidiary of one or more drilling rigs for one
or more other drilling rigs owned or held by another Person, provided that (A)
the Fair Market Value of the drilling rig or rigs traded or exchanged by the
Company or such Restricted Subsidiary (including any cash or Cash Equivalents to
be delivered by the Company or such Restricted Subsidiary) is reasonably
equivalent to the Fair Market Value of the drilling rig or rigs (together with
any cash or Cash Equivalents) to be received by the Company or such Restricted
Subsidiary and (B) such exchange is approved by a majority of the Disinterested
Directors of the Company; (v) any transfer by the Company or any Restricted
Subsidiary to its customers of drill pipe, tools and associated drilling
equipment utilized in connection with a drilling contract for the employment of
a drilling rig in the ordinary course of business and consistent with past
practice; and (vi) any transfers that, but for this clause (vi), would be Asset
Sales, if (A) the Company elects to designate such transfers as not constituting
Asset Sales and (B) after giving effect to such transfers, the aggregate Fair
Market Value of the properties or assets transferred in such transaction or any
such series of related transactions so designated by the Company does not exceed
$500,000.
"Attributable Indebtedness" in respect of a sale-and-leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale-and-leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). As used in the preceding sentence, the "net rental
payments" under any lease for any such period shall mean the sum of rental and
other payments required to be paid with respect to such period by the lessee
thereunder, excluding any amounts required to be paid by such lessee on account
of maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges. In the case of any lease that is terminable by the lessee upon
payment of penalty, such net rental payment shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
corporation or similar entity, any membership or other similar interests
therein; and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) any evidence of Indebtedness with a maturity
of 365 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality
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thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof); (ii) demand and time deposits and certificates
of deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million; (iii)
commercial paper with a maturity of 270 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-2 by
Standard and Poor's Ratings Group (or its successors) or at least P-2 by Moody's
Investors Service, Inc. (or its successors); (iv) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii) above; (v) overnight bank deposits and bankers'
acceptances at any commercial bank meeting the qualifications specified in
clause (ii) above; (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (ii) above,
provided all such deposits do not exceed $5 million in the aggregate at any one
time; (vii) demand and time deposits and certificates of deposit with any
commercial bank organized in the United States not meeting the qualifications
specified in clause (ii) above, provided that such deposits and certificates
support bond, letter of credit and other similar types of obligations incurred
in the ordinary course of business: and (viii) investments in money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (v) above.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such Consolidated
Net Income, plus (iii) consolidated net interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable
Indebtedness, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Interest Rate Protection Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net Income, plus
(iv) depreciation, amortization (including amortization of goodwill, debt
issuance costs and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges (including
any provision for the reduction in the carrying value of assets recorded in
accordance with GAAP but excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash charges were deducted in computing
such Consolidated Net Income, minus (v) any non-cash items increasing the
Consolidated Net Income of such Person and its Restricted Subsidiaries during
such period (excluding any such items that represent the reversal of any accrual
of, or cash reserve for, anticipated cash charges in any prior period commencing
subsequent to the Issue Date), in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the provision
for taxes on the income or profits of, and the depreciation and amortization and
other non-cash charges of, a Restricted Subsidiary of the referent Person shall
be added to Consolidated Net Income to compute Consolidated Cash Flow only to
the extent (and in same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
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Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof that is a Subsidiary Guarantor; (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders; (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded; and (iv) the cumulative effect of a
change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (y) all investments as of such date in unconsolidated Subsidiaries and
in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time that were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or futures contract or other similar agreement or arrangement designed to
protect against or manage such Person's or any of its Subsidiaries exposure to
fluctuations in foreign currency exchange rates.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors of the Company is
required to deliver a resolution of the Board of Directors under the Indenture,
a member of the Board of Directors of the Company who does not have any material
direct or indirect financial interest (other than an interest arising solely
from the beneficial ownership of Capital Stock of the Company) in or with
respect to such transaction or series of transactions.
"Disqualified Stock" means the Convertible Preferred Stock and any other
Capital Stock that, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date on which the Notes mature.
"Drilling Business" means (i) the drilling for oil, gas or other
hydrocarbons, whether offshore or onshore, and whether as an agent or principal,
and (ii) any business relating to or arising from drilling for oil, gas or other
hydrocarbons, including, without limitation, the rental of drill pipe, tools or
other equipment.
"Employee Stock Repurchases" means purchases by the Company of any of its
Capital Stock from employees for the purpose of permitting such employees to pay
personal income tax obligations with the proceeds, provided that the aggregate
amount of all such purchases shall not exceed $500,000 during any fiscal year of
the Company.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Event of Loss" means, with respect to any drilling rig or similar or
related property or asset of the Company or any Restricted Subsidiary, (i) any
damage to such drilling rig or similar or related property or asset that results
in an insurance settlement with respect thereto on the basis of a total loss or
a constructive or compromised total loss or (ii) the confiscation, condemnation
or requisition of title to such drilling rig or similar or related property or
asset by any government or instrumentality or agency thereof. An Event of Loss
shall be deemed to occur as of the date of the insurance settlement,
confiscation, condemnation or requisition of title, as applicable.
"Exempt Foreign Subsidiary" means (i) any Restricted Subsidiary engaged in
the Drilling Business exclusively outside the United States of America,
irrespective of its jurisdiction of incorporation and (ii) any other Restricted
Subsidiary whose assets (excluding any cash and Cash Equivalents) consist
exclusively of Capital Stock or Indebtedness of one or more Restricted
Subsidiaries described in clause (i) of this definition, that, in any case, is
so designated by the Company in an Officers' Certificate delivered to the
Trustee and (a) is not a guarantor of, and has not granted any Lien to secure,
the Senior Credit Facility or any other Indebtedness of the Company or any
Restricted Subsidiary other than another Exempt Foreign Subsidiary and (b) does
not have total assets that, when aggregated with the total assets of any other
Exempt Foreign Subsidiary, exceed 10% of the Company's consolidated total
assets, as determined in accordance with GAAP, as reflected on the Company's
most recent quarterly or annual balance sheet. The Company may revoke the
designation of any Exempt Foreign Subsidiary by notice to the Trustee.
"Existing Indebtedness" means up to $8 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Senior Credit Facility) in existence on the Issue Date,
until such amounts are repaid.
"Fair Market Value" means, with respect to any asset or Investment, the
fair market value of such asset or Investment at the time of the event requiring
such determination, and, with respect to any assets or Investment in excess of
$5 million (other than cash or Cash Equivalents) as determined by a reputable
appraisal firm that is, in the reasonable judgment of the Board of Directors of
the Company, qualified to perform the task for which such firm has been engaged
and independent with respect to the Company.
"Fixed Charges" means, with respect to any Person for any period, the sum
of (i) the consolidated interest expense (net of any interest income) of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(excluding amortization of debt issuance costs and including, without
limitation, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Indebtedness, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Interest
Rate Protection Obligations); (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period;
(iii) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not such
guarantee or Lien is called upon); and (iv) the product of (A) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person, to the
extent such preferred stock is owned by Persons other than such Person or its
Restricted Subsidiaries, times (B) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person for
such period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, guarantees or redeems any Indebtedness (other than revolving
credit borrowings) or issues preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or redemption of Indebtedness, or such issuance or
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redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions of businesses that
have been made by the referent Person or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period; (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded; and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
The term "guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts drawn down under letters of credit. When used as a verb, "guarantee"
has a corresponding meaning.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any obligations in respect of
Currency Hedge Obligations or Interest Rate Protection Obligations, except any
such balance that constitutes an accrued expense or trade payable, if and to the
extent any of the foregoing indebtedness (other than letters of credit, Currency
Hedge Obligations and Interest Rate Protection Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the guarantee by such Person of any Indebtedness
of any other Person.
"Interest Rate Protection Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's or any of its Subsidiaries exposure to
fluctuations in interest rates.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that the following shall not constitute Investments: (i) an acquisition
of assets, Equity Interests or other securities by the Company for consideration
consisting of common equity securities of the Company, (ii) extensions of trade
credit or other
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advances to customers on commercially reasonable terms in accordance with normal
trade practices or otherwise in the ordinary course of business, (iii) Interest
Rate Protection Obligations and Currency Hedge Obligations, but only to the
extent that the same constitute Permitted Indebtedness, and (iv) endorsements of
negotiable instruments and documents in the ordinary course of business. If the
Company or any Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of.
"Issue Date" means the date on which the Notes were first issued under the
Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other
than a precautionary financing statement respecting a lease not intended as a
security agreement).
"Net Equity Proceeds" means (i) in the case of any sale by the Company of
Qualified Capital Stock of the Company, the aggregate net proceeds received by
the Company, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in other property
(valued as determined reasonably and in good faith by the Board of Directors of
the Company, as evidenced by a written resolution of said Board of Directors, at
the fair market value thereof at the time of receipt) and (ii) in the case of
any exchange, exercise, conversion or surrender of any outstanding Indebtedness
of the Company or any Restricted Subsidiary for or into shares of Qualified
Capital Stock of the Company, the amount of such Indebtedness (or, if such
Indebtedness was issued at an amount less than the stated principal amount
thereof, the accrued amount thereof as determined in accordance with GAAP) as
reflected in the consolidated financial statements of the Company prepared in
accordance with GAAP as of the most recent date next preceding the date of such
exchange, exercise, conversion or surrender (plus any additional amount required
to be paid by the holders of such Indebtedness to the Company or to any Wholly
Owned Restricted Subsidiary of the Company upon such exchange, exercise,
conversion or surrender and less any and all payments made to the holders of
such Indebtedness, and all other expenses incurred by the Company in connection
therewith), in the case of each of clauses (i) and (ii) to the extend
consummated after the Issue Date.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), other than any gains associated with reimbursements for lost or damaged
rental tools in the ordinary course of business, together with any related
provision for taxes on such gain (but not loss), realized in connection with (a)
any Asset Sale (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or other sale of assets or (b) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss); and (iii) any interest income, together with
any related provision for taxes on such interest income.
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
(other than Indebtedness under the Senior Credit Facility) secured by a Lien on
the asset or assets that were the subject of such Asset Sale, amounts required
to be paid to any Person (other than the Company or any Restricted Subsidiary)
owning a beneficial interest in
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the asset or assets that were the subject of such Asset Sale, and any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (A) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (B) is directly or indirectly liable (as a Subsidiary
Guarantor or otherwise), or (C) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Non-Recourse Purchase Money Indebtedness" means Indebtedness or that
portion of Indebtedness of the Company or any Restricted Subsidiary incurred in
connection with the acquisition by the Company or such Restricted Subsidiary,
subsequent to the Issue Date, of any property or assets and as to which (i) the
holders of such Indebtedness agree that they will look solely to the property or
assets so acquired (or, in the case of the acquisition of all of the outstanding
Capital Stock of a Person, the underlying properties and assets of such Person
at the time of such acquisition, including proceeds thereof) and securing such
Indebtedness for payment on or in respect of such Indebtedness, and neither the
Company nor any Restricted Subsidiary (a) provides credit support, including any
undertaking, agreement or instrument which would constitute Indebtedness or (b)
is directly or indirectly liable for such Indebtedness, and (ii) no default with
respect to such Indebtedness would permit (after notice or passage of time or
both), according to the terms thereof, any holder of any Indebtedness of the
Company or a Restricted Subsidiary to declare a default on such Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and, provided, however, that any portion of the purchase price of such
property or assets that is not financed through the incurrence of such
Indebtedness, shall be deemed to be a "Restricted Investment" under the
Indenture, and shall only be permitted to be expended by the Company or any
Restricted Subsidiary to the extent that the Company would be permitted to make
a Restricted Payment in such amount under the terms of the covenant described
above under "-- Certain Covenants -- Restricted Payments."
"Permitted Indebtedness" means any of the following:
(i) Indebtedness (and any guarantee thereof) under the Revolving
Credit Facility in an aggregate principal amount at any one time
outstanding not to exceed the greater of (A) $50 million, less any amounts
derived from Asset Sales and applied to the permanent reduction of the
Indebtedness thereunder as contemplated by the covenant described above
under the caption "Repurchase at the Option of Holders -- Asset Sales" or
(B) the sum of (1) 80% of the Company's Eligible Accounts Receivable (as
defined in for purposes of the Revolving Credit Facility) and (2) 50% of
the rig materials and supplies of the Company and its Restricted
Subsidiaries determined in accordance with GAAP (the "Maximum Bank Facility
Amount"), and any renewals, amendments, extensions, supplements,
modifications, deferrals, refinancing or replacements (each, for purposes
of this clause (i), a "refinancing") thereof, including any successive
refinancing thereof, so long as the aggregate principal amount of any such
new Indebtedness, together with the aggregate principal amount of all other
Indebtedness outstanding pursuant to this clause (i), shall not at any one
time exceed the Maximum Bank Facility Amount;
(ii) Indebtedness under the Notes;
(iii) Indebtedness under the Term Credit Facility, any Existing
Indebtedness, and any Indebtedness under Letters of Credit existing on the
Issue Date;
(iv) Indebtedness under Interest Rate Protection Obligations, provided
that (A) such Interest Rate Protection Obligations are related to payment
obligations on Permitted Indebtedness or Indebtedness otherwise permitted
by the initial paragraph of the "Incurrence of Indebtedness and Issuance of
Preferred
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Stock" covenant, and (B) the notional principal amount of such Interest
Rate Protection Obligations does not exceed the principal amount of such
Indebtedness to which such Interest Rate Protection Obligations relate;
(v) Indebtedness under Currency Hedge Obligations, provided that (A)
such Currency Hedge Obligations are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by the initial
paragraph of the "Incurrence of Indebtedness and Issuance of Preferred
Stock" covenant or to the foreign currency cash flows reasonably expected
to be generated by the Company and its Restricted Subsidiaries, and (B) the
notional principal amount of such Currency Hedge Obligations does not
exceed the principal amount of such Indebtedness and the amount of such
foreign currency cash flows to which such Currency Hedge Obligations
relate;
(vi) the Subsidiary Guarantees of the Notes (and any assumption of the
obligations guaranteed thereby);
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary of the Company to
the Company or a Wholly Owned Restricted Subsidiary, provided, however,
that upon any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Wholly Owned Restricted Subsidiary
ceasing to be a Wholly Owned Restricted Subsidiary or any other subsequent
transfer of any such Indebtedness (except to the Company or a Wholly Owned
Restricted Subsidiary), such Indebtedness shall be deemed, in each case, to
be incurred and shall be treated as an incurrence for purposes of the
initial paragraph of the "Incurrence of Indebtedness and Issuance of
Preferred Stock" covenant at the time the Wholly Owned Restricted
Subsidiary in question ceased to be a Wholly Owned Restricted Subsidiary or
the time such subsequent transfer occurred;
(viii) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company or any Restricted Subsidiary thereof
in the ordinary course of business, including guarantees or obligations of
the Company or any Restricted Subsidiary thereof with respect to letters of
credit supporting such bid, performance or surety obligations (in each case
other than for an obligation for money borrowed);
(ix) the incurrence by the Company or its Restricted Subsidiaries of
Non-Recourse Purchase Money Indebtedness;
(x) any Permitted Refinancing Indebtedness incurred by the Company or
a Restricted Subsidiary of any Indebtedness incurred pursuant to clause
(ii) or (iii) of this definition, including any successive refinancing by
the Company or such Restricted Subsidiary; and
(xi) any additional Indebtedness in an aggregate principal amount not
in excess of $30 million at any one time outstanding and any guarantee
thereof.
"Permitted Investments" means any of the following: (i) Investments in Cash
Equivalents; (ii) Investments in the Company or any of its Wholly Owned
Restricted Subsidiaries; (iii) Investments by the Company or any of its
Restricted Subsidiaries in another Person, if as a result of such Investment (A)
such other Person becomes a Wholly Owned Restricted Subsidiary or (B) such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all of its properties and assets to, the Company or a Wholly Owned
Restricted Subsidiary; (iv) Investments permitted under the covenant described
above under the caption "-- Repurchase at the Option of Holders -- Asset Sales";
(v) Investments made in the ordinary course of business in prepaid expenses,
lease, utility, workers' compensation, performance and other similar deposits;
(vi) Investments in stock, obligations or securities received in settlement of
debts owing to the Company or any Restricted Subsidiary as a result of
bankruptcy or insolvency proceedings or upon the foreclosure, perfection or
enforcement of any Lien in favor of the Company or any Restricted Subsidiary, in
each case as to debt owing to the Company or any Restricted Subsidiary that
arose in the ordinary course of business of the Company or any such Restricted
Subsidiary, provided that any stocks, obligations or securities received in
settlement of debts that arose in the ordinary course of business (and received
other than as a result of bankruptcy or insolvency proceedings or upon
foreclosure, perfection or
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enforcement of any Lien) that are, within 30 days of receipt, converted into
cash or Cash Equivalents shall be treated as having been cash or Cash
Equivalents at the time received; and (vii) other Investments in joint ventures,
corporations, limited liability companies or partnerships formed with or
organized by third Persons, which joint ventures, corporations, limited
liability companies or partnerships, engage in the Drilling Business and are not
Unrestricted Subsidiaries at the time of such Investment, provided such
Investments do not, in the aggregate, exceed $12 million.
"Permitted Liens" means the following types of Liens:
(a) Liens existing as of the date of the Indenture;
(b) Liens securing the Notes or the Subsidiary Guarantees;
(c) Liens in favor of the Company;
(d) Liens securing Indebtedness that constitutes Permitted
Indebtedness pursuant to clause (i) or (iii) of the definition of Permitted
Indebtedness;
(e) Liens for taxes, assessments and governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required pursuant
to GAAP;
(f) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not delinquent or
being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made in
respect thereof;
(g) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other
types of social security, or to secure the payment or performance of
tenders, statutory or regulatory obligations, surety and appeal bonds,
bids, government contracts and leases, performance and return of money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(h) judgment Liens not giving rise to an Event of Default so long as
any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the
period within which such proceeding may be initiated shall not have
expired;
(i) any interest or title of a lessor under any Capital Lease
Obligation or operating lease;
(j) Liens securing Non-Recourse Purchase Money Indebtedness and other
purchase money Liens; provided, however, that (i) the related Non-Recourse
Purchase Money Indebtedness or other purchase money Indebtedness shall not
be secured by any property or assets of the Company or any Restricted
Subsidiary other than the property or assets so acquired and any proceeds
therefrom and (ii) the Lien securing any such Indebtedness shall be created
within 90 days of such acquisition;
(k) Liens securing obligations under or in respect of either Currency
Hedge Obligations or Interest Rate Protection Obligations;
(1) Liens upon specific items of inventory or other goods of any
Person securing such Person's obligations in respect of bankers acceptances
issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;
(m) Liens securing reimbursement obligations with respect to
commercial letters of credit that encumber documents and other property or
assets relating to such letters of credit and products and proceeds
thereof;
(n) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset and
set-off; and
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(o) Liens on, or related to, properties or assets to secure all or
part of the costs incurred in the ordinary course of business for the
exploration, drilling, development or operation thereof.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) with
respect to any such Indebtedness of the Company being extended, refinanced,
renewed, replaced, defeased or refunded, such Permitted Refinancing Indebtedness
shall not be incurred by any Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Public Equity Offering" means an underwriter offer and sale of common
stock of the Company pursuant to a registration statement that has been declared
effective by the Commission pursuant to the Securities Act (other than a
registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of the Company).
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Disqualified Stock.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Restricted Investment" means (without duplication) (i) the designation of
a Subsidiary as an Unrestricted Subsidiary in the manner described in the
definition of Unrestricted Subsidiary, (ii) any Investment other than a
Permitted Investment and (iii) any amount constituting a "Restricted Investment"
as contemplated in the definition of "Non-Recourse Purchase Money Indebtedness."
"Revolving Credit Facility" means the revolving loan facility under the
Senior Credit Facility.
"Senior Credit Facility" means, collectively, the Revolving Credit
Agreement and the Term Loan Agreement, each dated as of November 8, 1996, among
the Company, ING (U.S.) Capital Corporation ("ING") and the other lenders
identified therein, and ING, as agent, each as amended, modified, supplemented,
extended, restated, or renewed from time to time.
"Significant Subsidiary" means any (a) Subsidiary that would be a
significant subsidiary as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof and (b) any other Subsidiary that contributed more than 10% of
the Company's Consolidated Cash Flow for the most recent four fiscal quarters
for which financial statements are available.
"Subordinated Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Notes or the Subsidiary Guarantees, as the case may be.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time
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owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of that Person (or a combination thereof) and (ii) any
partnership (A) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (B) the only general
partners of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).
"Subsidiary Guarantee" means any guarantee of the Notes by any Subsidiary
Guarantor in accordance with the provisions described under "-- Subsidiary
Guarantees."
"Subsidiary Guarantors" means each of (i) the Company's Significant
Subsidiaries on the Issue Date (other than any Exempt Foreign Subsidiary, as
designated by the Company) or any other Restricted Subsidiary that provides a
guarantee under the Senior Credit Facility, (ii) any other Subsidiary that
executes a Subsidiary Guarantee in accordance with the provisions of the
Indenture, and (iii) their respective successors and assigns, as required under
the Indenture.
"Term Credit Facility" means the term loans under the Senior Credit
Facility in an aggregate amount not to exceed $100 million, less any amounts
derived from Asset Sales and applied to the permanent reduction of Indebtedness
thereunder as contemplated by the covenant described above under the caption
"-- Repurchase at the Option of Holders -- Asset Sales."
"Unrestricted Subsidiary" means any Subsidiary (or any successor to any of
them) that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a resolution of the Board of Directors; but only to the extent that
such Subsidiary (i) has no Indebtedness other than Non-Recourse Indebtedness;
(ii) is not party to any agreement, contract, arrangement or understanding with
the Company or any Restricted Subsidiary of the Company unless the terms of any
such agreement, contract, arrangement or understanding are no less favorable to
the Company or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company; (iii) is a Person
with respect to which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (A) to subscribe for additional Equity
Interests or (B) to maintain or preserve such Person's financial condition or to
cause such Person to achieve any specified levels of operating results; and (iv)
has not guaranteed or otherwise directly or indirectly provided credit support
for any Indebtedness of the Company or any of its Restricted Subsidiaries. Any
such designation by the Board of Directors shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by the covenant described above under the caption "-- Certain
Covenants -- Restricted Payments." If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it
shall thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be incurred as of such date under the covenant
described under the caption "-- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Preferred Stock," the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under the covenant described under the caption "-- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock," and
(ii) no Default or Event of Default would be in existence following such
designation.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary to the
extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying
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shares mandated by applicable law, is owned directly or indirectly by the
Company or (ii) such Restricted Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Restricted Subsidiary to transact business in such foreign
jurisdiction, provided that the Company, directly or indirectly, owns the
remaining Capital Stock or ownership interests in such Restricted Subsidiary
and, by contract or otherwise, controls the management and business of such
Restricted Subsidiary and derives the economic benefits of ownership of such
Restricted Subsidiary to substantially the same extent as if such Restricted
Subsidiary were a wholly owned Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of the
Capital Stock or other ownership interests in such Subsidiary, other than any
directors' qualifying shares mandated by applicable law, is owned directly or
indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Subsidiary to transact business in such foreign jurisdiction,
provided that the Company, directly or indirectly, owns the remaining Capital
Stock or ownership interests in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the economic
benefits of ownership of such Subsidiary to substantially the same extent as if
such Subsidiary were a wholly owned Subsidiary.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Old Notes where such Old Notes were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that it will make this Prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale for a period of 180
days after consummation of the Exchange Offer, or such shorter period as will
terminate when all Old Notes acquired by broker-dealers for their own accounts
as a result of market-making activities or other trading activities have been
exchanged for Exchange Notes and resold by such broker-dealers. A broker-dealer
that delivers such a prospectus to purchasers in connection with such resales
will be subject to certain of the civil liability provisions under the
Securities Act and will be bound by the provisions of the Registration Rights
Agreement (including certain indemnification rights and obligations).
The Company will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. For a period of 180 days after consummation of the Exchange Offer, or such
shorter period as will terminate when all Old Notes acquired by broker-dealers
for their own accounts as a result of market-making activities or other trading
activities have been exchanged for Exchange Notes and resold by such
broker-dealers, the Company will promptly send additional copies of this
Prospectus and any amendment or supplement to this Prospectus to any
broker-dealer that requests such documents in the Letter of Transmittal. The
Company has agreed in the
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Registration Rights Agreement to indemnify such broker-dealers against certain
liabilities, including liabilities under the Securities Act.
TRANSFER RESTRICTIONS ON OLD NOTES
The Old Notes have not been registered under the Securities Act and may not
be offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. Accordingly,
the Old Notes were offered and sold by the Initial Purchasers only (1) to
"Qualified Institutional Buyers" (as defined in Rule 144A under the Securities
Act) in compliance with Rule 144A and (2) to a limited number of other
institutional "Accredited Investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) that, prior to their purchase of any Notes,
delivered to the Initial Purchasers a letter containing certain representations
and agreements.
Each purchaser of Old Notes, by its acceptance thereof, is deemed to have
acknowledged, represented and agreed as follows:
(1) it is purchasing the Old Notes for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account is a Qualified Institutional Buyer or an Accredited
Investor, in each case for investment and not with a view to distribution;
(2) the Old Notes have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except as set forth below;
(3) if it should resell or otherwise transfer the Old Notes within
three years after the original issuance of the Old Notes, it will do so
only (a) to the Company or any of its subsidiaries, (b) inside the United
States to a Qualified Institutional Buyer in compliance with Rule 144A, (c)
inside the United States to an Accredited Investor that, prior to such
transfer, furnishes to the Trustee a signed letter containing certain
representations and agreements relating to the restrictions on transfer of
the Old Notes (the form of which letter can be obtained from such Trustee),
(d) outside the United States in compliance with Rule 904 of Regulation S
under the Securities Act, (e) pursuant to Rule 144 under the Securities
Act, or (f) pursuant to an effective registration statement under the
Securities Act;
(4) it will give to each transferee of the Old Notes notice of any
restrictions on transfer of such Old Notes;
(5) none of the Company or the Initial Purchasers or any person
representing the Company or the Initial Purchasers has made any
representation to it with respect to the Company or the offering or sale of
any Notes, other than the information contained in the Offering Circular
dated November 5, 1996, provided in connection with the sale of the Old
Notes, which has been delivered to it and upon which it is relying in
making its investment decision with respect to the Old Notes; accordingly,
it acknowledges that no representation or warranty is made by the Company
or the Initial Purchasers as to the accuracy or completeness of such
materials;
(6) it has had access to such financial and other information
concerning the Company and the Old Notes as it has deemed necessary in
connection with its decision to purchase the Old Notes, including an
opportunity to ask questions of and request information from the Company
and the Initial Purchasers;
(7) the Trustee will not be required to accept for registration of
transfer any Old Notes acquired by it, except upon presentation of evidence
satisfactory to the Company and the Trustee that the restrictions set forth
herein have been complied with;
(8) the Company, the Trustee, the Initial Purchasers and others will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and agrees that, if any of the
acknowledgments, representations or agreements deemed to have been made by
its purchase of the Old Notes are no longer accurate, it shall promptly
notify the Initial Purchasers; and
64
<PAGE> 73
(9) if it is acquiring the Old Notes as a fiduciary or agent for one
or more investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power to make
the foregoing acknowledgments, representations and agreements on behalf of
each account.
Each Accredited Investor that is an original purchaser of the Notes from
the Initial Purchasers will be required to sign an agreement to the foregoing
effect in the form attached to this Offering Circular as Annex A.
Each certificate representing the Old Notes will bear the following legend:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES
ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO
THE ISSUER OR (3) 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 (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
Any Old Notes not exchanged in the Exchange Offer for Exchange Notes will
remain subject to the transfer restrictions described above.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Notes offered
hereby will be passed upon for the Company by Vinson & Elkins L.L.P., Houston,
Texas.
EXPERTS
The consolidated balance sheet of Parker Drilling Company and subsidiaries
as of August 31, 1996 and 1995, and the consolidated statements of operations,
redeemable preferred stock and stockholders' equity, and cash flows for each of
the three years in the period ended August 31, 1996, incorporated by reference
in this Prospectus, have been incorporated herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
The combined balance sheets of Mallard Bay Drilling Division of Energy
Ventures, Inc. as of December 31, 1995 and 1994 and the combined statement of
income, equity investments and cash flows for each of the three years in the
period ended December 31, 1995, incorporated by reference in this Prospectus,
65
<PAGE> 74
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.
The balance sheets of Quail Tools, Inc. as of December 31, 1995 and 1994
and the related statements of earnings and retained earnings and cash flows for
each of the years in the three-year period ended December 31, 1995, incorporated
by reference in this Prospectus, have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, as stated in their report incorporated
by reference, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP refers to the adoption in 1994 of
the method of accounting for certain investments in debt and equity securities
prescribed by Statement of Financial Accounting Standards No. 115.
66
<PAGE> 75
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws provide that each person who was or is made a party
to, or is involved in, any action, suit or proceeding by reason of the fact that
he or she was a director or officer of the Company (or was serving at the
request of the Company as a director, officer, employee or agent for another
entity) will be indemnified and held harmless by the Company, to the full extent
authorized by the Delaware General Corporation Law.
Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify a director, officer, employee or agent of the corporation against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her if he or she acted in
good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. In the case of an action brought by or in the right of a corporation,
the corporation may indemnify a director, officer, employee or agent of the
corporation against expenses (including attorneys' fees) actually and reasonably
incurred by him or her if he or she acted in good faith and in a manner he or
she reasonably believed to be in the best interests of the corporation, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to the corporation
unless a court finds that, in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
court shall deem proper.
The Company's Certificate of Incorporation provides that to the fullest
extent permitted by Delaware General Corporation Law as the same exists or may
hereafter be amended, a director of the Company shall not be liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director. The Delaware General Corporation Law permits Delaware corporations
to include in their certificates of incorporation a provision eliminating or
limiting director liability for monetary damages arising from breaches of their
fiduciary duty. The only limitations imposed under the statute are that the
provision may not eliminate or limit a director's liability (i) for breaches of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or involving intentional misconduct or known
violations of law, (iii) for the payment of unlawful dividends or unlawful stock
purchases or redemptions, or (iv) for transactions in which the director
received an improper personal benefit.
The Company is insured against liabilities which it may incur by reason of
its indemnification of officers and directors in accordance with its By-Laws. In
addition, directors and officers are insured, at the Company's expense, against
certain liabilities which might arise out of their employment and are not
subject to indemnification under the By-Laws.
The foregoing summaries are necessarily subject to the complete text of the
statute, Certificate of Incorporation, By-Laws and agreements referred to above
and are qualified in their entirety by reference thereto.
ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES
The following instruments and documents are included as Exhibits to this
Registration Statement. Exhibits incorporated by reference are so indicated by
parenthetical information.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- -------------------- ------------------------------------------------------------------------
<C> <S>
4.1 -- Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3(a) to Annual Report on Form 10-K for the year
ended August 31, 1989, as amended by Form 8 dated December 27, 1989).
4.2 -- By-Laws of the Company (incorporated by reference to Exhibit 3(b) to
Annual Report on Form 10-K for the year ended August 31, 1992, as
amended by Form 8 dated February 18, 1993).
</TABLE>
II-1
<PAGE> 76
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- -------------------- ------------------------------------------------------------------------
<C> <S>
4.3* -- Indenture dated as of November 12, 1996 among the Company, as issuer,
certain Subsidiary Guarantors (as defined therein) and Texas Commerce
Bank National Association, as trustee.
4.4* -- Registration Rights Agreement dated as of November 12, 1996 by and
among the Company, certain Subsidiary Guarantors (as defined therein)
and Jefferies & Company, Inc. and ING Baring (U.S.) Securities Inc.
5.1* -- Opinion of Vinson & Elkins L.L.P.
23.1* -- Consent of Coopers & Lybrand L.L.P.
23.2* -- Consent of Arthur Andersen LLP
23.3* -- Consent of KPMG Peat Marwick LLP
23.4* -- Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
24.1* -- Powers of Attorney (included on the signature pages of this
Registration Statement).
25.1* -- Statement of Eligibility of Texas Commerce Bank National Association.
99.1* -- Form of Letter of Transmittal.
</TABLE>
- ---------------
* Filed herewith
ITEM 22. UNDERTAKINGS
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the provisions described under Item 15 above, or otherwise, the
Company has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless, in
the opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-2
<PAGE> 77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY
By: /s/ ROBERT L. PARKER JR.
------------------------------------
Robert L. Parker Jr.
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ ROBERT L. PARKER Chairman of the Board January 6, 1997
- ---------------------------------------------
Robert L. Parker
/s/ ROBERT L. PARKER JR. President, Chief Executive January 6, 1997
- --------------------------------------------- Officer and Director
Robert L. Parker Jr. (Principal Executive
Officer)
/s/ JAMES W. LINN Executive Vice President, January 6, 1997
- --------------------------------------------- Chief Operating Officer and
James W. Linn Director
/s/ BERNARD DUROC-DANNER Director January 6, 1997
- ---------------------------------------------
Bernard Duroc-Danner
/s/ DAVID L. FIST Director January 6, 1997
- ---------------------------------------------
David L. Fist
/s/ EARNEST F. GLOYNA Director January 6, 1997
- ---------------------------------------------
Earnest F. Gloyna
Director January , 1997
- ---------------------------------------------
R. Rudolph Reinfrank
/s/ JAMES J. DAVIS Senior Vice January 6, 1997
- --------------------------------------------- President -- Finance and
James J. Davis Chief Financial Officer
(Principal Financial and
Accounting Officer)
</TABLE>
<PAGE> 78
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY OF
OKLAHOMA, INC.
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Odessa, the
State of Texas, on January 6, 1997.
PARKER TECHNOLOGY, INC.
By: /s/ JOE N. BROWN
------------------------------------
Joe N. Brown
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ JOE N. BROWN Director January 6, 1997
- ---------------------------------------------
Joe N. Brown
/s/ DAVID L. HOLLAND Director January 6, 1997
- ---------------------------------------------
David L. Holland
/s/ KENNETH R. HOIT Director January 6, 1997
- ---------------------------------------------
Kenneth R. Hoit
</TABLE>
<PAGE> 80
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY
INTERNATIONAL LIMITED
By: /s/ JOHN R. GASS
------------------------------------
John R. Gass
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ JOHN R. GASS Director January 6, 1997
- ---------------------------------------------
John R. Gass
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 81
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
CHOCTAW INTERNATIONAL RIG
CORPORATION
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I.E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 82
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY LIMITED
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 83
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY OF
ALASKA LIMITED
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 84
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY OF
NEW GUINEA, INC.
By: /s/ T. BRUCE BLACKMAN
------------------------------------
T. Bruce Blackman
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ T. BRUCE BLACKMAN Director January 6, 1997
- ---------------------------------------------
T. Bruce Blackman
/s/ EVELYN ONA Director January 6, 1997
- ---------------------------------------------
Evelyn Ona
/s/ MICHAEL M. WOODMAN Director January 6, 1997
- ---------------------------------------------
Michael M. Woodman
</TABLE>
<PAGE> 85
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING COMPANY OF
NORTH AMERICA, INC.
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 86
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
PARKER DRILLING U.S.A. LIMITED
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 87
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Odessa, the
State of Texas, on January 6, 1997.
VANCE SYSTEMS ENGINEERING, INC.
By: /s/ JOE N. BROWN
------------------------------------
Joe N. Brown
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ JOE N. BROWN Director January 6, 1997
- ---------------------------------------------
Joe N. Brown
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 88
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
DGH, INC.
By: /s/ THOMAS L. WINGERTER
------------------------------------
Thomas L. Wingerter
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ THOMAS L. WINGERTER Director January 6, 1997
- ---------------------------------------------
Thomas L. Wingerter
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
/s/ LESLIE D. ROSENCUTTER Director January 6, 1997
- ---------------------------------------------
Leslie D. Rosencutter
</TABLE>
<PAGE> 89
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
MALLARD BAY DRILLING, INC.
By: /s/ ROBERT L. PARKER, JR.
-----------------------------------
Robert L. Parker, Jr.
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ JAMES J. DAVIS Director January 6, 1997
- ---------------------------------------------
James J. Davis
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
</TABLE>
<PAGE> 90
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
QUAIL TOOLS, INC.
By: /s/ JAMES W. LINN
------------------------------------
James W. Linn
President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ JAMES W. LINN Director January 6, 1997
- ---------------------------------------------
James W. Linn
/s/ JAMES J. DAVIS Director January 6, 1997
- ---------------------------------------------
James J. Davis
</TABLE>
<PAGE> 91
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
BAY DRILLING CORPORATION
By: /s/ ROBERT L. PARKER JR.
------------------------------------
Robert L. Parker Jr.
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<C> <S> <C>
/s/ JAMES J. DAVIS Director January 6, 1997
- ---------------------------------------------
James J. Davis
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
</TABLE>
<PAGE> 92
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement or Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, the
State of Oklahoma, on January 6, 1997.
AWI DRILLING & WORKOVER, INC.
By: /s/ ROBERT L. PARKER JR.
------------------------------------
Robert L. Parker Jr.
President and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Parker Jr. and James J. Davis, and each
of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign on
his behalf individually and in each capacity stated below any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents and either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ----------------------------- -----------------
<C> <S> <C>
/s/ JAMES J. DAVIS Director January 6, 1997
- ---------------------------------------------
James J. Davis
/s/ I. E. HENDRIX, JR. Director January 6, 1997
- ---------------------------------------------
I. E. Hendrix, Jr.
</TABLE>
<PAGE> 93
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- -------------------- ------------------------------------------------------------------------
<C> <S>
4.3* -- Indenture dated as of November 12, 1996 among the Company, as issuer,
certain Subsidiary Guarantors (as defined therein) and Texas Commerce
Bank National Association, as trustee.
4.4* -- Registration Rights Agreement dated as of November 12, 1996 by and
among the Company, certain Subsidiary Guarantors (as defined therein)
and Jefferies & Company, Inc. and ING Baring (U.S.) Securities Inc.
5.1* -- Opinion of Vinson & Elkins L.L.P.
23.1* -- Consent of Coopers & Lybrand L.L.P.
23.2* -- Consent of Arthur Andersen LLP
23.3* -- Consent of KPMG Peat Marwick LLP
23.4* -- Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
24.1* -- Powers of Attorney (included on the signature pages of this
Registration Statement).
25.1* -- Statement of Eligibility of Texas Commerce Bank National Association.
99.1* -- Form of Letter of Transmittal.
</TABLE>
- ---------------
* Filed herewith
<PAGE> 1
EXHIBIT 4.3
CONFORMED COPY
================================================================================
- --------------------------------------------------------------------------------
PARKER DRILLING COMPANY
AND
SUBSIDIARY GUARANTORS
9 3/4% SENIOR NOTES DUE 2006
--------------------
INDENTURE
Dated as of November 12, 1996
--------------------
Texas Commerce Bank National Association
Trustee
--------------------
$300,000,00
Series A 9 3/4% Senior Notes due 2006
Series B 9 3/4% Senior Notes due 2006
- --------------------------------------------------------------------------------
================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . 7.06;7.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.21
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03;11.04;11.05
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05;11.02
(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) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . 1
SECTION 1.01 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 OTHER DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . . . . . . 16
SECTION 1.04 RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 2 THE NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.01 FORM AND DATING. . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.02 EXECUTION AND AUTHENTICATION. . . . . . . . . . . . . . . . . . 17
SECTION 2.03 REGISTRAR AND PAYING AGENT. . . . . . . . . . . . . . . . . . . 18
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. . . . . . . . . . . . . . . 18
SECTION 2.05 HOLDER LISTS. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.06 TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.07 REPLACEMENT NOTES. . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.08 OUTSTANDING NOTES. . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.09 TREASURY NOTES. . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.10 TEMPORARY NOTES. . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.11 CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.12 DEFAULTED INTEREST. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.13 CUSIP NUMBERS. . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 3 REDEMPTION AND PREPAYMENT. . . . . . . . . . . . . . . . . . . . 25
SECTION 3.01 NOTICES TO TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED. . . . . . . . . . . . . . . . 25
SECTION 3.03 NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . . 26
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . . . . . 26
SECTION 3.06 NOTES REDEEMED IN PART. . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.07 OPTIONAL REDEMPTION . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.08 MANDATORY REDEMPTION . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. . . . . . . 27
ARTICLE 4 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.01 PAYMENT OF NOTES. . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . . . . . 29
SECTION 4.03 REPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.04 COMPLIANCE CERTIFICATE. . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.05 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.06 STAY, EXTENSION AND USURY LAWS. . . . . . . . . . . . . . . . . 31
SECTION 4.07 RESTRICTED PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES . 33
SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED EQUITY. . . 34
SECTION 4.10 ASSET SALES. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.11 TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . . 37
SECTION 4.12 LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.13 ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.14 SALE-AND-LEASEBACK TRANSACTIONS. . . . . . . . . . . . . . . . . 39
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL. . . . . . . . . . . 39
SECTION 4.16 BUSINESS ACTIVITIES. . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
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TABLE OF CONTENTS
PAGE
<TABLE>
<S> <C>
ARTICLE 5 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS. . . . . . . . . . . . 40
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED. . . . . . . . . . . . . . . . 40
ARTICLE 6 DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.01 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.02 ACCELERATION. . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.03 OTHER REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.04 WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.05 CONTROL BY MAJORITY. . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.06 LIMITATION ON SUITS. . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. . . . . . . . . . 44
SECTION 6.08 COLLECTION SUIT BY TRUSTEE. . . . . . . . . . . . . . . . . . . 44
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . . . . . . . 44
SECTION 6.10 PRIORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.11 UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 7 TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.01 DUTIES OF TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.02 RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . . 46
SECTION 7.04 TRUSTEE'S DISCLAIMER. . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.05 NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. . . . . . . . . . . 47
SECTION 7.07 COMPENSATION AND INDEMNITY. . . . . . . . . . . . . . . . . . . 47
SECTION 7.08 REPLACEMENT OF TRUSTEE. . . . . . . . . . . . . . . . . . . . . 48
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC. . . . . . . . . . . . . . . . 49
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. . . . . . . . . . . . . . . . . . 49
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY. . . . . . 49
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . 49
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. . . . 49
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE. . . . . . . . . . . . . . . . . 49
SECTION 8.03 COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. . . . . . . . . . . 50
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . 52
SECTION 8.06 REPAYMENT TO THE COMPANY. . . . . . . . . . . . . . . . . . . . 52
SECTION 8.07 REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . . . . . . . 53
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES. . . . . . . . . . . . . . . 53
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES. . . . . . . . . . . . . . . . 53
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. . . . . . . . . . . . . . . 55
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS. . . . . . . . . . . . . . . . 55
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES. . . . . . . . . . . . . . . . 55
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC. . . . . . . . . . . . . . . . . 55
</TABLE>
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TABLE OF CONTENTS
<TABLE>
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<S> <C>
ARTICLE 10 SUBSIDIARY GUARANTEES . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.01 SUBSIDIARY GUARANTEES . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.02 ADDITIONAL SUBSIDIARY GUARANTEES. . . . . . . . . . . . . . . . 57
SECTION 10.03 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY. . . . . . . . . 57
SECTION 10.04 SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.05 RELEASES OF SUBSIDIARY GUARANTORS . . . . . . . . . . . . . . . 59
SECTION 10.06 "TRUSTEE" TO INCLUDE PAYING AGENT . . . . . . . . . . . . . . . 59
SECTION 10.07 CONTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.08 EXECUTION OF SUBSIDIARY GUARANTEES. . . . . . . . . . . . . . . 59
ARTICLE 11 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.01 TRUST INDENTURE ACT CONTROLS. . . . . . . . . . . . . . . . . . 60
SECTION 11.02 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES. 62
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. . . . . . . 62
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . . . . . . . 62
SECTION 11.06 RULES BY TRUSTEE AND AGENTS. . . . . . . . . . . . . . . . . . 63
SECTION 11.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.08 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . . . . . . . 63
SECTION 11.10 SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.11 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.12 COUNTERPART ORIGINALS . . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC. . . . . . . . . . . . . . . . 63
</TABLE>
iii
<PAGE> 6
INDENTURE dated as of November 12, 1996 by and among Parker Drilling
Company, a Delaware corporation (the "Company"), the Subsidiary Guarantors (as
defined herein) and Texas Commerce Bank National Association, as trustee (the
"Trustee").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of one another and for the equal and ratable benefit of the
Holders of the Series A 9 3/4% Senior Notes due 2006 of the Company (the
"Original Notes") and the Series B 9 3/4% Senior Notes due 2006 of the Company
to be issued to Holders pursuant to the Exchange Offer (the "New Notes" and,
together with the Original Notes, the "Notes"), without preference of one
series of Notes over the other:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Acquired Indebtedness" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Attributable Indebtedness" in respect of a sale-and-leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale-and-leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). As used in the preceding sentence, the
"net rental payments" under any lease for any such period shall mean the sum of
rental and other payments required to be paid with respect to such period by
the lessee thereunder, excluding any amounts required to be paid by such lessee
on account of maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges. In the case of any lease that is terminable by the
lessee upon payment of penalty, such net rental payment shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated.
"Bankruptcy Custodian" means any receiver, trustee, assignee,
liquidator or similar officer under any Bankruptcy Law.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
<PAGE> 7
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock; (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
corporation or similar entity, any membership or other similar interests
therein; and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) demand and time deposits and certificates of
deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million; (iii)
commercial paper with a maturity of 270 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-2
by Standard and Poor's or at least P-2 by Moody's; (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii) above; (v) overnight bank deposits and bankers'
acceptances at any commercial bank meeting the qualifications specified in
clause (ii) above; (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (ii) above,
provided all such deposits do not exceed $5 million in the aggregate at any one
time; (vii) demand and time deposits and certificates of deposit with any
commercial bank organized in the United States not meeting the qualifications
specified in clause (ii) above, provided that such deposits and certificates
support bond, letter of credit and other similar types of obligations incurred
in the ordinary course of business: and (viii) investments in money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (v) above, including those for which the
Trustee, or any Affiliate thereof, receives compensation with respect to such
investment.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act); (ii) the Company consolidates with or merges
into another Person or any Person consolidates with, or merges into, the
Company, in any such event pursuant to a transaction in which the outstanding
voting stock of the Company is changed into or exchanged for cash, securities
or other property, other than any such transaction where (a) the outstanding
voting stock of the Company is changed into or exchanged for voting stock of
the surviving or resulting Person that is Qualified Capital Stock and (b) the
holders of the voting stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than a majority of the voting
stock of the surviving or resulting Person immediately after such transaction;
(iii) the adoption of a plan relating to the liquidation or dissolution of the
Company; (iv) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the voting stock of the Company or (v) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors. For purposes of this definition, any
transfer of an equity interest of an entity that was formed for the purpose
2
<PAGE> 8
of acquiring voting stock of the Company will be deemed to be a transfer of
such portion of such voting stock as corresponds to the portion of the equity
of such entity that has been so transferred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" or "SEC" means the Securities and Exchange Commission.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such
Consolidated Net Income, plus (iii) consolidated net interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Indebtedness, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Interest Rate Protection Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of
goodwill, debt issue costs and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) and other non-cash
charges (including any provision for the reduction in the carrying value of
assets recorded in accordance with GAAP but excluding any such non-cash charge
to the extent that it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such period to
the extent that such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income, minus (v) any non-cash
items increasing the Consolidated Net Income of such Person and its Restricted
Subsidiaries during such period (excluding any such items that represent the
reversal of any accrual of, or cash reserve for, anticipated cash charges in
any prior period commencing subsequent to the Issue Date), in each case, on a
consolidated basis and determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in same proportion) that
the Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to the Company by
such Restricted Subsidiary without prior governmental approval (that has not
been obtained), and without direct or indirect restriction pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that
is not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof that is a Subsidiary Guarantor; (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders; (iii) the Net Income of
3
<PAGE> 9
any Person acquired in a pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded; and (iv) the cumulative
effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the Issue Date in
the book value of any asset owned by such Person or a consolidated Restricted
Subsidiary of such Person, (y) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except,
in each case, Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the foregoing
determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issue Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Convertible Preferred Stock" means the Series D Convertible Preferred
Stock of the Company.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time that were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or futures contract or other similar agreement or arrangement designed to
protect against or manage such Person's or any of its Subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Custodian" or "Note Custodian" means the Trustee, as custodian with
respect to the Notes in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereof.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors of the
Company is required to deliver a resolution of the Board of Directors under
this Indenture, a member of the Board of Directors of the Company who does not
have any material direct or indirect financial interest (other than an interest
arising solely from the beneficial ownership of Capital Stock of the Company)
in or with respect to such transaction or series of transactions.
4
<PAGE> 10
"Disqualified Stock" means the Convertible Preferred Stock and any
other Capital Stock that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date on which the Notes mature.
"Drilling Business" means (i) the drilling for oil, gas or other
hydrocarbons, whether offshore or onshore, and whether as an agent or
principal, and (ii) any business relating to or arising from drilling for oil,
gas or other hydrocarbons, including, without limitation, the rental of drill
pipe, tools or other equipment.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt (or the debt of whose holding company) is rated
"A" (or higher) according to Standard and Poor's or "A2" (or higher) by Moody's
at the time as of which any investment or rollover therein is made.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Employee Stock Repurchases" means purchases by the Company of any of
its Capital Stock from employees for the purpose of permitting such employees
to pay personal income tax obligations with the proceeds, provided that the
aggregate amount of all such purchases shall not exceed $500,000 during any
fiscal year of the Company.
"Event of Loss" means, with respect to any drilling rig or similar or
related property or asset of the Company or any Restricted Subsidiary, (i) any
damage to such drilling rig or similar or related property or asset that
results in an insurance settlement with respect thereto on the basis of a total
loss or a constructive or compromised total loss or (ii) the confiscation,
condemnation or requisition of title to such drilling rig or similar or related
property or asset by any government or instrumentality or agency thereof. An
Event of Loss shall be deemed to occur as of the date of the insurance
settlement, confiscation, condemnation or requisition of title, as applicable.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange New Notes for
Original Notes.
"Executive Officer" means, for any Person, the managing general
partner, the chief financial officer, chief operating officer or chief
executive officer of such Person.
"Exempt Foreign Subsidiary" means (i) any Restricted Subsidiary
engaged in the Drilling Business exclusively outside the United States of
America, irrespective of its jurisdiction of incorporation and (ii) any other
Restricted Subsidiary whose assets (excluding any cash and Cash Equivalents)
consist exclusively of Capital Stock or Indebtedness of one or more Restricted
Subsidiaries described in clause (i) of this definition, that, in any case, is
so designated by the Company in an Officer's Certificate delivered to the
Trustee and (a) is not a guarantor or, and has not granted any Lien to secure,
the Senior Credit Facility or any other Indebtedness of the Company or any
Restricted Subsidiary other than another Exempt Foreign Subsidiary and (b) does
not have total assets that, when aggregated with the total assets of any other
Exempt Foreign Subsidiary, exceed 10% of the Company's consolidated total
assets, as determined in accordance with GAAP, as reflected on the Company's
most recent quarterly or annual balance sheet. The Company may revoke the
designation of any Exempt Foreign Subsidiary by notice to the Trustee.
5
<PAGE> 11
"Existing Indebtedness" means up to $8 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Senior Credit Facility) in existence on the Issue Date,
until such amounts are repaid.
"Fair Market Value" means, with respect to any asset or Investment,
the fair market value of such asset or Investment at the time of the event
requiring such determination, and, with respect to any assets or Investment in
excess of $5 million (other than cash or Cash Equivalents) as determined by a
reputable appraisal firm that is, in the reasonable judgment of the Board of
Directors, qualified to perform the task for which such firm has been engaged
and independent with respect to the Company.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (i) the consolidated interest expense (net of any interest income) of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (excluding amortization of debt issuance costs and including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Indebtedness, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Interest
Rate Protection Obligations); (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period;
(iii) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not
such guarantee or Lien is called upon); and (iv) the product of (A) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred stock of such Person, to
the extent such preferred stock is owned by Persons other than such Person or
its Restricted Subsidiaries, times (A) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person for
such period. In the event that the Company or any of its Restricted
Subsidiaries incurs, assumes, guarantees or redeems any Indebtedness (other
than revolving credit borrowings) or issues preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the date on which the event for which the calculation
of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee or redemption of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions of
businesses that have been made by the referent Person or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period; (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded; and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public
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<PAGE> 12
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as Exhibit A.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation of the United States of America, which, in either
case, are not callable or redeemable as the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such
Government Security or a specific payment of principal of or interest on any
such Government Security held by such custodian for the account of the holder
of such depository receipt; provided, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Security or the specific payment of principal of
or interest on the Government Security evidenced by such depository receipt.
The term "guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection
in the ordinary course of business), direct or indirect, in any manner, of any
part or all of such obligation and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of non-
performance) of all or any part of such obligation, including, without limiting
the foregoing, the payment of amounts drawn down under letters of credit. When
used as a verb, "guarantee" has a corresponding meaning.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any obligations in respect
of Currency Hedge Obligations or Interest Rate Protection Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and
to the extent any of the foregoing indebtedness (other than letters of credit,
Currency Hedge Obligations and Interest Rate Protection Obligations) would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, as well as all indebtedness of others secured by a Lien
on any asset of such Person (whether or not such indebtedness is assumed by
such Person) and, to the extent not otherwise included, the guarantee by such
Person of any Indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Appraiser" means an investment banking firm of national
standing with non-investment grade debt underwriting experience or any third
party appraiser of national standing; provided, however, that such firm or
appraiser is not an Affiliate of the Company.
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<PAGE> 13
"Interest Rate Agreement" means, with respect to any Person, any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement.
"Interest Rate Protection Obligations" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar agreements or arrangements designed to
protect against or manage such Person's or any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that the following shall not constitute Investments: (i) an
acquisition of assets, Equity Interests or other securities by the Company for
consideration consisting of common equity securities of the Company, (ii)
extensions of trade credit or other advances to customers on commercially
reasonable terms in accordance with normal trade practices or otherwise in the
ordinary course of business, (iii) Interest Rate Protection Obligations and
Currency Hedge Obligations, but only to the extent that the same constitute
Permitted Indebtedness, and (iv) endorsements of negotiable instruments and
documents in the ordinary course of business. If the Company or any Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any
direct or indirect Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Subsidiary not sold or disposed of.
"Issue Date" means the date on which the Notes were first issued under
this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of Houston, Texas or the City of New York or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction
other than a precautionary financing statement respecting a lease not intended
as a security agreement).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Moody's" means Moody's Investors Service, Inc. and any successor to
the rating agency business thereof.
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<PAGE> 14
"Net Equity Proceeds" means (i) in the case of any sale by the Company
of Qualified Capital Stock of the Company, the aggregate net proceeds received
by the Company, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in other property
(valued as determined reasonably and in good faith by the Board of Directors of
the Company, as evidenced by a written resolution of said Board of Directors,
at the fair market value thereof at the time of receipt) and (ii) in the case
of any exchange, exercise, conversion or surrender of any outstanding
Indebtedness of the Company or any Restricted Subsidiary for or into shares of
Qualified Capital Stock of the Company, the amount of such Indebtedness (or, if
such Indebtedness was issued at an amount less than the stated principal amount
thereof, the accrued amount thereof as determined in accordance with GAAP) as
reflected in the consolidated financial statements of the Company prepared in
accordance with GAAP as of the most recent date next preceding the date of such
exchange, exercise, conversion or surrender (plus any additional amount
required to be paid by the holders of such Indebtedness to the Company or to
any Wholly Owned Restricted Subsidiary of the Company upon such exchange,
exercise, conversion or surrender and less any and all payments made to the
holders of such Indebtedness, and all other expenses incurred by the Company in
connection therewith), in the case of each of clauses (i) and (ii) to the
extend consummated after the Issue Date.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), other than any gains associated with reimbursements for lost or damaged
rental tools in the ordinary course of business, together with any related
provision for taxes on such gain (but not loss), realized in connection with
(a) any Asset Sale (including, without limitation, dispositions pursuant to
sale and leaseback transactions) or other sale of assets or (b) the disposition
of any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries; (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss); and (iii) any interest income, together with
any related provision for taxes on such interest income.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Indebtedness under the Senior Credit
Facility) secured by a Lien on the asset or assets that were the subject of
such Asset Sale, amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the asset
or assets that were the subject of such Asset Sale, and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Non-Recourse Indebtedness" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (A) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (B) is directly or indirectly liable (as a Subsidiary
Guarantor or otherwise), or (C) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries.
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<PAGE> 15
"Non-Recourse Purchase Money Indebtedness" means Indebtedness or that
portion of Indebtedness of the Company or any Restricted Subsidiary incurred in
connection with the acquisition by the Company or such Restricted Subsidiary,
subsequent to the Issue Date, of any property or assets and as to which (i) the
holders of such Indebtedness agree that they will look solely to the property
or assets so acquired (or, in the case of the acquisition of all of the
outstanding Capital Stock of a Person, the underlying properties and assets of
such Person at the time of such acquisition, including proceeds thereof) and
securing such Indebtedness for payment on or in respect of such Indebtedness,
and neither the Company nor any Restricted Subsidiary (a) provides credit
support, including any undertaking, agreement or instrument which would
constitute Indebtedness or (b) is directly or indirectly liable for such
Indebtedness, and (ii) no default with respect to such Indebtedness would
permit (after notice or passage of time or both), according to the terms
thereof, any holder of any Indebtedness of the Company or a Restricted
Subsidiary to declare a default on such Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity; and,
provided, however, that any portion of the purchase price of such property or
assets that is not financed through the incurrence of such Indebtedness, shall
be deemed to be a "Restricted Investment" under this Indenture, and shall only
be permitted to be expended by the Company or any Restricted Subsidiary to the
extent that the Company would be permitted to make a Restricted Payment in such
amount under the terms of Section 4.07 hereof.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Original Notes by the Company
pursuant to the Offering Circular.
"Offering Circular" means the Offering Circular of the Company, dated
November 5, 1996, with respect to the Notes.
"Officer" means, with respect to any Person, the President, Chief
Financial Officer, Treasurer or any Vice President of such Person.
"Officers' Certificate" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer, principal
accounting officer or principal financial officer of the Company, that meets
the requirements of Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company.
"Permitted Investments" means any of the following: (i) Investments
in Cash Equivalents; (ii) Investments in the Company or any of its Wholly Owned
Restricted Subsidiaries; (iii) Investments by the Company or any of its
Restricted Subsidiaries in another Person, if as a result of such Investment
(A) such other Person becomes a Wholly Owned Restricted Subsidiary or (B) such
other Person is merged or consolidated with or into, or transfers or conveys
all or substantially all of its properties and assets to, the Company or a
Wholly Owned Restricted Subsidiary; (iv) Investments permitted under Section
4.10 hereof; (v) Investments made in the ordinary course of business in prepaid
expenses, lease, utility, workers' compensation, performance and other similar
deposits; (vi) Investments in stock, obligations or securities received in
settlement of debts owing to the Company or any Restricted Subsidiary as a
result of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection or enforcement of any Lien in favor of the Company or any Restricted
Subsidiary, in each case as to debt owing to the Company or any Restricted
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<PAGE> 16
Subsidiary that arose in the ordinary course of business of the Company or any
such Restricted Subsidiary, provided that any stocks, obligations or securities
received in settlement of debts that arose in the ordinary course of business
(and received other than as a result of bankruptcy or insolvency proceedings or
upon foreclosure, perfection or enforcement of any Lien) that are, within 30
days of receipt, converted into cash or Cash Equivalents shall be treated as
having been cash or Cash Equivalents at the time received; and (vii) other
Investments in joint ventures, corporations, limited liability companies or
partnerships formed with or organized by third Persons, which joint ventures,
corporations, limited liability companies or partnerships engage in the
Drilling Business and are not Unrestricted Subsidiaries at the time of such
Investment, provided such investments do not, in the aggregate, exceed $12
million.
"Permitted Liens" means the following types of Liens:
(i) Liens existing as of the Issue Date;
(ii) Liens securing the Notes or the Subsidiary
Guarantees;
(iii) Liens in favor of the Company;
(iv) Liens securing Indebtedness that constitutes
Permitted Indebtedness pursuant to clause (i) or (iii) of the
definition of "Permitted Indebtedness" included in Section 4.09
hereof;
(v) Liens for taxes, assessments and governmental charges
or claims either (A) not delinquent or (B) contested in good faith by
appropriate proceedings and as to which the Company or its Restricted
Subsidiaries shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(vi) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law incurred in the ordinary course of business for
sums not delinquent or being contested in good faith, if such reserve
or other appropriate provision, if any, as shall be required by GAAP
shall have been made in respect thereof;
(vii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the payment or performance of tenders, statutory or regulatory
obligations, surety and appeal bonds, bids, government contracts and
leases, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(viii) judgment Liens not giving rise to an Event of Default
so long as any appropriate legal proceedings which may have been duly
initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated
shall not have expired;
(ix) any interest or title of a lessor under any Capital
Lease Obligation or operating lease;
(x) Liens securing Non-Recourse Purchase Money
Indebtedness and other purchase money Liens; provided, however, that
(i) the related Non-Recourse Purchase Money Indebtedness or other
purchase money Indebtedness shall not be secured by any property or
assets of the Company or any Restricted Subsidiary other than the
property or assets so acquired and any
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<PAGE> 17
proceeds therefrom and (ii) the Lien securing any such Indebtedness
shall be created within 90 days of such acquisition;
(xi) Liens securing obligations under or in respect of
either Currency Hedge Obligations or Interest Rate Protection
Obligations;
(xii) Liens upon specific items of inventory or other goods
of any Person securing such Person's obligations in respect of bankers
acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or
other goods;
(xiii) Liens securing reimbursement obligations with respect
to commercial letters of credit that encumber documents and other
property or assets relating to such letters of credit and products and
proceeds thereof;
(xiv) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off; and
(xv) Liens on, or related to, properties or assets to
secure all or part of the costs incurred in the ordinary course of
business for the exploration, drilling, development or operation
thereof.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded and (iv) with
respect to any such Indebtedness of the Company being extended, refinanced,
renewed, replaced, defeased or refunded, such Permitted Refinancing
Indebtedness shall not be incurred by any Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Public Equity Offering" means an underwritten offer and sale of
common stock of the Company pursuant to a registration statement that has been
declared effective by the Commission pursuant to the Securities Act (other than
a registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of the Company).
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Disqualified Stock.
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<PAGE> 18
"Rating Agencies" means Standard and Poor's and Moody's, or any
successor to the respective rating agency businesses thereof.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Restricted Investment" means (without duplication) (i) the
designation of a Subsidiary as an Unrestricted Subsidiary in the manner
described in the definition of "Unrestricted Subsidiary," (ii) any Investment
other than a Permitted Investment and (iii) any amount constituting a
"Restricted Investment" as contemplated in the definition of "Non-Recourse
Purchase Money Indebtedness."
"Revolving Credit Facility" means the revolving loan facility under
the Senior Credit Facility.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means, collectively, the Revolving Credit
Agreement and the Term Loan Agreement, each dated November 8, 1996, among the
Company, ING (U.S.) Capital Corporation ("ING Capital") and the other lenders
identified therein, and ING Capital, as agent, each as amended, modified,
supplemented, extended, restated or renewed from time to time.
"Significant Subsidiary" means any (a) Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof or (b) any other Subsidiary that contributed more than 10% of
the Company's Consolidated Cash Flow for the most recent four fiscal quarters
for which financial statements are available.
"Standard and Poor's" means Standard and Poor's Ratings Group, a
division of The McGraw-Hill Companies, Inc., and any successor to the rating
agency business thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Notes or the Subsidiary Guarantees, as the case may be.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (A) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (B) the only general
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<PAGE> 19
partners of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).
"Subsidiary Guarantors" means each of (i) the Company's Significant
Subsidiaries on the Issue Date (other than an Exempt Foreign Subsidiary, as
designated by the Company) or any other Restricted Subsidiary that provides a
guarantee under the Senior Credit Facility, (ii) any other Subsidiary that
executes a Subsidiary Guarantee in accordance with Article 10 hereof, and (iii)
their respective successors and assigns, as required under Article 10 hereof.
"Term Credit Facility" means the term loans under the Senior Credit
Facility in an aggregate amount not to exceed $100 million, less any amounts
derived from Asset Sales and applied to the permanent reduction of Indebtedness
thereunder as contemplated by Section 4.10 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa- 77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.03 hereof.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06(g) hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary (or any successor to
any of them) that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors; but only to the
extent that such Subsidiary (i) has no Indebtedness other than Non-Recourse
Indebtedness; (ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (iii) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (A) to
subscribe for additional Equity Interests or (B) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; and (iv) has not guaranteed or otherwise directly
or indirectly provided credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.07
hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company
shall be in default of such Section). The Board of Directors may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i)
such Indebtedness is permitted under the Section 4.09 hereof and (ii) no
Default or Event of Default would be in existence following such designation.
"Voting Stock" means, with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
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"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (B) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
to the extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be
partially owned by the government of such foreign jurisdiction or individual or
corporate citizens of such foreign jurisdiction in order for such Restricted
Subsidiary to transact business in such foreign jurisdiction, provided that the
Company, directly or indirectly, owns the remaining Capital Stock or ownership
interests in such Restricted Subsidiary and, by contract or otherwise, controls
the management and business of such Restricted Subsidiary and derives the
economic benefits of ownership of such Restricted Subsidiary to substantially
the same extent as if such Restricted Subsidiary were a wholly owned
Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all
of the Capital Stock or other ownership interests in such Subsidiary, other
than any directors' qualifying shares mandated by applicable law, is owned
directly or indirectly by the Company or (ii) such Subsidiary is organized in a
foreign jurisdiction and is required by the applicable laws and regulations of
such foreign jurisdiction to be partially owned by the government of such
foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction in order for such Subsidiary to transact business in such foreign
jurisdiction, provided that the Company, directly or indirectly, owns the
remaining Capital Stock or ownership interests in such Subsidiary and, by
contract or otherwise, controls the management and business of such Subsidiary
and derives the economic benefits of ownership of such Subsidiary to
substantially the same extent as if such Subsidiary were a wholly owned
Subsidiary.
SECTION 1.02 OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
---- -------
<S> <C>
"Adjusted Net Assets" . . . . . . . . . . . . . . . . . . 10.07
"Affiliate Transaction" . . . . . . . . . . . . . . . . . 4.11
"Asset Sale" . . . . . . . . . . . . . . . . . . . . . . . 4.10
"Asset Sale Offer" . . . . . . . . . . . . . . . . . . . . 4.10
"Asset Sale Offer Payment" . . . . . . . . . . . . . . . . 3.09
"Asset Sale Offer Trigger Date" . . . . . . . . . . . . . 4.10
"Benefitted Party" . . . . . . . . . . . . . . . . . . . 10.01
"Change of Control Offer" . . . . . . . . . . . . . . . . 4.15
"Change of Control Offer Payment" . . . . . . . . . . . . 4.15
"Change of Control Payment Date" . . . . . . . . . . . . 4.15
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . 8.03
"DTC" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Event of Default" . . . . . . . . . . . . . . . . . . . . 6.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . 4.10
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . 10.07
"Incur" . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
</TABLE>
15
<PAGE> 21
<TABLE>
<S> <C>
"Interest Payment Date" . . . . . . . . . . . . . . . . . Exhibit A
"Legal Defeasance" . . . . . . . . . . . . . . . . . . . 8.02
"Maximum Bank Facility Amount" . . . . . . . . . . . . . . 4.09
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . 3.09
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . 3.09
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Default" . . . . . . . . . . . . . . . . . . . . 6.01
"Permitted Indebtedness" . . . . . . . . . . . . . . . . . 4.09
"refinancing" . . . . . . . . . . . . . . . . . . . . . . 4.09
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Restricted Payments" . . . . . . . . . . . . . . . . . . 4.07
"Subsidiary Guarantees" . . . . . . . . . . . . . . . . . 10.01
</TABLE>
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, any Subsidiary Guarantor and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the
plural include the singular;
(v) provisions apply to successive events and
transactions; and
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(vi) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the Commission from time to
time.
ARTICLE 2
THE NOTES
SECTION 2.01 FORM AND DATING.
The Original Notes, the notation thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The New Notes, the notation
thereon relating to the Subsidiary Guarantees and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be issued in minimum denominations of $1,000
and integral multiples thereof.
The Original Notes and the New Notes shall be considered collectively
to be a single class for all purposes of this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.
The terms and provisions contained in the form of the Notes and the
notation thereon relating to the Subsidiary Guarantees annexed hereto as
Exhibit A and Exhibit B and the Subsidiary Guarantees shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes issued in global form shall be substantially in the form of
Exhibit A or Exhibit B attached hereto, as applicable (including, in each case,
the text referred to in footnotes 1 and 2 thereto). Notes issued in definitive
form shall be substantially in the form of Exhibit A or Exhibit B attached
hereto, as applicable (but without including the text referred to in footnotes
1 and 2 thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Notes from time to time endorsed
thereon and that the aggregate amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
SECTION 2.02 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid. Each Subsidiary Guarantor shall execute its Subsidiary
Guarantee in the manner set forth in Section 10.07.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall authenticate (i) the Original Notes for original
issue up to the aggregate principal amount of up to $300,000,000 and (ii) the
New Notes from time to time for issue only in exchange for a like principal
amount of Original Notes, in each case upon a written order of the Company
signed by two
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Officers, which written order shall specify (i) the amount of Notes to be
authenticated, (ii) whether the Notes are Original Notes or New Notes, and
(iii) the amount of Notes to be issued in global form or definitive form. The
aggregate principal amount of Notes outstanding at any time may not exceed
$300,000,000 except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
SECTION 2.03 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of each series of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any co-
registrar and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary thereof) shall have no further liability for the money. If the
Company or a Subsidiary thereof acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of the Holders all money held by
it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating
to the Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times
as the Trustee may request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and addresses of the Holders
of Notes and the Company shall otherwise comply with TIA Section 312(a).
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<PAGE> 24
SECTION 2.06 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in
writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification to that
effect from such Holder (in substantially the form of Exhibit
C hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or 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
C hereto); or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit C 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.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest
in a Global Note except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted
Security, a certification from the Holder thereof (in substantially
the form of Exhibit C hereto) to the effect that such Definitive Note
is being transferred by such Holder to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer
Restricted Security, written instructions from the Holder thereof
directing the Trustee to make, or to direct the Note Custodian
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<PAGE> 25
to make, an endorsement on the Global Note to reflect an increase in
the aggregate principal amount of the Notes represented by the Global
Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee shall
authenticate, a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial interest for a
Definitive Note. Upon receipt by the Trustee of written instructions
or such other form of instructions as is customary for the Depository,
from the Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Note, and, in the case of a Transfer
Restricted Security, the following additional information and
documents (all of which may be submitted 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 C
hereto); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or 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 C hereto); or
(C) if such beneficial interest is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit C hereto) and an Opinion of
Counsel from the transferee or 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 Note Custodian, at the direction of
the Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depository and the Note Custodian,
cause the aggregate principal amount of Global Notes to be reduced
accordingly and, following such reduction, the Company shall execute
and the Trustee shall authenticate and deliver to the transferee a
Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or
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<PAGE> 26
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), 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.
(f) Authentication of Definitive Notes in Absence of Depository.
If at any time:
(i) the Depository for the Notes notifies the Company
that the Depository is unwilling or unable to continue as Depository
for the Global Notes and a successor Depository for the Global Notes
is not appointed by the Company within 90 days after delivery of such
notice; or
(ii) the Company, at its discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes
under this Indenture,
then the Company shall execute, and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii)
and (iii), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the
following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION
5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE
144A UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR
(3) 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
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<PAGE> 27
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act or pursuant
to an effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Note, the Registrar shall permit
the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the legend
set forth in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such Transfer
Restricted Security shall not be required to bear the legend
set forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(c) hereof; provided, however,
that with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Note for a
Definitive 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 C
hereto).
(iii) Notwithstanding the foregoing, upon consummation of
the Exchange Offer, the Company shall issue and the Trustee shall
authenticate New Notes in exchange for Original Notes accepted for
exchange in the Exchange Offer, which New Notes shall not bear the
legend set forth in (i) above, and the Registrar shall rescind any
restriction on the transfer of such Notes, in each case unless the
Holder of such Original Notes is either (A) a broker-dealer, (B) a
Person participating in the distribution of the Original Notes or (C)
a Person who is an affiliate (as defined in Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or canceled, all Global Notes shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the
Trustee or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate
Definitive Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 3.09, 4.10, 4.15 and
9.05 hereto).
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(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection; or
(B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in
part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest
payment date.
(j) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes, and
neither the Trustee, any Agent nor the Company shall be affected by notice to
the contrary.
SECTION 2.07 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company,
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company, any of the Subsidiary
Guarantors or any Affiliate of the Company or any of the Subsidiary Guarantors
holds the Note.
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If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any of the Subsidiary Guarantors or any Affiliate of the Company or
any of the Subsidiary Guarantors, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers thereof. Temporary Notes shall be substantially
in the form of definitive Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
such canceled Notes. The Trustee shall provide a certificate of destruction to
the Company from time to time, at the written request of the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation. If the Company or any
Subsidiary Guarantor shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, provided that no such
special record date shall be less than
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10 days prior to the related payment date for such defaulted interest. At
least 15 days before the special record date, the Company (or, upon the written
request of the Company, the Trustee in the name and at the expense of the
Company) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest
to be paid.
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers
printed on the Notes, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company shall promptly notify the
Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; provided that no Notes of $1,000 or less will
be redeemed in part. In the event that less than all of the Notes are to be
redeemed by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
The provisions of the two preceding paragraphs of this Section 3.02
shall not apply with respect to any redemption affecting only a Global Note,
whether such Global Note is to be redeemed in whole or in part. In case of any
such redemption in part, the unredeemed portion of the principal amount of the
Global Note shall be in an authorized denomination.
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<PAGE> 31
SECTION 3.03 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address. Failure to receive such
notice or any defect in the notice to any such Holder shall not affect the
validity of the proceedings for the redemption of any other Notes or portion
thereof.
The notice shall identify the Notes to be redeemed (including CUSIP
number) and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(vi) that, unless the Company's defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
If any of the Notes to be redeemed is in the form of a Global Note,
then the Company shall modify such notice to the extent necessary to accord
with the procedures of the Depository applicable to redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days (unless the
Trustee and the Company agree to a shorter period) prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
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SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent (or, if the Company is acting
as its own Paying Agent, segregate and hold in trust as provided in Section
2.04 hereof) money sufficient to pay the redemption price of and accrued
interest and Liquidated Damages, if any, on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess
of the amounts necessary to pay the redemption price of, and accrued interest
on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest and Liquidated
Damages, if any, shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of
the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption date until such
principal is paid, and to the extent lawful on any interest not paid on such
unpaid principal, in each case at the rate provided in the Note and in Section
4.01 hereof.
SECTION 3.06 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.07 OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable at the Company's option prior
to November 15, 2001. Thereafter, the Notes will be subject to redemption at
the option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on November 15, of the years indicated
below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.875%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.250%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.625%
2004 and thereafter . . . . . . . . . . . . . . . . . . . . . 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time on or prior to
November 15, 1999, the Company may redeem up to an aggregate of $105.0 million
principal amount of Notes at a redemption price of 109.75% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon
to the redemption date, with the net proceeds of a Public Equity Offering;
provided that at least $195.0 million in aggregate principal amount of Notes
remain outstanding immediately after the occurrence of such redemption; and,
provided, further, that such redemption shall occur within 60 days of the date
of the closing of such Public Equity Offering.
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(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08 MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments or sinking fund
payments with respect to the Notes.
SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
(i) The Asset Sale Offer shall be made to all Holders and
shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period
is required by applicable law (the "Offer Period").
(ii) If the Asset Sale Offer Purchase Date is on or after
an interest record date and on or before the related interest payment
date, any accrued and unpaid interest and Liquidated Damages thereon,
if any, shall be paid to the Person in whose name a Note is registered
at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.
(iii) Within 10 days following any Asset Sale Offer Trigger
Date, the Company shall send, by first class mail, a notice to each of
the Holders at such Holder's registered address, with a copy to the
Trustee. The notice, which shall govern the terms of the Asset Sale
Offer, shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer,
and shall state:
(A) that the Asset Sale Offer Trigger Date has
occurred pursuant to Section 4.10 hereof and that the Company
is offering to purchase the maximum principal of Notes that
may be purchased out of the Excess Proceeds (the "Offer
Amount") at an offer price in cash in an amount equal to
100.0% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to
date of purchase, which shall be a Business Day (the "Asset
Sale Offer Purchase Date") that is not earlier than 30 days
nor later than 60 days from the date such notice is mailed;
(B) the amount of accrued and unpaid interest, if
any, and unpaid Liquidated Damages, if any, as of the Asset
Sale Offer Purchase Date;
(C) that any Note subject to the Asset Sale Offer
not tendered shall continue to accrue interest;
(D) that, unless the Company defaults in the
payment of the purchase price for the Notes payable pursuant
to the Asset Sale Offer, any such Notes accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue
interest, after the Asset Sale Offer Purchase Date;
(E) that Holders electing to have a Note
purchased pursuant to an Asset Sale Offer may only elect to
have all of such Note purchased and may not elect to have only
a portion of such Note purchased;
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(F) that Holders electing to have a Note
purchased pursuant to any Asset Sale Offer shall be required
to surrender the Note, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note completed
to the Company or a Paying Agent at the address specified in
the notice at least three days before the Purchase Date;
(G) that Holders shall be entitled to withdraw
their election if the Company or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer
Period, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder
is withdrawing his election to have such Note purchased;
(H) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Offer Amount or less
than all of the Notes tendered pursuant to the Asset Sale
Offer are accepted for payment by the Company for any reason
consistent with this Indenture, the Trustee shall select the
Notes to be purchased in compliance with the requirements of
the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or by such method as the Trustee deems
fair and appropriate; provided that Notes accepted for payment
in part will only be purchased in integral multiples of
$1,000; and
(I) that Holders whose Notes were purchased only
in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.
If any of the Notes subject to an Asset Sale Offer is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to repurchases.
(b) On the Asset Sale Offer Purchase Date, the Company shall: (i)
accept for payment the maximum principal amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer that can be purchased out of the
Excess Proceeds; (ii) deposit with the Paying Agent the aggregate purchase
price of all Notes or portions thereof accepted for payment; and (iii) deliver
or cause to be delivered to the Trustee all Notes tendered pursuant to the
Asset Sale Offer. The Company or the Paying Agent, as the case may be, shall
promptly mail to each Holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes and the Trustee shall
promptly authenticate and mail to any such Holder of Notes accepted for payment
in part a new Note equal in principal amount to any unpurchased portion of the
Notes, and any Note not accepted for payment in whole or in part shall be
promptly returned to the Holder of such Note. The Company shall announce the
results of the Asset Sale Offer to Holders of the Notes on or as soon as
practicable after the Asset Sale Offer Purchase Date. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act, and any other
securities laws or regulations, if applicable, in connection with any Asset
Sale Offer.
(c) Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in
the Notes. Principal, premium, if any, and interest shall
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be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time one
Business Day prior to the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1.0% per annum in excess of the then applicable interest rate on the Notes
to the extent lawful; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace period) at the
same rate to the extent lawful.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
presented for payment, surrendered for registration of transfer or for exchange
and where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Company shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.03 REPORTS.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Holders of Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the consolidated financial condition and results of
operations of the Company and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
information that would be required to be contained in a filing with the
Commission on Form 8-K if the Company were required to file such Forms. In
addition, whether or not required by the rules and regulations of the
Commission, the Company shall file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Company shall at all
times comply with TIA Section 314(a).
(b) For so long as any Transfer Restricted Securities remain
outstanding, the Company shall furnish to all Holders and prospective
purchasers of the Notes designated by the Holders of Transfer
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<PAGE> 36
Restricted Securities, promptly upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company'
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04 COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred and is continuing, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by
a written statement of the Company' independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto.
SECTION 4.05 TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the
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<PAGE> 37
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07 RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of
its Restricted Subsidiaries' Equity Interests (including, without limitation,
any payment in connection with any merger or consolidation involving the
Company) or to the direct or indirect holders of the Company's Equity Interests
in their capacity as such (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly Owned Restricted Subsidiary
of the Company); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any Affiliate of the Company (other than
(A) any such Equity Interests owned by the Company or any Wholly Owned
Restricted Subsidiary of the Company that is a Subsidiary Guarantor and (B)
Employee Stock Repurchases); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Subordinated
Indebtedness, except in accordance with the mandatory redemption or repayment
provisions set forth in the original documentation governing such Indebtedness;
or (iv) make any Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant
to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the Issue Date (excluding Restricted
Payments permitted by clauses (x) and (y) the next succeeding
paragraph, but including the Restricted Payment permitted by clause
(z) of the next succeeding paragraph), is less than the sum of (i) 50%
of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter
commencing after the Issue Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus (ii) 100% of the aggregate Net Equity Proceeds (A)
received by the Company from the issue or sale, subsequent to the
Issue Date, of Qualified Capital Stock of the Company or (B) of any
other Equity Interests or debt securities of the Company that have
been issued upon conversion of the Convertible Preferred Stock), plus
(iii) to the extent not otherwise included in Consolidated Net Income,
the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or a Restricted
Subsidiary after the Issue Date from any Unrestricted Subsidiary or
from the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued as provided below), plus (iv) $15 million.
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The foregoing provisions shall not prohibit any of the following: (w)
the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Indenture; (x) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or
out of the Net Equity Proceeds of, the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of Qualified Capital Stock of
the Company (other than any Disqualified Stock); provided that the amount of
any such Net Equity Proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (y) the defeasance, redemption or
repurchase of Subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness or the substantially
concurrent sale (other than to a Restricted Subsidiary of the Company) of
Qualified Capital Stock of the Company; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph and (z) the redemption of the Convertible Preferred Stock,
if required, and payment of any accrued dividends thereon pursuant to the terms
thereof as in effect on the Issue Date.
For purposes of the foregoing provisions, the amount of any Restricted
Payment (other than cash) shall be the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed, which calculations may be based upon the Company's latest
available financial statements.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would be permitted by the
provisions of this Section 4.07 and if such Restricted Subsidiary otherwise
meets the definition of an Unrestricted Subsidiary. For purposes of making
such determination, all outstanding Investments by the Company and its
Restricted Subsidiaries (except to the extent repaid in cash prior to such
designation) in the Restricted Subsidiary so designated will be deemed to be
Restricted Payments at the time of such designation and will reduce the amount
available for Restricted Payments under the paragraph (c) of this Section 4.07.
All such outstanding Investments will be deemed to constitute Investments in an
amount equal to the Fair Market Value of such Investments at the time of such
designation.
SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock
or (2) with respect to any other interest or participation in, or measured by,
its profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries; (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries; or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (r) Existing
Indebtedness as in effect on the Issue Date, (s) the Senior Credit Facility as
in effect as of the Issue Date, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacement or
refinancings are no more restrictive with respect to such dividend and other
payment restrictions than those contained in the Senior Credit Facility as in
effect on the Issue Date, (t) this Indenture and the Notes, (u) applicable law,
(v) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Company or any of its Restricted Subsidiaries as
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in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of Section 4.09
hereof to be incurred, (w) by reason of customary non-assignment provisions in
leases entered into in the ordinary course of business and customary provisions
in other agreements that restrict assignment of such agreements or rights
thereunder, (x) customary restrictions contained in asset sale agreements
limiting the transfer of such assets pending the closing of such sale, (y)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the nature described in clause (iii) above
on the property so acquired, or (z) Permitted Refinancing Indebtedness with
respect to any indebtedness referred to in clauses (r), (t) and (v) above,
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those contained
in the agreements governing the Indebtedness being refinanced.
SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED EQUITY.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
continentally or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness but excluding any Permitted
Indebtedness) and that the Company will not issue any Disqualified Stock and
will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that the Company may incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock, and
any Restricted Subsidiary may incur Indebtedness (including Acquired
Indebtedness), if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been issued, as
the case may be, at the beginning of such four-quarter period.
(b) The Company shall not , and shall not permit any Subsidiary
Guarantor to, directly or indirectly, in any event incur any Indebtedness that
by its terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of the Company or such Subsidiary
Guarantor, as the case may be, unless such Indebtedness is also by its terms
(or by the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Notes or the Subsidiary Guarantee of such Subsidiary
Guarantor, as the case may be, to the same extent and in the same manner as
such Indebtedness is subordinated pursuant to subordination provisions that are
most favorable to the holders of any other Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be.
The foregoing provisions shall not apply to the incurrence of any of
the following Indebtedness (collectively, "Permitted Indebtedness"):
(i) Indebtedness (and any guarantee thereof) under the
Revolving Credit Facility in an aggregate principal amount at any one
time outstanding not to exceed the greater of (A) $50 million, less
any amounts derived from Asset Sales and applied to the permanent
reduction of the Indebtedness thereunder as contemplated by Section
4.10 hereof or (B) the sum of (1) 80% of the Company's Eligible
Accounts Receivable (as defined for purposes of the Revolving Credit
Facility) and (2) 50% of the rig materials and supplies of the Company
and its Restricted Subsidiaries determined in accordance with GAAP
(the "Maximum Bank Facility Amount"), and any renewals, amendments,
extensions, supplements, modifications, deferrals, refinancing or
replacements (each, for purposes of this clause (i), a "refinancing")
thereof, including any successive refinancing
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thereof, so long as the aggregate principal amount of any such new
Indebtedness, together with the aggregate principal amount of all
other Indebtedness outstanding pursuant to this clause (i), shall not
at any one time exceed the Maximum Bank Facility Amount;
(ii) Indebtedness under the Notes;
(iii) Indebtedness under the Term Credit Facility, any
Existing Indebtedness, and any Indebtedness under Letters of Credit
existing on the Issue Date;
(iv) Indebtedness under Interest Rate Protection
Obligations, provided that (A) such Interest Rate Protection
Obligations are related to payment obligations on Permitted
Indebtedness or Indebtedness otherwise permitted by the initial
paragraph of this Section 4.09, and (B) the notional principal amount
of such Interest Rate Protection Obligations does not exceed the
principal amount of such Indebtedness to which such Interest Rate
Protection Obligations relate;
(v) Indebtedness under Currency Hedge Obligations,
provided that (A) such Currency Hedge Obligations are related to
payment obligations on Permitted Indebtedness or Indebtedness
otherwise permitted by the initial paragraph of this Section 4.09 or
to the foreign currency cash flows reasonably expected to be generated
by the Company and its Restricted Subsidiaries, and (B) the notional
principal amount of such Currency Hedge Obligations does not exceed
the principal amount of such Indebtedness and the amount of such
foreign currency cash flows to which such Currency Hedge Obligations
relate;
(vi) the Subsidiary Guarantees of the Notes (and any
assumption of the obligations guaranteed thereby);
(vii) Indebtedness of the Company to a Wholly Owned
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary of
the Company to the Company or a Wholly Owned Restricted Subsidiary,
provided, however, that upon any subsequent issuance or transfer of
any Capital Stock or any other event which results in any such Wholly
Owned Restricted Subsidiary ceasing to be a Wholly Owned Restricted
Subsidiary or any other subsequent transfer of any such Indebtedness
(except to the Company or a Wholly Owned Restricted Subsidiary), such
Indebtedness shall be deemed, in each case, to be incurred and shall
be treated as an incurrence for purposes of the initial paragraph of
this Section 4.09 at the time the Wholly Owned Restricted Subsidiary
in question ceased to be a Wholly Owned Restricted Subsidiary or the
time such subsequent transfer occurred;
(viii) Indebtedness in respect of bid, performance or surety
bonds issued for the account of the Company or any Restricted
Subsidiary thereof in the ordinary course of business, including
guarantees or obligations of the Company or any Restricted Subsidiary
thereof with respect to letters of credit supporting such bid,
performance or surety obligations (in each case other than for an
obligation for money borrowed);
(ix) the incurrence by the Company or its Restricted
Subsidiaries of Non-Recourse Purchase Money Indebtedness;
(x) any Permitted Refinancing Indebtedness incurred by
the Company or a Restricted Subsidiary of any Indebtedness incurred
pursuant to clause (ii) or (iii) of this definition, including any
successive refinancing by the Company or such Restricted Subsidiary;
and
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(xi) any additional Indebtedness in an aggregate principal
amount not in excess of $30 million at any one time outstanding and
any guarantee thereof.
SECTION 4.10 ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, sell, issue, convey, transfer, lease or otherwise dispose of, to any Person
other than the Company or any of its Restricted Subsidiaries (including,
without limitation, by means of a sale-and-leaseback transaction or a merger or
consolidation) (collectively, for purposes of this Section 4.10, a "transfer"),
directly or indirectly, in one or a series of related transactions, (a) any
Capital Stock of any Restricted Subsidiary held by the Company or any other
Restricted Subsidiary, (b) all or substantially all of the properties and
assets of any division or line of business of the Company or any of its
Restricted Subsidiaries, (c) any Event of Loss or (d) any other properties or
assets of the Company or any of its Restricted Subsidiaries other than
transfers of cash, Cash Equivalents, accounts receivable, or properties or
assets in the ordinary course of business; provided that the sale, lease,
conveyance or other disposition of all or substantially all of the properties
or assets of the Company and its Restricted Subsidiaries, taken as a whole,
shall be governed by Sections 4.15 and/or 5.01 and not by the provisions of
this Section 4.10 (each of the foregoing, an "Asset Sale"), unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are Subordinated Indebtedness or
otherwise by their terms subordinated to the Notes or the Subsidiary
Guarantees) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted Subsidiary into cash
within 180 days of closing such Asset Sale (to the extent of the cash received)
shall be deemed to be cash for purposes of this clause (ii).
Notwithstanding the foregoing, any of the following shall, not be
deemed an "Asset Sale": (i) any transfer of properties or assets to an
Unrestricted Subsidiary, if such transfer is permitted under Section 4.07
hereof; (ii) sales of damaged, worn-out or obsolete equipment or assets that,
in the Company's reasonable judgment, are either (A) no longer used or (B) no
longer useful in the business of the Company or its Restricted Subsidiaries;
(iii) any lease of any property entered into in the ordinary course of business
and with respect to which the Company or any Restricted Subsidiary is the
lessor, except any such lease that provides for the acquisition of such
property by the lessee during or at the end of the term thereof for an amount
that is less than the fair market value thereof at the time the right to
acquire such property is granted; (iv) any trade or exchange by the Company or
any Restricted Subsidiary of one or more drilling rigs for one or more other
drilling rigs owned or held by another Person, provided that (A) the Fair
Market Value of the drilling rig or rigs traded or exchanged by the Company or
such Restricted Subsidiary (including any cash or Cash Equivalents to be
delivered by the Company or such Restricted Subsidiary) is reasonably
equivalent to the Fair Market Value of the drilling rig or rigs (together with
any cash or Cash Equivalents) to be received by the Company or such Restricted
Subsidiary and (B) such exchange is approved by a majority of the Disinterested
Directors of the Company; (v) any transfer by the Company or any Restricted
Subsidiary to its customers of drill pipe, tools and associated drilling
equipment utilized in connection with a drilling contract for the employment of
a drilling rig in the ordinary course of business and consistent with past
practice; and (vi) any transfers that, but for this clause (vi), would be Asset
Sales, if (A) the Company elects to designate such transfers as not
constituting Asset Sales and (B) after giving effect to such transfers, the
aggregate Fair Market Value of the properties or assets transferred in such
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transaction or any such series of related transactions so designated by the
Company does not exceed $500,000.
Within 365 days after the receipt of any Net Proceeds from any Asset
Sale, the Company may (i) apply all or any of the Net Proceeds therefrom to
repay Indebtedness (other than Subordinated Indebtedness) of the Company or any
Restricted Subsidiary, provided, in each case, that the related loan commitment
of any revolving credit facility or other borrowing (if any) is thereby
permanently reduced by the amount of such Indebtedness so repaid, or (ii)
invest all or any part of the Net Proceeds thereof in properties and other
capital assets that replace the properties or other capital assets that were
the subject of such Asset Sale or in other properties or other capital assets
that will be used in the business of the Company and its Restricted
Subsidiaries. Pending the final application of any such Net Proceeds, the
Company may temporarily reduce borrowings under any revolving credit facility
or otherwise invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph shall be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
equals or exceeds $15 million (the date of such occurrence being called the
"Asset Sale Offer Trigger Date"), the Company shall make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages thereon to the date of
purchase, in accordance with the procedures set forth in Section 3.09 hereof.
To the extent that the aggregate amount of Notes tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be deeded to be reset at zero.
The Company shall not permit any Restricted Subsidiary to enter into
or suffer to exist any agreement that would place any restriction of any kind
(other than pursuant to law or regulation) on the ability of the Company to
make an Asset Sale Offer following any Asset Sale. The Company shall comply
with Rule 14e-1 under the Exchange Act, and any other securities laws and
regulations thereunder, if applicable, in the event that an Asset Sale occurs
and the Company is required to purchase Notes pursuant to this Section 4.10.
SECTION 4.11 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, (a) sell, lease, transfer or otherwise dispose of any of its
properties, assets or securities to, (b) purchase or lease any property, assets
or securities from, (c) make any Investment in, or (d) enter into or suffer to
exist any other transaction or series of related transactions with, or for the
benefit of, any Affiliate of the Company unless (i) such transaction or series
of transactions is on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that would be available
in a comparable arm's length transaction with an unrelated third party, (ii)
with respect to any one transaction or series of related transactions involving
aggregate payments in excess of $1 million, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of
related transactions complies with clause (i) above, and (iii) with respect to
a transaction or series of related transactions involving payments in excess of
$5 million, the Company delivers an Officers' Certificate to the Trustee
certifying that (A) such transaction or series of related transactions complies
with clause (i) above and (B) such transaction or series of related
transactions has been approved by a majority of the Disinterested Directors of
the Company; provided, however, that the foregoing restriction shall not apply
to (u) any arrangements in effect on the Issue Date, (v) transactions between
or among the Company and its Wholly Owned Restricted Subsidiaries, (w) loans or
advances to officers, directors and employees of the Company or any Restricted
Subsidiary made in the ordinary course of business and consistent with past
practices of the Company and its Restricted Subsidiaries in an aggregate amount
not to exceed $1 million outstanding at any one time, (x)
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indemnities of officers, directors and employees of the Company or any
Restricted Subsidiary permitted by bylaw or statutory provisions, (y) the
payment of reasonable and customary regular fees to directors of the Company or
any of its Restricted Subsidiaries who are not employees of the Company or any
Affiliate and (z) the Company's employee compensation and other benefit
arrangements.
SECTION 4.12 LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, except for Permitted Liens, upon any of
their respective property or assets, whether now owned or acquired after the
Issue Date, or any income, profits or proceeds therefrom, to secure (i) any
Indebtedness of the Company or such Restricted Subsidiary (if it is not also a
Subsidiary Guarantor), unless prior to, or contemporaneously therewith, the
Notes are equally and ratably secured, or (ii) any Indebtedness of any
Subsidiary Guarantor, unless prior to, or contemporaneously therewith, the
Subsidiary Guarantees are equally and ratably secured; provided, however, that
if such Indebtedness is expressly subordinated to the Notes or the Subsidiary
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Notes or the Subsidiary Guarantees, as the case may
be, with the same relative priority as such Indebtedness has with respect to
the Notes or the Subsidiary Guarantees. The foregoing covenant shall not apply
to any Lien securing Acquired Indebtedness, provided that any such Lien extends
only to the property or assets that were subject to such Lien prior to the
related acquisition by the Company or such Restricted Subsidiary and was not
created, incurred or assumed in contemplation of such transaction.
SECTION 4.13 ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, or otherwise
dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary of the
Company to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company), unless (A) such transfer, conveyance, sale, or
other disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (B) the cash Net Proceeds from such transfer, conveyance, sale,
or other disposition are applied in accordance with Section 4.10 hereof, and
(ii) will not permit any Wholly Owned Restricted Subsidiary of the Company to
issue any of its Equity Interests to any Person other than to the Company or a
Wholly Owned Restricted Subsidiary of the Company; except, in the case of both
clauses (i) and (ii) above, with respect to dispositions or issuances by a
Wholly Owned Restricted Subsidiary of the Company as contemplated in clauses
(i) and (ii) of the definition of "Wholly Owned Restricted Subsidiary" included
in Section 1.01 hereof.
SECTION 4.14 SALE-AND-LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale-and-leaseback transaction; provided that
the Company or any Restricted Subsidiary, as applicable, may enter into a sale-
and-leaseback transaction if (i) the Company could have (A) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating to
such sale-and-leaseback transaction pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof and (B) incurred a
Lien to secure such Indebtedness pursuant to Section 4.12 hereof; (ii) the
gross cash proceeds of such sale-and-leaseback transaction are at least equal
to the fair market value (as determined in good faith by the Board of Directors
and set forth in an Officers' Certificate delivered to the Trustee) of the
property that is the subject of such sale-and-leaseback transaction; and (iii)
the transfer of assets in such sale-and-leaseback transaction is permitted by,
and the Company applies the proceeds of such transaction in compliance with,
Section 4.10 hereof.
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SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes on a
Business Day (the "Change of Control Payment Date") not more than 60 nor less
than 30 days following such Change of Control, pursuant to the offer described
below (the "Change of Control Offer") at an offer price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes pursuant to
the procedures required by Section 4.15 and described in such notice. The
Company shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the
Notes as a result of a Change of Control. The Change of Control Offer shall be
required to remain open for at least 20 Business Days and until the close of
business on the fifth Business Day prior to the Change of Control Payment Date.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with
the Paying Agent an amount equal to the Change of Control Payment in respect of
all Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted, together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail or
otherwise deliver to each Holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided that each such new Note shall be in a principal amount of $1,000 or an
integral multiple thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) The Change of Control provisions described above shall be
applicable whether or not any other provisions of this Indenture are
applicable.
(d) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.16 BUSINESS ACTIVITIES.
The Company shall not, and will not permit any Restricted Subsidiary
to, engage in any business other than (i) the Drilling Business, (ii) such
other businesses as the Company or its Restricted Subsidiaries are engaged in
on the Issue Date and (iii) such other business activities as are reasonably
related or incidental thereto.
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ARTICLE 5
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person
unless (i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes and this Indenture pursuant to a
supplemental Indenture in a form reasonably satisfactory to the Trustee; (iii)
except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company, immediately after such transaction no Default or
Event of Default exists; and (iv) except in the case of a merger of the Company
with or into a Wholly Owned Subsidiary of the Company, the Company or the
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) will, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test
set forth in the first paragraph of Section 4.09 hereof.
In connection with any consolidation, merger or transfer contemplated
by this provision, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent in this
Indenture provided for relating to such transaction or transactions have been
complied with.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
properties or assets of the Company in accordance with Section 5.01 hereof, the
Person formed by such consolidation or into or with which the Company is merged
or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to "the Company" shall
refer instead to such Person and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect as if
such Person had been named as the Company herein; provided, however, that the
Company shall not be relieved from the obligation to pay the principal of,
premium, if any, and interest on the Notes except in the case of a sale of all
or substantially all of the Company's properties or assets that meets the
requirements of Section 5.01 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(i) the Company defaults for 30 days in the payment when
due of interest on, or Liquidated Damages with respect to, the Notes;
(ii) the Company defaults in payment when due of the
principal of or premium, if any, on the Notes;
(iii) the Company fails to comply with the provisions of
Section 4.10, 4.15 or 5.01 hereof;
(iv) the Company fails for 45 days after notice to comply
with any of its other agreements in this Indenture or the Notes;
(v) the Company or any of its Restricted Subsidiaries
defaults under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the Issue
Date, which default (A) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (B) results in the
acceleration of such Indebtedness prior to its express maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $7.5 million or more;
(vi) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Subsidiaries and such judgment or
judgments remain unpaid and undischarged for a period (during which
execution shall not be effectively stayed) of 60 consecutive days,
provided that the aggregate of all such unpaid and undischarged
judgments exceeds $10 million;
(vii) any Subsidiary Guarantee shall for any reason cease
to be, or be asserted by the Company or any Subsidiary Guarantor, as
applicable, not to be, in full force and effect (except pursuant to
the release of any Subsidiary Guarantee in accordance with this
Indenture);
(viii) the Company or any of its Restricted Subsidiaries
that constitutes a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy
Custodian of it or for all or substantially all of its
property,
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(D) makes a general assignment for the benefit of
its creditors, or
(E) generally is not paying its debts as they
become due; or
(ix) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief, in an involuntary case,
against the Company or any of its Restricted Subsidiaries that
constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute
a Significant Subsidiary;
(B) appoints a Bankruptcy Custodian of the
Company or any of its Restricted Subsidiaries that constitutes
a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary, for all or substantially all of the
property of the Company or any of such Restricted
Subsidiaries; or
(C) orders the liquidation of the Company or any
of its Restricted Subsidiaries that constitutes a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, for all
or substantially all of the property of the Company or any of
such Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02 ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.01 hereof with respect to the Company or any
of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause
(viii) or (ix) of Section 6.01 hereof occurs with respect to the Company or any
of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes shall be due and payable
immediately without further action or notice.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders waive any existing Default or Event of Default acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
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, premium, if
any, and interest on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or
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constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of interest on, or the principal of, the Notes (including in
connection with an offer to purchase). Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05 CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
SECTION 6.06 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Note only if:
(i) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(iii) such Holder of a Notes or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority
in aggregate principal amount of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), 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.
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SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and the Holders of the Notes allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Holders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on
the Notes for principal, premium, Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any, and interest, respectively;
and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by
Holders of more than 10% in aggregate principal amount of the then outstanding
Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely
by the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under
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this Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Compete with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the
Commission for permission to continue as trustee or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04 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 Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in
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the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium, if
any, or interest on any Notes, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event
described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2) and Section 313(b)(1). The Trustee
shall also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for its
acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request
for all reasonable disbursements, advances and expenses incurred or made by it
in addition to the compensation for its services. Such expenses shall include
the reasonable compensation, disbursements and expenses of the Trustee's agents
and counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all losses, liabilities, damages, claims or expenses,
including taxes (other than taxes based on the income of the Trustee), incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company or any Holder or any
other person) or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to its negligence or bad faith. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium
and Liquidated Damages, if any, and interest on particular Notes. Such Lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law. The Trustee shall also be entitled to receive compensation for
extraordinary services in default administration.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of
a majority in aggregate principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in aggregate principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof.
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Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to another corporation,
the successor corporation without any further act shall be the successor
Trustee. As soon as practicable, the successor Trustee shall mail a notice of
its succession to the Company and the Holders of the Notes.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each Subsidiary Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its obligations with respect to
all outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in clauses (i) and (ii) below, and
the Company and each Subsidiary Guarantor shall be deemed to have satisfied all
of its other obligations under such Notes or Subsidiary Guarantee and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Notes to
receive solely from the trust fund described in Section 8.04 hereof, and as
more fully set forth in such Section, payments in respect of the principal of,
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premium, if any, and interest and Liquidated Damages on such Notes when such
payments are due; (ii) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof; (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith; and (iv) this Article 8. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.05, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof and Article 10 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and any Subsidiary Guarantor may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(v) and 6.01(vii) hereof shall not constitute
Events of Default.
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) The Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars, non-
callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest and Liquidated Damages on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be, and
the Company must specify whether the Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article 8
concurrently with such incurrence) or insofar as Section 6.01(viii) or 6.01(ix)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date such opinion, (i) the trust funds
will not be subject to rights of holders of Indebtedness other than the Notes
and (ii) assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit (assuming no Holder of Notes is
an insider of the Company) or the day following the end of such other
preference period in effect at the time of such opinion (assuming a Holder of
Notes is an insider of the Company), as applicable, following the deposit, the
trust funds will not be subject to the effects of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally under any applicable United States or state law;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over any other creditors of the
Company or any Subsidiary Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company, or any Subsidiary Guarantor or
others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which, taken together, state that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest and
Liquidated Damages, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
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Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof that, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06 REPAYMENT TO THE COMPANY.
Subject to the applicable escheat and abandoned property laws, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest or Liquidated Damages on any Note and remaining unclaimed for two
years after such principal, and premium, if any, or interest or Liquidated
Damages has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Notes shall thereafter, as a secured creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 8.07 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.05
hereof by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.05 hereof; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest or Liquidated Damages on any Note following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the
Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding Section 9.02 of this Indenture, the Company,
the Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture or the Notes without the consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(iii) to provide for the assumption of the Company's
obligations to the Holders of the Notes pursuant to
Article 5 or Section 10.04(b) hereof;
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(iv) to secure the Notes pursuant to the requirements of
Section 4.12 or otherwise;
(v) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under
this Indenture of any such Holder;
(vi) to add any Restricted Subsidiary as an additional
Subsidiary Guarantor as provided in Section 10.02
hereof or to evidence the succession of another
Person to any Subsidiary Guarantor pursuant to
Section 10.04 hereof and the assumption by any such
successor of the covenants and agreements of such
Subsidiary Guarantor contained herein and in the
Subsidiary Guarantee of such Subsidiary Guarantor;
(vii) to release a Subsidiary Guarantor from its
obligations under this Indenture and its Subsidiary
Guarantee pursuant to Section 10.05 hereof; or
(viii) to comply with requirements of the Commission in
order to effect or maintain the qualification of this
Indenture under the TIA.
(b) Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company and
the Subsidiary Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make
any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture, the Subsidiary Guarantors or
the Notes with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes) and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except
a payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including consents obtained in connection with a
purchase of, tender offer or exchange offer for Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Company and the Subsidiary
Guarantors in the execution of such amended or supplemental Indenture unless
such amended or supplemental Indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance
in a particular instance by the Company and the Subsidiary Guarantors with any
provision of this Indenture or the Notes. However, without the consent of
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each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity
of any Note or alter or waive any of the provisions
with respect to the redemption of the Notes (except
as provided below with respect to Sections 3.09, 4.10
and 4.15 hereof);
(iii) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding
Notes and a waiver of the payment default that
resulted from such acceleration);
(v) make any Note payable in money other than that stated
in the Notes;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of
Holders of Notes to receive payments of principal of
or premium, if any, or interest on the Notes;
(vii) waive a redemption payment with respect to any Note
(other than a payment required by Section 4.10 or
4.15 hereof);
(viii) alter the ranking of the Notes relative to other
Indebtedness of the Company; or
(ix) make any change in the foregoing amendment and waiver
provisions.
In addition, without the consent of Holders of not less than 66-2/3%
in aggregate principal amount of the Notes then outstanding, no such amendment,
supplement or waiver may amend, change or modify the obligation of the Company
to make and consummate a Change of Control Offer in the event of a Change of
Control or make and consummate an Asset Sale Offer with respect to any Asset
Sale or modify any of the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
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SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until its Board
of Directors approves it. In executing any amended or supplemental Indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01 hereof)
shall be fully protected in relying upon, Officers' Certificates and Opinions
of Counsel stating that the execution of such amended or supplemental Indenture
is authorized or permitted by this Indenture.
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.01. SUBSIDIARY GUARANTEES.
(a) The Subsidiary Guarantors and each Subsidiary of the Company
that in accordance with Section 10.02 hereof is required to guarantee the
obligations of the Company under the Notes and this Indenture hereby jointly
and severally and unconditionally guarantees, on a senior basis (each such
guarantee being a "Subsidiary Guarantee"), to each Holder of a Note
authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture, the Notes or the obligations of the Company
under this Indenture or the Notes, that: (i) the principal of, premium, if any,
and interest on the Notes shall be paid in full when due, whether at the
maturity or interest payment or mandatory redemption date, by acceleration,
call for redemption or otherwise, and interest on the overdue principal and
interest, if any, of the Notes and all other obligations of the Company to the
Holders or the Trustee under this Indenture or the Notes shall be promptly paid
in full or performed, all in accordance with the terms of this Indenture and
the Notes; and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, they shall be paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed for whatever reason, each Subsidiary Guarantor shall be
obligated to pay the same whether or not such failure to pay has become an
Event of Default that could cause acceleration pursuant to Section 6.02 hereof.
Each Subsidiary Guarantor agrees that this is a guarantee of payment not a
guarantee of collection.
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(b) Each Subsidiary Guarantor hereby agrees that its obligations
with regard to its Subsidiary Guarantee shall be unconditional, irrespective of
the validity or enforceability of the Notes or the obligations of the Company
under this Indenture, the absence of any action to enforce the same, the
recovery of any judgment against the Company or any other obligor with respect
to this Indenture, the Notes or the obligations of the Company under this
Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) that might otherwise constitute
a legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor further, to the extent permitted by law, waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims,
rights or remedies, including but not limited to: (i) any right to require the
Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed
against the Company or any other Person or to proceed against or exhaust any
security held by a Benefitted Party at any time or to pursue any other remedy
in any Benefitted Party's power before proceeding against such Subsidiary
Guarantor; (ii) the defense of the statute of limitations in any action
hereunder or in any action for the collection of any Indebtedness or the
performance of any obligation hereby guaranteed; (iii) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of
any other Person or the failure of a Benefitted Party to file or enforce a
claim against the estate (in administration, bankruptcy or any other
proceeding) of any other Person; (iv) demand, protest and notice of any kind
including but not limited to notice of the existence, creation or incurring of
any new or additional Indebtedness or obligation or of any action or non-action
on the part of such Subsidiary Guarantor, the Company, any Benefitted Party,
any creditor of such Subsidiary Guarantor, the Company or on the part of any
other Person whomsoever in connection with any Indebtedness or Obligations
hereby guaranteed; (v) any defense based upon an election of remedies by a
Benefitted Party, including but not limited to an election to proceed against
such Subsidiary Guarantor for reimbursement; (vi) any defense based upon any
statute or rule of law that provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (vii) any defense arising because of a Benefitted Party's election,
in any proceeding instituted under any Bankruptcy Law, of the application of
Section 1111(b)(2) under the Bankruptcy Law; (viii) any defense based on any
borrowing or grant of a security interest under Section 364 under the
Bankruptcy Law; or (ix) any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever. Each Subsidiary Guarantor
hereby covenants that its Subsidiary Guarantee will not be discharged except by
complete performance of all of the obligations contained in its Subsidiary
Guarantee, the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Subsidiary Guarantor, or any
custodian, trustee, or similar official acting in relation to either the
Company or such Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Holder, the applicable Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(d) Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 6.02 hereof for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company or any other obligor on the
Notes of the obligations guaranteed hereby and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.02
hereof, those obligations (whether or not due and payable) will forthwith
become due and payable by such Subsidiary Guarantor for the purpose of this
Subsidiary Guarantee.
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SECTION 10.02. ADDITIONAL SUBSIDIARY GUARANTEES.
(a) If, after the Issue Date, (i) the Company or any of its
Restricted Subsidiaries shall (A) transfer or cause to be transferred, any
assets, businesses, divisions, real property or equipment having a fair market
or book value in excess of $1 million to any Restricted Subsidiary that is not
a Subsidiary Guarantor or (B) make any Investment having an aggregate fair
market or book value in excess of $1 million in any Restricted Subsidiary that
is not a Subsidiary Guarantor, or (ii) any Restricted Subsidiary that is not a
Subsidiary Guarantor (A) shall provide a guarantee under the Senior Credit
Facility or (B) shall own any assets or properties having an aggregate fair
market or book value in excess of $1 million, then the Company shall cause such
Restricted Subsidiary (other than any Exempt Foreign Subsidiary) to execute and
deliver a supplemental indenture to this Indenture agreeing to be bound by its
terms applicable to a Subsidiary Guarantor and providing for a Subsidiary
Guarantee of the Notes by such Restricted Subsidiary, in accordance with the
terms of this Indenture.
(b) The Company shall not permit any of its Restricted
Subsidiaries, other than a Subsidiary Guarantor, directly or indirectly, to (i)
incur, guarantee or secure through the granting of Liens the payment of any
Indebtedness of the Company or (ii) pledge any intercompany notes representing
obligations of any of its Restricted Subsidiaries to secure the payment of any
Indebtedness of the Company, in each case, unless the Company shall cause such
Restricted Subsidiary to execute a Subsidiary Guarantee and deliver an Opinion
of Counsel in advance in accordance with the terms of this Indenture. Further,
if after the Issue Date, the Company shall revoke the designation of any Exempt
Foreign Subsidiary, then the Company shall cause such subsidiary to execute a
Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with the
terms of this Indenture.
SECTION 10.03. LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY.
(a) Each Subsidiary Guarantor and by its acceptance hereof, each
beneficiary hereof, hereby confirm that it is its intention that the Subsidiary
Guarantee by such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any of the Subsidiary Guarantees. To
effectuate the foregoing intention, each such person hereby irrevocably agrees
that the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee under this Article 10 shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Subsidiary Guarantor under the Subsidiary
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law.
(b) For purposes of such limitations and the applicable fraudulent
conveyance laws, any indebtedness of a Subsidiary Guarantor incurred from time
to time pursuant to the Senior Credit Facility and secured by a perfected Lien
on the assets of such Subsidiary Guarantor (assuming, for purposes of such
determination, that the incurrence of any such indebtedness and the granting of
any such security interest did not violate any such fraudulent conveyance laws)
shall be deemed, to the extent of the value of the assets subject to such Lien,
to have been incurred prior to the incurrence by such Subsidiary Guarantor of
liability under its Subsidiary Guarantee.
(c) Each beneficiary under the Subsidiary Guarantees, by accepting
the benefits hereof, confirms its intention that, in the event of a bankruptcy,
reorganization or other similar proceeding of the Company or any Subsidiary
Guarantor in which concurrent claims are made upon such Subsidiary Guarantor
hereunder, to the extent such claims will not be fully satisfied, each such
claimant with a valid
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claim against the Company shall be entitled to a ratable share of all payments
by such Subsidiary Guarantor in respect of such concurrent claims.
SECTION 10.04. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person),
another Person (other than the Company or another Subsidiary Guarantor),
whether or not affiliated with such Subsidiary Guarantor, unless (i) subject to
the provisions of the following paragraph, the Person formed by or surviving
any such consolidation or merger (if other than such Subsidiary Guarantor)
shall execute and deliver a supplemental indenture to this Indenture agreeing
to be bound by its terms applicable to a Subsidiary Guarantor and providing for
a Subsidiary Guarantee of the Notes by such Person, in accordance with the
terms of this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists; (iii) such Subsidiary
Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Subsidiary Guarantor immediately preceding the transaction; (iv) the Company
would be permitted by virtue of the Company's pro forma Fixed Charge Coverage
Ratio, immediately after giving effect to such transaction, to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09 hereof; and (v) such transaction does not
violate any of the covenants contained in Articles 4 and 5 hereof..
(b) Notwithstanding the foregoing, (i) a Subsidiary Guarantor may
consolidate with or merge with or into the Company, provided that the surviving
corporation (if other than the Company) shall expressly assume by supplemental
indenture complying with the requirements of this Indenture, the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Notes, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be performed by the Company; and
(ii) a Subsidiary Guarantor may consolidate with or merge with or into any
other Subsidiary Guarantor.
SECTION 10.05. RELEASES OF SUBSIDIARY GUARANTORS.
In the event of (i) the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary or (ii) a sale or other disposition of all or
substantially all of the properties or assets of any Subsidiary Guarantor to a
third party or an Unrestricted Subsidiary, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, in either case, in a transaction or manner that does not
violate any of the covenants or other provision of this Indenture, then such
Subsidiary Guarantor (in the event of such a designation or a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Subsidiary Guarantor) or the Person acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Subsidiary Guarantor) will be released from and
relieved of any obligations under this Indenture and its Subsidiary Guarantee,
provided that any Net Proceeds of such sale or other disposition are applied in
accordance with Section 4.10 hereof and provided, further, however, that any
such termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests that secure, any other
Indebtedness of the Company or its Restricted Subsidiaries shall also terminate
upon such release, sale or disposition.
SECTION 10.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
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within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
SECTION 10.07. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under a Subsidiary Guarantee, such Funding Guarantor shall
be entitled to a contribution from all other Subsidiary Guarantors in a pro
rata amount based on the Adjusted Net Assets (as defined below) of each
Subsidiary Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to such Subsidiary Guarantee. "Adjusted
Net Assets" of such Subsidiary Guarantor at any date shall mean the lesser of
the amount by which (x) the fair value of the property of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities, but excluding liabilities under the
Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the
present fair salable value of the assets of such Subsidiary Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Subsidiary Guarantor on its debts (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date and after giving
effect to any collection from any subsidiary of such Subsidiary Guarantor in
respect of the obligations of such subsidiary under the Subsidiary Guarantees),
excluding debt in respect of the Subsidiary Guarantees, as they become absolute
and matured.
SECTION 10.08. EXECUTION OF SUBSIDIARY GUARANTEES.
To evidence its guarantee to each Holder of Notes, each of the
Subsidiary Guarantors hereby agree to execute its Subsidiary Guarantee in
substantially the form of Exhibit A recited to be endorsed on each Note ordered
to be authenticated and delivered by the Trustee. Each Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee set forth in Section 10.01 hereof
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Subsidiary Guarantee. Each such Subsidiary
Guarantee shall be signed on behalf of each Subsidiary Guarantor by one Officer
of such Subsidiary Guarantor who shall have been duly authorized by all
requisite corporate actions, and the delivery of such Note by the Trustee,
after the authentication thereof hereunder, shall constitute due delivery of
such Subsidiary Guarantee on behalf of such Subsidiary Guarantor. Such
signatures upon the Subsidiary Guarantee may be by manual or facsimile
signature of such Officer and may be imprinted or otherwise reproduced on the
Subsidiary Guarantee, and in case any such Officer who shall have signed the
Subsidiary Guarantee shall cease to be such Officer before the Note on which
such Subsidiary Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Note nevertheless
may be authenticated and delivered or disposed of as though the person who
signed the Subsidiary Guarantee had not ceased to be such officer of the
Subsidiary Guarantor.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
59
<PAGE> 65
SECTION 11.02 NOTICES.
Any notice or communication by the Company, any of the Subsidiary
Guarantors or the Trustee to any of the others is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing
next-day delivery, to such other's address:
If to the Company:
Parker Drilling Company
Parker Building
8 East Third Street
Tulsa, Oklahoma 74103
Telecopier No.: (918) 631-1253
Attention: Chief Financial Officer
With a copy to:
T. Mark Kelly, Esq. and
C. Michael Harrington
Vinson & Elkins L.L.P.
1001 Fannin, 36th Floor
Houston, Texas 77002-6760
Telecopier No.: (713) 758-2346
If to any Subsidiary Guarantor:
c/o Parker Drilling Company
Parker Building
8 East Third Street
Tulsa, Oklahoma 74103
Telecopier No.: (918) 631-1253
Attention: Chief Financial Officer
With a copy to:
T. Mark Kelly, Esq. and
C. Michael Harrington
Vinson & Elkins L.L.P.
1001 Fannin, 36th Floor
Houston, Texas 77002-6760
Telecopier No.: (713) 758-2346
If to the Trustee:
For payment, registration, transfer, exchange and tender of
Notes:
By hand:
-------
Texas Commerce Bank National Association
One Main Place
1201 Main Street, 18th Floor
Dallas, Texas 75202
Telephone: (214) 871-9393 or (800) 275-2048
Attention: Registered Bond Events
60
<PAGE> 66
By mail:
-------
Texas Commerce Bank National Association
P.O. Box 2320
Dallas, Texas 75221-2320
Attention: Registered Bond Events
For all other communications relating to the Notes:
Texas Commerce Bank National Association
600 Travis Street, 8th Floor
Houston, Texas 77002
Telephone: (713) 216-4648
Telecopy No.: (713) 216-7757
Attention: Global Trust Services
The Company, any of the Subsidiary Guarantors or the Trustee, by
notice to the others, may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the United
States mail, postage prepaid, if mailed; when receipt acknowledged, if
telecopied; the next Business Day after timely delivery to the courier, if sent
for overnight delivery by a courier guaranteeing next-day delivery; and the
second Business Day after timely delivery to the courier, if sent for second-
day delivery by a courier guaranteeing second-day delivery.
Any notice or communication to a Holder shall be mailed by first class
U.S. mail to its address shown on the register kept by the Registrar. Any
notice or communication shall also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the TIA. Failure to mail a notice
or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Subsidiary Guarantors, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, such requesting entity shall furnish to the
Trustee:
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<PAGE> 67
(i) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action
have been satisfied; and
(ii) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions
of TIA Section 314(e) and shall include:
(i) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
SECTION 11.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company or any Subsidiary Guarantor, as such, shall have
any liability for any obligations of the Company or such Subsidiary Guarantor
under the Notes, this Indenture or the Subsidiary Guarantees, as the case may
be, or for any claim based on, in respect of, or by reason of, such obligations
or their creation. Each Holder by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes and the Subsidiary Guarantees.
SECTION 11.08 GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
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<PAGE> 68
SECTION 11.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10 SUCCESSORS.
All agreements of the Company or any Subsidiary Guarantor in this
Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.12 COUNTERPART ORIGINALS.
The parties hereto may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[signature page follows]
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<PAGE> 69
In witness whereof, the parties hereto have executed this Indenture as
of the date first written above.
PARKER DRILLING COMPANY,
a Delaware corporation
By: \S\ JAMES J. DAVIS
-------------------------------------
Name: James J. Davis
Title: Vice President of Finance and
Chief Financial Officer
[intentionally left blank]
<PAGE> 70
SUBSIDIARY GUARANTORS:
Parker Drilling Company of Oklahoma, Inc.
Parker Technology, Inc.
Parker Drilling Company International Ltd.
(Nevada)
Choctaw International Rig Corporation
Parker Drilling Company Ltd. (Nevada)
Parker Drilling Company of Alaska Limited
Vance Systems Engineering, Inc.
DGH, Inc.
Parker Drilling U.S.A. Ltd.
Parker Drilling Company of New Guinea, Inc.
Parker Drilling Company North America, Inc.
By: \S\ I. F. HENDRIX, JR.
-----------------------------------
Name: I. F. Hendrix, Jr.
(for each of the above-listed
Subsidiary Guarantors)
[intentionally left blank]
<PAGE> 71
Quail Tools, Inc.
Mallard Bay Drilling, Inc.
Bay Drilling Corporation
AWI Drilling and Workover, Inc.
By: \S\ JAMES J. DAVIS
----------------------------------
Name: James J. Davis
(for each of the above-listed
Subsidiary Guarantors)
[intentionally left blank]
<PAGE> 72
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
By: \S\ WAYNE MENTZ
------------------------------------
Authorized Signatory
<PAGE> 73
================================================================================
EXHIBIT A
[FORM OF ORIGINAL NOTE]
Series A 9 3/4% Senior Notes due 2006
CUSIP:
----------
No. $
--------- ------------------
PARKER DRILLING COMPANY
promises to pay to
---------------------
or registered assigns,
the principal sum of
-------------------
Dollars on November 15, 2006.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
PARKER DRILLING COMPANY
By:
------------------------------------
Name: James J. Davis
Title: Vice President of Finance
and Chief Financial Officer
Trustee's Certificate of Authentication:
Dated: November 12, 1996
This is one of the
Notes referred to in the
within-mentioned Indenture:
Texas Commerce Bank National Association,
as Trustee
By:
-------------------------------------
Authorized Signatory
================================================================================
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<PAGE> 74
(Parker Drilling Company)
Series A 9 3/4% Senior Notes due 2006
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co, has an interest
herein.(1)
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE HOLDER
OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN OF RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR (3) 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 (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Parker Drilling Company, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at 9 3/4% per annum from November 12, 1996 until maturity and shall pay the
Liquidated Damages payable pursuant to Section 5 of the Registration Rights
- ----------
(1) This paragraph should be included only in the Note if issued in global form.
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<PAGE> 75
Agreement referred to below. The Company shall pay interest and Liquidated
Damages semi-annually on May 15 and November 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"Interest Payment Date"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided that the first Interest Payment Date shall
be May 15, 1997. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (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. If this Note is exchanged for a New Note (as defined in
the Indenture) pursuant to the Registration Rights Agreement, dated November
12, 1996 (the "Registration Rights Agreement"), among the Company, the
Subsidiary Guarantors and the parties named on the signature pages thereof,
then accrued but unpaid interest on this Note shall be paid on the first
Interest Payment Date for such New Note.
2. Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the May 1 or November 1
next preceding the Interest Payment Date, even if such Notes are canceled after
such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium, interest and Liquidated
Damages at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall
have provided written wire transfer instructions to the Company or the Paying
Agent at least 10 Business Days prior to the applicable payment date. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, Texas Commerce Bank
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.
4. Indenture and Subsidiary Guarantees. The Company issued the
Notes under an Indenture dated as of November 12, 1996 (the "Indenture") among
the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are obligations of the Company limited to $300 million in aggregate
principal amount. Payment on each Note is guaranteed on a senior basis,
jointly and severally, by the Subsidiary Guarantors pursuant to Article 10 of
the Indenture.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to November 15,
2001. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the
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redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the applicable redemption date, if redeemed during the twelve-month period
beginning on November 15 of each of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . 104.875%
2002 . . . . . . . . . . . . . . . . . . . . 103.250%
2003 . . . . . . . . . . . . . . . . . . . . 101.625%
2004 and thereafter . . . . . . . . . . . . 100.000%
</TABLE>
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to November 15, 1999, the Company may
redeem up to an aggregate of $105.0 million principal amount of Notes at a
redemption price of 109.75% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon to the redemption date, with the
net proceeds of a Public Equity Offering; provided that at least $195.0 million
in aggregate principal amount of Notes remain outstanding immediately after the
occurrence of such redemption; and, provided, further, that such redemption
shall occur within 60 days of the date of the closing of such Public Equity
Offering.
6. Mandatory Redemption. The Company shall not be required to
make mandatory redemption payments or sinking fund payments with respect to the
Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and any unpaid interest and Liquidated Damages thereon, if any, to the
Change of Control Payment Date (as hereinafter defined) (the "Change of Control
Payment"). Within 30 days of the occurrence of a Change of Control, the
Company shall notify the Trustee in writing of such proposed occurrence and
shall make a Change of Control Offer. Within 50 days following the occurrence
of a Change of Control, the Company shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, within 10 days following each Asset Sale Trigger Date, the Company
shall commence an offer to all Holders of Notes (an "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
Asset Sale Offer Purchase Date in accordance with the procedures set forth in
the Indenture. To the extent that the aggregate amount of Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
(or such Subsidiary) may use such excess for general corporate purposes.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before a redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes
or portions thereof called for redemption.
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9. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Notes. Without the consent of any Holder of a Note, the Indenture or the Notes
may be amended or supplemented to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to secure the Notes, to add or release any Subsidiary Guarantor
pursuant to the terms of the Indenture or to comply with the requirements of
the Commission in order to effect or maintain the qualification of the
Indenture under the TIA.
12. Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase)
or otherwise, (iii) failure by the Company to comply with Section 4.10, 4.15 or
5.01 of the Indenture; (iv) failure by the Company for 45 days after notice to
the Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding to comply with certain other
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Company, which default (A) is caused
by a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (B) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$7.5 million or more; (vi) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; (vii) any Subsidiary
Guarantee shall for any reason cease to be, or be asserted by the Company or
any Restricted Subsidiary that is a Guarantor, as applicable, not to be, in
full force and effect (except pursuant to the release of any Subsidiary
Guarantee in accordance with the Indenture); and (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company, any
Restricted Subsidiary that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would
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<PAGE> 78
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the payment
of principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
13. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No past, present or future
director, officer, employee, incorporation, stockholder of the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Company or such Subsidiary Guarantor under the Notes, the Indenture or the
Subsidiary Guarantees, as the case may be, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the
Subsidiary Guarantees.
15. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee.
16. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17. Additional Rights of Holders of Transfer Restricted
Securities. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of November 12,
1996, among the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
A-6
<PAGE> 79
The Company shall 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:
Parker Drilling Company
8 East Third Street
Tulsa, Oklahoma 74103
Telecopier No.: (918) 585-8221
Attention: Treasurer
[intentionally left blank]
A-7
<PAGE> 80
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEES]
Each of the Subsidiary Guarantors under the Indenture (the
"Indenture") referred to in the Note upon which this notation is endorsed, has
unconditionally guaranteed the obligations of the Company under the Notes and
the Indenture, jointly and severally (each such guarantee being a "Subsidiary
Guarantee"), to each Holder of a Note authenticated and delivered by the
Trustee irrespective of the validity or enforceability of the Indenture, the
Notes or the obligations of the Company under the Indenture or the Notes, that:
(i) the principal of, premium, if any, and interest on the Notes of every
series issued hereunder shall be paid in full when due, whether at the maturity
or interest payment or mandatory redemption date, by acceleration, call for
redemption or otherwise, and interest on the overdue principal and interest, if
any, of the Notes and all other obligations of the Company to the Holders or
the Trustee under the Indenture or the Notes shall be promptly paid in full or
performed, all in accordance with the terms of the Indenture and the Notes; and
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, they shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to
pay the same whether or not such failure to pay has become an Event of Default
that could cause acceleration pursuant to Section 6.02 of the Indenture. Each
Subsidiary Guarantor agrees that this is a guarantee of payment, not a
guarantee of collection. Capitalized terms used herein have the meanings
assigned to them in the Indenture unless otherwise indicated, and the
obligations of the Subsidiary Guarantors pursuant to the Subsidiary Guarantees
are subject to the terms of the Indenture, to which reference is hereby made
for the precise terms thereof. The obligations of each Subsidiary Guarantor to
the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth, and are senior unsecured obligations
of each such Subsidiary Guarantor to the extent and in the manner provided, in
Article 10 of the Indenture, and may be released or limited under certain
circumstances. Reference is hereby made to such Indenture for the precise
terms of the Subsidiary Guarantee therein made.
The Subsidiary Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note on which the
Subsidiary Guarantees are noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
By each of the following, and any other Subsidiary Guarantor as may be
added or substituted from time to time, as Subsidiary Guarantors:
[signature page follows]
A-8
<PAGE> 81
SUBSIDIARY GUARANTORS:
Parker Drilling Company of Oklahoma, Inc.
Parker Technology, Inc.
Parker Drilling Company International Ltd. (Nevada)
Choctaw International Rig Corporation
Parker Drilling Company Ltd. (Nevada)
Parker Drilling Company of Alaska Limited
Vance Systems Engineering, Inc.
DGH, Inc.
Parker Drilling U.S.A. Ltd.
Parker Drilling Company of New Guinea, Inc.
Parker Drilling Company North America, Inc.
By:
----------------------------------------------------
Name: I.F. Hendrix, Jr.
(for each of the above-listed Subsidiary Guarantors)
[intentionally left blank]
<PAGE> 82
Quail Tools, Inc.
Mallard Bay Drilling, Inc.
Bay Drilling Corporation
AWI Drilling and Workover, Inc.
By:
----------------------------------------------------
Name: James J. Davis
(for each of the above-listed Subsidiary Guarantors)
[intentionally left blank]
<PAGE> 83
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
--------------------
Your Signature:
---------------------------------
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee.
A-9
<PAGE> 84
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $
------------
Date:
--------------------
Your Signature:
---------------------------------
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee.
A-10
<PAGE> 85
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES(1)
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease this Global Note authorized
in Principal Amount of increase in following such signatory of
Date of Amount of this Principal Amount of decrease (or Trustee or Note
Exchange Global Note this Global Note increase) Custodian
-------- ------------------ --------------------- ------------------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
- ------------
(1) This should be included only if the Note is issued in global form.
A-11
<PAGE> 86
================================================================================
- --------------------------------------------------------------------------------
EXHIBIT B
[FORM OF NEW NOTE]
Series B 9 3/4% Senior Notes due 2006
CUSIP: __________
No. ____ $__________________
PARKER DRILLING COMPANY
promises to pay to _______________
or registered assigns,
the principal sum of _______________
Dollars on November 15, 2006.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
PARKER DRILLING COMPANY
By:
---------------------------------
Name:
Title:
Dated:
-----------------------------------
Trustee's Certificate of Authentication:
This is one of the
Notes referred to in the
within-mentioned Indenture:
Texas Commerce Bank National Association,
as Trustee
By:
---------------------------------------
Authorized Signatory
- --------------------------------------------------------------------------------
================================================================================
B-1
<PAGE> 87
(Parker Drilling Company)
Series B 9 3/4% Senior Notes due 2006
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co, has an interest
herein.(1)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Parker Drilling Company, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 9
3/4% per annum from the most recent date to which interest has been paid or, if
no interest has been paid, from the date of original issuance hereof until
maturity. The Company shall pay interest semi-annually on May 15 and November
15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"). Interest on the
Notes shall accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of issuance; provided that the
first Interest Payment Date shall be _______________. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the May 1 or November 1 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest. The Notes will be payable as to
principal, premium and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest premium on, all Global
Notes and all other Notes the Holders of which shall have provided written wire
transfer instructions to the Company or the Paying Agent at least 10 Business
Days prior to the applicable payment date. Such payment shall be in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
- ------------------------
(1) This paragraph should be included only in the Note if issued in global
form.
B-2
<PAGE> 88
3. Paying Agent and Registrar. Initially, Texas Commerce Bank
National Association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any
such capacity.
4. Indenture and Subsidiary Guarantees. The Company issued the
Notes under an Indenture dated as of November 12, 1996 (the "Indenture") among
the Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are obligations of the Company limited to $300 million in aggregate
principal amount. Payment on each Note is guaranteed on a senior basis,
jointly and severally, by the Subsidiary Guarantors pursuant to Article 10 of
the Indenture.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to November 15,
2001. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on November 15 of each of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.875%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.250%
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.625%
2004 and thereafter . . . . . . . . . . . . . . . . . . . . 100.000%
</TABLE>
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to November 15, 1999, the Company may
redeem up to an aggregate of $105.0 million principal amount of Notes at a
redemption price of 109.75% of the principal amount thereof, plus accrued and
unpaid interest thereon to the redemption date, with the net proceeds of a
Public Equity Offering; provided that at least $195.0 million in aggregate
principal amount of Notes remain outstanding immediately after the occurrence
of such redemption; and, provided, further, that such redemption shall occur
within 60 days of the date of the closing of such Public Equity Offering.
6. Mandatory Redemption. The Company shall not be required to
make mandatory redemption payments or sinking fund payments with respect to the
Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and any unpaid interest thereon, if any, to the Change of Control
Payment Date (as hereinafter defined) (the "Change of Control Payment").
Within 30 days of the occurrence of a Change of Control, the Company shall
notify the Trustee in writing of such proposed occurrence and shall make a
Change of Control Offer.
B-3
<PAGE> 89
Within 50 days following the occurrence of a Change of Control, the Company
shall mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, within 10 days following each Asset Sale Trigger Date, the Company
shall commence an offer to all Holders of Notes (an "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the Asset Sale Offer Purchase
Date in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may
use such excess for general corporate purposes. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before a redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes
or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Notes. Without the consent of any Holder of a Note, the Indenture or the Notes
may be amended or supplemented to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, to secure the Notes, to add or release any Subsidiary Guarantor
pursuant to the terms of the Indenture or to comply with the requirements of
the Commission in order to effect or maintain the qualification of the
Indenture under the TIA.
12. Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest on the Notes; (ii) default in
payment when due of principal of or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including in connection
B-4
<PAGE> 90
with an offer to purchase) or otherwise, (iii) failure by the Company to comply
with Section 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company
for 45 days after notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding to comply
with certain other agreements in the Indenture or the Notes; (v) default under
certain other agreements relating to Indebtedness of the Company, which default
(A) is caused by a failure to pay principal of or premium, if any, or interest
on such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") or (B)
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated, aggregates
$7.5 million or more; (vi) certain final judgments for the payment of money
that remain undischarged for a period of 60 days; (vii) any Subsidiary
Guarantee shall for any reason cease to be, or be asserted by the Company or
any Restricted Subsidiary that is a Guarantor, as applicable, not to be, in
full force and effect (except pursuant to the release of any Subsidiary
Guarantee in accordance with the Indenture); and (viii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company, any
Restricted Subsidiary that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
13. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No past, present or future
director, officer, employee, incorporation, stockholder of the Company or any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Company or such Subsidiary Guarantor under the Notes, the Indenture or the
Subsidiary Guarantees, as the case may be, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the
Subsidiary Guarantees.
15. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee.
16. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (=
B-5
<PAGE> 91
joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
17. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Parker Drilling Company
8 East Third Street
Tulsa, Oklahoma 74103
Telecopier No.: (918) 585-8221
Attention: Treasurer
[intentionally left blank]
B-6
<PAGE> 92
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEES]
Each of the Subsidiary Guarantors under the Indenture (the
"Indenture") referred to in the Note upon which this notation is endorsed, has
unconditionally guaranteed the obligations of the Company under the Notes and
the Indenture, jointly and severally (each such guarantee being a "Subsidiary
Guarantee"), to each Holder of a Note authenticated and delivered by the
Trustee irrespective of the validity or enforceability of the Indenture, the
Notes or the obligations of the Company under the Indenture or the Notes, that:
(i) the principal of, premium, if any, and interest on the Notes of every
series issued hereunder shall be paid in full when due, whether at the maturity
or interest payment or mandatory redemption date, by acceleration, call for
redemption or otherwise, and interest on the overdue principal and interest, if
any, of the Notes and all other obligations of the Company to the Holders or
the Trustee under the Indenture or the Notes shall be promptly paid in full or
performed, all in accordance with the terms of the Indenture and the Notes; and
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, they shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Subsidiary Guarantor shall be obligated to
pay the same whether or not such failure to pay has become an Event of Default
that could cause acceleration pursuant to Section 6.02 of the Indenture. Each
Subsidiary Guarantor agrees that this is a guarantee of payment, not a
guarantee of collection. Capitalized terms used herein have the meanings
assigned to them in the Indenture unless otherwise indicated, and the
obligations of the Subsidiary Guarantors pursuant to the Subsidiary Guarantees
are subject to the terms of the Indenture, to which reference is hereby made
for the precise terms thereof. The obligations of each Subsidiary Guarantor to
the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth, and are senior unsecured obligations
of each such Subsidiary Guarantor to the extent and in the manner provided, in
Article 10 of the Indenture, and may be released or limited under certain
circumstances. Reference is hereby made to such Indenture for the precise
terms of the Subsidiary Guarantee therein made.
The Subsidiary Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note on which the
Subsidiary Guarantees are noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
By each of the following, and any other Subsidiary Guarantor as may be
added or substituted from time to time, as Subsidiary Guarantors:
[signature page follows]
B-7
<PAGE> 93
SUBSIDIARY GUARANTORS:
Parker Drilling Company of Oklahoma, Inc.
Parker Technology, Inc.
Parker Drilling Company International Ltd.
(Nevada)
Choctaw International Rig Corporation
Parker Drilling Company Ltd. (Nevada)
Parker Drilling Company of Alaska Limited
Vance Systems Engineering, Inc.
DGH, Inc.
Parker Drilling U.S.A. Ltd.
Parker Drilling Company of New Guinea, Inc.
Parker Drilling Company North America, Inc.
By:
----------------------------------
Name: I.F. Hendrix, Jr.
(for each of the above-listed
Subsidiary Guarantors)
[intentionally left blank]
<PAGE> 94
Quail Tools, Inc.
Mallard Bay Drilling, Inc.
Bay Drilling Corporation
AWI Drilling and Workover, Inc.
By:
----------------------------------
Name: James J. Davis
(for each of the above-listed
Subsidiary Guarantors)
<PAGE> 95
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
------------------------
Your Signature:
--------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee.
B-9
<PAGE> 96
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $
---------------
Date:
------------------
Your Signature:
---------------------------------
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee.
B-10
<PAGE> 97
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES(1)
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
<TABLE>
<CAPTION>
Amount of Principal Amount of Signature of
decrease in this Global Note authorized
Principal Amount Amount of increase in following such signatory of
of this Global Principal Amount of decrease (or Trustee or Note
Date of Exchange Note this Global Note increase) Custodian
- ---------------- ---------------- --------------------- ------------------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
- -------------------------------
(1) This should be included only if the Note is issued in global form.
B-11
<PAGE> 98
- --------------------------------------------------------------------------------
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF NOTES
Re: 9 3/4% Senior Notes due 2006 of Parker Drilling Company.
This Certificate relates to $_____ principal amount of Notes held in *
________ book-entry or *_______ definitive form by ________________ (the
"Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by or on behalf of the
Depository a Note or Notes in definitive, registered form of
authorized denominations in an aggregate principal amount equal to its
beneficial interest in such Global Note (or the portion thereof
indicated above); or
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
[ ] Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
[ ] Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A (in satisfaction of
Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i) (B)
of the Indenture) or pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the Indenture.)
[ ] Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture).
[ ] Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Rule 904 under the Securities Act. An
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the
Indenture).
-------------------------------------
[INSERT NAME OF TRANSFEROR]
Date: By:
----------------------- ----------------------------------
*Check applicable box.
- --------------------------------------------------------------------------------
C-1
<PAGE> 1
EXHIBIT 4.4
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of November 12, 1996
by and among
Parker Drilling Company
Parker Drilling Company of Oklahoma, Inc.
Parker Technology, Inc.
Parker Drilling Company International Limited Nevada
Choctaw International Rig Corporation
Parker Drilling Company Ltd. (Nevada)
Parker Drilling Company of Alaska Limited
Vance Systems Engineering Inc.
DGH Engineering, Inc.
Parker Driling USA Ltd.
Parker Drilling Company of New Guinea, Inc.
Parker Drilling Company North America, Inc.
and the other Subsidiary Guarantors as defined in the Indenture referred to
herein
and
Jefferies & Company, Inc.
ING Baring (U.S.) Securities Inc.
================================================================================
<PAGE> 2
This Registration Rights Agreement (this "Agreement") is made
and entered into as of November 12, 1996 by and among Parker Drilling Company,
a Delaware corporation (the "Company"), Parker Drilling Company, Parker
Drilling Company of Oklahoma, Inc., Parker Technology, Inc., Parker Drilling
Company International Limited Nevada, Choctaw International Rig Corporation,
Parker Drilling Company Ltd. (Nevada), Parker Drilling Company of Alaska
Limited, Vance Systems Engineering Inc., DGH Engineering, Inc., Parker Driling
USA Ltd. and Parker Drilling Company of New Guinea, Inc., Parker Drilling
Company North America, Inc. and each of the Company's other subsidiaries that
are "Subsidiary Guarantors" under the Indenture (as defined below)
(collectively, the "Subsidiary Guarantors") and Jefferies & Company, Inc. and
ING Baring (U.S.) Securities Inc. (each, a "Purchaser" and, collectively, the
"Purchasers"), each of whom has agreed to purchase the Company's 9 3/4% Senior
Notes due 2006 (the "Original Notes") pursuant to the Purchase Agreement (as
defined below).
This Agreement is made pursuant to the Purchase Agreement,
dated November 5, 1996 (the "Purchase Agreement"), by and among the Company,
the Subsidiary Guarantors and the Purchasers. In order to induce the
Purchasers to purchase the Original Notes, the Company has agreed to provide
the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Purchasers
set forth in Section 2 of the Purchase Agreement.
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.
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Certificated Securities: The registered certificated form of
the Global Note.
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<PAGE> 3
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i) the
filing and effectiveness under the Act of the Exchange Offer Registration
Statement relating to the New Notes to be issued in the Exchange Offer, (ii)
the maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Company to the Registrar under the Indenture of New Notes in the same aggregate
principal amount as the aggregate principal amount of Original Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Original Notes,
each Interest Payment Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as
amended.
Exchange Offer: The registration by the Company under the Act
of the New Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of Transfer Restricted Securities the opportunity to
exchange the Transfer Restricted Securities held by such Holders for New Notes
in an aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Purchasers
propose to sell the Original Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act, and to certain
institutional "accredited investors," as such term is defined in Rule
501(a)(1), (2), (3) and (7) of Regulation D under the Act ("Accredited
Institutions").
Global Note: One or more fully registered global notes,
collectively representing the Original Notes as initially issued.
3
<PAGE> 4
Global Note Holder: The nominee of the Depository in whose
name the Global Note is registered.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of November 12, 1996,
among the Company, Texas Commerce Bank National Association, as trustee (the
"Trustee") and the Subsidiary Guarantors, pursuant to which the Notes are to be
issued, as such Indenture is amended or supplemented from time to time in
accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the
Notes.
NASD: National Association of Securities Dealers, Inc.
New Notes: The Company's 9 3/4% Senior Notes due 2006, Series
B to be issued pursuant to the Indenture in the Exchange Offer.
Notes: The Original Notes and the New Notes.
Person: An individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration
Statement, 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.
Purchaser: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date
relating to the Notes, each Person who is a Holder of Notes on the record date
with respect to the Interest Payment Date on which such Damages Payment Date
shall occur.
Registration Default: As defined in Section 5 hereof.
4
<PAGE> 5
Registration Statement: Any registration statement of the
Company relating to (i) an offering of New Notes pursuant to an Exchange Offer
or (ii) the registration for resale of Transfer Restricted Securities pursuant
to the Shelf Registration Statement, which is filed pursuant to the provisions
of this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 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 (i) the date on which such Note has been exchanged by a person
other than a broker-dealer for a New Note in the Exchange Offer, (ii) following
the exchange by a broker-dealer in the Exchange Offer of a Note for a New Note,
the date on which such New Note is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities
entitled to the benefits of this Agreement are the Transfer Restricted
Securities.
(b) Holders of Transfer Restricted Securities. A Person
is deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
5
<PAGE> 6
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Company hereby agrees: (i) to file an Exchange Offer
Registration Statement with the Commission on or prior to 60 days after the
Closing Date, (ii) to use its best efforts to have the Exchange Offer
Registration Statement declared effective by the Commission on or prior to 120
days after the Closing Date, (iii) unless the Exchange Offer would not be
permitted by applicable law or Commission policy, to commence the Exchange
Offer and use its best efforts to issue on or prior to 30 business days after
the date on which the Exchange Offer Registration Statement was declared
effective by the Commission, New Notes in exchange for all Notes tendered prior
thereto in the Exchange Offer and (iv) if obligated to file the Shelf
Registration Statement, to use its best efforts to file the Shelf Registration
Statement with the Commission on or prior to 30 days after such filing
obligation arises (and in any event within 90 days after the Closing Date) and
to cause the Shelf Registration to be declared effective by the Commission on
or prior to 90 days after such obligation arises.
(b) The Company shall 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 shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Notes shall be
included in the Exchange Offer Registration Statement. The Company shall use
its 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 business days thereafter.
(c) The Company shall indicate in a "Plan of
Distribution" section contained in the Prospectus contained in the Exchange
Offer Registration Statement that any Broker-Dealer who holds Original Notes
that are Transfer Restricted Securities and that were acquired for its own
account as a result of market-making activities or other trading activities
(other than Transfer Restricted Securities acquired directly from the Company),
may exchange such Original Notes pursuant to the Exchange Offer; however, 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 any resales of the New Notes received by such Broker-
Dealer in the Exchange Offer, which prospectus delivery requirement may be
satisfied by the delivery by such Broker-Dealer of the Prospectus contained in
the Exchange Offer Registration Statement. Such "Plan of Distribution" section
shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such resales
pursuant thereto, but such "Plan of Distribution" shall not name any such
Broker-Dealer or disclose the amount of Notes held by any such Broker-Dealer
except to the extent required by the Commission as a result of a change in
policy after the date of this Agreement.
The Company and the Subsidiary Guarantors shall use their best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales
of Notes acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms 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 date on which the Exchange Offer Registration
Statement is declared effective.
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<PAGE> 7
The Company shall provide sufficient copies of the latest
version of such Prospectus to Broker-Dealers promptly upon request at any time
during such one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not
required to file an Exchange Offer Registration Statement or to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a) below have
been complied with) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 business days of the Consummation of the
Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the New Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and that the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder, or (C) that such Holder is a Broker-Dealer and holds
Original Notes acquired directly from the Company or one of its affiliates,
then the Company and each of the Subsidiary Guarantors shall:
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Act, which may be an amendment to the
Exchange Offer Registration Statement (in either event, the "Shelf
Registration Statement") on or prior to the earliest to occur of (1)
the 30th day after the date on which the Company determines that it is
not required to file the Exchange Offer Registration Statement, (2)
the 30th day after the date on which the Company receives notice from
a Holder of Transfer Restricted Securities as contemplated by clause
(ii) above, and (3) the 60th day after the Closing Date (such earliest
date being the "Shelf Filing Deadline"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted
Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on
or before the 30th day after the Shelf Filing Deadline.
The Company and each of the Subsidiary Guarantors shall use
its best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Sections
6(b) and (c) hereof to the extent necessary to ensure that such Shelf
Registration Statement is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a),
and to ensure that such Shelf Registration Statement conforms 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 at least
three years following the Closing Date.
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<PAGE> 8
(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, within 20 business days after
receipt of a request therefor, such information as the Company may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant to
Section 5 hereof unless and until such Holder shall have used its best efforts
to provide all such reasonably requested information. Each Holder as to which
any Shelf Registration Statement is being effected agrees to furnish promptly
to the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.
SECTION 5. LIQUIDATED DAMAGES
(a) If (i) the Company fails to file any of the Registration
Statements required by this Agreement on or before the date specified for such
filing, (ii) any of such Registration Statements is not declared effective by
the Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"), (iii) the Company fails to consummate the
Exchange Offer within 30 Business days of the Effectiveness Target Date with
respect to the Exchange Offer Registration Statement, or (iv) the Shelf
Registration Statement or the Exchange Offer Registration Statement is declared
effective but thereafter ceases to be effective or usable in connection with
the Exchange Offer or resales of Transfer Restricted Securities, as the case
may be, during the periods specified in the Registration Rights Agreement (each
such event referred to in clauses (i) through (iv) above, a "Registration
Default"), then the interest rate on the Transfer Restricted Securities, with
respect to the first 90-day period immediately following the occurrence of such
Registration Default shall increase ("Liquidated Damages") by 0.50% per annum
and will increase by an additional 0.50% per annum with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of 2% per annum with respect to all
Registration Defaults. All accrued Liquidated Damages shall be paid by the
Company on each Damages Payment Date to the Global Note Holder by wire transfer
of immediately available funds and to Holders of Certificated Securities by
wire transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified. Following the
cure of all Registration Defaults, the accrual of Liquidated Damages shall
cease.
(b) All obligations of the Company and the Subsidiary
Guarantors set forth in Section 5(a) above that are outstanding with respect to
any Transfer Restricted Security at the time such security ceases to be a
Transfer Restricted Security shall survive until such time as all such
obligations with respect to such Transfer Restricted Security shall have been
satisfied in full.
8
<PAGE> 9
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection
with the Exchange Offer, the Company and each of the Subsidiary Guarantors
shall comply with all of the provisions of Section 6(c) below, shall use its
best efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the
Company there is a question as to whether the Exchange Offer is
permitted by applicable law, the Company and the Subsidiary Guarantors
hereby agree to seek a no-action letter or other favorable decision
from the Commission allowing the Company and the Subsidiary Guarantors
to Consummate an Exchange Offer for such Original Notes. The Company
and the Subsidiary Guarantors each hereby agrees to pursue the
issuance of such a decision to the Commission staff level but shall
not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company and the Subsidiary
Guarantors each hereby agrees, however, to (A) participate in
telephonic conferences with the Commission, (B) deliver 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 pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation thereof, a written representation to the
Company (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 New Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange
Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (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 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 should 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 if the resales are of New Notes obtained by such Holder in
exchange for Original Notes acquired by such Holder directly from the
Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Subsidiary Guarantors
shall provide a supplemental letter to the Commission (A) stating that
the Company and the Subsidiary Guarantors are registering the Exchange
Offer in reliance on the position of the Commission
9
<PAGE> 10
enunciated in Exxon Capital Holdings Corporation (available May 13,
1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above
and (B) including a representation that neither the Company nor any of
the Subsidiary Guarantors has entered into any arrangement or
understanding with any Person to distribute the New Notes to be
received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange
Offer is acquiring the New Notes in its ordinary course of business
and has no arrangement or understanding with any Person to participate
in the distribution of the New Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the
Shelf Registration Statement, the Company and each of the Subsidiary Guarantors
shall comply with all the provisions of Section 6(c) below and shall use its
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, and pursuant thereto the Company shall as
expeditiously as possible prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the Act,
which form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of distribution
thereof.
(c) General Provisions. In connection with any
Registration Statement and any Prospectus required by this Agreement to permit
the sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required to
permit resales of Senior Notes by Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements (including, if required by the Act or any regulation
thereunder, financial statements of the Subsidiary Guarantors) 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 a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, in the case of
clause (A), correcting any such misstatement or omission, and, in the
case of either clause (A) or (B), use its best efforts to cause such
amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for their intended purpose(s)
as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as applicable,
or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold;
cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to
10
<PAGE> 11
Rule 424 under the Act, and to comply fully with the applicable
provisions of Rules 424 and 430A 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 the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, to 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 Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or 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 or the Prospectus in order to make the
statements therein not misleading. 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
Subsidiary Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of
the underwriter(s), 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 documents incorporated by reference after
the initial filing of such Registration Statement), which documents
will be subject to the review of such Holders and underwriter(s), 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 a selling Holder of Transfer Restricted Securities covered by
such Registration Statement or the underwriter(s), if any, shall
reasonably object within five business days after the receipt thereof.
A selling Holder or underwriter, if any, 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 a material misstatement or omission;
(v) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders and
to the underwriter(s), if any, make the Company's representatives
available (and representatives of the Subsidiary Guarantors) 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 selling Holders or underwriter(s), if any, reasonably
may request;
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<PAGE> 12
(vi) make available at reasonable times for inspection by
the selling Holders, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney or
accountant retained by such selling Holders or any of the
underwriter(s), all financial and other records, pertinent corporate
documents and properties of the Company and the Subsidiary Guarantors
and cause the Company's and the Subsidiary Guarantors' officers,
directors and employees to supply all information reasonably requested
by any such Holder, underwriter, attorney or accountant in connection
with such Registration Statement subsequent to the filing thereof and
prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the purchase
price being paid therefor and any other terms of the offering of the
Transfer Restricted Securities to be sold in such offering; 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 incorporated in such Prospectus supplement or post-
effective amendment;
(viii) cause the Transfer Restricted Securities covered by
the Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate
principal amount of Notes covered thereby or the underwriter(s), if
any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, 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);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, 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 Subsidiary Guarantors hereby consent to the use of the
Prospectus and any amendment or supplement thereto by each of the
selling Holders and each of the underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(xi) enter into, and cause the Subsidiary Guarantors to
enter into, such agreements (including an underwriting agreement), and
make, and cause the Subsidiary Guarantors to make, such
representations and warranties, and take all such other actions in
connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement, all to such
extent as may be requested by any Purchaser or by any Holder of
Transfer Restricted Securities or underwriter in connection with any
sale or resale pursuant to any Registration Statement contemplated by
this Agreement; and whether or not an underwriting agreement is
entered into and whether or not the registration is an Underwritten
Registration, the Company and the Subsidiary Guarantors shall:
(A) furnish to each Purchaser, each selling
Holder and each underwriter, if any, in such substance and
scope as they may request and as are customarily made by
issuers to
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underwriters in primary underwritten offerings, upon the date
of the Consummation of the Exchange Offer and, if applicable,
the effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, signed by (y) the President or any
Vice President and (z) a principal financial or
accounting officer of each of the Company and the
Subsidiary Guarantors, confirming, as of the date
thereof, the matters set forth in paragraphs (a),
(b), (c) and (d) of Section 9(f) of the Purchase
Agreement and such other matters as such parties 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
Subsidiary Guarantors, covering the matters set forth
in Section 9(h) of the Purchase Agreement and such
other matter as such parties 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, representatives of the independent public
accountants for the Company, the Purchasers'
representatives and the Purchasers' counsel in
connection with the preparation of such Registration
Statement and the related Prospectus and have
considered the matters required to be stated therein
and the statements contained therein, although such
counsel has not independently verified 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 a large
extent upon facts provided to such counsel by
officers and other representatives of the Company 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, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated 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 light of the circumstances
under which they were made, not misleading. Without
limiting the foregoing, such counsel may state
further that such counsel 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; and
(3) a customary comfort letter, dated as
of the date of Consummation of the Exchange Offer or
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 by underwriters in connection with
primary underwritten offerings, and affirming the
matters
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<PAGE> 14
set forth in the comfort letters delivered pursuant
to Sections 9(j) and 9(k) of the Purchase Agreement,
without exception;
(B) set forth in full or incorporate by reference
in the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to
all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates
as may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company pursuant to this clause
(xi), if any.
If at any time the representations and warranties of the
Company and the Subsidiary Guarantors contemplated in clause (A)(1)
above cease to be true and correct, the Company or the Subsidiary
Guarantors shall so advise the Purchasers and the underwriter(s), if
any, and each selling Holder promptly and, if requested by such
Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with, and cause the Subsidiary Guarantors to
cooperate with, the selling Holders, the underwriter(s), if any, and
their respective 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 or underwriter(s) 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
Shelf Registration Statement; provided, however, that neither the
Company nor the Subsidiary Guarantors 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) shall issue, upon the request of any Holder of
Original Notes covered by the Shelf Registration Statement, New Notes,
having an aggregate principal amount equal to the aggregate principal
amount of Original Notes surrendered to the Company by such Holder in
exchange therefor or being sold by such Holder; such New Notes to be
registered in the name of such Holder or in the name of the
purchaser(s) of such Notes, as the case may be; in return, the
Original Notes held by such Holder shall be surrendered to the Company
for cancellation;
(xiv) cooperate with, and cause the Subsidiary Guarantors
to cooperate with, the selling Holders and the underwriter(s), if any,
to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing
any restrictive legends; and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as
the Holders or the underwriter(s), if any, may request at least two
business days prior to any sale of Transfer Restricted Securities made
by such underwriter(s);
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<PAGE> 15
(xv) use its best efforts to cause 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 or the
underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause
(viii) above;
(xvi) if any fact or event contemplated by clause
(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 not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities that are in a form
eligible for deposit with the Depository Trust Company;
(xviii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use its reasonable best efforts
to cause such Registration Statement to become effective and approved
by such governmental agencies or authorities as may be necessary to
enable the Holders selling Transfer Restricted Securities to
consummate the disposition of such Transfer Restricted Securities;
(xix) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) for the twelve-month period (A) commencing
at the end of any fiscal quarter in which Transfer Restricted
Securities are sold to underwriters in a firm or best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(xx) 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,
and cause the Subsidiary Guarantors to cooperate, with the Trustee and
the Holders of Senior Notes 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 cause the Subsidiary
Guarantors to 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;
(xxi) cause all Transfer Restricted Securities covered by
the Registration Statement to be listed on each securities exchange on
which similar securities issued by the Company are then listed if
requested by the Holders of a majority in aggregate principal amount
of Original Notes or the managing underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
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<PAGE> 16
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 6(c)(iii)(D) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(xvi)
hereof, or until it is advised in writing (the "Advice") 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. If so directed by the Company, each Holder will 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 such notice.
In the event the Company shall give any such notice, the time period regarding
the effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(D) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the
Subsidiary Guarantors' performance of or compliance with this Agreement will be
borne by the Company or the Subsidiary Guarantors, regardless of whether a
Registration Statement becomes effective, including without limitation: (i) all
registration and filing fees and expenses (including filings made by any
Purchaser or Holder with the NASD (and, if applicable, the fees and expenses of
any "qualified independent underwriter" and its counsel that may be required by
the rules and regulations of the NASD)); (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 New 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 Subsidiary Guarantors and, subject to Section 7(b) below, the
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing Senior 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 Subsidiary Guarantors (including the expenses of any special
audit and comfort letters required by or incident to such performance).
The Company shall, in any event, bear its and the Subsidiary
Guarantor's internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the
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<PAGE> 17
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company.
(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 shall
reimburse the Purchasers and the Holders of Transfer Restricted Securities
being tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
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<PAGE> 18
SECTION 8. INDEMNIFICATION
(a) The Company and each Subsidiary Guarantor, jointly
and severally, agree: (i) to indemnify and hold harmless each of the Initial
Purchasers and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) either of the Initial
Purchasers (any of such persons being hereinafter referred to as a "controlling
person") and the respective officers, directors, partners, employees,
representatives and agents of either of the Initial Purchasers or any
controlling person (any person referred to above being sometimes referred to as
an "Indemnified Party"), to the fullest extent lawful, from and against any and
all losses, claims, damages, liabilities, actions and judgments directly or
indirectly caused by, related to, based upon, arising out of or in connection
with any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus (and any amendment or
supplement thereto) or any omission or alleged omission to state therein a
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; provided, however, that neither the Company nor any Subsidiary
Guarantor will be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage, liability, action or judgment is
based upon an untrue statement or omission or alleged untrue statement or
omission made in any Registration Statement or Prospectus (or any amendment or
supplement thereto), in reliance upon and in conformity with written
information furnished to the Company or the Subsidiary Guarantors by or on
behalf of the Holders specifically for use therein; and (ii) to reimburse any
Indemnified Party for any reasonable legal or other expenses incurred by such
person in connection with investigating, preparing, pursuing or defending
against any such loss, claim, damage, liability, action or judgment or any
investigation or proceeding by any governmental or regulatory agency or body,
commenced or threatened, as such expenses are incurred. The Company and the
Subsidiary Guarantors shall notify the Holders promptly of the institution,
threat or assertion of any claim, proceeding (including any governmental or
regulatory investigation or proceeding) or action of which the Company or the
Subsidiary Guarantors are aware in connection with the matters addressed by
this Agreement that involves the Company, the Subsidiary Guarantors or any
Indemnified Party.
In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought or asserted against
any of the Indemnified Parties with respect to which indemnity may be sought
against the Company or the Subsidiary Guarantors, such Indemnified Party shall
promptly notify the Company in writing (provided that the failure to give such
notice shall not relieve the Company or the Subsidiary Guarantors of their
obligations pursuant to this Agreement) and the Company or the Subsidiary
Guarantors, as the case may be, shall assume the defense thereof, including the
employment of counsel satisfactory to such Indemnified Party or Indemnified
Parties and payment of all fees and expenses. Notwithstanding the foregoing,
such Indemnified Party or Indemnified Parties shall have the right to employ
its or their own counsel in any such action, but the fees and expenses of such
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<PAGE> 19
counsel shall be at the expense of such Indemnified Party or Indemnified
Parties unless (i) the Company or any of the Subsidiary Guarantors agrees to
pay such fees and expenses, (ii) the Company or any of the Subsidiary
Guarantors shall not have employed counsel reasonably satisfactory to such
Indemnified Party to take charge of the defense of such action promptly after
notice of commencement of the action, or (iii) such Indemnified Party or
Indemnified Parties shall have reasonably concluded that there may be defenses
available to it or them that are different from or additional to those
available to the Company or any of the Subsidiary Guarantors (in which case the
Company or the Subsidiary Guarantors shall not have the right to direct the
defense of such action on behalf of the Indemnified Party or Indemnified
Parties); provided, however, that unless there exists a conflict among
Indemnified Parties hereunder, the Company or the Subsidiary Guarantors shall
only be liable for the legal fees and expenses of one firm of attorneys (in
addition to any local counsel) for all Indemnified Parties and that all such
fees and expenses shall be reimbursed by the Company and the Subsidiary
Guarantors as they are incurred (regardless of whether it is ultimately
determined that such Indemnified Party or Indemnified Parties are not entitled
to indemnification hereunder). The Company and the Subsidiary Guarantors shall
be liable for any settlement of any such action or proceeding effected with the
Company's prior written consent, which consent shall not be unreasonably
withheld, and such persons agree to indemnify and hold harmless each of the
Indemnified Parties from and against any loss, claim, damage, expense or
liability by reason of any settlement of any action effected with the consent
of the Company. Notwithstanding the foregoing sentence, if at any time an
Indemnified Party has requested an indemnifying party to reimburse the
Indemnified Party for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 10 business days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the Indemnified Party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel, an
indemnifying party shall not be liable for any settlement of the nature
contemplated by clause (ii) of the first paragraph of this Section 8(a)
effected without its consent if such indemnifying party, prior to the date of
settlement, (i) reimburses such indemnified party in accordance with such
request to the extent such indemnifying party considers such request to be
reasonable and (ii) provides written notice in reasonable detail to the
indemnified party of the reasons such indemnifying party considers the unpaid
balance unreasonable. Such indemnifying party shall be liable for all costs
and expenses of the indemnifying party in seeking to recover such unpaid
balance if a court of competent jurisdiction (or an arbitrator, if such matter
is submitted to arbitration) finds such balance to be reasonable.
No indemnifying party shall, without the prior written consent
of the Indemnified Party, settle or compromise or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action,
claim, litigation or proceeding in respect of which indemnity could have been
sought hereunder (whether or not any
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<PAGE> 20
Indemnified Party is a party thereto), unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such action, claim, litigation or proceeding.
(b) The Holders of Transfer Restricted Securities jointly
agree to indemnify and hold harmless the Company, the Subsidiary Guarantors 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 any Subsidiary Guarantor and
the respective officers, directors, partners, employees, representatives and
agents of the Company, the Subsidiary Guarantors or any such controlling
person, to the same extent as the foregoing indemnity from the Company provided
in Section 8(a) above, the Subsidiary Guarantors to the Indemnified Parties but
only with respect to claims and actions based on information relating to the
Indemnified Parties furnished in writing by or on behalf of such Indemnified
Party specifically for use in any Registration Statement or Prospectus (and any
amendment or supplement thereto) (as set forth in Section 8(e) hereof).
(c) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) (other than by reason of exceptions provided in Section
8(a) or (b) above) in respect of any losses, claims, damages, liabilities,
actions or judgments referred to herein, 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, actions and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Subsidiary
Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of the Transfer Restricted Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or if the indemnified
party failed to give the notice required under Section 8(a) above, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, the
Subsidiary Guarantors, on the one hand, and the Holders, on the other hand, in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities, actions or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company and the
Subsidiary 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 Subsidiary Guarantors, on the one hand, or the Holders, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
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<PAGE> 21
The Company, the Subsidiary Guarantors and each Holder of a
Transfer Restricted Security agree that it would not be just and equitable if
contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation that 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, actions or judgments referred to in
the immediately preceding paragraph shall be deemed to include any legal or
other expenses incurred by such indemnified party in connection with
investigating, preparing to defend or defending any such action or claim.
Notwithstanding the provisions of this Section 8(c), none of the Holders shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the total discounts and commissions received by it with respect to the
Original Notes exceeds the amount of any damages that such Holder has otherwise
been required to pay by reason of such untrue statement 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.
(d) In any proceeding relating to any Registration
Statement or Prospectus (or any supplement or amendment thereto), each party
against whom contribution may be sought under this Section 8 hereby consents to
the jurisdiction of any court having jurisdiction over any other contributing
party, agrees that process issuing from such court may be served upon him or it
by any other contributing party and consents to the service of such process and
agrees that any other contributing party may join him or it as an additional
defendant in any such proceeding in which such other contributing party is a
party.
(e) The indemnity and contribution agreements contained
in this Section 8 are in addition to any liability that the indemnifying
persons may otherwise have to the indemnified persons referred to above.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from 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.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements
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<PAGE> 22
and (b) completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the
Shelf Registration Statement who desire to do so may sell such Transfer
Restricted Securities in an Underwritten Offering. In any such Underwritten
Offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company and each of the Subsidiary
Guarantors agree that monetary damages (including the liquidated damages
contemplated hereby) would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not,
and shall cause the Subsidiary Guarantor not to, 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 the
Subsidiary Guarantors has previously entered into any agreement granting any
registration rights with respect to its 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 securities
under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company shall
not take any action, or permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) 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 the Company
has obtained the written consent of Holders of a
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majority of the outstanding principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
securities are being tendered pursuant to the Exchange Offer and that does not
affect directly or indirectly the rights of other Holders whose 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 being tendered or registered.
(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 (as defined in the
Indenture) under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company, to:
Parker Drilling Company
Parker Building
8 East Third Street
Tulsa, Oklahoma 74103
Fax: (918) 631-1253;
with a copy to:
T. Mark Kelly, Esq.
Vinson & Elkins L.L.P.
1001 Fannin Street, 36th Floor
Houston, Texas 77002
Fax: (713) 615-5531.
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 answered back, if telexed; 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 of Transfer Restricted Securities;
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provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder.
(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.
(k) Entire Agreement. This Agreement together with the
other Operative Documents (as defined in the Purchase 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 by the
Company with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[signature page follows]
24
<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
THE COMPANY:
PARKER DRILLING COMPANY
By:
Name:
Title:
SUBSIDIARY GUARANTORS:
SUBSIDIARIES OF THE COMPANY:
PARKER DRILLING COMPANY OF
OKLAHOMA, INC.
By:
Name:
Title:
PARKER TECHNOLOGY, INC.
By:
Name:
Title:
PARKER DRILLING COMPANY
INTERNATIONAL LIMITED NEVADA
By:
Name:
Title:
25
<PAGE> 26
CHOCTAW INTERNATIONAL RIG
CORPORATION
By:
Name:
Title:
PARKER DRILLING COMPANY LTD.
(NEVADA)
By:
Name:
Title:
PARKER DRILLING COMPANY OF
ALASKA LIMITED
By:
Name:
Title:
VANCE SYSTEMS ENGINEERING
INC.
By:
Name:
Title:
DGH ENGINEERING, INC.
By:
Name:
Title:
PARKER DRILING USA LTD.
By:
Name:
Title:
26
<PAGE> 27
PARKER DRILLING COMPANY OF
NEW GUINEA, INC.
By:
Name:
Title:
PARKER DRILLING COMPANY NORTH
AMERICA, INC.
By:
Name:
Title:
PARKER DRILLING COMPANY
By:
Name:
Title:
27
<PAGE> 28
ACQUIRED GUARANTORS:
QUAIL TOOLS, INC.
By:
Name:
Title:
MALLARD BAY DRILLING, INC.
By:
Name:
Title:
BAY DRILLING CORPORATION
By:
Name:
Title:
EV OFFSHORE, INC.
By:
Name:
Title:
AWI DRILLING AND WORKOVER,
INC.
By:
Name:
Title:
DELTA ____________, INC.
By:
Name:
Title:
28
<PAGE> 29
JEFFERIES & COMPANY, INC.
By:
Name:
Title:
29
<PAGE> 1
EXHIBIT 5.1
January 6, 1997
Parker Drilling Company
Subsidiary Guarantors (as defined below)
8 East Third Street
Tulsa, Oklahoma 74103
Dear Sirs:
We have acted as counsel for Parker Drilling Company, a Delaware
corporation (the "Company"), and the Subsidiary Guarantors (defined below) in
connection with the proposed offer by the Company to exchange (the "Exchange
Offer") for all outstanding 9.75% Senior Notes Due 2006, Series A ($300 million
principal amount outstanding) (the "Old Notes") 9.75% Senior Notes Due 2006,
Series B ($300 million principal amount) (the "Exchange Notes"). The Old Notes
have been, and the Exchange Notes will be, issued pursuant to an Indenture dated
as of November 12, 1996 (the "Indenture") among the Company, the Subsidiary
Guarantors (defined below) and Texas Commerce Bank National Association, as
trustee (the "Trustee"). Parker Drilling Company of Oklahoma, Inc., Parker
Technology, Inc., Parker Drilling Company International Limited, Choctaw
International Rig Corporation, Parker Drilling Company Limited, Parker Drilling
Company of Alaska Limited, Parker Drilling Company of New Guinea, Parker
Drilling Company North America, Inc., Parker Drilling U.S.A. Limited, Vance
Systems Engineering, Inc., DGH, Inc., Mallard Bay Drilling, Inc., Quail Tools,
Inc., Bay Drilling Corporation and AWI Drilling and Workover, Inc. are
collectively referred to as the "Subsidiary Guarantors," and the guarantees by
the Subsidiary Guarantors with respect to the Exchange Notes are collectively
referred to as the "Subsidiary Guarantees."
In connection with such matters we have examined the Indenture, the
Registration Statement on Form S-4, filed by the Company with the Securities and
Exchange Commission, for the registration of the Exchange Notes and the
Subsidiary Guarantees thereof (collectively referred to as the "Securities")
under the Securities Act of 1933 (the Registration Statement, as amended at the
time it becomes effective, being referred to as the "Registration Statement")
and such corporate records of the Company and the Subsidiary Guarantors,
certificates of public officials and such other documents as we have deemed
necessary or appropriate for the purpose of this opinion.
Based upon the foregoing, subject to the qualifications hereinafter set
forth, and having regard for such legal considerations as we deem relevant, we
are of the opinion that the Securities proposed to be issued pursuant to the
Exchange Offer have been duly authorized for issuance and, subject to the
Registration Statement becoming effective under the Securities Act of 1933, and
to compliance with any applicable state securities laws, when issued, delivered
and sold in accordance with the Exchange Offer and the Indenture, will be valid
and legally binding obligations of the Company and the Subsidiary Guarantors,
enforceable against the Company and the Subsidiary Guarantors in accordance with
their respective terms.
The opinions expressed herein are subject to the following: the
enforceability of the Securities may be limited or affected by (i) bankruptcy,
insolvency, reorganization, moratorium, liquidation, rearrangement, fraudulent
transfer, fraudulent conveyance and other similar laws (including court
decisions) now or hereafter in effect and affecting the rights and remedies of
creditors generally or providing for the relief of debtors, (ii) the refusal of
a particular court to grant equitable remedies, including without limitation
specific performance and injunctive relief, and (iii) general principles of
equity (regardless of whether such remedies are sought in a proceeding in equity
or at law).
The opinions expressed herein are limited exclusively to the laws of the
State of New York and the General Corporation Law of the State of Delaware.
<PAGE> 2
Parker Drilling Company
Page 2
January 6, 1997
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to Vinson & Elkins L.L.P. under
"Legal Matters" in the Prospectus forming a part of the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933 and the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
on Form S-4 (File No. 333- ) of our report dated October 14, 1996, on
our audits of the financial statements and financial statement schedule of
Parker Drilling Company. We also consent to the reference to our firm under the
caption "Experts."
COOPERS & LYBRAND L.L.P.
Tulsa, Oklahoma
January 3, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-4 (File No. 333- ) of our report dated October
7, 1996 on the combined financial statements of the Mallard Bay Drilling
division of Energy Ventures, Inc. as of December 31, 1995 and 1994, and for each
of the three years in the period ended December 31, 1995, and to all references
to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Houston, Texas
January 3, 1997
<PAGE> 1
EXHIBIT 23.3
The Board of Directors
Parker Drilling Company:
We consent to the incorporation by reference in the registration statement
on Form S-4 of Parker Drilling Company of our report dated September 27, 1996,
with respect to the balance sheets of Quail Tools, Inc. as of December 31, 1995
and 1994, and the related statements of earnings, shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1995,
which report appears in the Form 8-K/A of Parker Drilling Company dated January
6, 1997. Our report refers to the adoption in 1994 of the method of accounting
for certain investments in debt and equity securities prescribed by Statement of
Financial Accounting Standards No. 115.
We also consent to the reference to our firm under the heading "Experts" in
the prospectus.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
January 3, 1997
<PAGE> 1
EXHIBIT 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) ____
---------------
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
74-0800980
(I.R.S. Employer Identification Number)
712 MAIN STREET, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
LEE BOOCKER, 712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002 (713) 216-2448
(Name, address and telephone number of agent for service)
PARKER DRILLING COMPANY
(Exact name of obligor as specified in its charter)
DELAWARE 73-0618660
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
8 EAST THIRD STREET, TULSA, OKLAHOMA 74103
(Address of principal executive offices) (Zip code)
9.75% SENIOR NOTES DUE 2006
(Title of indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee. (See Note on
Page 7.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
-------------- ------------------
<S> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH
ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(A) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER
INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
1
<PAGE> 3
ITEM 4. (CONTINUED)
(B) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR
THE CLAIM THAT NO CONFLICTING INTEREST WITHIN THE MEANING OF
SECTION 310(B)(1) OF THE ACT ARISES AS A RESULT OF THE
TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE, INCLUDING A STATEMENT
AS TO HOW THE INDENTURE SECURITIES WILL RANK AS COMPARED WITH THE
SECURITIES ISSUED UNDER SUCH OTHER INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH OBLIGOR
OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICER OF
THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY
EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH
CONNECTION.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF
THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
- ------------- -------------- ------------ ----------------
<S> <C> <C> <C>
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
</TABLE>
2
<PAGE> 4
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF
THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
- ------------- -------------- ------------ ----------------
<S> <C> <C> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO THE SECURITIES OF THE
OBLIGOR OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN
DEFAULT BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
WHETHER THE BENEFICIALLY OR PERCENT OF
SECURITIES HELD AS COLLATERAL CLASS
ARE VOTING SECURITY FOR REPRESENTED BY
OR NONVOTING OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS SECURITIES DEFAULT IN COL. C
- -------------- ------------ -------------- --------------
<S> <C> <C> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
3
<PAGE> 5
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY
FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
- -------------- ----------- ------------------ -------------
<S> <C> <C> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY
FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE
OF THE TRUSTEE (1) OWNS 10% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR OR
(2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
- -------------- ----------- ------------------ -------------
<S> <C> <C> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
4
<PAGE> 6
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A
PERSON OWNING 50% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY
FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE, OWNS 50% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OR SUCH PERSON ANY OF
WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
- -------------- ----------- ------------------ -------------
<S> <C> <C> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED
TO THE TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<TABLE>
COL. A COL. B COL. C
NATURE OF AMOUNT
INDEBTEDNESS OUTSTANDING DATE DUE
------------ ----------- --------
<S> <C> <C>
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
</TABLE>
ITEM 13. DEFAULTS BY THE OBLIGOR.
(A) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH
DEFAULT.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 7.)
5
<PAGE> 7
ITEM 13. (CONTINUED)
(B) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN
ONE OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER
THERE HAS BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY
THE INDENTURE OR SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH
DEFAULT.
There has not been a default under any such indenture or series. (See
Note on Page 7.)
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
Not applicable by virtue of Form T-1 General
Instruction B and response to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE
IS AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE
QUALIFIED UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
o 1. A copy of the articles of association of the trustee
now in effect.
# 2. A copy of the certificate of authority of the trustee
to commence business.
* 3. A copy of the certificate of authorization of the
trustee to exercise corporate trust powers issued by the Board of
Governors of the Federal reserve System under date of January 21,
1948.
[X] 4. A copy of the existing bylaws of the trustee.
5. Not applicable.
6
<PAGE> 8
6. The consent of the United States institutional
trustees required by Section 321(b) of the Act.
[ ] 7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
- ---------------
o Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as an exhibit to
the Form S-3 File No. 33-56195.
# Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as an exhibit to
the Form S-3 File No. 33-42814.
* Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as an exhibit to
the Form S-11 File No. 33-25132.
[X] Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as an exhibit to
the Form S-3 File No. 33-65055.
[ ] Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as an exhibit to
the Form S-3 File No. 333-18511.
---------------
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the trustee of all facts on which to base responsive answers to Items 2 and 13,
the answers to said Items are based on incomplete information. Such Items may,
however, be considered as correct unless amended by an amendment to this Form
T-1.
7
<PAGE> 9
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE
TRUSTEE, TEXAS COMMERCE BANK NATIONAL ASSOCIATION, A NATIONAL BANKING
ASSOCIATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF
AMERICA, HAS DULY CAUSED THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO AUTHORIZED, ALL IN THE CITY OF HOUSTON,
AND STATE OF TEXAS, ON THE 6TH DAY OF JANUARY, 1997.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(Trustee)
By: /s/ WAYNE MENTZ
-------------------------------------
Wayne Mentz
Assistant Vice President
8
<PAGE> 10
Exhibit 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is trustee under an indenture dated as of November 12,
1996, between Parker Drilling Company, a Delaware corporation, and Texas
Commerce Bank National Association, as Trustee, entered into in connection with
the issuance of its 9.75% Senior Notes Due 2006.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: /s/ WAYNE MENTZ
-------------------------------------
Wayne Mentz
Assistant Vice President
<PAGE> 1
EXHIBIT 99.1
PARKER DRILLING COMPANY
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING 9.75% SENIOR NOTES DUE 2006, SERIES A
IN EXCHANGE FOR
9.75% SENIOR NOTES DUE 2006, SERIES B
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FEBRUARY , 1997, UNLESS EXTENDED (THE "EXPIRATION DATE")
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN
AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME,
ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE
DELIVER TO THE EXCHANGE AGENT:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
<TABLE>
<S> <C>
By Hand/Overnight Courier: By Mail:
Texas Commerce Bank National Association Texas Commerce Bank National Association
ATTN: Frank Ivins -- Registered Bond Events -- ATTN: Frank Ivins -- Registered Bond Events --
Personal & Confidential Personal & Confidential
1201 Main St, 18th Floor P.O. Box 2320
Dallas, TX 75202 Dallas, TX 75221-2320
</TABLE>
By Facsimile:
(214) 672-5746
Confirm by Telephone:
(800) 275-2048
------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the Prospectus
dated January 6, 1997 (the "Prospectus") of Parker Drilling Company, a Delaware
corporation (the "Company"), and this Letter of Transmittal (the "Letter of
Transmittal"), which together describe the Company's offer (the "Exchange
Offer") to exchange its 9.75% Senior Notes due 2006, Series B (the "Exchange
Notes"), which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement of which the
Prospectus is a part, for a like principal amount of its issued and outstanding
9.75% Senior Notes due 2006, Series A (the "Old Notes"). Capitalized terms used
but not defined herein have the respective meaning given to them in the
Prospectus.
The Company reserves the right, at any time or from time to time, to extend
the Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest date to which the Exchange Offer is extended. The Company
shall notify the holders of the Old Notes of any extension by oral or written
notice and will mail to the record holders of Old Notes an announcement thereof,
each prior to 9:00 A.M., New York City time, on the next business day after the
previously scheduled Expiration Date.
This Letter of Transmittal is to be used by a holder of Old Notes either if
original Old Notes, if available, are to be forwarded herewith or if delivery of
Old Notes is to be made by book-entry transfer to the account maintained by the
Exchange Agent at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in the Prospectus under the
caption "The Exchange Offer -- Procedures for Tendering" and "Book-Entry
Transfer." Holders of Old Notes whose Old Notes are not immediately available,
or who are unable to deliver their Old Notes and all other documents required by
this Letter of Transmittal to the Exchange Agent on or prior to the Expiration
Date, or who are unable to complete the procedure for book-entry transfer on a
timely basis, must tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus under the caption "The Exchange
Offer -- Guaranteed Delivery Procedures." See Instruction 1. Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Exchange Agent.
The term "holder" with respect to the Exchange Offer means any person in
whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder. The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must complete
this Letter of Transmittal in its entirety.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
List below the Old Notes to which this Letter of Transmittal relates. If the
space below is inadequate, list the registered numbers and principal amounts on
a separate signed schedule and affix the list to this Letter of Transmittal.
<PAGE> 2
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- -----------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) EXACTLY AS NAME(S)
APPEAR(S) ON OLD NOTES
(PLEASE FILL IN, IF BLANK) OLD NOTE(S) TENDERED
- -----------------------------------------------------------------------------------------------------------
AGGREGATE PRINCIPAL PRINCIPAL
REGISTERED AMOUNT REPRESENTED BY AMOUNT
NUMBER(S)* NOTE(S) TENDERED**
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Unless otherwise indicated, any tendering holder of Old Notes will be deemed to have tendered the
entire aggregate principal amount represented by such Old Notes. All tenders must be in integral
multiples of $1,000.
- -----------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (FOR USE BY ELIGIBLE
INSTITUTIONS ONLY):
Name of Tendering Institution:..................................................
Account Number:.................................................................
Transaction Code Number:........................................................
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY ENCLOSED HEREWITH AND COMPLETE THE FOLLOWING (FOR USE BY
ELIGIBLE INSTITUTIONS ONLY):
Name(s) of Registered holder(s) of Old Notes:...................................
Date of Execution of Notice of Guaranteed Delivery:.............................
Window Ticket Number (if available):............................................
Name of Eligible Institution that Guaranteed Delivery:..........................
Account Number (if delivered by book-entry transfer):...........................
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO:
Name:...........................................................................
Address:........................................................................
<PAGE> 3
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Company for exchange the principal amount of Old Notes
indicated above. Subject to and effective upon the acceptance for exchange of
the principal amount of Old Notes tendered in accordance with this Letter of
Transmittal, the undersigned hereby exchanges, assigns and transfers to the
Company all right, title and interest in and to the Old Notes tendered for
exchange hereby. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent, the agent and attorney-in-fact of the undersigned (with full
knowledge that the Exchange Agent also acts as the agent of the Company in
connection with the Exchange Offer) with respect to the tendered Old Notes with
full power of substitution to (i) deliver such Old Notes, or transfer ownership
of such Old Notes on the account books maintained by the Book-Entry Transfer
Facility, to the Company and deliver all accompanying evidences of transfer and
authenticity, and (ii) present such Old Notes for transfer on the books of the
Company and receive all benefits and otherwise exercise all rights of beneficial
ownership of such Old Notes, all in accordance with the terms of the Exchange
Offer. The power of attorney granted in this paragraph shall be deemed to be
irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign and transfer the Old Notes
tendered hereby and to acquire the Exchange Notes issuable upon the exchange of
such tendered Old Notes, and that the Company will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim, when the same are accepted
for exchange by the Company.
The undersigned acknowledge(s) that this Exchange Offer is being made in
reliance upon interpretations contained in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation, SEC No-Action Letter (available
April 13, 1989), Morgan Stanley & Co. Inc., SEC No-Action Letter (available June
5, 1991) (the "Morgan Stanley Letter") and Mary Kay Cosmetics, Inc., SEC
No-Action Letter (available June 5, 1991), that the Exchange Notes issued in
exchange for the Old Notes pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than (i) a
broker-dealer who purchased Old Notes exchanged for such Exchange Notes directly
from the Company to resell pursuant to Rule 144A or any other available
exemption under the Securities Act or (ii) any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are acquired
in the ordinary course of such holders' business and such holders are not
participating in, and have no arrangement with any person to participate in, the
distribution of such Exchange Notes. The undersigned specifically represent(s)
to the Company that (i) any Exchange Notes acquired in exchange for Old Notes
tendered hereby are being acquired in the ordinary course of business of the
person receiving such Exchange Notes, whether or not the undersigned, (ii) the
undersigned is not participating in, and has no arrangement with any person to
participate in, the distribution of Exchange Notes, and (iii) neither the
undersigned nor any such other person is an "affiliate" (as defined in Rule 405
under the Securities Act) of the Company or a broker-dealer tendering Old Notes
acquired directly from the Company for its own account.
If the undersigned or the person receiving the Exchange Notes is a
broker-dealer that is receiving Exchange Notes for its own account pursuant to
the Exchange Offer, the undersigned acknowledges that it or such other person
will deliver a prospectus in connection with any resale of such Exchange Notes.
The undersigned acknowledges that if the undersigned is participating in the
Exchange Offer for the purpose of distributing the Exchange Notes (i) the
undersigned cannot rely on the position of the staff of the SEC in the Morgan
Stanley Letter and similar SEC no-action letters, and, in the absence of an
exemption therefrom, must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the Exchange Notes, in which case the registration statement must
contain the selling security holder information required by Item 507 or Item
508, as applicable, of Regulation S-K of the SEC, and (ii) a broker-dealer that
delivers such a prospectus to purchasers in connection with such resales will be
subject to certain of the civil liability provisions under the Securities Act
and will be bound by the provisions of the Registration Rights Agreement
(including certain indemnification rights and obligations).
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the exchange, assignment and transfer of the Old Notes
tendered hereby, including the transfer of such Old Notes on the account books
maintained by the Book-Entry Transfer Facility.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted for exchange validly tendered Old Notes when, as and if the Company
gives oral or written notice thereof to the Exchange Agent. Any tendered Old
Notes that are not accepted for exchange pursuant to the Exchange Offer for any
reason will be returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein under "Special
Delivery Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned acknowledges that the Company's acceptance of properly
tendered Old Notes pursuant to the procedures described under the caption "The
Exchange Offer--Procedures for Tendering" in the Prospectus and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Exchange
Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the Exchange Notes issued in exchange for the Old Notes accepted for
exchange and return any Old Notes not tendered or not exchanged, in the name(s)
of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail or deliver the Exchange Notes issued in
exchange for the Old Notes accepted for exchange and any Old Notes not tendered
or not exchanged (and accompanying documents, as appropriate) to the undersigned
at the address shown below the undersigned's signature(s). In the event that
both "Special Issuance Instructions" and "Special Delivery Instructions" are
completed, please issue the Exchange Notes issued in exchange for the Old Notes
accepted for exchange in the name(s) of, and return any Old Notes not tendered
or not exchanged to, the person(s) so indicated. The undersigned recognizes that
the Company has no obligation pursuant to the "Special Issuance Instructions"
and "Special Delivery Instructions" to transfer any Old Notes from the name of
the registered holder(s) thereof if the Company does not accept for exchange any
of the Old Notes so tendered for exchange.
<PAGE> 4
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Old Notes in a principal amount not tendered,
or Exchange Notes issued in exchange for Old Notes accepted for exchange, are
to be issued in the name of someone other than the undersigned, or (ii) if Old
Notes tendered by book-entry transfer which are not exchanged are to be
returned by credit to an account maintained at the Book-Entry Transfer
Facility. Issue Exchange Notes and/or Old Notes to:
Name:
..............................................................................
(Please Type or Print)
..............................................................................
Address:......................................................................
..............................................................................
(include Zip Code)
..............................................................................
(Tax Identification or Social Security No.)
(Complete Substitute Form W-9)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY if Old Notes in the principal amount not tendered, or
Exchange Notes issued in exchange for Old Notes accepted for exchange, are to
be mailed or delivered to someone other than the undersigned, or to the
undersigned at an address other than that shown below the undersigned's
signature.
Mail or deliver Exchange Notes and/or Old Notes to:
Name:
..............................................................................
(Please Type or Print)
..............................................................................
Address:......................................................................
..............................................................................
(include Zip Code)
..............................................................................
(Tax Identification or Social Security No.)
[ ] Credit unexchanged Old Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility set forth below:
Book-Entry Transfer Facility Account Number:
<PAGE> 5
------------------------------------------------------------
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 on Reverse Side)
X...........................................................
X...........................................................
(Signature(s) of Registered Holders of Old Notes)
Dated:......................................., 1997
(The above lines must be signed by the registered holder(s)
of Old Notes as name(s) appear(s) on the Old Notes or on a
security position listing, or by person(s) authorized to
become registered holder(s) by a properly completed bond
power from the registered holder(s), a copy of which must be
transmitted with this Letter of Transmittal. If Old Notes to
which this Letter of Transmittal relate are held of record
by two or more joint holders, then all such holders must
sign this Letter of Transmittal. If signature is by a
trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person
acting in a fiduciary or representative capacity, then such
person must (i) set forth his or her full title below and
(ii) unless waived by the Company, submit evidence
satisfactory to the Company of such person's authority so to
act. See Instruction 5 regarding the completion of this
Letter of Transmittal, printed below.)
Name(s):....................................................
(Please Type or Print)
Capacity:...................................................
Address:....................................................
............................................................
(Include Zip Code)
Area Code and Telephone Number:.............................
------------------------------------------------------------
------------------------------------------------------------
MEDALLION SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible
Institution.
Signature(s) Guaranteed by an
Eligible Institution:.......................................
(Authorized Signature)
............................................................
(Title)
............................................................
(Name of Firm)
............................................................
(Address, Include Zip Code)
............................................................
(Area Code and Telephone Number)
Dated:................................................, 1997
------------------------------------------------------------
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE
OFFER
1. Delivery of this Letter of Transmittal and Old Notes or Book-Entry
Confirmations. All physically delivered Old Notes or any confirmation of a
book-entry transfer to the Exchange Agent's account at the Book-Entry Transfer
Facility of Old Notes tendered by book-entry transfer (a "Book-Entry
Confirmation"), as well as a properly completed and duly executed copy of this
Letter of Transmittal or facsimile hereof, and any other documents required by
this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. The method of delivery of the tendered Old Notes, this Letter
of Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the holder and, except as otherwise provided below, the
delivery will be deemed made only when actually received or confirmed by the
Exchange Agent. Instead of delivery by mail, it is recommended that the holder
use an overnight or hand delivery service. In all cases, sufficient time should
be allowed to assure delivery to the Exchange Agent before the Expiration Date.
No Letter of Transmittal or Old Notes should be sent to the Company.
2. Guaranteed Delivery Procedures. Holders who wish to tender their Old
Notes and whose Old Notes are not immediately available or who cannot deliver
their Old Notes, this Letter of Transmittal or any other documents required
hereby to the Exchange Agent prior to the Expiration Date or who cannot complete
the procedure for book-entry transfer on a timely basis, must tender their Old
Notes according to the guaranteed delivery procedures set forth in the
Prospectus. Pursuant to such procedures: (i) such tender must be made by or
through a firm which is a member of a registered national securities exchange or
of the National Association of Securities Dealers Inc., a commercial bank or a
trust company having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15 under the
Exchange Act (an "Eligible Institution"); (ii) prior to the Expiration Date, the
Exchange Agent must have received from the Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address of the
holder of the Old Notes, the registration number(s) of such Old Notes and the
total principal amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that, within five business days after the
Expiration Date, this Letter of Transmittal (or facsimile hereof) together with
the Old Notes in proper form for transfer (or a Book-Entry Confirmation) and any
other documents required hereby, must be deposited by the Eligible Institution
with the Exchange Agent within five business days after the Expiration Date; and
(iii) the certificates for all physically tendered shares of Old Notes, in
proper form for transfer (or Book-Entry Confirmation, as the case may be) and
all other documents required hereby are received by the Exchange Agent within
five business days after the Expiration Date.
Any holder of Old Notes who wishes to tender Old Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York
City time, on the Expiration Date. Upon request of the Exchange Agent, a Notice
of Guaranteed Delivery will be sent to holders who wish to tender their Old
Notes according to the guaranteed delivery procedures set forth above.
See "The Exchange Offer -- Guaranteed Delivery Procedures" section of the
Prospectus.
3. Tender by Holder. Only a holder of Old Notes may tender such Old Notes
in the Exchange Offer. Any beneficial holder of Old Notes who is not the
registered holder and who wishes to tender should arrange with the registered
holder to execute and deliver this Letter of Transmittal on his behalf or must,
prior to completing and executing this Letter of Transmittal and delivering his
Old Notes, either make appropriate arrangements to register ownership of the Old
Notes in such holder's name or obtain a properly completed bond power from the
registered holder.
4. Partial Tenders. Tenders of Old Notes will be accepted only in integral
multiples of $1,000. If less than the entire principal amount of any Old Notes
is tendered, the tendering holder should fill in the principal amount tendered
in the third column of the box entitled "Description of Old Notes Tendered"
above. The entire principal amount of Old Notes delivered to the Exchange Agent
will be deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Old Notes is not tendered, then Old Notes for the
principal amount of Old Notes not tendered and Exchange Notes issued in exchange
for any Old Notes accepted will be sent to the holder at his or her registered
address, unless a different address is provided in the appropriate box on this
Letter of Transmittal, promptly after the Old Notes are accepted for exchange.
5. Signatures on this Letter of Transmittal; Bond Powers and Endorsements;
Medallion Guarantee of Signatures. If this Letter of Transmittal (or facsimile
hereof) is signed by the record holder(s) of the Old Notes tendered hereby, the
signature must correspond with the name(s) as written on the face of the Old
Notes without alteration, enlargement or any change whatsoever. If this Letter
of Transmittal (or facsimile hereof) is signed by a participant in the
Book-Entry Transfer Facility, the signature must correspond with the name as it
appears on the security position listing as the holder of the Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder or holders of Old Notes listed and tendered hereby and the
Exchange Notes issued in exchange therefor are to be issued (or any untendered
principal amount of Old Notes is to be reissued) to the registered holder, the
said holder need not and should not endorse any
<PAGE> 7
tendered Old Notes, nor provide a separate bond power. In any other case, such
holder must either properly endorse the Old Notes tendered or transmit a
properly completed separate bond power with this Letter of Transmittal, with the
signatures on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered holder or holders of any Old Notes listed, such Old
Notes must be endorsed or accompanied by appropriate bond powers, in each case
signed as the name of the registered holder or holders appears on the Old Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
No signature guarantee is required if (i) this Letter of Transmittal (or
facsimile hereof) is signed by the registered holder(s) of the Old Notes
tendered herein (or by a participant in the Book-Entry Transfer Facility whose
name appears on a security position listing as the owner of the tendered Old
Notes) and the Exchange Notes are to be issued directly to such registered
holder(s) (or, if signed by a participant in the Book-Entry Transfer Facility,
deposited to such participant's account at such Book-Entry Transfer Facility)
and neither the box entitled "Special Delivery Instructions" nor the box
entitled "Special Registration Instructions" has been completed, or (ii) such
Old Notes are tendered for the account of an Eligible Institution. In all other
cases, all signatures on this Letter of Transmittal (or facsimile hereof) must
be guaranteed by an Eligible Institution.
6. Special Registration and Delivery Instructions. Tendering holders should
indicate, in the applicable box or boxes, the name and address (or account at
the Book-Entry Transfer Facility) to which Exchange Notes or substitute Old
Notes for principal amounts not tendered or not accepted for exchange are to be
issued or sent, if different from the name and address of the person signing
this Letter of Transmittal. In the case of issuance in a different name, the
taxpayer identification or social security number of the person named must also
be indicated.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, Exchange Notes or Old Notes for principal amounts not tendered or
accepted for exchange are to be delivered to, or are to be registered or issued
in the name of, any person other than the registered holder of the Old Notes
tendered hereby, or if tendered Old Notes are registered in the name of any
person other than the person signing this Letter of Transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 7, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD NOTES LISTED IN THIS LETTER OF
TRANSMITTAL.
8. Tax Identification Number. Federal income tax law requires that a holder
of any Old Notes which are accepted for exchange must provide the Company (as
payor) with its correct taxpayer identification number ("TIN"), which, in the
case of a holder who is an individual is his or her social security number. If
the Company is not provided with the correct TIN, the holder may be subject to a
$50 penalty imposed by Internal Revenue Service. (If withholding results in an
over-payment of taxes, a refund may be obtained.) Certain holders (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional instructions.
To prevent backup withholding, each tendering holder must provide such
holder's correct TIN by completing the Substitute Form W-9 set forth herein,
certifying that the TIN provided is correct (or that such holder is awaiting a
TIN), and that (i) the holder has not been notified by the Internal Revenue
Service that such holder is subject to backup withholding as a result of failure
to report all interest or dividends or (ii) the Internal Revenue Service has
notified the holder that such holder is no longer subject to backup withholding.
If the Old Notes are registered in more than one name or are not in the name of
the actual owner, see the enclosed "Guidelines for Certification of Taxpayer
Identification Number of Substitute Form W-9" for information on which TIN to
report.
The Company reserves the right in its sole discretion to take whatever
steps are necessary to comply with the Company's obligations regarding backup
withholding.
9. Validity of Tenders. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject any
and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of the Company or its counsel, be
unlawful. The
<PAGE> 8
Company also reserves the absolute right to waive any conditions of the Exchange
Offer or defects or irregularities in tenders as to particular Old Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(includes this Letter of Transmittal and the instructions hereto) shall be final
and binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with regard to tenders of Old Notes nor shall any of them incur any liability
for failure to give such notification.
10. Waiver of Conditions. The Company reserves the absolute right to waive,
in whole or part, any of the conditions to the Exchange Offer set forth in the
Prospectus.
11. No Conditional Tender. No alternative, conditional, irregular or
contingent tender of Old Notes on transmittal of this Letter of Transmittal will
be accepted.
12. Mutilated, Lost, Stolen or Destroyed Old Notes. Any holder whose Old
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address indicated above for further instructions.
13. Requests for Assistance or Additional Copies. Requests for assistance
or for additional copies of the Prospectus or this Letter of Transmittal may be
directed to the Exchange Agent at the address or telephone number set forth on
the cover page of this Letter of Transmittal. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
14. Withdrawal. Tenders may be withdrawn only pursuant to the limited
withdrawal rights set forth in the Prospectus under the caption "The Exchange
Offer -- Withdrawal of Tenders."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF
(TOGETHER WITH THE OLD NOTES DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL
HARD COPY FORM) MUST BE RECEIVED BY THE EXCHANGE AGENT, OR THE NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT, PRIOR TO THE
EXPIRATION TIME.
(TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE INSTRUCTION 5))
PAYER'S NAME: PARKER DRILLING COMPANY
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Social Security Number
OR Employer Identification
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN Number
IN THE BOX AT RIGHT AND CERTIFY
FORM W-9 BY SIGNING AND DATING BELOW. --------------------------------------
---------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of PART 3 --
perjury, I certify that:
(1) The number shown on this form is my correct Awaiting TIN [ ]
Taxpayer Identification Number (or I am
waiting for Please complete the
a number to be issued to me) and Certificate of Awaiting
(2) I am not subject to backup withholding Taxpayer Identification
either because Number below.
I have not been notified by the Internal
Revenue
Service ("IRS") that I am subject to
backup
withholding as a result of failure to
DEPARTMENT OF THE TREASURY report all interest
INTERNAL REVENUE SERVICE or dividends, or the IRS has notified me
that I am no
PAYER'S REQUEST FOR TAXPAYER longer subject to backup withholding.
IDENTIFICATION NUMBER (TIN)
---------------------------------------------------------------------------
Certification Instructions -- You must cross out item (2) in Part 2 above
if you have been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends on your tax
return. However, if after being notified by the IRS that you were subject
to backup withholding you received another notification from the IRS
stating that you are no longer subject to backup withholding, do not cross
out item (2).
SIGNATURE DATE ___________________________, 1997
- ---------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
<PAGE> 9
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b)I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number within 60 days, 31%
of all reportable payments made to me thereafter will be withheld until I
provide a number.
-------------------------------- -------------------------, 1997
Signature Date
CERTIFICATE FOR FOREIGN RECORD HOLDERS
Under penalties of perjury, I certify that I am not a United States citizen or
resident (or I am signing for a foreign corporation, partnership, estate or
trust).
-------------------------------- -------------------------, 1997
Signature Date
------------------------------------------------------------------------------
<PAGE> 10
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING 9.75% SENIOR NOTES DUE 2006, SERIES A
IN EXCHANGE FOR
9.75% SENIOR NOTES DUE 2006, SERIES B
This form, or one substantially equivalent hereto, must be used by a holder
to accept the Exchange Offer of Parker Drilling Company, a Delaware corporation
(the "Company"), and to tender 9.75% Senior Notes due 2006, Series A (the "Old
Notes") to the Exchange Agent pursuant to the guaranteed delivery procedures
described in "The Exchange Offer -- Guaranteed Delivery Procedures" of the
Company's Prospectus, dated January 6, 1997 (the "Prospectus") and in
Instruction 2 to the related Letter of Transmittal. Any holder who wishes to
tender Old Notes pursuant to such guaranteed delivery procedures must ensure
that the Exchange Agent receives this Notice of Guaranteed Delivery prior to the
Expiration Date (as defined below) of the Exchange Offer. Capitalized terms used
but not defined herein have the meanings ascribed to them in the Prospectus or
the Letter of Transmittal.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
FEBRUARY , 1997. UNLESS EXTENDED (THE "EXPIRATION DATE"). OLD NOTES TENDERED
IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
The Exchange Agent for the Exchange Offer is:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
<TABLE>
<S> <C>
By Hand/Overnight Courier: By Mail:
Texas Commerce Bank National Association Texas Commerce Bank National Association
ATTN: Frank Ivins -- Registered Bond Events -- ATTN: Frank Ivins -- Registered Bond Events --
Personal and Confidential Personal and Confidential
1201 Main Street, 18th Floor P.O. Box 2320
Dallas, TX 75202 Dallas, TX 75221-2320
</TABLE>
By Facsimile:
(214) 672-5746
Confirm by Telephone:
(800) 275-2048
---------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED BOX ON THE
LETTER OF TRANSMITTAL FOR GUARANTEE OF SIGNATURES.
<PAGE> 11
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the related Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Old Notes set forth below pursuant to the guaranteed delivery procedures set
forth in the Prospectus and in Instruction 2 of the Letter of Transmittal.
The undersigned hereby tenders the Old Notes listed below:
<TABLE>
<CAPTION>
AGGREGATE
CERTIFICATE NUMBER(S) (IF KNOWN) OF OLD NOTES PRINCIPAL AGGREGATE PRINCIPAL
OR ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY AMOUNT REPRESENTED AMOUNT TENDERED
- --------------------------------------------- ------------------ -------------------
<S> <C> <C>
</TABLE>
PLEASE SIGN AND COMPLETE
<TABLE>
<S> <C>
Names of Record Holders: _______________________ Signatures: ________________________________
Addresses: _____________________________________ ____________________________________________
________________________________________________ Dated: ______________________________ , 1997
Area Code and Telephone Numbers: _______________
________________________________________________
</TABLE>
This Notice of Guaranteed Delivery must be signed by the holder(s) exactly
as their name(s) appear on certificates for Old Notes or on a security position
listing as the owner of Old Notes, or by person(s) authorized to become
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must provide the following information.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
_______________________________________________________________________________
_______________________________________________________________________________
Capacity:
_______________________________________________________________________________
Address(es):
_______________________________________________________________________________
_______________________________________________________________________________
2
<PAGE> 12
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or is a commercial bank or trust company having an office or correspondent in
the United States, or is otherwise an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934,
guarantees deposit with the Exchange Agent of the Letter of Transmittal (or
facsimile thereof), together with the Old Notes tendered hereby in proper form
for transfer (or confirmation of the book-entry transfer of such Old Notes into
the Exchange Agent's account at the Book-Entry Transfer Facility described in
the Prospectus under the caption "The Exchange Offer -- Book-Entry Transfer" and
in the Letter of Transmittal) and any other required documents, all by 5:00
p.m., New York City time, within five business days following the Expiration
Date.
<TABLE>
<S> <C>
Name of Firm: ............................. .............................................
(AUTHORIZED SIGNATURE)
Address: ..................................
(INCLUDE ZIP CODE) Name: .......................................
Area Code and Tel. Number: Title: ......................................
........................................... (PLEASE TYPE OR PRINT)
Date: ................................,, 1997
</TABLE>
DO NOT SEND OLD NOTES WITH THIS FORM. ACTUAL SURRENDER OF OLD NOTES MUST BE
MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
3
<PAGE> 13
INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY
1. Delivery of this Notice of Guaranteed Delivery. A properly completed
and duly executed copy of this Notice of Guaranteed Delivery and any other
documents required by this Notice of Guaranteed Delivery must be received by the
Exchange Agent at its address set forth herein prior to the Expiration Date. The
method of delivery of this Notice of Guaranteed Delivery and any other required
documents to the Exchange Agent is at the election and sole risk of the holder,
and the delivery will be deemed made only when actually received by the Exchange
Agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, is recommended. As an alternative to delivery by mail, the
holders may wish to consider using an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure timely delivery. For a
description of the guaranteed delivery procedures, see Instruction 2 of the
Letter of Transmittal.
2. Signatures on this Notice of Guaranteed Delivery. If this Notice of
Guaranteed Delivery is signed by the registered holder(s) of the Old Notes
referred to herein, the signature must correspond with the name(s) written on
the face of the Old Notes without alteration, enlargement, or any change
whatsoever. If this Notice of Guaranteed Delivery is signed by a participant of
the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of the Old Notes, the signature must correspond with the
name shown on the security position listing as the owner of the Old Notes.
If this Notice of Guaranteed Delivery is signed by a person other than the
registered holder(s) of any Old Notes listed or a participant of the Book-Entry
Transfer Facility, this Notice of Guaranteed Delivery must be accompanied by
appropriate bond powers, signed as the name of the registered holder(s) appears
on the Old Notes or signed as the name of the participant shown on the
Book-Entry Transfer Facility's security position listing.
If this Notice of Guaranteed Delivery is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, or other
person acting in a fiduciary or representative capacity, such person should so
indicate when signing and submit with the Letter of Transmittal evidence
satisfactory to the Company of such person's authority to so act.
3. Requests for Assistance or Additional Copies. Questions and requests
for assistance and requests for additional copies of the Prospectus may be
directed to the Exchange Agent at the address specified in the Prospectus.
Holders may also contact their broker, dealer, commercial bank, trust company,
or other nominee for assistance concerning the Exchange Offer.
4
<PAGE> 14
PARKER DRILLING COMPANY
LETTER TO REGISTERED HOLDERS AND
DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING 9.75% SENIOR NOTES DUE 2006, SERIES A
IN EXCHANGE FOR
9.75% SENIOR NOTES DUE 2006, SERIES B
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FEBRUARY , 1997. UNLESS EXTENDED (THE "EXPIRATION DATE").
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN
AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
To Registered Holders and Depository
Trust Company Participants:
We are enclosing herewith the material listed below relating to the offer
by Cliffs Drilling Company, a Delaware corporation (the "Company"), to exchange
its 9.75% Senior Notes due 2006, Series B (the "Exchange Notes"), which have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), for a like principal amount of its issued and outstanding 9.75% Senior
Notes due 2006, Series A (the "Old Notes") upon the terms and subject to the
conditions set forth in the Company's Prospectus, dated January 6, 1997, and the
related Letter of Transmittal (which together constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated January 6, 1997;
2. Letter of Transmittal (together with accompanying Substitute Form
W-9 Guidelines);
3. Notice of Guaranteed Delivery;
4. Letter which may be sent to your clients for whose account you hold
Old Notes in your name or in the name of your nominee; and
5. Letter which may be sent from your clients to you with such
client's instruction with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the Exchange
Offer will expire on the Expiration Date unless extended.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) the Exchange Notes acquired in exchange for
Old Notes pursuant to the Exchange Offer are being acquired in the ordinary
course of business of the person receiving such Exchange Notes, whether or not
the holder, (ii) the holder is not participating in, and has no arrangement with
any person to participate in, the distribution of Exchange Notes within the
meaning of the Securities Act, and (iii) neither the holder nor any such other
person is an "affiliate" (within the meaning of Rule 405 under the Securities
Act) of the Company or a broker-dealer tendering Old Notes acquired directly
from the Company. If the holder is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Old Notes, it acknowledges that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
The enclosed Letter to Clients contains an authorization by the beneficial
owners of the Old Notes for you to make the foregoing representations.
The Company will not pay any fee or commission to any broker or dealer or
to any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company
will pay or cause to be paid any transfer taxes payable on the transfer of Old
Notes to it, except as otherwise provided in Instruction 7 of the enclosed
Letter of Transmittal.
Additional copies of the enclosed material may be obtained from the
undersigned.
Very truly yours,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
<PAGE> 15
PARKER DRILLING COMPANY
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING 9.75% SENIOR NOTES DUE 2006, SERIES A
IN EXCHANGE FOR
9.75% SENIOR NOTES DUE 2006, SERIES B
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FEBRUARY , 1997, UNLESS EXTENDED (THE "EXPIRATION DATE").
NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN
AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
BUSINESS DAY PRIOR TO THE EXPIRATION DATE.
To Our Clients:
We are enclosing herewith a Prospectus, dated January 6, 1997, of Parker
Drilling Company, a Delaware corporation (the "Company") and a related Letter of
Transmittal, which together constitute (the "Exchange Offer") relating to the
offer by the Company, to exchange its 9.75% Senior Notes due 2006, Series B (the
"Exchange Notes"), which have been registered under the Securities Act of 1933,
as amended (the "Securities Act") for a like principal amount of its issued and
outstanding 9.75% Senior Notes due 2006, Series A (the "Old Notes"), upon the
terms and subject to the conditions set forth in the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
We are the holder of record of Old Notes held by us for your own account. A
tender of such Old Notes can be made only by us as the record holder and
pursuant to your instructions. The Letter of Transmittal is furnished to you for
your information only and cannot be used by you to tender Old Notes held by us
for your account.
We request instructions as to whether you wish to tender any or all of the
Old Notes held by us for your account pursuant to the terms and conditions of
the Exchange Offer. We also request that you confirm that we may on your behalf
make the representations and warranties contained in the Letter of Transmittal.
Very truly yours,
<PAGE> 16
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION
DATE.
INSTRUCTION TO REGISTERED HOLDER AND/OR BOOK
ENTRY TRANSFER PARTICIPANT
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus dated January
6, 1997 (the "Prospectus") of Parker Drilling Company, a Delaware corporation
(the "Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer") to exchange its 9.75% Senior Notes due 2006, Series B (the "Exchange
Notes"), for all of its outstanding 9.75% Senior Notes due 2006, Series A (the
"Old Notes"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to the action to be taken by you relating to the
Exchange Offer with respect to the Old Notes held by you for the account of the
undersigned.
The aggregate face amount of the Old Notes held by you for the account of
the undersigned is (FILL IN AMOUNT):
$________________________ of the 9.75% Senior Notes due 2006, Series A.
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[ ] To TENDER the following Old Notes held by you for the account of
the undersigned (INSERT PRINCIPAL AMOUNT OF OLD NOTES TO BE TENDERED) (IF
ANY): $________________________.
[ ] NOT to TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you for
the account of the undersigned, it is understood that you are authorized to
make, on behalf of the undersigned (and the undersigned, by its signature below,
hereby makes to you), the representations and warranties contained in the Letter
of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations, that (i) the
Exchange Notes acquired in exchange for Old Notes pursuant to the Exchange Offer
are being acquired in the ordinary course of business of the person receiving
such Exchange Notes, whether or not undersigned, (ii) the undersigned is not
participating in, and has no arrangement with any person to participate in, the
distribution within the meaning of the Securities Act of Exchange Notes, and
(iii) neither the undersigned nor any such other person is an "affiliate"
(within the meaning of Rule 405 under the Securities Act) of the Company or a
broker-dealer tendering Old Notes acquired directly from the Company. If the
undersigned is a broker-dealer that will receive Exchange Notes for its own
account in exchange for Old Notes, it acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange Notes.
SIGN HERE
Name of beneficial owner(s): ---------------------------------------------------
Signature(s): ------------------------------------------------------------------
Name(s) (please print): --------------------------------------------------------
Address: -----------------------------------------------------------------------
Telephone Number: --------------------------------------------------------------
Taxpayer Identification or Social Security Number: -----------------------------
Date: --------------------------------------------------------------------------
2
