<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 13, 1999
REGISTRATION NO. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------
BAKER HUGHES INCORPORATED
(Exact name of Registrant as specified in its charter)
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DELAWARE 3533 76-0207995
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
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3900 ESSEX LANE LAWRENCE O'DONNELL, III
HOUSTON, TEXAS 77027-5177 VICE PRESIDENT AND GENERAL COUNSEL
(713) 439-8600 BAKER HUGHES INCORPORATED
(Address, including zip code, and telephone number, 3900 ESSEX LANE
including area code, of Registrant's principal executive offices) HOUSTON, TEXAS 77027-5177
(713) 439-8600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
J. DAVID KIRKLAND, JR.
BAKER & BOTTS, L.L.P.
ONE SHELL PLAZA
910 LOUISIANA
HOUSTON, TEXAS 77002-4995
(713) 229-1101
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. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933 (the "Securities Act"),
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_|
--------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE (1) OFFERING PRICE (1) REGISTRATION FEE
====================================================================================================================
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5.80% Notes due 2003......... $ 100,000,000 100% $ 100,000,000 $ 27,800
- --------------------------------------------------------------------------------------------------------------------
6% Notes due 2009............ $ 200,000,000 100% $ 200,000,000 $ 55,600
- --------------------------------------------------------------------------------------------------------------------
6 1/4% Notes due 2009........ $ 325,000,000 100% $ 325,000,000 $ 90,350
- --------------------------------------------------------------------------------------------------------------------
6 7/8% Notes due 2029........ $ 400,000,000 100% $ 400,000,000 $ 111,200
- --------------------------------------------------------------------------------------------------------------------
Total .................. $1,025,000,000 $1,025,000,000 $ 284,950
====================================================================================================================
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act.
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
===============================================================================
<PAGE> 2
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, Dated
April 13, 1999
PROSPECTUS
$1,025,000,000
BAKER HUGHES INCORPORATED
OFFER TO EXCHANGE
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5.80% NOTES DUE 2003 6% NOTES DUE 2009 FOR 6 1/4% NOTES DUE 2009 for 6 7/8% NOTES DUE 2029
FOR ALL OUTSTANDING ALL OUTSTANDING ALL OUTSTANDING FOR ALL OUTSTANDING
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 6 7/8% NOTES DUE 2029
($100,000,000) ($200,000,000) ($325,000,000) ($400,000,000)
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THE NEW NOTES
o will be freely tradeable and otherwise substantially identical to the old
notes
THE EXCHANGE OFFER
o expires at 5:00 p.m., New York City time, on , 1999, unless extended
o is not conditioned upon any minimum aggregate principal amount of old notes
being tendered
YOU SHOULD NOTE THAT
o we will exchange all old notes that are validly tendered and not validly
withdrawn for an equal principal amount of new notes that we have
registered under the Securities Act of 1933
o you may withdraw tenders of old notes at any time prior to the expiration
of the exchange offer
o the exchange of old notes for new notes in the exchange offer will not be a
taxable event for U.S. federal income tax purposes
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE NEW NOTES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS , 1999.
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TABLE OF CONTENTS
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Forward-Looking Statements....................................................2
Where You Can Find More Information...........................................3
Prospectus Summary............................................................4
Private Placement.............................................................9
Use of Proceeds...............................................................9
Capitalization...............................................................10
Selected Financial Data......................................................11
About Baker Hughes...........................................................13
The Exchange Offer...........................................................15
Description of the Notes.....................................................24
Exchange and Registration Rights Agreements..................................33
Book Entry; Delivery and Form................................................35
Federal Income Tax Consequences..............................................37
Plan of Distribution.........................................................38
Transfer Restrictions on Old Notes...........................................39
Legal Matters................................................................39
Experts......................................................................39
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THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION WE
HAVE PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. WE
ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER
IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE ON THE FRONT OF THIS DOCUMENT AND THAT ANY
INFORMATION WE HAVE INCORPORATED BY REFERENCE IS ACCURATE ONLY AS OF THE DATE OF
THE DOCUMENT INCORPORATED BY REFERENCE.
---------------------------
FORWARD-LOOKING STATEMENTS
This prospectus, including the information we incorporate by
reference, includes forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. You can identify our forward-looking statements by the words "anticipate,"
"believe," "expect," "plan," "intend," "estimate," "project," "budget,"
"forecast," "will," "could," "should," "may" and similar expressions. We caution
you that our actual results may differ materially from those anticipated or
projected in our forward-looking statements. Any differences could result from a
variety of factors, including the following:
o prices of and demand for crude oil and natural gas
o the level of petroleum industry exploration and production
activity and expenditures
o drilling activity
o the effect of competition
o world economic conditions
o weather
o the legislative environment in the United States and other
countries
o OPEC policy
o conflict in the Middle East and other major petroleum producing
or consuming regions
o the development of technology that affects overall finding and
development costs
o the condition of the capital and equity markets
2
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WHERE YOU CAN FIND MORE INFORMATION
This prospectus incorporates important business and financial
information about us that we have not included in or delivered with this
prospectus. This information is available without charge upon written or oral
request. You should make any request to Linda J. Smith, Corporate Secretary,
Baker Hughes Incorporated, 3900 Essex Lane, Houston, Texas 77027-5177, telephone
number: (713) 439-8600. To ensure timely delivery, you should request the
information no later than , 1999.
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You can read and copy any materials we file with
the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can obtain information about the operation of the
SEC's Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a Web site that contains information we file electronically with the
SEC, which you can access over the Internet at http://www.sec.gov. You can
obtain information about us at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005 and the Pacific Exchange, 301 Pine
Street, San Francisco, California 94104 or 233 South Beaudry Avenue, Los
Angeles, California 90012.
We are "incorporating by reference" information we file with the SEC,
which means that we are disclosing important information to you by referring you
to those documents. The information we incorporate by reference is an important
part of this prospectus, and later information that we file with the SEC
automatically will update and supersede this information. We incorporate by
reference our annual report on Form 10-K for the year ended December 31, 1998
and any future filings we make with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 until the offering made by this
prospectus terminates.
You may request a copy of these filings (other than an exhibit to
those filings unless we have specifically incorporated that exhibit by reference
into the filing), at no cost, by writing or telephoning us at the following
address:
Baker Hughes Incorporated
3900 Essex Lane
Houston, Texas 77027-5177
Attention: Linda J. Smith
Corporate Secretary
Telephone (713) 439-8600
3
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PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus, but
does not contain all information that is important to you. This prospectus
includes specific terms of the exchange offer and the new notes, information
about our business and financial data. We encourage you to read this prospectus
in its entirety.
ABOUT BAKER HUGHES
We are a leading supplier of reservoir-centered products, services and
systems to the worldwide oil and gas industry and a leading supplier of
separation technologies to the worldwide process industries. In August 1998, we
completed our acquisition of Western Atlas Inc. Through our eight oilfield
service companies, including those acquired as part of Western Atlas, we provide
products and services for oil and gas exploration, drilling, completion and
production. Our process company provides equipment and services for a variety of
process applications, including liquid/solid separation technology.
Our principal executive offices are located at 3900 Essex Lane,
Houston, Texas 77027-5177, and our telephone number at that address is (713)
439-8600.
SUMMARY OF THE EXCHANGE OFFER
We issued the old notes in the following transactions:
o on January 14, 1999, we issued $325 million principal amount of
the outstanding 6 1/4% Notes due 2009 and $400 million principal
amount of the outstanding 6 7/8% Notes due 2029
o on February 4, 1999, we issued $200 million principal amount of
the outstanding 6% Notes due 2009
o on February 10, 1999, we issued $100 million principal amount of
the outstanding 5.80% Notes due 2003
In connection with these transactions, we entered into exchange and
registration rights agreements with the initial purchasers of the old notes. We
agreed to deliver to you this prospectus and to complete the exchange offer for
each series of notes within 180 days after the date we issued that series. In
the exchange offer, you are entitled to exchange your old notes for new notes
with substantially identical terms. You should read the discussion under the
headings "--Summary of Terms of the New Notes" beginning on page 7 and
"Description of the Notes" beginning on page 24 for further information about
the new notes.
The exchange offer consists of separate, independent exchange offers
for each series of notes. We have summarized the terms of the exchange offer
below. You should read the discussion under the heading "The Exchange Offer"
beginning on page 15 for further information about the exchange offer and resale
of the new notes.
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Expiration Date............. The exchange offer will expire at 5:00 p.m., New York City time,
on , 1999, or such later date and time to which we
extend it.
Withdrawal of Tenders....... You may withdraw your tender of old notes at any time prior to the
expiration date. We will return to you, without charge, promptly
after the expiration or termination of the exchange offer any old
notes that you tendered but that were not accepted for exchange.
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4
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Conditions to the
Exchange Offer............ We will not be required to accept old notes for exchange:
o if the exchange offer would be unlawful or would violate any interpretation
of the staff of the SEC
o if any legal action has been instituted or threatened that would impair our
ability to proceed with the exchange offer
The exchange offer is not conditioned upon any minimum aggregate principal amount of
old notes being tendered. Please read the section "The Exchange Offer--Conditions to
the Exchange Offer" beginning on page 17 for more information about the conditions to
the exchange offer.
Procedures for Tendering
Old Notes................ If your old notes are held through The Depositary Trust Company and you wish to
participate in the exchange offer, you may do so through DTC's automated tender offer
program. If you tender under this program, you will agree to be bound by the letter
of transmittal that we are providing with this prospectus as though you had signed
the letter of transmittal. By signing or agreeing to be bound by the letter of
transmittal, you will represent to us that, among other things:
o any new notes that you receive will be acquired in the ordinary course of your
business
o you have no arrangement or understanding with any person to participate in the
distribution of the old notes or the new notes
o you are not our "affiliate," as defined in Rule 405 of the Securities Act of
1933, or, if you are our affiliate, you will comply with any applicable
registration and prospectus delivery requirements of the Securities Act of
1933
o if you are not a broker-dealer, you are not engaged in and do not intend to
engage in the distribution of the new notes
o if you are a broker-dealer that will receive new notes for your own account in
exchange for old notes that you acquired as a result of market-making
activities or other trading activities, you will deliver a prospectus in
connection with any resale of such new notes
Special Procedures for
Beneficial Owners......... If you own a beneficial interest in old notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender the old notes in the exchange offer, please contact the registered holder as
soon as possible and instruct the registered holder to tender on your behalf and to
comply with our instructions described in this prospectus.
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Guaranteed Delivery
Procedures............... You must tender your old notes according to the guaranteed delivery procedures
described in "The Exchange Offer-- Guaranteed Delivery Procedures" beginning on page
21 if any of the following apply:
o you wish to tender your old notes but they are not immediately available
o you cannot deliver your old notes, the letter of transmittal or any other
required documents to the exchange agent prior to the expiration date or
o you cannot comply with the applicable procedures under DTC's automated
tender offer program prior to the expiration date
U.S. Federal Income
Tax Considerations....... The exchange of old notes for new notes in the exchange offer will not be a taxable
event for U.S. federal income tax purposes. Please read "Federal Income Tax
Consequences" on page 37.
Use of Proceeds............. We will not receive any cash proceeds from the issuance of new notes in the exchange
offer.
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THE EXCHANGE AGENT
We have appointed Citibank, N.A. as exchange agent for the exchange
offer. Please direct questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal and
requests for the notice of guaranteed delivery to the exchange agent. If you are
not tendering under DTC's automated tender offer program, you should send the
letter of transmittal and any other required documents to the exchange agent as
follows:
CITIBANK, N.A.
800-422-2066
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<CAPTION>
BY COURIER: BY MAIL (REGISTERED OR CERTIFIED BY HAND:
MAIL RECOMMENDED):
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c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc. 111 Wall Street
400 Sette Drive Post Office Box 7073 5th Floor Receive Window
Paramus, New Jersey 07652 Paramus, New Jersey 07653 New York, New York
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(201) 262-3240
Attention: Dayle Grayson
Confirm by Telephone:
(201) 262-6633
6
<PAGE> 8
SUMMARY OF TERMS OF THE NEW NOTES
The new notes will be freely tradeable and otherwise substantially
identical to the old notes. The new notes will not have registration rights or
provisions for additional interest. The new notes will evidence the same debt as
the old notes, and the old notes and the new notes will be governed by the same
indenture. The old notes of a series and the new notes of that series will vote
together as a single separate class under the indenture.
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Notes Offered.............. $100 million principal amount of 5.80% Notes due 2003
$200 million principal amount of 6% Notes due 2009
$325 million principal amount of 6 1/4% Notes due 2009
$400 million principal amount of 6 7/8% Notes due 2029
Maturity Date............... February 15, 2003 for the 5.80% Notes due 2003
February 15, 2009 for the 6% Notes due 2009
January 15, 2009 for the 6 1/4% Notes due 2009
January 15, 2029 for the 6 7/8% Notes due 2029
Interest Payment Dates...... February 15 and August 15 of each year, commencing August 15, 1999,
for the 5.80% Notes due 2003 and the 6% Notes due 2009
January 15 and July 15 of each year, commencing July 15, 1999,
for the 6 1/4% Notes due 2009 and the 6 7/8% Notes due 2029
Optional Redemption......... We may not redeem the 5.80% Notes due 2003 prior to maturity, nor are they entitled
to the benefits of a sinking fund. We may redeem at any time any or all of the other
series of new notes in principal amounts of $1,000 or any integral multiple thereof.
We will pay a redemption price equal to the principal amount of notes we redeem plus
a make-whole premium, which is described under the heading "Description of the
Notes--Optional Redemption" beginning on page 25. We will also pay accrued interest
to the redemption date.
Ranking.................... The new notes:
o are unsecured
o rank equally with all of our existing and future senior debt
o are senior to any future subordinated debt
o are effectively junior to our secured indebtedness and to all existing and
future indebtedness and other liabilities of our subsidiaries
Restrictive Covenants....... We will issue the new notes under an indenture containing covenants for your benefit.
These covenants restrict our ability, with certain exceptions, to:
o incur debt secured by liens
o engage in sale/leaseback transactions
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Rights under Exchange and
Registration Rights
Agreements................. If we fail to complete the exchange offer as required by the exchange and
registration rights agreements, we may be obligated to pay additional interest to
holders of the old notes. Please read "Exchange and Registration Rights Agreements"
beginning on page 33 for more information regarding your rights as a holder of old
notes.
Absence of a Public Market
for the New Notes........... There is no existing market for the new notes. We cannot provide any assurance about:
o the liquidity of any markets that may develop for the new notes
o your ability to sell your new notes
o the prices at which you will be able to sell your new notes
Future trading prices of the new notes will depend on many factors, including:
o prevailing interest rates
o our operating results
o ratings of the new notes
o the market for similar securities
The initial purchasers of the old notes have advised us that they currently intend to
make a market in the new notes we issue in the exchange offer. Those purchasers do
not, however, have any obligation to do so, and they may discontinue any
market-making activities at any time without any notice. In addition, we do not
intend to apply for listing of the new notes on any securities exchange or for
quotation of the new notes in any automated dealer quotation system
</TABLE>
8
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PRIVATE PLACEMENT
We issued the $325 million principal amount of the outstanding 6 1/4%
Notes due 2009 and the $400 million principal amount of the outstanding 6 7/8%
Notes due 2029 on January 14, 1999 to the initial purchasers of those notes at
the respective prices of 99.18% and 99.627% of the principal amount. We issued
the $200 million principal amount of the outstanding 6% Notes due 2009 on
February 4, 1999 to the initial purchaser of those notes at a price of 99.295%
of the principal amount. We issued the $100 million principal amount of the
outstanding 5.80% Notes due 2003 on February 10, 1999 to the initial purchaser
of those notes at a price of 99.252% of the principal amount.
We issued the old notes of each series to the initial purchasers in
transactions exempt from or not subject to registration under the Securities Act
of 1933. The initial purchasers then offered and resold the notes to qualified
institutional buyers, institutional accredited investors and non-U.S. persons
initially at the following prices:
o 99.830% of the principal amount of 6 1/4% Notes due 2009
o 98.502% of the principal amount of 6 7/8% Notes due 2029
o 99.945% of the principal amount of 6% Notes due 2009
o 99.576% of the principal amount of 5.80% Notes due 2003
We received aggregate net proceeds of $1,010.6 million from the sale of
the old notes. We used those proceeds to repay short-term borrowings (including
borrowings classified as long-term debt) and current maturities of long-term
debt.
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the new
notes. In consideration for issuing the new notes of each series, we will
receive in exchange a like principal amount of old notes of that series. The old
notes surrendered in exchange for the new notes will be retired and canceled and
cannot be reissued. Accordingly, issuance of the new notes will not result in
any change in our capitalization.
9
<PAGE> 11
CAPITALIZATION
We have presented in the table below a summary of our short-term debt
and consolidated capitalization as of December 31, 1998 and as adjusted to give
effect to our sale of the old notes and the application of the net proceeds. You
should read this table in conjunction with our consolidated financial
statements, related notes and other financial information we have incorporated
by reference in this prospectus.
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DECEMBER 31, 1998
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ACTUAL AS ADJUSTED
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(IN MILLIONS)
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SHORT-TERM DEBT:
Short-term borrowings and current maturities of long-term debt ........ $ 44.4 $ 44.4
------------ ------------
LONG-TERM DEBT:
Commercial paper and short-term borrowings (1) ........................ 1,700.0 839.4
5.80% Notes due 2003 .................................................. -- 99.2
6% Notes due 2009 ..................................................... -- 198.6
6 1/4% Notes due 2009 ................................................. -- 322.3
6 7/8% Notes due 2029 ................................................. -- 390.5
7 5/8% Notes due 1999 ................................................. 150.0 --
Liquid Yield Option Notes due 2008 .................................... 275.5 275.5
8% Notes due 2004 ..................................................... 99.2 99.2
7.875% Notes due 2004 of Western Atlas Inc. ........................... 247.8 247.8
8.55% Debentures due 2024 of Western Atlas Inc. ....................... 147.2 147.2
8.59% Debentures due 2000 ............................................. 93.0 93.0
Other indebtedness .................................................... 13.6 13.6
------------ ------------
Total long-term debt ................................................. 2,726.3 2,726.3
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value; 400.0 shares authorized,
327.1 shares outstanding .......................................... 327.1 327.1
Capital in excess of par value ........................................ 2,931.8 2,931.8
Retained earnings ..................................................... 100.4 100.4
Cumulative foreign currency translation adjustment .................... (155.4) (155.4)
Unrealized loss on securities available for sale ...................... (0.1) (0.1)
Pension liability adjustments ......................................... (4.4) (4.4)
------------ ------------
Total stockholders' equity ................ 3,199.4 3,199.4
------------ ------------
Total capitalization and short-term debt .. $ 5,970.1 $ 5,970.1
============ ============
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(1) At December 31, 1998, we had $2,237.4 million of credit facilities with
commercial banks, of which $1,000.0 million was committed. Our policy is
to classify commercial paper and short-term borrowings under revolving
credit facilities as long-term debt to the extent of our committed
credit facilities and to the extent of our intent to refinance the
short-term obligations, because we have the ability under our credit
agreements, and the intent, to maintain these obligations for longer
than one year.
10
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SELECTED FINANCIAL DATA
We have derived the following selected financial data from our
historical consolidated financial statements. These data reflect our acquisition
of Western Atlas Inc. accounted for as a pooling of interests. You should read
this table in conjunction with our consolidated financial statements, related
notes and other financial information we have incorporated by reference in this
prospectus.
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THREE MONTHS
YEAR ENDED ENDED YEAR ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, ----------------------------------------------------
1998 1997(a) 1997(b) 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ----------
(In millions, except ratios and percentages)
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STATEMENT OF OPERATIONS DATA:
Revenues ............................... $ 6,311.9 $ 1,572.9 $ 5,343.6 $ 4,445.8 $ 3,920.4 $ 3,699.3
---------- ---------- ---------- ---------- ---------- ----------
Costs and expenses:
Costs of revenues .................... 4,710.9(c) 1,045.7 3,676.9(d) 3,062.8 2,711.4 2,551.5
Selling, general and administrative .. 1,301.8(c) 324.6 1,036.1 889.2 818.2 831.9
Merger-related costs ................. 219.1(c) -- -- -- -- --
Unusual charge ....................... 215.8(c) -- 52.1 39.6 -- 31.8
Acquired in-process research and
development .................... -- -- 118.0 -- -- --
Operating income of business sold ...... -- -- -- -- -- (10.5)
---------- ---------- ---------- ---------- ---------- ----------
Total ........................ 6,447.6 1,370.3 4,883.1 3,991.6 3,529.6 3,404.7
---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss) ................ (135.7) 202.6 460.5 454.2 390.8 294.6
Interest expense ....................... (149.0) (24.5) (91.4) (87.9) (89.1) (106.4)
Interest income ........................ 3.6 1.1 3.6 4.9 6.6 5.2
Spin-off related costs ................. -- -- (8.4) -- -- --
Gain on sale of Varco stock ............ -- -- -- 44.3 -- --
Gain on sale of Pumpsystems ............ -- -- -- -- -- 101.0
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
continuing operations before income
taxes, extraordinary loss and
cumulative effect of accounting
changes ............................. (281.1) 179.2 364.3 415.5 308.3 294.4
Income taxes ........................... (16.3) (68.0) (163.4) (169.1) (126.9) (123.5)
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
continuing operations before
extraordinary loss and cumulative
effect of accounting changes ........ (297.4) 111.2 200.9 246.4 181.4 170.9
Extraordinary loss ..................... -- -- -- -- -- (44.3)
Cumulative effect of accounting
changes ............................. -- -- (12.1) -- (14.6) (44.2)
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations .......................... (297.4) 111.2 188.8 246.4 166.8 82.4
Discontinued operations, net of tax .... -- 2.8 (154.9) 55.7 38.4 38.0
---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) ...................... $ (297.4) $ 114.0 $ 33.9 $ 302.1 $ 205.2 $ 120.4
========== ========== ========== ========== ========== ==========
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<CAPTION>
THREE MONTHS
YEAR ENDED ENDED YEAR ENDED SEPTEMBER 30,
DECEMBER 31, DECEMBER 31, ----------------------------------------------------
1998 1997(a) 1997(b) 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ----------
(In millions, except ratios and percentages)
<S> <C> <C> <C> <C> <C> <C>
OTHER DATA:
EBITDA (e) ............................. $ 626.2 $ 345.4 $ 1,010.6 $ 968.4 $ 825.6 $ 802.7
Adjusted EBITDA (e) .................... 1,434.8 345.4 1,211.0 963.7 825.6 723.0
Operating cash flow from continuing
operations .......................... 809.7 141.1 713.5 636.6 397.0 517.4
Capital expenditures ................... 1,318.2 296.6 1,047.7 657.7 462.4 255.3
Ratio of EBITDA to interest expense .... 4.20x 14.10x 11.06x 11.02x 9.27x 7.54x
Ratio of Adjusted EBITDA to interest
expense ............................. 9.63x 14.10x 13.25x 10.96x 9.27x 8.29x
Ratio of earnings to fixed charges (f).. -- 5.72x 3.55x 4.30x 3.44x 3.04x
STATEMENT OF FINANCIAL POSITION DATA
(AT END OF PERIOD):
Working capital ........................ $ 1,414.6 $ 1,502.7 $ 1,398.4 $ 1,856.1 $ 1,812.2 $ 1,584.4
Total assets ........................... 7,810.8 7,230.6 7,087.0 5,796.6 5,435.2 5,141.3
Long-term debt ......................... 2,726.3 1,605.3 1,473.3 1,124.2 1,295.3 1,128.0
Total debt ............................. 2,770.7 1,782.6 1,589.5 1,179.1 1,300.1 1,185.0
Stockholders' equity ................... 3,199.4 3,519.0 3,491.5 3,190.9 2,870.3 2,886.8
Percent of total debt to total ......... 46.4% 33.6% 31.3% 27.0% 31.2% 29.1%
capitalization (g)
</TABLE>
- -------------------
(a) In August 1998, we changed our fiscal year end from September 30 to
December 31, effective with the calendar year beginning January 1,
1998.
(b) In July 1997, we completed the acquisition of Petrolite Corporation and
its 47% stockholder in a transaction accounted for using the purchase
method. We have allocated the purchase price, consisting of 19.3
million shares of our common stock valued at $730.2 million, to the
assets purchased (including $118.0 million to in-process research and
development charged to operations) and the liabilities assumed based
upon their estimated fair market value at the date of the acquisition.
We have included the operating results of the acquired companies in our
consolidated statement of operations from the date of the acquisition.
(c) During the year ended December 31, 1998, we (1) provided reserves and
recorded write-downs reflected in costs of revenues aggregating $305.0
million; (2) recorded selling, general and administrative expenses
relating to reserves, accruals and the loss on the sale of assets
aggregating $68.7 million; (3) recorded merger-related costs in
connection with the Western Atlas merger of $219.1 million; and (4)
recognized unusual charges aggregating $215.8 million.
(d) During the year ended September 30, 1997, we incurred a nonrecurring
item (included in costs of revenues) of $21.9 million to increase
finished goods inventory acquired in the Petrolite acquisition to its
estimated selling price.
(e) "EBITDA" means earnings before interest expense, taxes, depreciation,
depletion and amortization. "Adjusted EBITDA" represents EBITDA
adjusted by (1) adding the items listed in notes (c) and (d) above; (2)
adding the amounts shown as unusual charges for the years ended
September 30, 1997, 1996 and 1994; (3) adding the writeoff of acquired
in-process research and development of $118.0 million and the spin-off
related costs of $8.4 million incurred in the year ended September 30,
1997; (4) deducting the gain of $44.3 million on sale of Varco stock
realized in the year ended September 30, 1996 and (5) deducting the
gain of $101.0 million on the sale of Pumpsystems and deducting $10.5
million of operating income of business sold, both realized in the year
ended September 30, 1994. EBITDA and Adjusted EBITDA are not generally
accepted accounting principles measures and may not be comparable to
similarly titled items of other companies. You should not consider
these items as alternatives to net income or any other generally
accepted accounting principles measure of performance as an indicator
of our operating performance or as a measure of our liquidity. We
believe EBITDA and Adjusted EBITDA are widely accepted financial
indicators of a company's ability to service debt.
(f) We have computed the historical ratios of earnings to fixed charges by
dividing earnings by fixed charges. For this purpose, earnings consist
of income before income taxes and extraordinary items and fixed
charges. Fixed charges consist of interest expense and one-third of
annual rental expense, which has been deemed to represent the interest
factor. For the year ended December 31, 1998, earnings were inadequate
to cover fixed charges by $493.6 million. See note (c).
(g) Percentage of total debt to total debt plus stockholders' equity.
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<PAGE> 14
ABOUT BAKER HUGHES
We are a leading supplier of reservoir-centered products, services and
systems to the worldwide oil and gas industry and a leading supplier of
separation technologies to the worldwide process industries. Through our eight
oilfield service companies described below, including those acquired as part of
Western Atlas, we provide products and services for oil and gas exploration,
drilling, completion and production. Our process company provides equipment and
services for a variety of process applications, including liquid/solid
separation technology.
WESTERN ATLAS MERGER
In August 1998, we completed our acquisition of Western Atlas by
issuing 148.6 million shares of our common stock to stockholders of Western
Atlas in a transaction accounted for as a pooling of interests. Western Atlas
specializes in land, marine and transition-zone seismic data acquisition and
processing services, well-logging and completion services and reservoir
characterization and project management services. The combination of Baker
Hughes and Western Atlas was designed to achieve the following advantages:
o An enhanced strategic position in providing integrated "life
of field" and "reservoir management" related products and
services. These products and services span the planning,
exploration, development and production phases of an oil and
gas reservoir, integrating Baker Hughes' drilling, completion
and production technologies with Western Atlas' reservoir
information technologies.
o The ability to provide integrated product and service
offerings and project management on an outsourced basis by
combining Baker Hughes' drilling solutions with Western Atlas'
seismic and reservoir information integration technologies.
o Leading positions in an expanded number of product lines and
service offerings, which allows us to compete effectively with
the industry's largest integrated oilfield service providers.
OPERATING DIVISIONS
Baker Atlas
Baker Atlas is a leading provider of a broad range of well-logging and
data analysis services for various phases of drilling and production. These
services are designed to measure rock and fluid properties of subsurface
formations. Baker Atlas uses new-generation high-resolution logging instruments,
coupled with faster data transmission techniques, to provide for the transfer of
larger amounts of data from the borehole to the surface in less time. These
new-generation tools, used in combination with other logging instruments and
sensors to obtain simultaneous multiple measurements, have resulted in more
accurate reservoir evaluation while reducing logging turnaround time, and
consequently lowering drilling costs and risks.
Baker Oil Tools
Baker Oil Tools is a leading provider of completion, workover and
fishing equipment and services. Baker Oil Tools specializes in providing
solutions for the life of the well that help its customers reduce costs while
enhancing recovery of oil and gas. Its product lines include packer systems,
fishing services, liner hangers, service tools and subsurface safety systems.
Packers are used to seal the space between the production tubing and the casing
to protect the casing from reservoir pressures and corrosive formation fluids
and also to maintain the separation of productive zones. Fishing tool services
use specialized tools to locate, dislodge and retrieve twisted off, dropped or
damaged pipe, tools or other objects from the well bore. Liner hanger tools and
equipment are used to suspend and set strings of casing pipe in wells. Baker Oil
Tools also provides flow control devices, inflatable packers, thru-tubing
packers, thru-tubing fishing services and milling/cutting services.
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<PAGE> 15
Baker Petrolite
Baker Petrolite is a leading provider of oilfield specialty chemicals
and integrated chemical technology solutions for petroleum production,
transportation and refining. Chemicals provided by Baker Petrolite include
specialty chemicals used by production segments of the petroleum industry, as
well as industrial chemicals used in refining, waste water treatment, mineral
handling and cooling and boiler water processes. Baker Petrolite also provides
chemical technology solutions to other industrial markets throughout the world,
including petrochemicals, fuel additives, plastics, imaging, adhesives, steel
and crop protection.
Centrilift
Centrilift is a leader in proprietary technology for oilfield electric
submersible pumping ("ESP") systems, which help raise oil to the surface.
Centrilift manufactures the critical components of an ESP system, including
variable speed motor controllers and specialty armored power cables designed for
oilfield use.
E&P Solutions
E&P Solutions was formed by combining Western Atlas E&P Services and
Baker Hughes Solutions. E&P Solutions seeks clients and partners for oil and gas
exploration and production opportunities who value the subsurface information
technologies that E&P Solutions possesses to exploit the full potential of
hydrocarbon-bearing properties. E&P Solutions is organized into
multidisciplinary project teams of geophysicists, geologists and reservoir
engineers that offer a wide range of experience in exploration and production
techniques, including integrated geoscience subsurface analysis, reservoir
characterization, economic and risk analysis, drilling recommendations and
project management and implementation. E&P Solutions plays a leading role in
project management and the integration of products and services from us and
other service providers.
Hughes Christensen
Hughes Christensen Company is a leading manufacturer and marketer of
Tricone(TM) roller cone bits, fixed cutter (diamond) bits and slim hole bits for
the worldwide oil, gas and geothermal industries. New technology includes
poly-diamond crystalline (PDC), Tricone and Ream-While-Drilling designs. Baker
Hughes Mining Tools, a part of Hughes Christensen, provides tools and equipment
for the mining industry.
Baker Hughes INTEQ
Baker Hughes INTEQ is a leading supplier of directional and horizontal
drilling services, downhole motors, drilling fluid systems, coring services,
subsurface surveying and measurement-while-drilling services to the oil and gas
industry. The division's specialized positive displacement downhole motors help
operators to steer wells into pay zones for conventional directional drilling
and short, medium and long-radius horizontal drilling. A full range of
measurement-while-drilling systems provided by Baker Hughes INTEQ use mud-pulse
telemetry to deliver real-time downhole information on the drilling process and
the reservoir. The systems are available for a wide range of applications, from
directional-only service through real-time logging-while-drilling.
Western Geophysical
Western Geophysical is a leading provider of seismic data acquisition
and processing services to assist oil and gas companies in evaluating the
producing potential of sedimentary basins and in locating productive zones.
Western Geophysical conducts seismic surveys on land, in deep waters and across
shallow-water transition zones worldwide. These seismic surveys encompass
high-resolution two-dimensional and three-dimensional surveys for delineating
exploration targets and extend to the integration of seismic data with
borehole-derived information to describe petrophysical properties throughout a
reservoir. Western Geophysical also conducts time-lapse four-dimensional seismic
surveys for monitoring reservoir fluid movement. Seismic information reduces
field development and production costs by reducing turnaround time, lowering
drilling risks and minimizing the number of wells necessary to explore and
develop reservoirs.
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<PAGE> 16
Baker Process
Baker Process provides a broad range of solid/liquid separation
equipment and systems to concentrate product or separate and remove waste
material in the mineral, industrial, pulp and paper and municipal industries.
Its product lines include vacuum filters (drum, disc and horizontal belt),
filter presses, belt presses, granular media filters, thickeners, clarifiers,
flotation cells and aeration equipment. Baker Process also designs and
manufactures process solutions for the oilfield and refinery markets. These
solutions include equipment for processing and conditioning seawater for
injection, desalting oil streams and separating oil from water in oil production
streams, with products consisting of fine filters, coarse filters, nutshell
filters, flotation units, hydrocyclones, coalescers, deaeration towers,
electrochlorinators and electrostatic desalters. In addition, Baker Process
manufactures a broad range of continuous and batch centrifuges and specialty
filters, which are widely used in the municipal, industrial, chemical, minerals
and pharmaceutical markets to dewater or classify process and waste streams.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the old notes, we entered into exchange
and registration rights agreements with the initial purchasers of the old notes.
In these agreements, we agreed to file a registration statement relating to an
offer to exchange each series of old notes for new notes of the same series. We
also agreed to use our reasonable best efforts to complete the exchange offer
for each series within 180 days after the issue date of that series. We are
offering the new notes of each series under this prospectus in a separate,
independent exchange offer for the old notes of that series to satisfy our
obligations under the exchange and registration rights agreements. We sometimes
refer to these separate, independent exchange offers as the "exchange offer."
RESALE OF NEW NOTES
Based on interpretations of the SEC staff in "no action letters" issued
to third parties, we believe that each new note issued in the exchange offer may
be offered for resale, resold and otherwise transferred by you without
compliance with the registration and prospectus delivery provisions of the
Securities Act if:
o you are not our "affiliate" within the meaning of Rule 405
under the Securities Act
o you acquire such new notes in the ordinary course of your
business and
o you do not intend to participate in the distribution of new
notes
If you tender your old notes in the exchange offer with the intention
of participating in any manner in a distribution of the new notes, you:
o cannot rely on such interpretations by the SEC staff and
o must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a
secondary resale transaction
Unless an exemption from registration is otherwise available, the
resale by any securityholder intending to distribute new notes should be covered
by an effective registration statement under the Securities Act containing the
selling securityholder's information required by Item 507 or Item 508, as
applicable, of Regulation S-K under the Securities Act. This prospectus may be
used for an offer to resell, resale or other retransfer of new notes only as
specifically described in this prospectus. Only those broker-dealers that
acquired the old notes as a result of market-making activities or other trading
activities may participate in the exchange offer. Each broker-dealer that
receives new notes for its own account in exchange for old notes, where that
broker-dealer acquired such old notes as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus in
15
<PAGE> 17
connection with any resale of such new notes. Please read the section captioned
"Plan of Distribution" for more details regarding the transfer of new notes.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions described in this
prospectus and in the letter of transmittal, we will accept for exchange any old
notes of a series properly tendered and not withdrawn prior to the expiration
date of the exchange offer for notes of that series. We will issue $1,000
principal amount of new notes of a series in exchange for each $1,000 principal
amount of old notes of that series surrendered under the applicable exchange
offer. Old notes may be tendered only in integral multiples of $1,000.
No exchange offer for notes of a series is conditioned upon any minimum
aggregate principal amount of old notes of that series being tendered for
exchange or upon the consummation of any other exchange offer.
As of the date of this prospectus, $100 million principal amount of
5.80% Notes due 2003, $200 million principal amount of 6% Notes due 2009, $325
million principal amount of 6 1/4% Notes due 2009 and $400 million principal
amount of 6 7/8% Notes due 2029 are outstanding. This prospectus and the letter
of transmittal are being sent to all registered holders of old notes. There will
be no fixed record date for determining registered holders of old notes entitled
to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the
provisions of the exchange and registration rights agreements, the applicable
requirements of the Securities Act and the Securities Exchange Act of 1934 and
the rules and regulations of the SEC. Old notes that are not tendered for
exchange in the exchange offer:
o will remain outstanding
o will continue to accrue interest
o will be entitled to the rights and benefits that holders have
under the indenture relating to the notes and the exchange and
registration rights agreements
We will be deemed to have accepted for exchange properly tendered old
notes when we have given oral or written notice of the acceptance to the
exchange agent and complied with the applicable provisions of the exchange and
registration rights agreements. The exchange agent will act as agent for the
tendering holders for the purposes of receiving the new notes from us.
If you tender old notes in the exchange offer, you 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.
We will pay all charges and expenses, other than certain applicable taxes
described below, in connection with the exchange offer. It is important that you
read the section labeled "--Fees and Expenses" for more details about fees and
expenses incurred in the exchange offer.
We will return any old notes that we do not accept for exchange for any
reason without expense to the tendering holder as promptly as practicable after
the expiration or termination of the applicable exchange offer.
EXPIRATION DATE
Each exchange offer will expire at 5:00 p.m., New York City time,
on , 1999, unless in our sole discretion we extend it.
EXTENSIONS, DELAY IN ACCEPTANCE, TERMINATION OR AMENDMENT
We expressly reserve the right, at any time or at various times, to
extend the period of time during which an exchange offer for notes of a series
is open. We may extend that period for each series independently. We may delay
acceptance for exchange of any old notes of a series by giving oral or written
notice of the extension to their
16
<PAGE> 18
holders. During any such extensions, all old notes of that series you have
previously tendered will remain subject to the exchange offer for that series,
and we may accept them for exchange.
To extend an exchange offer, we will notify the exchange agent orally
or in writing of any extension. We also will make a public announcement of the
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.
If any of the conditions described below under "--Conditions to the
Exchange Offer" have not been satisfied with respect to an exchange offer for
notes of a series, we reserve the right, in our sole discretion:
o to delay accepting for exchange any old notes of that series
o to extend that exchange offer
o to terminate that exchange offer
We will give oral or written notice of such delay, extension or termination to
the exchange agent. Subject to the terms of the exchange and registration rights
agreements, we also reserve the right to amend the terms of that exchange offer
in any manner.
Any such delay in acceptance, extension, termination or amendment will
be followed as promptly as practicable by oral or written notice thereof to the
registered holders of old notes of the series affected. If we amend the exchange
offer in a manner that we determine to constitute a material change, we will
promptly disclose that amendment by means of a prospectus supplement. We will
distribute the supplement to the registered holders of the old notes of the
series affected. Depending upon the significance of the amendment and the manner
of disclosure to the registered holders, we will extend the exchange offer if
the exchange offer would otherwise expire during such period.
Without limiting the manner in which we may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the exchange offer, we have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, we will not be required
to accept for exchange, or exchange any new notes of a series for, any old notes
of that series, and we may terminate the exchange offer for that series as
provided in this prospectus before accepting any old notes of that series for
exchange, if in our reasonable judgment:
o the exchange offer for that series, or the making of any
exchange by a holder of old notes of that series, would
violate applicable law or any applicable interpretation of the
staff of the SEC or
o any action or proceeding has been instituted or threatened in
any court or by or before any governmental agency with respect
to the exchange offer for that series that, in our judgment,
would reasonably be expected to impair our ability to proceed
with that exchange offer
In addition, we will not be obligated to accept for exchange the old
notes of any holder that has not made to us:
o the representations described under "--Procedures for
Tendering" and "Plan of Distribution" and
o such other representations as may be reasonably necessary
under applicable SEC rules, regulations or interpretations to
make available to us an appropriate form for registering the
new notes under the Securities Act
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<PAGE> 19
We expressly reserve the right to amend or terminate each exchange
offer, and to reject for exchange any old notes not previously accepted for
exchange in that exchange offer, upon the occurrence of any of the conditions to
the exchange offer specified above. We will give oral or written notice of any
extension, amendment, non-acceptance or termination to the holders of the old
notes of the series affected as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or
waive them in whole or in part at any time or at various times in our sole
discretion. Our failure at any time to exercise any of these rights will not
mean that we have waived our rights. Each right will be deemed an ongoing right
that we may assert at any time or at various times.
In addition, we will not accept for exchange any old notes tendered,
and will not issue new notes in exchange for any such old notes, if at such time
any stop order has been threatened or is in effect with respect to the
registration statement of which this prospectus constitutes a part or the
qualification of the indenture relating to the notes under the Trust Indenture
Act of 1939.
PROCEDURES FOR TENDERING
How to Tender Generally
Only a holder of old notes may tender such old notes in the exchange
offer. To tender in the exchange offer, a holder must either (1) comply with the
procedures for physical tender or (2) comply with the automated tender offer
program procedures of The Depository Trust Company, or DTC, described below.
To complete a physical tender, a holder must:
o complete, sign and date the letter of transmittal or a
facsimile of the letter of transmittal
o have the signature on the letter of transmittal guaranteed if
the letter of transmittal so requires
o mail or deliver the letter of transmittal or facsimile to the
exchange agent prior to the expiration date and
o deliver the old notes to the exchange agent prior to the
expiration date or comply with the guaranteed delivery
procedures described below
To be tendered effectively, the exchange agent must receive any
physical delivery of the letter of transmittal and other required documents at
its address provided above under "Prospectus Summary--The Exchange Agent" prior
to the expiration date.
To complete a tender through DTC's automated tender offer program, the
exchange agent must receive, prior to the expiration date, a timely confirmation
of book-entry transfer of such old notes into the exchange agent's account at
DTC according to the procedure for book-entry transfer described below or a
properly transmitted agent's message.
The tender by a holder that is not withdrawn prior to the expiration
date and our acceptance of that tender will constitute an agreement between the
holder and us in accordance with the terms and subject to the conditions
described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK.
RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE
DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND
THE LETTER OF TRANSMITTAL OR OLD NOTES TO US. YOU MAY REQUEST YOUR BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE ABOVE
TRANSACTIONS FOR YOU.
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<PAGE> 20
How to Tender If You Are a Beneficial Owner
If you beneficially own old notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and you wish to
tender those notes, you should contact the registered holder as soon as possible
and instruct the registered holder to tender on your behalf. If you are a
beneficial owner and wish to tender on your own behalf, you must, prior to
completing and executing the letter of transmittal and delivering your old
notes, either:
o make appropriate arrangements to register ownership of the old
notes in your name or
o obtain a properly completed bond power from the registered
holder of your old notes
The transfer of registered ownership may take considerable time and may
not be completed prior to the expiration date.
Signatures and Signature Guarantees
You must have signatures on a letter of transmittal or a notice of
withdrawal described below guaranteed by an "eligible institution" unless the
old notes are tendered:
o by a registered holder who has not completed the box entitled
"Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal
o for the account of an eligible institution
An "eligible institution" is 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 Securities Exchange Act of 1934, that is a member of one of
the recognized signature guarantee programs identified in the letter of
transmittal.
When Endorsements or Bond Powers Are Needed
If a person other than the registered holder of any old notes signs the
letter of transmittal, the old notes must be endorsed or accompanied by a
properly completed bond power. The registered holder must sign the bond power as
the registered holder's name appears on the old notes. An eligible institution
must guarantee that signature.
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,
those persons should so indicate when signing. Unless we waive this requirement,
they also must submit evidence satisfactory to us of their authority to deliver
the letter of transmittal.
Tendering Through DTC's Automated Tender Offer Program
The exchange agent and DTC have confirmed that any financial
institution that is a participant in DTC's system may use DTC's automated tender
offer program to tender. Accordingly, participants in the program may, instead
of physically completing and signing the letter of transmittal and delivering it
to the exchange agent, transmit their acceptance of the exchange offer
electronically. They may do so by causing DTC to transfer the old notes to the
exchange agent in accordance with its procedures for transfer. DTC will then
send an agent's message to the exchange agent.
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<PAGE> 21
An "agent's message" is a message transmitted by DTC to and received by
the exchange agent and forming part of the book-entry confirmation, stating
that:
o DTC has received an express acknowledgment from a participant
in DTC's automated tender offer program that is tendering old
notes that are the subject of such book-entry confirmation
o the participant has received and agrees to be bound by the
terms of the letter of transmittal or, in the case of an
agent's message relating to guaranteed delivery, the
participant has received and agrees to be bound by the
applicable notice of guaranteed delivery and
o we may enforce the agreement against such participant
Determinations Under the Exchange Offer
We will determine in our sole discretion all questions as to the
validity, form, eligibility, time of receipt, acceptance of tendered old notes
and withdrawal of tendered old notes. Our determination will be final and
binding. We reserve the absolute right to reject any old notes not properly
tendered or any old notes our acceptance of which, in the opinion of our
counsel, might be unlawful. We also reserve the right to waive any defects,
irregularities or conditions of the exchange offer as to particular old notes.
Our interpretation of the terms and conditions of the exchange offer, including
the instructions in the letter of transmittal, will 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 we determine. Neither we, the
exchange agent nor any other person will be under any duty to give notification
of defects or irregularities with respect to tenders of old notes, nor will we
or those persons incur any liability for failure to give such notification.
Tenders of old notes will not be deemed made until such defects or
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 to the tendering
holder, unless otherwise provided in the letter of transmittal, as soon as
practicable following the expiration date.
When We Will Issue New Notes
In all cases, we will issue new notes for old notes that we have
accepted for exchange in the exchange offer only after the exchange agent timely
receives:
o old notes or a timely book-entry confirmation of such old
notes into the exchange agent's account at DTC and
o a properly completed and duly executed letter of transmittal
and all other required documents or a properly transmitted
agent's message
Return of Old Notes Not Accepted or Exchanged
If we do not accept any tendered old notes for exchange for any reason
described in the terms and conditions of the exchange offer or if old notes are
submitted for a greater principal amount than the holder desires to exchange, we
will return the unaccepted or non-exchanged old notes without expense to their
tendering holder. In the case of old notes tendered by book-entry transfer into
the exchange agent's account at DTC according to the procedures described below,
such non-exchanged old notes will be credited to an account maintained with DTC.
These actions will occur as promptly as practicable after the expiration or
termination of the exchange offer.
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<PAGE> 22
Your Representations to Us
By signing or agreeing to be bound by the letter of transmittal, you
will represent to us that, among other things:
o any new note you receive will be acquired in the ordinary
course of your business
o you have no arrangement or understanding with any person to
participate in the distribution of the new notes or the old
notes within the meaning of the Securities Act
o you are not our "affiliate," as defined in Rule 405 under the
Securities Act or, if you are our affiliate, that you will
comply with the applicable registration and prospectus
delivery requirements of the Securities Act
o if you are not a broker-dealer, you are not engaged in and do
not intend to engage in the distribution of the new notes
o if you are a broker-dealer that will receive new notes for
your own account in exchange for old notes that you acquired
as a result of market-making activities, you will deliver a
prospectus in connection with any resale of such new notes
BOOK-ENTRY TRANSFER
The exchange agent will make a request to establish an account with
respect to the old notes at DTC for purposes of the exchange offer promptly
after the date of this prospectus. Any financial institution participating in
DTC's system may make book-entry delivery of old notes by causing DTC to
transfer such old notes into the exchange agent's account at DTC in accordance
with DTC's procedures for transfer. If you are unable to deliver confirmation of
the book-entry tender of your old notes into the exchange agent's account at DTC
or all other documents required by the letter of transmittal to the exchange
agent on or prior to the expiration date, you must tender your old notes
according to the guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old notes but they are not immediately
available or if you cannot deliver your old notes, the letter of transmittal or
any other required documents to the exchange agent or comply with the applicable
procedures under DTC's automated tender offer program prior to the expiration
date, you may tender if:
o the tender is made through 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
o prior to the expiration date, the exchange agent receives from
such member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc.,
commercial bank or trust company having an office or
correspondent in the United States, or eligible guarantor
institution either a properly completed and duly executed
notice of guaranteed delivery by facsimile transmission, mail
or hand delivery or a properly transmitted agent's message and
notice of guaranteed delivery:
o stating your name and address, the
registered number(s) of your old notes and
the principal amount of old notes tendered
o stating that the tender is being made
thereby
o guaranteeing that, within three New York
Stock Exchange trading days after the
expiration date, the letter of transmittal
or facsimile thereof or agent's message
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in lieu thereof, together with the old notes
or a book-entry confirmation, and any other
documents required by the letter of
transmittal will be deposited by the
eligible guarantor institution with the
exchange agent
o the exchange agent receives such properly completed and
executed letter of transmittal or facsimile or agent's
message, as well as all tendered old notes in proper form for
transfer or a book-entry confirmation, and all other documents
required by the letter of transmittal, within three New York
Stock Exchange trading days after the expiration date
Upon request to the exchange agent, the exchange agent will send a
notice of guaranteed delivery to you if you wish to tender your old notes
according to the guaranteed delivery procedures described above.
WITHDRAWAL OF TENDERS
Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to 5:00 p.m., New York City time, on the expiration
date.
For a withdrawal to be effective:
o the exchange agent must receive a written notice of withdrawal
at one of the addresses listed above under "Prospectus
Summary--The Exchange Agent" or
o the withdrawing holder must comply with the appropriate
procedures of DTC's automated tender offer program
Any notice of withdrawal must:
o specify the name of the person who tendered the old notes to
be withdrawn
o identify the old notes to be withdrawn, including the
registration number or numbers and the principal amount of
such old notes
o be signed by the person who tendered the old notes in the same
manner as the original signature on the letter of transmittal
used to deposit those old notes (or be accompanied by
documents of transfer sufficient to permit the trustee to
register the transfer into the name of the person withdrawing
the tender)
o specify the name in which such old notes are to be registered,
if different from that of the person who tendered the old
notes
If old notes have been tendered under the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at DTC to be credited with the withdrawn old notes and
otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility
and time of receipt of notice of withdrawal, and our determination shall be
final and binding on all parties. We will deem any old notes so withdrawn not to
have been validly tendered for exchange for purposes of the exchange offer.
Any old notes that have been tendered for exchange but that are not
exchanged for any reason will be returned to their holder without cost to the
holder or, in the case of old notes tendered by book-entry transfer into the
exchange agent's account at DTC according to the procedures described above,
such old notes will be credited to an account maintained with DTC for the old
notes. This return or crediting will take place as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. You may
retender properly withdrawn old notes by following one of the procedures
described under "--Procedures for Tendering" above at any time on or prior to
the expiration date.
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FEES AND EXPENSES
We will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail; however, we may make additional solicitation
by facsimile, email, telephone or in person by our officers and regular
employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses. We 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.
We will pay the cash expenses to be incurred in connection with the
exchange offer. They include:
o SEC registration fees
o fees and expenses of the exchange agent and trustee
o accounting and legal fees and printing costs
o related fees and expenses
The initial purchasers of the old notes will reimburse us for certain
of these expenses.
TRANSFER TAXES
If you tender your old notes for exchange, you will not be required to
pay any transfer taxes. We will pay all transfer taxes, if any, applicable to
the exchange of old notes in the exchange offer. The tendering holder will,
however, be required to pay any transfer taxes, whether imposed on the
registered holder or any other person, if:
o certificates representing new notes or old notes for principal
amounts not tendered or accepted for exchange are to be
delivered to, or are to be issued in the name of, any person
other than the registered holder of old notes tendered
o tendered old notes are registered in the name of any person
other than the person signing the letter of transmittal
o a transfer tax is imposed for any reason other than the
exchange of old notes in the exchange offer
If satisfactory evidence of payment of any transfer taxes payable by a note
holder is not submitted with the letter of transmittal, the amount of such
transfer taxes will be billed directly to that tendering holder. The exchange
agent will retain possession of new notes with a face amount equal to the amount
of the transfer taxes due until it receives payment of the taxes.
CONSEQUENCES OF FAILURE TO EXCHANGE
If you do not exchange your old notes for new notes in the exchange
offer, you will remain subject to the existing restrictions on transfer of the
old notes. In general, you may not offer or sell the old notes unless either
they are registered under the Securities Act or the offer or sale is exempt from
or not subject to registration under the Securities Act and applicable state
securities laws. Except as required by the exchange and registration rights
agreements, we do not intend to register resales of the old notes under the
Securities Act.
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The tender of old notes of a series in the exchange offer will reduce
the principal amount of the old notes of that series outstanding. Due to the
corresponding reduction in liquidity, this may have an adverse effect upon, and
increase the volatility of, the market price of any old notes of that series
that you continue to hold.
ACCOUNTING TREATMENT
We will amortize our expenses of each exchange offer over the term of
the applicable series of new notes under generally accepted accounting
principles.
OTHER
Participation in the exchange offer is voluntary, and you should
carefully consider whether to accept. You are urged to consult your financial
and tax advisors in making your decision on what action to take. In the future,
we may seek to acquire untendered old notes in open market or privately
negotiated transactions, through subsequent exchange offers or otherwise. We
have no present plan to acquire any old notes that are not tendered in the
exchange offer or to file a registration statement to permit resales of any
untendered old notes, except as required by the exchange and registration rights
agreements.
DESCRIPTION OF THE NOTES
We will issue the new notes, and we issued the old notes, under an
indenture dated as of May 15, 1991 with Citibank, N.A., as successor trustee to
Morgan Guaranty Trust Company of New York. We have summarized selected
provisions of the notes and the indenture below. The summary is not complete.
For a complete description, you should refer to the indenture and the terms of
the notes, which we have filed with the SEC. Please read "Where You Can Find
More Information." In this summary description of the notes, all references to
us mean Baker Hughes Incorporated only, unless we state otherwise or the context
clearly indicates otherwise.
The indenture does not limit the amount of debt securities that we can
issue under the indenture. We may issue debt securities under the indenture from
time to time in separate series, each up to the aggregate amount we authorize
from time to time for that series. In addition to the old notes, our 8% Notes
due 2004 and Liquid Yield Option(TM) Notes due 2008 are outstanding under the
indenture.
The old notes of a series, the new notes of that series issued in the
exchange offer and any debt securities of that series issued in the private
exchange described below under "Exchange and Registration Rights Agreements"
will together constitute a separate single class of debt securities under the
indenture. If the exchange offer for notes of a series is consummated, holders
of old notes of that series who do not exchange their old notes for either new
notes of that series in the exchange offer or debt securities of that series in
the private exchange will vote together with holders of that series of new notes
and private exchange notes for all relevant purposes under the indenture.
Accordingly, in determining whether the required holders have given any notice,
consent or waiver or taken any other action permitted under the indenture, any
old notes that remain outstanding after the applicable exchange offer or private
exchange will be aggregated with the applicable series of new notes and private
exchange notes, and the holders of those old notes, new notes and private
exchange notes will vote together as a single series. All references in this
summary description of the notes to specified percentages in aggregate principal
amount of the outstanding notes of a series means, at any time after the
exchange offer or private exchange for notes of that series is consummated, the
percentages in aggregate principal amount of the applicable old notes, new notes
and private exchange notes then outstanding.
INTEREST AND MATURITY
The 5.80% Notes due 2003 will mature on February 15, 2003 and bear
interest at 5.80% per year from February 10, 1999. The 6% Notes due 2009 will
mature on February 15, 2009 and bear interest at 6% per year from February 4,
1999. We will pay interest on these series semi-annually in arrears on February
15 and August 15 of
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each year, commencing August 15, 1999. The record dates for interest payments
will be the February 1 and August 1 preceding the applicable interest payment
date.
The 6 1/4% Notes due 2009 will mature on January 15, 2009 and bear
interest at 6 1/4% per year from January 14, 1999. The 6 7/8% Notes due 2029
will mature on January 15, 2029 and bear interest at 6 7/8% per year from
January 14, 1999. We will pay interest on these series semi-annually in arrears
on January 15 and July 15 of each year, commencing July 15, 1999. The record
dates for interest payments will be the January 1 and July 1 preceding the
applicable interest payment date.
With respect to each series of notes:
o we will compute interest on the basis of a 360-day year of
twelve 30-day months
o we will make all payments by wire transfer for notes held in
book-entry form
o for notes not held in book-entry form, we may make interest
payments by wire transfer or by check mailed to the person
entitled to the payment as it appears on the security register
and will make principal payments upon surrender of the notes
at the corporate trust office of the paying agent in New York,
New York
OPTIONAL REDEMPTION
We may not redeem the 5.80% Notes due 2003 prior to maturity, nor are
they entitled to the benefit of any sinking fund.
We may redeem any other series of notes at our option, in whole or in
part, at any time and from time to time, at a redemption price equal to the
greater of:
o 100% of the principal amount of the notes to be redeemed and
o the sum of the present values of the Remaining Scheduled
Payments on the notes to be redeemed, discounted to the
redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate
plus:
o 20 basis points for the 6% Notes due 2009 and the 6
1/4% Notes due 2009
o 30 basis points for the 6 7/8% Notes due 2029
In each case, we will pay accrued interest to the date of redemption.
For purposes of this calculation, we have used the following defined
terms:
"Comparable Treasury Issue" means the United States Treasury security
selected by an independent investment banker that would be used, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the applicable series of notes. An "independent investment banker" is one of
the Reference Treasury Dealers appointed by us.
"Comparable Treasury Price" means either:
o the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its
principal amount) as of the third business day before the
redemption date, as set forth in the daily statistical release
(or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or
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o if that release or any successor release is not published or
does not contain such prices on that business day, either:
o the average of the Reference Treasury Dealer
Quotations for the redemption date, after excluding
the highest and lowest of such Reference Treasury
Dealer Quotations or
o if the trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such
quotations
"Reference Treasury Dealer" means:
o for the 6% Notes due 2009, each of NationsBanc Montgomery
Securities LLC (and its affiliates) and three other nationally
recognized investment banking firms we specify from time to
time that are primary U.S. Government securities dealers
o for the 6 1/4% Notes due 2009 and the 6 7/8% Notes due 2029,
each of Chase Securities Inc. (and its successors), Salomon
Smith Barney Inc. (and its successors) and two other
nationally recognized investment banking firms we specify from
time to time that are primary U.S. Government securities
dealers
If, however, any of these dealers ceases to be a primary U.S. Government
securities dealer, we will substitute another nationally recognized investment
banking firm that is such a dealer.
"Reference Treasury Dealer Quotations" means the average, as determined
by the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by the applicable Reference Treasury Dealer as of 3:30
p.m., New York time, on the third business day preceding the redemption date.
"Remaining Scheduled Payments" means the remaining scheduled payments
of the principal of and interest on the note to be redeemed that would be due
after the related redemption date but for such redemption. If the redemption
date is not an interest payment date for that note, the amount of the next
scheduled interest payment on that note will be reduced by the amount of
interest accrued on that note to the redemption date.
"Treasury Rate" means the rate per year equal to the semi-annual
equivalent yield to maturity (computed as of the second business day immediately
preceding the redemption date) of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for the redemption
date.
We will mail notice of a redemption at least 30 days but not more than
60 days before the redemption date to holders of notes to be redeemed. If we are
redeeming less than all the notes of a series, the trustee will select the
particular notes of that series to be redeemed by lot or by another method the
trustee deems fair and appropriate. Unless we default in payment of the
redemption price, on and after the redemption date, interest will cease to
accrue on the notes or portions thereof called for redemption.
Except as described above, the notes will not be redeemable by us prior
to maturity and will not be entitled to the benefit of any sinking fund.
RANKING
The notes of each series will be our senior unsecured obligations and
will rank equal in right of payment with notes of the other series and with all
of our other unsecured and unsubordinated indebtedness.
The indenture does not limit the amount of debt that we or any of our
subsidiaries may incur or issue, nor does it restrict transactions between us
and our affiliates or dividends and other distributions by us or our
subsidiaries.
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We currently conduct substantially all our operations through
subsidiaries, and substantially all of our operating income and cash flow are
generated by our subsidiaries. As a result, distributions or advances from our
subsidiaries are the principal source of funds necessary to meet our debt
service obligations. Contractual provisions or laws, as well as our
subsidiaries' financial condition and operating requirements, may limit our
ability to obtain cash from our subsidiaries that we require to pay our debt
service obligations, including payments on the notes. In addition, holders of
the notes will have a junior position to the claims of creditors of our
subsidiaries on their assets and earnings.
As of December 31, 1998, as adjusted to give effect to the issuance of
the old notes and the use of proceeds from the issuance, we would have had an
aggregate of $2.8 billion of consolidated indebtedness, of which approximately
$2.4 billion would have ranked equally in right of payment with the notes and
approximately $400 million would have been owed by subsidiaries or secured and
therefore effectively senior to the notes.
RESTRICTIVE COVENANTS
Other than the restrictions described in this section, neither the
indenture nor the notes contain any covenants or other provisions designed to
protect holders of the notes in the event we participate in a highly leveraged
transaction. We have agreed, however, to two principal restrictions on our
activities for the benefit of holders of the notes. The restrictive covenants
summarized below will apply to each series of notes (unless waived or amended)
as long as any of those notes are outstanding. We have used in this summary
description capitalized terms that we have defined below under "--Glossary." In
this description of the covenants, all references to us mean Baker Hughes
Incorporated and its subsidiaries, unless the context clearly indicates
otherwise.
Limitation on Liens
We have agreed that we will issue, assume, guarantee or suffer to exist
any debt for money borrowed secured by lien upon any of our properties or upon
any shares of stock or indebtedness of our subsidiaries only if we secure the
notes (and all other debt securities issued under the indenture) equally and
ratably with or prior to the debt secured by the lien. This covenant has
exceptions that permit:
(a) liens on any property we acquire, construct or improve
after May 15, 1991 that are created within 180 days after the
acquisition, the completion of construction or the commencement of
commercial operation of the property to secure or provide for the
payment of the purchase price of the property or the cost of the
construction or improvement; in the case of construction or
improvement, the exception permits liens on property previously owned
by us only if the property is unimproved real property on which the
property being constructed or the improvement is located
(b) liens on property existing at the time we acquire the
property or liens outstanding at the time any corporation becomes a
subsidiary, but only to the extent that the lien applies to property
either:
o owned by that corporation at the time it becomes a
subsidiary or
o acquired by that corporation from a third party after
the corporation becomes a subsidiary
(c) intercompany liens
(d) liens in favor of a governmental entity either:
o to secure payments under any contract or statute or
o to secure indebtedness incurred to finance the
purchase price or the cost of constructing or
improving the property subject to the lien, including
liens securing pollution control or industrial
revenue bonds or similar indebtedness
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(e) any extensions, renewals or replacements of the
above-described liens if both
o the amount of debt secured by the new lien does not
exceed the amount of debt refinanced and
o the new lien is limited to all or a part of the
property (plus any improvements) secured by the
original lien
In addition, without securing the notes as described above, we may
issue, assume or guarantee secured debt that this covenant would otherwise
restrict in an aggregate amount that, when added to all of our other secured
debt that this covenant would otherwise restrict and to outstanding Attributable
Debt for Sale and Lease-Back Transactions, does not exceed a "basket" equal to
10% of Consolidated Net Worth as of a date within 90 days before the proposed
transaction. When calculating this aggregate amount, we exclude from the
calculation Attributable Debt for Sale and Lease-Back Transactions the proceeds
of which we have used to retire debt as described in clause (b) below under
"Limitation on Sale and Lease-Back Transactions."
Limitation on Sale and Lease-Back Transactions
We have agreed that we will enter into a Sale and Lease-Back
Transaction only if one of the following applies:
(a) we could incur debt in an amount at least equal to the
Attributable Debt for that Sale and Lease-Back Transaction and, without
violating the "Limitation on Liens" covenant, could secure that debt by
a lien on the property to be leased without equally and ratably
securing the notes or
(b) within 90 days of the effective date of the Sale and
Lease-Back Transaction, we apply an amount equal to the net proceeds
from the sale of the property so leased to the voluntary retirement of
either:
o notes
o other debt securities issued under the indenture or
o any of our Funded Debt that is not subordinated to
the notes or other debt securities issued under the
indenture
This covenant does not apply to any Sale and Lease-Back Transaction
entered into in connection with an industrial revenue bond or pollution control
financing or any intercompany Sale and Lease-Back Transaction. When calculating
the amount of Attributable Debt, we will exclude any Attributable Debt for these
Sale and Lease-Back Transactions.
Glossary
"Attributable Debt" means the present value of the net rental payments
during the remaining term of the lease included in the Sale and Lease-Back
Transaction. To determine the present value, we use a discount rate equal to the
lease rate implicit in the Sale and Lease-Back Transaction.
"Consolidated Net Worth" means the amount of total stockholders' equity
shown in our most recent consolidated statement of financial position.
The term "debt" means all indebtedness for borrowed money.
"Funded Debt" means all debt that matures on or is extendible or
renewable to a date more than twelve months after the date of the creation of
the debt.
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"Sale and Lease-Back Transaction" means any arrangement with anyone
under which we lease for a term of more than three years any property that we
have or will sell or transfer to that person. This term excludes leases of
property we acquire or place in service within 180 days prior to the
arrangement.
In this description of the covenants, all references to us mean to
Baker Hughes Incorporated and its subsidiaries, unless the context clearly
indicates otherwise. For this purpose, the term "subsidiary" means a corporation
of which we own more than 50% of the outstanding voting stock, either directly
or indirectly. The term "voting stock" means stock that ordinarily has voting
power for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The indenture generally permits a consolidation or merger between us
and another entity. It also permits the sale by us of all or substantially all
of our assets. We have agreed, however, that we will consolidate with or merge
into any entity or transfer or dispose of all or substantially all of our assets
to any entity only if:
o the resulting entity is organized and existing under the laws
of any domestic jurisdiction and assumes the due and punctual
payments on the notes and the other debt securities issued
under the indenture and the performance of our covenants under
the indenture
o immediately after giving effect to the transaction, no event
of default, and no event that, after notice or lapse of time,
would become an event of default, would occur and be
continuing
o if as a result of the transaction our property or assets
become subject to a lien not permitted by the covenant
described above under "Restrictive Covenants--Limitation on
Liens," we or the resulting entity secures the notes and the
other debt securities issued under the indenture as described
in that section
EVENTS OF DEFAULT
The following events are events of default under the indenture with
respect to notes of a series:
o our failure to pay interest on any note of that series for 30
days
o our failure to pay principal of or any premium on any note of
that series when due
o our failure to perform any of our other covenants in the
indenture (other than a covenant included in the indenture
solely for the benefit of another series of debt securities),
continued for 90 days after written notice by the trustee or
by the holders of at least 25% in principal amount of the
outstanding notes of that series
o certain events involving bankruptcy, insolvency or
reorganization of Baker Hughes Incorporated
If an event of default for any series of notes occurs and is
continuing, either the trustee or the holders of at least 25% in principal
amount of the outstanding notes of that series by notice as provided in the
indenture may require us to pay the principal amount of all notes of that series
immediately. The holders of a majority in principal amount of the outstanding
notes of that series may in some cases rescind and annul that acceleration.
A holder of a note of any series may pursue any remedy under the
indenture only if:
o the holder has previously given written notice to the trustee
of a continuing event of default with respect to that series
of notes
o the holders of not less than 25% in principal amount of the
outstanding notes of that series have made written request to
the trustee to institute proceedings in its own name
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o the holder has offered the trustee reasonable indemnity
o the trustee has failed to act within 60 days after receipt of
the notice and indemnity and
o the holders of a majority in principal amount of the
outstanding notes of that series have given no direction
inconsistent with the request
This provision does not, however, affect the right of a holder of any
note to sue for the enforcement of any overdue payment.
In most cases, the trustee will be under no obligation to exercise any
of its rights or powers under the indenture at the request or direction of any
of the holders, unless those holders have offered to the trustee reasonable
indemnity. Subject to this provision for indemnification, the holders of a
majority in principal amount of the outstanding notes of any series may direct
the time, method and place of:
o conducting any proceeding for any remedy available to the
trustee
o exercising any trust or power conferred on the trustee with
respect to the notes of that series
We are required to furnish to the trustee annually a statement as to
our performance of certain of our obligations under the indenture and as to any
default in performance.
DEFEASANCE
When we use the term defeasance, we mean discharge from some or all of
our obligations under the indenture. If we deposit with the trustee funds or
U.S. government securities sufficient to make payments on the notes of a series
on the dates those payments are due and payable, then, at our option, either of
the following will occur:
o we will be discharged from our obligations with respect to the
notes of that series ("legal defeasance and discharge") or
o we will no longer have any obligation to comply with the
restrictive covenants under the indenture, the related events
of default will no longer apply to us, but our other
obligations under the indenture and the notes of that series,
including our obligation to make payments on the notes, will
survive ("covenant defeasance")
If we elect legal defeasance and discharge of a series of notes, the
holders of the notes of that series will not be entitled to the benefits of the
indenture, except for our obligations relating to:
o temporary notes and exchange of those notes
o registration of transfer or exchange of notes of that series
o replacement of stolen, lost or mutilated notes of that series
o maintenance of paying agencies and
o holding of monies for payment in trust
Holders of notes of that series would be entitled to look only to the trust fund
for payments on their notes until maturity.
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We will be required to deliver to the trustee an opinion of counsel
that the deposit and related defeasance would not cause the holders of the notes
to recognize income, gain or loss for federal income tax purposes and that the
holders would 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 the deposit and
related defeasance had not occurred. If we elect legal defeasance and discharge,
that opinion of counsel must be based upon a ruling from the United States
Internal Revenue Service or a change in law to that effect.
Under current United States federal income tax law, legal defeasance
and discharge would likely be treated as a taxable exchange of notes to be
defeased for interests in the defeasance trust. As a consequence, a United
States holder would recognize gain or loss equal to the difference between the
holder's cost or other tax basis for the notes and the value of the holder's
interest in the defeasance trust, and thereafter would be required to include in
income a share of the income, gain or loss of the defeasance trust. Under
current United States federal income tax law, covenant defeasance would not be
treated as a taxable exchange of such notes.
PAYMENT AND PAYING AGENTS
We will make payments on the notes at the office of such paying agents
as we designate from time to time. We will make all payments by wire transfer
for notes held in book-entry form. For notes not held in book-entry form, we may
make, at our option, interest payments by wire transfer or by check mailed to
the person entitled to the payment as it appears on the security register and
will make principal payments upon surrender of the notes at the corporate trust
offices of a paying agent in New York, New York. We will make interest payments
to the person in whose name the note is registered at the close of business on
the record date for the interest payment.
We have designated the corporate trust office of the trustee in New
York, New York as a paying agent for payments on the notes. We may at any time
designate additional paying agents, rescind the designation of any paying agent
or approve a change in the office through which any paying agent acts. We will,
however, be required to maintain a paying agent in each place of payment for a
series of notes.
All monies we pay to a paying agent for payments on any note that
remain unclaimed for two years after the payments become due and payable will
(subject to applicable escheat laws) be repaid to us. After repayment to us, the
holder of that note must look only to us for payment.
MODIFICATION AND WAIVER
We may modify or amend the indenture if the holders of a majority in
principal amount of the outstanding debt securities of all series issued under
the indenture affected by the modification or amendment consent to it. Without
the consent of each outstanding note affected, however, no modification may:
o change the stated maturity of the principal of or any
installment of principal of or interest on any note
o reduce the principal amount of, the interest rate on or the
premium payable upon redemption of any note
o change the redemption date for any note
o change the coin or currency in which any note or any premium
or interest on any note is payable
o change the redemption right of any holder
o impair the right to institute suit for the enforcement of any
payment on any note
o reduce the percentage in principal amount of outstanding notes
of any series necessary to modify the indenture, to waive
compliance with certain provisions of such indenture or to
waive certain defaults
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<PAGE> 33
o change our obligation to maintain an office or agency in the
places and for the purposes required by the indenture
o modify any of the above provisions
We may modify or amend the indenture without the consent of any holders
of the notes in certain circumstances, including:
o to provide for the assumption of our obligations under the
indenture and the notes by a successor upon any merger,
consolidation or asset transfer
o to add covenants and events of default or to surrender any
rights we have under the indenture
o to make any change that does not adversely affect any
outstanding notes of a series in any material respect
o to secure the notes as described above under "Restrictive
Covenants--Limitation on Liens"
o to provide for successor trustees
o to cure any ambiguity, omission, defect or inconsistency
The holders of a majority in principal amount of the outstanding notes
of any series may waive past defaults under the indenture and compliance by us
with our covenants described above under "Restrictive Covenants" with respect to
the notes of that series only. Those holders may not, however, waive any default
in any payment on any note of that series or compliance with a provision that
cannot be modified or amended without the consent of each holder affected.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
We will issue the new notes in definitive fully registered form,
without coupons, in denominations of $1,000 and integral multiples thereof.
Notes of any series will be exchangeable for other notes of the same
series, the same total principal amount and the same terms but in different
authorized denominations in accordance with the indenture. Holders may present
notes for registration of transfer at the office of the security registrar or
any transfer agent we designate. The security registrar or transfer agent will
effect the transfer or exchange when it is satisfied with the documents of title
and identity of the person making the request. We will not charge a service
charge for any registration of transfer or exchange of the notes. We may,
however, require the payment of any tax or other governmental charge payable for
that registration.
We have appointed the trustee as security registrar for the notes. We
are required to maintain an office or agency for transfers and exchanges in each
place of payment. We may at any time designate additional transfer agents for
any series of notes.
In the case of any redemption in part, we will not be required:
o to issue, register the transfer of or exchange notes of a
series either during a period beginning 15 business days prior
to the selection of notes of that series for redemption and
ending on the close of business on the day of mailing of the
relevant notice of redemption or
o to register the transfer of or exchange any note, or portion
of any note, called for redemption, except the unredeemed
portion of any note we are redeeming in part
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<PAGE> 34
REPLACEMENT OF NOTES
We will replace any mutilated note at the holder's expense upon
surrender of the note to the trustee. We will replace notes that become
destroyed, stolen or lost at the holder's expense upon delivery to the trustee
of the note or evidence of destruction, loss or theft satisfactory to us and the
trustee. In the case of a destroyed, lost or stolen note, we may require an
indemnity satisfactory to the trustee and to us at the holder's expense before
we issue a replacement note.
GOVERNING LAW
New York law governs the indenture and the notes.
THE TRUSTEE
Citibank, N.A. is the trustee under the indenture. We maintain banking
relationships in the ordinary course of business with the trustee and its
affiliates. The trustee is an affiliate of Salomon Smith Barney Inc., one of the
initial purchasers of the 6 1/4% Notes due 2009 and the 6 7/8% Notes due 2029.
EXCHANGE AND REGISTRATION RIGHTS AGREEMENTS
In connection with the issuance of the old notes, we entered into
exchange and registration rights agreements with the initial purchasers of the
old notes. These agreements provide that we will:
o file with the SEC a registration statement relating to an
exchange offer for each series of old notes under the
Securities Act
o use our reasonable best efforts to consummate the exchange
offer for each series within 180 days following the issue date
of that series
o keep the exchange offer for each series of old notes open for
at least 30 days after the date on which notice of the
exchange offer is mailed to the registered holders of the old
notes of that series, or longer, if required by applicable law
and
o accept for exchange all old notes tendered and not validly
withdrawn in the exchange offer
If any holder holds any old notes acquired by it that have the status
of an unsold allotment in an initial distribution or if any holder is not
entitled to participate in the exchange offer, we will issue and deliver to that
holder in a private exchange, upon request and in exchange for the old notes
held by that holder, a like aggregate principal amount of our debt securities
that are identical in all material respects to the new notes. These new notes
will, however, be subject to transfer restrictions.
Under the following circumstances, we will use our reasonable best
efforts to file and to cause to become effective under the Securities Act a
shelf registration statement to cover resales of the old notes of each series by
those holders who provide required information in connection with that shelf
registration statement:
o if any change in law or applicable interpretations by the
staff of the SEC does not permit us to effect the exchange
offer for the old notes as contemplated by the exchange and
registration rights agreements
o if the exchange offer for a series of old notes is not
consummated within 180 days after the issue date of that
series
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<PAGE> 35
o if any initial purchaser of old notes so requests with respect
to such old notes or any new notes received in the private
exchange described above that are not eligible to be exchanged
for new notes in the exchange offer and that are held by that
initial purchaser following the consummation of the exchange
offer
o if any applicable law or interpretations do not permit any
holder of old notes (other than an initial purchaser) to
participate in the exchange offer
o if any holder of old notes that participates in the exchange
offer does not receive freely transferable new notes, other
than restrictions imposed on an "exchanging dealer," which is
a broker-dealer that will receive new notes for its own
account in exchange for old notes that it acquired as a result
of market-making activities or
o if we so elect
If applicable, we will use our reasonable best efforts to keep such shelf
registration statement effective for a period of up to two years after the
applicable issue date. We will have the ability to suspend the availability of
the shelf registration statement in limited circumstances.
If any "registration default" with respect to a series of old notes
occurs, we will become obligated to pay additional interest on that series at
the rate of 0.25% per year. This rate will increase by an additional 0.25% per
year if we have not cured the registration default within 90 days. These rates
will continue until we have cured all registration defaults. In no event will
the rate of additional interest exceed 0.50% per year.
A "registration default" with respect to a series of old notes will
occur if, among other things:
o we have not consummated the exchange offer on or prior to 180
days after the issue date of that series or
o we file the shelf registration statement and the SEC declares
it effective within 180 days after that issue date, but
afterward the shelf registration statement ceases to be
effective at a time we are obligated to maintain its
effectiveness and we do not file and the SEC does not declare
effective an additional shelf registration statement within 60
days
The exchange and registration rights agreements also provide that we
will:
o make available for at least 180 days (in the case of any
"exchanging dealer") or 90 days (in the case of any other
broker-dealer) after the consummation of the exchange offer a
prospectus meeting the requirements of the Securities Act to
any exchanging dealer or broker-dealer to use in connection
with any resale of new notes
o pay certain expenses incident to the exchange offer
o indemnify certain holders of the new notes (including any
broker-dealer) against certain liabilities, including
liabilities under the Securities Act
A broker-dealer that delivers this prospectus to purchasers in connection with
resales will be subject to applicable civil liability provisions under the
Securities Act and will be bound by the provisions of the exchange and
registration rights agreements.
If you desire to tender your old notes, you will be required to make to
us the representations described under "The Exchange Offer--Procedures for
Tendering--Your Representations to Us" to participate in the exchange offer. In
addition, we may require you to deliver information that we will use in
connection with the shelf registration statement to have your notes included in
the shelf registration statement and benefit from the
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<PAGE> 36
provisions regarding additional interest described in the preceding paragraphs.
If you sell old notes under the shelf registration statement, you generally
will:
o be required to be named as a selling securityholder in the
related prospectus and to deliver a prospectus to purchasers
o be subject to applicable civil liability provisions under the
Securities Act in connection with those sales and
o be bound by the provisions of the exchange and registration
rights agreements applicable to you
This description of the exchange and registration rights agreements is
a summary only. For more information, you may read the provisions of the
agreements, which we have filed as exhibits to the registration statement of
which this prospectus is a part. Please read "Where You Can Find More
Information."
BOOK ENTRY; DELIVERY AND FORM
We will issue the new notes of each series in the form of one or more
permanent global notes in definitive, fully registered, book-entry form. The
global notes will be deposited with or on behalf of The Depository Trust Company
and registered in the name of Cede & Co., as nominee of DTC, or will remain in
the custody of the trustee in accordance with the FAST Balance Certificate
Agreement between DTC and the trustee. The global notes will be deposited on
behalf of the acquirors of the new notes for credit to the respective accounts
of the acquirors or to such other accounts as they may direct at DTC. Please
read "The Exchange Offer--Book-Entry Transfer."
GLOBAL NOTES
DTC has advised us as follows:
o DTC is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency"
registered under Section 17A of the Securities Exchange Act of
1934
o DTC holds securities that its participants deposit with DTC
and facilitates the settlement among participants of
securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized
book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities
certificates
o Direct participants include securities brokers and dealers,
banks, trust companies, clearing corporations and other
organizations
o DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange,
Inc. and the National Association of Securities Dealers, Inc.
o Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a
direct participant, either directly or indirectly
o The rules applicable to DTC and its participants are on file
with the SEC
We have provided the following descriptions of the operations and
procedures of DTC solely as a matter of convenience. These operations and
procedures are solely within the control of DTC and are subject to change by
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<PAGE> 37
them from time to time. Neither we nor the trustee takes any responsibility for
these operations or procedures, and you are urged to contact DTC or its
participants directly to discuss these matters.
We expect that under procedures established by DTC:
o upon deposit of the global notes with DTC or its custodian,
DTC will credit on its internal system the accounts of direct
participants designated by the underwriters with portions of
the principal amounts of the global notes
o ownership of the new notes will be shown on, and the transfer
of ownership thereof will be effected only through, records
maintained by DTC or its nominee, with respect to interests of
direct participants, and the records of direct and indirect
participants, with respect to interests of persons other than
participants
The laws of some jurisdictions may require that purchasers of
securities take physical delivery of those securities in definitive form.
Accordingly, the ability to transfer interests in the new notes represented by a
global note to those persons may be limited. In addition, because DTC can act
only on behalf of its participants, who in turn act on behalf of persons who
hold interests through participants, the ability of a person having an interest
in new notes represented by a global note to pledge or transfer those interests
to persons or entities that do not participate in DTC's system, or otherwise to
take actions in respect of such interest, may be affected by the lack of a
physical definitive security in respect of such interest.
So long as DTC or its nominee is the registered owner of a global note,
DTC or that nominee will be considered the sole owner or holder of the new notes
represented by that global note for all purposes under the indenture and under
the new notes. Except as provided below, owners of beneficial interests in a
global note:
o will not be entitled to have new notes represented by that
global note registered in their names
o will not receive or be entitled to receive physical delivery
of certificated notes and
o will not be considered the owners or holders thereof under the
indenture or under the new notes for any purpose, including
with respect to the giving of any direction, instruction or
approval to the trustee
Accordingly, each holder owning a beneficial interest in a global note must rely
on the procedures of DTC and, if that holder is not a direct or indirect
participant, on the procedures of the participant through which that holder owns
its interest, to exercise any rights of a holder of new notes under the
indenture or the global note.
Neither we nor the trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of new
notes by DTC, or for maintaining, supervising or reviewing any records of DTC
relating to the new notes.
Payments on the new notes represented by the global notes will be made
to DTC or its nominee, as the case may be, as the registered owner thereof. We
expect that DTC or its nominee, upon receipt of any payment on the new notes
represented by a global note, will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the global
note as shown in the records of DTC or its nominee. We also expect that payments
by participants to owners of beneficial interests in the global note held
through such participants will be governed by standing instructions and
customary practice as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. The
participants will be responsible for those payments.
Transfers between participants in DTC are expected to be effected in
accordance with DTC rules and settled in immediately available funds.
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<PAGE> 38
CERTIFICATED NOTES
We will issue certificated notes to each person that DTC identifies as
the beneficial owner of the new notes represented by the global notes upon
surrender by DTC of the global notes if either:
o we notify the trustee in writing that:
o DTC is no longer willing or able to act as a
depositary for the global notes or
o DTC ceases to be registered as a clearing agency
under the Securities Exchange Act of 1934 and
in each case, we have not appointed a successor depositary
within 90 days
o we determine not to have the new notes represented by a global
note or
o an event of default has occurred and is continuing, and DTC
requests the issuance of certificated notes
Neither we nor the trustee will be liable for any delay by DTC, its
nominee or any direct or indirect participant in identifying the beneficial
owners of the related new notes. We and the trustee may conclusively rely on,
and will be protected in relying on, instructions from DTC or its nominee for
all purposes, including with respect to the registration and delivery, and the
respective principal amounts, of the new notes to be issued.
FEDERAL INCOME TAX CONSEQUENCES
We have based the following discussion on the current provisions of the
Internal Revenue Code of 1986, applicable Treasury regulations, judicial
authority and administrative rulings and practice. We can give you no assurance
that the Internal Revenue Service will not take a contrary view, and we have not
sought and will not seek a ruling from the IRS. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conditions described in this section. These changes or
interpretations may be retroactive and could affect the tax consequences to you.
If you are an insurance company, tax-exempt organization, financial institution,
broker-dealer, foreign corporation or person who is not a citizen or resident of
the United States, you may be subject to special rules we have not discussed. WE
RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES OF EXCHANGING YOUR OLD NOTES FOR NEW NOTES, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
We believe that the exchange of old notes for new notes in the exchange
offer will not be treated as an "exchange" for federal income tax purposes,
because the new notes will not be considered to differ materially in kind or
extent from the old notes. Rather, the new notes you receive should be treated
as a continuation of the old notes in your hands. As a result, there should be
no federal income tax consequences to your exchanging old notes for new notes in
the exchange offer.
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PLAN OF DISTRIBUTION
Based on interpretations by the staff of the SEC in no action letters
issued to third parties, we believe that you may transfer new notes issued in
the exchange offer in exchange for the old notes if:
o you acquire the new notes in the ordinary course of your
business and
o you are not engaged in, and do not intend to engage in, and
have no arrangement or understanding with any person to
participate in, a distribution of new notes
We believe that you may not transfer new notes issued in the exchange
offer in exchange for the old notes if you are:
o our "affiliate" within the meaning of Rule 405 under the
Securities Act
o a broker-dealer that acquired old notes directly from us or
o a broker-dealer that acquired old notes as a result of
market-making or other trading activities without compliance
with the registration and prospectus delivery provisions of
the Securities Act
If you wish to exchange your old notes for new notes in the exchange
offer, you will be required to make representations to us as described in "The
Exchange Offer -- Procedures for Tendering -- Your Representations to Us" of
this prospectus and in the letter of transmittal. In addition, if a
broker-dealer receives new notes for its own account in exchange for old notes
that were acquired by it 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 by it of such new notes. A
broker-dealer may use this prospectus, as we may amend or supplement it, in
connection with these resales. We have agreed that, for a period of 180 days
after the closing date of the exchange offer, we will make this prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account in
the exchange offer may be sold from time to time in one or more transactions:
o in the over-the-counter market
o in negotiated transactions
o through the writing of options on the new notes or
o a combination of such methods of resale
The prices at which these sales occur may be:
o at market prices prevailing at the time of resale
o at prices related to such prevailing market prices or
o at 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 or the purchasers of any such new notes. Any
broker-dealer that resells new notes that it received for its own account in the
exchange offer and any broker or dealer that participates in a distribution of
new notes may be deemed to be an "underwriter" within the
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meaning of the Securities Act. Any profit on any resale of new notes and any
commission or concessions received by any such persons may be deemed to be
underwriting compensation. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For 180 days after the closing of the exchange offer, we will promptly
send additional copies of this prospectus and any amendment or supplement to
this prospectus to any broker-dealer that requests them in the letter of
transmittal. We have agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the holders of the old notes), other
than commissions or concessions of any broker-dealer. The initial purchasers of
the old notes will reimburse us for certain of these expenses. We also have
agreed to indemnify the holders of the old notes (including any broker-dealer)
against certain liabilities, including liabilities under the Securities Act.
TRANSFER RESTRICTIONS ON OLD NOTES
The old notes were not registered under the Securities Act.
Accordingly, we offered and sold the old notes only in private sales exempt from
or not subject to the registration requirements of the Securities Act:
o to "qualified institutional buyers" under Rule 144A under the
Securities Act
o outside the United States in compliance with Regulation S
under the Securities Act and
o to a limited number of institutional "accredited investors"
You may not offer or sell those old notes in the United States or to, or for the
account or benefit of, U.S. persons except in transactions exempt from or not
subject to the Securities Act registration requirements.
LEGAL MATTERS
Baker & Botts, L.L.P., our outside legal counsel, has issued an
opinion about the legality of the new notes.
EXPERTS
The consolidated financial statements of Baker Hughes Incorporated as
of December 31, 1998 and 1997, and for the year ended December 31, 1998, the
three-month period ended December 31, 1997 and for each of the two years in the
period ended September 30, 1997, incorporated in this prospectus by reference
from our annual report on Form 10-K for the year ended December 31, 1998, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to the change in the method of accounting for
impairment of long-lived assets to be disposed of to conform to Statement of
Financial Accounting Standard No. 121), which is incorporated in this prospectus
by reference and has been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
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===============================================================================
$1,025,000,000
BAKER HUGHES INCORPORATED
OFFER TO EXCHANGE
<TABLE>
<S> <C> <C> <C>
5.80% NOTES DUE 2003 6% Notes due 2009 for 6 1/4% Notes due 2009 for 6 7/8% Notes due 2029
FOR ALL OUTSTANDING all outstanding all outstanding for all outstanding
5.80% NOTES DUE 2003 6% Notes due 2009 6 1/4% Notes due 2009 6 7/8% Notes due 2029
($100,000,000) ($200,000,000) ($325,000,000) ($400,000,000)
</TABLE>
-----------------
PROSPECTUS
-----------------
, 1999
===============================================================================
<PAGE> 42
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation contains a
provision that eliminates the personal liability of a director to the Company
and its stockholders for monetary damages for breach of his fiduciary duty as a
director to the extent currently allowed under the Delaware General Corporation
Law. If a director were to breach such duty in performing his duties as a
director, neither the Company nor its stockholders could recover monetary
damages from the director, and the only course of action available to the
Company's stockholders would be equitable remedies, such as an action to enjoin
or rescind a transaction involving a breach of fiduciary duty. To the extent
certain claims against directors are limited to equitable remedies, the
provision in the Company's Restated Certificate of Incorporation may reduce the
likelihood of derivative litigation and may discourage stockholders or
management from initiating litigation against directors for breach of their
fiduciary duty. Additionally, equitable remedies may not be effective in many
situations. If a stockholder's only remedy is to enjoin the completion of the
Board of Directors' action, this remedy would be ineffective if the stockholder
does not become aware of a transaction or event until after it has been
completed. In such a situation, it is possible that the stockholders and the
Company would have no effective remedy against the directors. Under the
Company's Restated Certificate of Incorporation, liability for monetary damages
remains for (a) any breach of the duty of loyalty to the Company or its
stockholders, (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) payment of an improper
dividend or improper repurchase of the Company's stock under Section 174 of the
Delaware General Corporation Law, or (d) any transaction from which the director
derived an improper personal benefit. The Company's Restated Certificate of
Incorporation further provides that in the event the Delaware General
Corporation Law is amended to allow the further elimination or limitation of the
liability of directors, then the liability of the Company's directors shall be
limited or eliminated to the fullest extent permitted by the amended Delaware
General Corporation Law.
Under Article III of the Company's By-laws as currently in effect and
an indemnification agreement with the Company's officers and directors (the
"Indemnification Agreement"), each person who is or was a director or officer of
the Company or a subsidiary of the Company, or who serves or served any other
enterprise or organization at the request of the Company or a subsidiary of the
Company, shall be indemnified by the Company to the full extent permitted by the
Delaware General Corporation Law.
Under such law, to the extent that such person is successful on the
merits in defense of a suit or proceeding brought against him by reason of the
fact that he is or was a director or officer of the Company, or serves or served
any other enterprise or organization at the request of the Company, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred in connection with such action.
Under such law, if unsuccessful in defense of a third-party civil suit
or a criminal suit, or if such suit is settled, such a person shall be
indemnified against both (a) expenses, including attorneys' fees, and (b)
judgments, fines and amounts paid in settlement if he acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the Company, and, with respect to any criminal action, had no reasonable
cause to believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such a suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) actually and
reasonably incurred in the defense or settlement of such suit if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the Company, except that if such person is adjudged to be
liable in such a suit for negligence or misconduct in the performance of his
duty to the Company, he cannot be made whole for expenses unless the court
determines that he is fairly and reasonably entitled to indemnity for such
expenses.
The Indemnification Agreement provides directors and officers with
specific contractual assurance that indemnification and advancement of expenses
will be available to them regardless of any amendments to or
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<PAGE> 43
revocation of the indemnification provisions of the Company's By-laws. The
Indemnification Agreement provides for indemnification of directors and officers
against both stockholder derivative claims and third-party claims. Sections
145(a) and 145(b) of the Delaware General Corporation Law, which grant
corporations the power to indemnify directors and officers, specifically
authorize lesser indemnification in connection with derivative claims than in
connection with third-party claims. The distinction is that Section 145(a),
concerning third-party claims, authorizes expenses and judgments and amounts
paid in settlement (as is provided in the Indemnification Agreement), but
Section 145(b), concerning derivative suits, generally authorizes only
indemnification of expenses. However, Section 145(f) expressly provides that the
indemnification and advancement of expenses provided by or granted pursuant to
the subsections of Section 145 shall not be exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any agreement. No Delaware case directly answers the question whether
Delaware's public policy would support this aspect of the Indemnification
Agreement under the authority of Section 145(f), or would cause its invalidation
because it does not conform to the distinctions contained in Sections 145(a) and
145(b).
Pursuant to the Indemnification Agreement, the Company has agreed to
provide, at all times during the two-year period following a "change in control"
(as defined in the Indemnification Agreement) of the Company, irrevocable
letters of credit in an aggregate amount not less than $25,000,000 for the
benefit of the officers and directors of the Company to secure its obligations
under the Indemnification Agreement.
Delaware corporations also are authorized to obtain insurance to
protect officers and directors from certain liabilities, including liabilities
against which the corporation cannot indemnify its directors and officers. The
Company currently has in effect a directors' and officers' liability insurance
policy.
ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES
(a) Exhibits
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
----------- -------
<S> <C>
4.1 -- Indenture dated as of May 15, 1991 between the Company and
Citibank, N.A., as successor trustee to Morgan Guaranty Trust
Company of New York (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (Registration No. 33-39520)
and incorporated herein by reference)
4.2 -- Purchase Agreement dated January 11, 1999 by and between the
Company and Chase Securities Inc., Salomon Smith Barney Inc.,
J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated
and NationsBanc Montgomery Securities LLC relating to $325
million principal amount of 6 1/4% Notes due 2009 and $400
million principal amount of 6 7/8% Notes due 2029
4.3 -- Purchase Agreement dated February 1, 1999 by and between the
Company and NationsBanc Montgomery Securities LLC relating to
$200 million principal amount of 6% Notes due 2009
4.4 -- Purchase Agreement dated February 5, 1999 by and between the
Company and J.P. Morgan Securities Inc. relating to $100
million principal amount of 5.80% Notes due 2003
</TABLE>
II-2
<PAGE> 44
<TABLE>
<S> <C>
4.5 -- Exchange and Registration Rights Agreement dated January 11,
1999 by and between the Company and Chase Securities Inc.,
Salomon Smith Barney Inc., J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated and NationsBanc Montgomery
Securities LLC relating to $325 million principal amount of
6 1/4% Notes due 2009 and $400 million principal amount of
6 7/8% Notes due 2029
4.6 -- Exchange and Registration Rights Agreement dated February 4,
1999 by and between the Company and NationsBanc Montgomery
Securities LLC relating to $200 million principal amount of 6%
Notes due 2009
4.7 -- Exchange and Registration Rights Agreement dated February 10,
1999 by and between the Company and J.P. Morgan Securities
Inc. relating to $100 million principal amount of 5.80% Notes
due 2003
4.8 -- Terms of 6 1/4% Notes due 2009 and 6 7/8% Notes due 2029,
including the form of notes
4.9 -- Terms of 6% Notes due 2009, including the form of note
4.10 -- Terms of 5.80% Notes due 2003, including the form of note
5.1 -- Opinion of Baker & Botts, L.L.P. as to the legality of the
securities
12.1 -- Computation of ratio of earnings to fixed charges
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5.1)
24.1 -- Powers of Attorney (included on the signature page of the
Registration Statement)
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of Citibank, N.A., as
successor trustee to Morgan Guaranty Trust Company of New York
under the Indenture, on Form T-1
99.1 -- Form of Letter of Transmittal
99.2 -- Form of Notice of Guaranteed Delivery
99.3 -- Form of Letter to Depository Trust Company Participants
99.4 -- Form of Letter to Clients
</TABLE>
(b) Financial Statement Schedules
Not applicable.
II-3
<PAGE> 45
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934, as amended (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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant 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 Registrant 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 Registrant 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.
II-4
<PAGE> 46
(d) 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.
(e) 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-5
<PAGE> 47
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Lawrence O'Donnell, III and Max L.
Lukens, and each of them, each of whom may act without joinder of the other, his
or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any or all pre-and post-effective
amendments to this Registration Statement, including without limitation any
registration statement of the type contemplated by Rule 462(b) under the
Securities Act of 1933, 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 or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, and each of them, or
the substitute or substitutes of any or all of them, may lawfully do or cause to
be done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Houston,
State of Texas, on April 13, 1999.
BAKER HUGHES INCORPORATED
By /s/ MAX L. LUKENS
------------------------------------------
Max L. Lukens
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ MAX L. LUKENS Chairman of the Board, President, April 13, 1999
- --------------------------------------- Chief Executive Officer
Max L. Lukens and Director
(principal executive officer)
/s/ ERIC L. MATTSON Senior Vice President and Chief April 13, 1999
- --------------------------------------- Financial Officer
Eric L. Mattson (principal financial officer)
/s/ JAMES W. HARRIS Vice President-Tax and Controller April 13, 1999
- --------------------------------------- (principal accounting officer)
James W. Harris
/s/ LESTER M. ALBERTHAL, JR. Director April 13, 1999
- ---------------------------------------
Lester M. Alberthal, Jr.
/s/ VICTOR G. BEGHINI DIRECTOR APRIL 13, 1999
- ---------------------------------------
Victor G. Beghini
/s/ ALTON J. BRANN DIRECTOR APRIL 13, 1999
- ---------------------------------------
ALTON J. BRANN
/s/ JOSEPH T. CASEY DIRECTOR APRIL 13, 1999
- ---------------------------------------
JOSEPH T. CASEY
</TABLE>
II-6
<PAGE> 48
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ EUNICE M. FILTER DIRECTOR APRIL 13, 1999
- ---------------------------------------
EUNICE M. FILTER
/s/ JOE B. FOSTER DIRECTOR APRIL 13, 1999
- ---------------------------------------
JOE B. FOSTER
/s/ CLAIRE W. GARGALLI DIRECTOR APRIL 13, 1999
- ---------------------------------------
CLAIRE W. GARGALLI
/s/ RICHARD D. KINDER DIRECTOR APRIL 13, 1999
- ---------------------------------------
RICHARD D. KINDER
DIRECTOR
- ---------------------------------------
JOHN F. MAHER
/s/ JAMES F. MCCALL DIRECTOR APRIL 13, 1999
- ---------------------------------------
JAMES F. MCCALL
DIRECTOR
- ---------------------------------------
H. JOHN RILEY, JR.
/s/ JOHN R. RUSSELL DIRECTOR APRIL 13, 1999
- ---------------------------------------
JOHN R. RUSSELL
/s/ CHARLES L. WATSON DIRECTOR APRIL 13, 1999
- ---------------------------------------
CHARLES L. WATSON
DIRECTOR
- ---------------------------------------
MAX P. WATSON, JR.
</TABLE>
II-7
<PAGE> 49
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<S> <C>
4.1 -- Indenture dated as of May 15, 1991 between the Company and
Citibank, N.A., as successor trustee to Morgan Guaranty Trust
Company of New York (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (Registration No. 33-39520)
and incorporated herein by reference)
4.2 -- Purchase Agreement dated January 11, 1999 by and between the
Company and Chase Securities Inc., Salomon Smith Barney Inc.,
J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated
and NationsBanc Montgomery Securities LLC relating to $325
million principal amount of 6 1/4% Notes due 2009 and $400
million principal amount of 6 7/8% Notes due 2029
4.3 -- Purchase Agreement dated February 1, 1999 by and between the
Company and NationsBanc Montgomery Securities LLC relating to
$200 million principal amount of 6% Notes due 2009
4.4 -- Purchase Agreement dated February 5, 1999 by and between the
Company and J.P. Morgan Securities Inc. relating to $100
million principal amount of 5.80% Notes due 2003
4.5 -- Exchange and Registration Rights Agreement dated January 11,
1999 by and between the Company and Chase Securities Inc.,
Salomon Smith Barney Inc., J.P. Morgan Securities Inc., Morgan
Stanley & Co. Incorporated and NationsBanc Montgomery
Securities LLC relating to $325 million principal amount of
6 1/4% Notes due 2009 and $400 million principal amount of
6 7/8% Notes due 2029
4.6 -- Exchange and Registration Rights Agreement dated February 4,
1999 by and between the Company and NationsBanc Montgomery
Securities LLC relating to $200 million principal amount of 6%
Notes due 2009
4.7 -- Exchange and Registration Rights Agreement dated February 10,
1999 by and between the Company and J.P. Morgan Securities
Inc. relating to $100 million principal amount of 5.80% Notes
due 2003
4.8 -- Terms of 6 1/4% Notes due 2009 and 6 7/8% Notes due 2029,
including the form of notes
4.9 -- Terms of 6% Notes due 2009, including the form of note
4.10 -- Terms of 5.80% Notes due 2003, including the form of note
5.1 -- Opinion of Baker & Botts, L.L.P. as to the legality of the
securities
12.1 -- Computation of ratio of earnings to fixed charges
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5.1)
24.1 -- Powers of Attorney (included on the signature page of the
Registration Statement)
25.1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of Citibank, N.A., as
successor trustee to Morgan Guaranty Trust Company of New York
under the Indenture, on Form T-1
99.1 -- Form of Letter of Transmittal
99.2 -- Form of Notice of Guaranteed Delivery
99.3 -- Form of Letter to Depository Trust Company Participants
99.4 -- Form of Letter to Clients
</TABLE>
<PAGE> 1
EXHIBIT 4.2
BAKER HUGHES INCORPORATED
$725,000,000
6 1/4% Notes due 2009
6 7/8% Notes due 2029
PURCHASE AGREEMENT
January 11, 1999
CHASE SECURITIES INC.
SALOMON SMITH BARNEY INC.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
c/o Chase Securities Inc.
270 Park Avenue, 8th floor
New York, New York 10017
Ladies and Gentlemen:
Baker Hughes Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell $325,000,000 aggregate principal amount of its 6 1/4%
Notes due 2009 and $400,000,000 aggregate principal amount of its 6 7/8% Notes
due 2029 (collectively, the "Securities"). The Securities will be issued
pursuant to an Indenture dated as of May 15, 1991 (the "Indenture") between the
Company and Citibank, N.A., as trustee (the "Trustee"). The Company hereby
confirms its agreement with Chase Securities Inc. ("CSI") and Salomon Smith
Barney Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and
NationsBanc Montgomery Securities LLC (together with CSI, the "Initial
Purchasers") concerning the purchase of the Securities from the Company by the
several Initial Purchasers.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated January 4, 1999 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum
dated the date hereof (the "Offering Memorandum") setting forth information
concerning the Company and the Securities. Copies of the Preliminary Offering
Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Company to the Initial Purchasers pursuant to the terms of this
Agreement. Any references herein to the Preliminary Offering Memorandum and the
Offering Memorandum shall be deemed to refer to and include any documents
incorporated by reference therein as of the date of such Preliminary Offering
Memorandum or the Offering Memorandum, and any reference to any amendment or
supplement to the Preliminary Offering Memorandum shall be
<PAGE> 2
deemed to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), after the date of the Preliminary
Offering Memorandum or the Offering Memorandum, as the case may be, unless
otherwise noted. The Company hereby confirms that it has authorized the use of
the Preliminary Offering Memorandum and the Offering Memorandum in connection
with the offering and resale of the Securities by the Initial Purchasers in
accordance with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees as set forth therein) will be entitled to the
benefits of an Exchange and Registration Rights Agreement, substantially in the
form attached hereto as Annex A (the "Registration Rights Agreement"), pursuant
to which the Company will agree to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Securities
Act (the "Exchange Offer Registration Statement") registering debt securities
of the Company (the "Exchange Securities") which are identical in all material
respects to the Securities (except that the Exchange Securities will not
contain terms with respect to transfer restrictions or the payment of
additional interest) and (ii) under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, the several Initial
Purchasers on and as of the date hereof and the Closing Date (as defined in
Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, did not, and on the Closing Date the
Offering Memorandum, as amended or supplemented, will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation or warranty as to information
contained in or omitted from the Preliminary Offering Memorandum or the
Offering Memorandum in reliance upon and in conformity with written information
relating to the Initial Purchasers furnished to the Company by or on behalf of
any Initial Purchaser specifically for use therein (the "Initial Purchasers'
Information").
(b) The documents incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum (the "Exchange Act Reports"),
when they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of the
Commission thereunder and none of such documents contained an untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and any further documents so filed and incorporated by
reference in the Preliminary Offering Memorandum and the Offering Memorandum,
when such documents are filed with the Commission, will conform in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder and shall not contain an untrue statement of a
material fact
-2-
<PAGE> 3
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, contains or incorporates by reference
all of the information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(d) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the offer,
resale and delivery of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement and the Offering Memorandum, to register the
Securities under the Securities Act.
(e) The Company has all necessary corporate power and authority to
execute and deliver this Agreement, the Registration Rights Agreement, the
Securities and any supplemental indenture or other document required under the
Indenture to establish the series of Securities thereunder (the "Supplemental
Indenture") (collectively, the "Transaction Documents") and to perform its
obligations under the Indenture and the Transaction Documents; and all
corporate action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby have been duly and
validly taken.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The Registration Rights Agreement has been duly authorized by
the Company and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity or
at law) and except to the extent that the enforceability of the indemnification
provisions may be limited as against public policy.
(h) The Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(i) The Securities have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in the
Indenture and the Supplemental Indenture and paid for as provided herein, will
be duly and validly issued and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
-3-
<PAGE> 4
enforceable against the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(j) Each Transaction Document and the Indenture conforms in all
material respects to the description thereof contained in the Offering
Memorandum.
(k) The execution, delivery and performance by the Company of each
of the Transaction Documents, the issuance, authentication, sale and delivery
of the Securities and compliance by the Company with the terms thereof, the
compliance by the Company with the terms of the Indenture and the consummation
of the transactions contemplated by the Transaction Documents will not conflict
with or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the Company or any
of its subsidiaries or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except as would not have, in any case, a material adverse
effect on the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"); and no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order, decree,
rule or regulation is required for the execution, delivery and performance by
the Company of each of the Transaction Documents, the issuance, authentication,
sale and delivery of the Securities and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (i) which shall have been obtained or
made prior to the Closing Date, (ii) as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement, and (iii) except to the extent that the
failure to obtain such consents, approvals, authorizations, filings,
registrations or qualifications would not have a Material Adverse Effect.
(l) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Securities or suspends the sale of the
Securities in any jurisdiction; no injunction, restraining order or order of
any nature by any federal or state court of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Securities or the use of the
Preliminary Offering Memorandum or the Offering Memorandum in any jurisdiction;
no action, suit or proceeding is pending against or, to the best knowledge of
the Company, threatened against or affecting the Company or any of its
subsidiaries before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to interfere
with or adversely affect the issuance of the
-4-
<PAGE> 5
Securities or in any manner draw into question the validity or enforceability
of any of the Transaction Documents or the Indenture or any action taken or to
be taken pursuant thereto; and the Company has complied with any and all
requests by any securities authority in any jurisdiction for additional
information to be included in the Preliminary Offering Memorandum and the
Offering Memorandum.
(m) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(n) In connection with the offering and sale of Securities in
reliance on Regulation S, neither the Company nor any of its affiliates or any
person acting on its or their behalf other than the Initial Purchasers, as to
which the Company makes no representation, has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S under the
Securities Act ("Regulation S")), and all such persons other than the Initial
Purchasers, as to which the Company makes no representation, have complied and
will comply with the offering restrictions requirement of Regulation S to the
extent applicable.
(o) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as such term is defined in the
Securities Act), which is or will be integrated with the sale of the Securities
in a manner that would require registration of the Securities under the
Securities Act.
(p) None of the Company or any of its affiliates or any other
person acting on its or their behalf other than the Initial Purchasers, as to
which the Company makes no representation, has engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(q) No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Offering Memorandum or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 99.18% of
the principal amount thereof for the 6 1/4% Notes due 2009 and 97.627% of the
principal amount for the 6 7/8% Notes due 2029. The Company shall not be
obligated to deliver any of the Securities except upon payment for all of the
Securities to be purchased as provided herein.
(b) The Initial Purchasers have advised the Company that they
propose to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. Each Initial
Purchaser, severally and not jointly, represents and warrants to, and agrees
with, the Company that (i) it is purchasing the Securities pursuant to a
private sale
-5-
<PAGE> 6
exempt from registration under the Securities Act, (ii) it has not solicited
offers for, or offered or sold, and will not solicit offers for, or offer or
sell, the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D under the
Securities Act ("Regulation D") or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act and (iii) it has
solicited and will solicit offers for the Securities only from, and has offered
or sold and will offer, sell or deliver the Securities, as part of its initial
offering, only (A) within the United States to persons whom it reasonably
believes to be qualified institutional buyers ("Qualified Institutional
Buyers"), as defined in Rule 144A under the Securities Act ("Rule 144A"), or if
any such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented
to it that each such account is a Qualified Institutional Buyer to whom notice
has been given that such sale or delivery is being made in reliance on Rule
144A and, in each case, in transactions in accordance with Rule 144A, (B) to a
limited number of other institutional accredited investors (as such term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D), and (C) outside
the United States to persons other than U.S. persons in reliance on, and in
accordance with, Regulation S. Each Initial Purchaser, severally and not
jointly, represents and warrants to, and agrees with, the Company that it is an
accredited investor within the meaning of Rule 501(a) under the Securities Act.
(c) In connection with the offer and sale of Securities in
reliance on Regulation S, each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) The Securities 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 transactions not subject to, the registration
requirements of the Securities Act.
(ii) Such Initial Purchaser has offered and sold the Securities,
and will offer and sell the Securities, (A) as part of their
distribution at any time and (B) otherwise until 40 days after the
later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Rule 903 of Regulation S or Rule
144A or any other available exemption from registration under the
Securities Act.
(iii) None of such Initial Purchaser or any of its affiliates or
any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities,
and all such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
(iv) At or prior to the confirmation of sale of any Securities
sold in reliance on Regulation S, it will have sent to each
distributor, dealer or other person receiving a selling concession,
fee or other remuneration that purchase Securities from it during the
distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (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 (i) as part of their
distribution at any time or (ii) otherwise until
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<PAGE> 7
40 days after the later of the commencement of the offering of the
Securities and the date of original issuance of the Securities,
except in accordance with Regulation S or Rule 144A or any other
available exemption from registration under the Securities Act.
Terms used above have the meanings given to them by Regulation S."
(v) It has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution or delivery of
the Securities, except with its affiliates or with the prior written
consent of the Issuers.
Terms used in this Section 2(c) have the meanings given to them by Regulation
S.
(d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and prior to the date
six months after the Closing Date will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 and the Public Offers
of Securities Regulations 1995 with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(e) Each Initial Purchaser, severally and not jointly, agrees
that, prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall
furnish to that purchaser a copy of the Offering Memorandum (and any amendment
or supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and (e), counsel for the Company and for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers and their compliance with their agreements
contained in this Section 2, and each Initial Purchaser hereby consents to such
reliance.
(f) The Company acknowledges and agrees that the Initial
Purchasers may sell Securities to any affiliate of an Initial Purchaser and
that any such affiliate may sell Securities purchased by it to an Initial
Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Vinson & Elkins
L.L.P., 1001 Fannin Street, Houston, Texas, or at such other place as shall be
agreed upon by the Initial Purchasers and the Company, at
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<PAGE> 8
10:00 a.m., New York City time, on January 14, 1999, or at such other time or
date, not later than seven full business days thereafter, as shall be agreed
upon by the Initial Purchasers and the Company (such date and time of payment
and delivery being referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior
to the Closing Date or by such other means as the parties hereto shall agree
prior to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligations of the Initial Purchasers hereunder. Upon
delivery, the Securities shall be in global form, registered in such names and
in such denominations as CSI on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Securities available for inspection by CSI on behalf of the Initial Purchasers
in New York, New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with each of
the several Initial Purchasers:
(a) at any time prior to completion of the resale of the
Securities by the Initial Purchasers: to advise the Initial Purchasers promptly
and, if requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made or incorporated by
reference in the Offering Memorandum untrue or which requires the making of any
additions to or changes in the Offering Memorandum (as amended or supplemented
from time to time) in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; to advise the Initial
Purchasers promptly of any order preventing or suspending the use of the
Preliminary Offering Memorandum or the Offering Memorandum, of any suspension
of the qualification of the Securities for offering or sale in any jurisdiction
and of the initiation or threatening of any proceeding for any such purpose;
and to use its best efforts to prevent the issuance of any such order
preventing or suspending the use of the Preliminary Offering Memorandum or the
Offering Memorandum or suspending any such qualification and, if any such
suspension is issued, to obtain the lifting thereof at the earliest possible
time;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any amendments
or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by notice to
the Company after a reasonable period to review; provided that the Company
shall be permitted in any case to make all applicable filings under the
Exchange Act;
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<PAGE> 9
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of counsel for the Initial
Purchasers or counsel for the Company, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Offering Memorandum to comply with
applicable law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable law;
(e) to file all reports and definitive proxy or information
statement required to be filed by the Company with the Commission pursuant to
Section 12(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Offering Circular for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act;
(f) for five years from the date hereof, to furnish to the Initial
Purchasers copies of any annual reports, quarterly reports and current reports
filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company to the
Trustee or to the holders of the Securities pursuant to the Indenture or the
Exchange Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering and
sale under the securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may designate and to continue such qualifications in effect for so
long as required for the resale of the Securities; and to arrange for the
determination of the eligibility for investment of the Securities under the
laws of such jurisdictions as the Initial Purchasers may reasonably request;
provided that the Company and its subsidiaries shall not be obligated to
qualify as foreign corporations in any jurisdiction in which they are not so
qualified or to file a general consent to service of process in any
jurisdiction;
(h) not to, and to cause its affiliates not to, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated with
the sale of the Securities in a manner which would require registration of the
Securities under the Securities Act;
(i) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
not to, and to cause its affiliates not to, and not to authorize or knowingly
permit any person acting on their behalf to, solicit any offer to buy or offer
to sell the Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act; and
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale, contract
or disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to
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<PAGE> 10
be applicable to the offering and sale of the Securities as contemplated by
this Agreement and the Offering Memorandum;
(j) until the Closing Date, not to offer for sale, sell, contract
to sell or otherwise dispose of, directly or indirectly, or file a registration
statement for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the Company or any
of its subsidiaries (other than the Securities) without the prior written
consent of the Initial Purchasers;
(k) for a period of two years after the Closing Date without the
prior written consent of the Initial Purchasers, not to, and not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell any
of the Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act;
(l) in connection with the offering of the Securities, until CSI
on behalf of the Initial Purchasers shall have notified the Company of the
completion of the resale of the Securities, not to, and to cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to, either
alone or with one or more other persons, bid for or purchase, for any account
in which it or any of its affiliated purchasers has a beneficial interest, any
Securities, or attempt to induce any person to purchase any Securities; and not
to, and to cause its affiliated purchasers not to, make bids or purchase for
the purpose of creating actual, or apparent, active trading in or of raising
the price of the Securities;
(m) not to, for so long as the Securities are outstanding, be or
become an open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act of 1940, as amended, and to not be or become a
closed-end investment company required to be registered, but not registered
thereunder;
(n) so long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) promulgated under the Securities Act, the
Company will, unless it is subject to and complies with Section 13 or 15(d) of
the Exchange Act, provide to each holder of such restricted securities and to
each prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) or a successor provision
under the Securities Act; provided that this covenant is intended to be solely
for the benefit of the holders, and the prospective purchasers designated by
such holders, from time to time of such restricted securities; and
(o) to apply the net proceeds from the sale of the Securities as
set forth in the Offering Memorandum under the heading "Use of Proceeds."
5. Conditions of Initial Purchasers' Obligations. The respective
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company contained herein, to the accuracy
of the statements of the Company and its officers made in any certificates
delivered pursuant hereto,
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<PAGE> 11
to the performance by the Company of its obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers may
agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which is material or omits to state any fact which is material and is
required to be stated therein or is necessary to make the statements therein
not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the
Transaction Documents, the Indenture and the transactions contemplated thereby,
shall be reasonably satisfactory in all material respects to the Initial
Purchasers, and the Company shall have furnished to the Initial Purchasers all
documents and information that they or their counsel may reasonably request to
enable them to pass upon such matters.
(d) Lawrence O'Donnell III, General Counsel to the Company, and
Baker & Botts, L.L.P., special counsel to the Company, shall have furnished to
the Initial Purchasers their written opinions, addressed to the Initial
Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
in Annexes B-1 and B-2 hereto, respectively.
(e) The Initial Purchasers shall have received from Vinson &
Elkins L.L.P., counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial Purchasers
may reasonably require, and the Company shall have furnished to such counsel
such documents and information as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial Letter") of Deloitte & Touche LLP, addressed to the
Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers, substantially to the effect set forth
in Annex C hereto.
(g) The Company shall have furnished to the Initial Purchasers a
letter (the "Bring- Down Letter") of Deloitte & Touche LLP, addressed to the
Initial Purchasers and dated the Closing Date (i) confirming that they are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of Rule 101 of the Code of Professional Conduct of the AICPA
and its interpretations and rulings thereunder, (ii) stating, as of the date of
the Bring-
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<PAGE> 12
Down Letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than three business days
prior to the date of the Bring-Down Letter), that the conclusions and findings
of such accountants with respect to the financial information and other matters
covered by the Initial Letter are accurate and (iii) confirming in all material
respects the conclusions and findings set forth in the Initial Letter.
(h) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of its chief executive officer and its
chief financial officer stating that (A) such officers have carefully examined
the Offering Memorandum, (B) in their opinion, (i) the Offering Memorandum,
including the documents incorporated therein by reference, as of its date, did
not include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) since the date of the Offering Memorandum, no
event has occurred which should have been set forth in a supplement or
amendment to the Offering Memorandum so that the Offering Memorandum (as so
amended or supplemented) would not include any untrue statement of a material
fact and would not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (C) to the best of
their knowledge, as of the Closing Date, the representations and warranties of
the Company in this Agreement are true and correct in all material respects,
the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder on or prior to the Closing
Date, and subsequent to the date of the most recent financial statements
contained in the Offering Memorandum, there has been no material adverse change
in the financial position or results of operation of the Company or any of its
subsidiaries, or any change, or any development including a prospective change,
in or affecting the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole,
except at set forth in the Offering Memorandum.
(i) The Initial Purchasers shall have received a counterpart of
the Registration Rights Agreement which shall have been executed and delivered
by a duly authorized officer of the Company.
(j) The Securities shall have been duly executed and delivered by
the Company and duly authenticated by the Trustee.
(k) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the Initial
Purchasers shall have been given a reasonable opportunity to comment thereon,
and copies thereof shall have been delivered to the Initial Purchasers
reasonably in advance of the Closing Date.
(l) There shall not have occurred any invalidation of Rule 144A
under the Securities Act by any court or any withdrawal or proposed withdrawal
of any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the judgment of the Initial Purchasers would
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<PAGE> 13
materially impair the ability of the Initial Purchasers to purchase, hold or
effect resales of the Securities as contemplated hereby.
(m) Subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall not
have been any change in the capital stock or long-term debt or any change, or
any development involving a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, the effect of which, in any such
case described above, is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum (exclusive of any
amendment or supplement thereto).
(n) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Securities; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities.
(o) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Securities or any
of the Company's other debt securities or preferred stock by any "nationally
recognized statistical rating organization", as such term is defined by the
Commission for purposes of Rule 436(g)(2) of the rules and regulations of the
Commission under the Securities Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its rating of
the Securities or any of the Company's other debt securities or preferred
stock.
(p) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or in the over-the-counter market
shall have been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any such
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Company on any exchange or in
the over-the-counter market shall have been suspended or (ii) any moratorium on
commercial banking activities shall have been declared by federal or New York
state authorities or (iii) an outbreak of escalation of hostilities or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) the effect of which, in the case of clause (iii)
or (iv), is, in the judgment of CSI on behalf of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or the delivery of the Securities on the terms and in the manner
contemplated by this Agreement and in the Offering Memorandum (exclusive of any
amendment or supplement thereto).
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<PAGE> 14
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Company prior to delivery of and payment
for the Securities if, prior to that time, any of the events described in
Section 5(l), (m), (n), (o) or (p) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Company and the
non-defaulting Initial Purchasers, but if no such arrangements are made within
36 hours after such default, this Agreement shall terminate without liability
on the part of the non-defaulting Initial Purchasers or the Company, except
that the Company will continue to be liable for the payment of expenses to the
extent set forth in Section 12 and except that the provisions of Sections 9 and
10 shall not terminate and shall remain in effect. As used in this Agreement,
the term "Initial Purchasers" includes, for all purposes of this Agreement
unless the context otherwise requires, any party not listed in Schedule 1
hereto that, pursuant to this Section 7, purchases Securities which a
defaulting Initial Purchaser agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company or any non-defaulting
Initial Purchaser for damages caused by its default. If other persons are
obligated or agree to purchase the Securities of a defaulting Initial
Purchaser, either the non-defaulting Initial Purchasers or the Company may
postpone the Closing Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Initial Purchasers may be necessary in the Offering Memorandum or in any other
document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement (other than pursuant to Section 5(p)), the Company shall reimburse
the Initial Purchasers for such out-of-pocket expenses (including reasonable
fees and disbursements of counsel) as shall have been reasonably incurred by
the Initial Purchasers in connection with this Agreement and the proposed
purchase and resale of the Securities. If this Agreement is terminated pursuant
to Section 7 by reason of the default of one or more of the Initial Purchasers,
the Company shall not be obligated to reimburse any Initial Purchaser on
account of any expenses.
9. Indemnification. (a) The Company shall indemnify and hold harmless
each Initial Purchaser, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
any Initial Purchaser within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 9(a) and Section 10
as an
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<PAGE> 15
Initial Purchaser), from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, without
limitation, any loss, claim, damage, liability or action relating to purchases
and sales of the Securities), to which that Initial Purchaser may become
subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum
or the Offering Memorandum or in any amendment or supplement thereto or (ii)
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
shall reimburse each Initial Purchaser promptly upon demand for any reasonable
legal or other expenses reasonably incurred by that Initial Purchaser in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with any
Initial Purchasers' Information; and provided, further, that with respect to
any such untrue statement in or omission from the Preliminary Offering
Memorandum, the indemnity agreement contained in this Section 9(a) shall not
inure to the benefit of any such Initial Purchaser to the extent that the sale
to the person asserting any such loss, claim, damage, liability or action was
an initial resale by such Initial Purchaser and any such loss, claim, damage,
liability or action of or with respect to such Initial Purchaser results from
the fact that both (A) a copy of the Offering Memorandum was not sent or given
to such person at or prior to the written confirmation of the sale of such
Securities to such person and (B) the untrue statement in or omission from the
Preliminary Offering Memorandum giving rise to such loss, claim, damage,
liability or action was corrected in the Offering Memorandum unless, in either
case, such failure to deliver the Offering Memorandum was a result of
non-compliance by the Company with Section 4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(b) and
Section 10 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Initial Purchasers' Information
provided by it, and shall reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending or preparing to defend against or appearing as a third
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<PAGE> 16
party witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party pursuant to Section 9(a) or 9(b), notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 9 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and, provided, further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 9. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defenses of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 9 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that an indemnified party shall have the right to employ its
own counsel in any such action, but the fees, expenses and other charges of
such counsel for the indemnified party will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based upon advice of counsel to the indemnified
party) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm of attorneys (in addition to any local counsel) at any one
time for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 9(a) and 9(b),
shall use all reasonable efforts to cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by
-16-
<PAGE> 17
such indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
The obligations of the Company and the Initial Purchasers in this
Section 9 and in Section 10 are in addition to any other liability that the
Company or the Initial Purchasers, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Initial Purchasers on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by or on behalf of the Company, on the one hand, and the total
discounts and commissions received by the Initial Purchasers with respect to
the Securities purchased under this Agreement, on the other, bear to the total
gross proceeds from the sale of the Securities under this Agreement. The
relative fault 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 the Company or information
supplied by the Company on the one hand or to any Initial Purchasers'
Information on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Initial Purchasers agree that
it would not be just and equitable if contributions pursuant to this Section 10
were to be determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for purposes
of this Section 10, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
10, no Initial Purchaser shall be required to contribute any amount in excess
of the amount by which the total discounts and commissions received by such
Initial Purchaser with respect to the Securities purchased by it under this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to
-17-
<PAGE> 18
contribute as provided in this Section 10 are several in proportion to their
respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 9 and 10 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Company and the Initial
Purchasers. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 11, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein. No purchaser of Securities from any Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
12. Expenses. The Company agrees with the Initial Purchasers to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (c) the fees and expenses of the
Company's independent accountants; (d) any fees charged by rating agencies for
rating the Securities; (e) the fees and expenses of the Trustee and any paying
agent (including related fees and expenses of any counsel to such parties); (f)
all expenses and application fees incurred in connection with the approval of
the Securities for book-entry transfer by DTC; and (g) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement which are not otherwise specifically provided for in this
Section 12; provided, however, that the Initial Purchasers shall pay their own
costs and expenses (except as provided in this Section 12 and in Section 8),
the costs incident to the printing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and any amendments or supplements thereto,
the costs of legal counsel for the Initial Purchasers and the Company and the
costs of certain roadshow presentations.
13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Company
or the Initial Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or
on behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by
mail or telecopy transmission to Chase Securities Inc., 270 Park, Avenue, New
York, New York 10017, Attention: William Rogers (telecopier no.: (212)
834-6170); or
-18-
<PAGE> 19
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the Offering
Memorandum, Attention: General Counsel (telecopier no.: (713) 439-8472);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
16. Initial Purchasers' Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the statements contained in the second
paragraph, the chart following the second paragraph, the third paragraph, the
third sentence of the sixth paragraph as to intention to make a market, and the
seventh and eighth paragraphs under the heading "Plan of Distribution" in the
Preliminary Offering Memorandum and the Offering Memorandum.
17. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
18. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
parties hereto.
20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
-19-
<PAGE> 20
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the several
Initial Purchasers in accordance with its terms.
Very truly yours,
BAKER HUGHES INCORPORATED
By: /s/ LAWRENCE O'DONNELL, III
---------------------------------
Name: Lawrence O'Donnell, III
Title: Vice President
Accepted:
CHASE SECURITIES INC.
By: /s/ WILLIAM D. ROGERS
-----------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
1 Chase Manhattan Plaza, 26th floor
New York, New York 10081
Attention: Legal Department
SALOMON SMITH BARNEY INC.
By: /s/ JEFFREY HAMILTON
-----------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
7 World Trade Center, 32nd Floor
New York, New York 10048
Attention: Legal Department
-20-
<PAGE> 21
J.P. MORGAN SECURITIES INC.
By: /s/ ROBERT McMINN
-----------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
60 Wall Street
New York, New York 10260
Attention: Legal Department
MORGAN STANLEY & CO. INCORPORATED
By: /s/ STEPHEN M. TRAUBER
-----------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
Chase Tower
600 Travis Street, Suite 3700
Houston, Texas 77002-2993
Attention: Legal Department
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ ADONIS HEMBRICK
-----------------------------------
Authorized Signatory
Address for notices pursuant to Section 9(c):
NC1-007-07-01
NationsBank Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: Legal Department
-21-
<PAGE> 22
SCHEDULE 1
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
INITIAL PURCHASERS 6 1/4% NOTES DUE 2009 6 7/8% NOTES DUE 2029
- ------------------- --------------------- ---------------------
<S> <C> <C>
Chase Securities Inc........................ $ 113,750,000 $ 140,000,000
Salomon Smith Barney Inc.................... 81,250,000 100,000,000
J.P. Morgan Securities Inc.................. 48,750,000 60,000,000
Morgan Stanley & Co. Incorporated........... 48,750,000 60,000,000
NationsBanc Montgomery Securities LLC....... 32,500,000 40,000,000
---------------- -----------------
Total..................... $ 325,000,000 $ 400,000,000
================ =================
</TABLE>
<PAGE> 23
ANNEX A
[Form of Exchange and Registration Rights Agreement]
<PAGE> 24
ANNEX B-1
[Form of Opinion of General Counsel to the Company]
Lawrence O'Donnell III shall have furnished to the Initial Purchasers
his written opinion, as General Counsel to the Company, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
substantial property or the conduct of its businesses requires such
qualification, and has all power and authority necessary to own or
hold its properties and to conduct the businesses in which it is
engaged (except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a Material
Adverse Effect);
(ii) the Company has an authorized capitalization as set
forth or incorporated by reference in the Offering Memorandum;
(iii) such counsel does not have actual knowledge of any
current or pending legal or governmental actions, suits or proceedings
which (A) would be required to be described in the Offering Memorandum
if the Offering Memorandum were a prospectus included in a
registration statement on Form S-3 which are not described as so
required or (B) questions the validity or enforceability of any of the
Transaction Documents or the Indenture or any action taken or to be
taken pursuant thereto;
(iv) the execution, delivery and performance of each of the
Transaction Documents and the issuance and sale of the Securities and
compliance with the terms thereof and of the Indenture will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of
any governmental agency or body or any court having jurisdiction over
the Company, any of its subsidiaries or their respective properties,
or the certificate of incorporation or by-laws of the Company or any
of its subsidiaries or, to such counsel's knowledge, any agreement or
instrument that relates to the borrowing of funds or that is filed as
an exhibit to any document incorporated by reference in the Offering
Memorandum to which the Company or any of its subsidiaries is bound or
to which any of the properties of the Company or any of its
subsidiaries is subject, except for such breach, violation or default
that would not have a Material Adverse Effect; and
(v) the Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they were filed with the Commission
appeared on their face to comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder.
B-1-1
<PAGE> 25
Such counsel shall also state that he has participated in conferences
with representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Initial Purchasers and
their counsel at which conferences the contents of the Offering Memorandum and
related matters were discussed. Although he did not independently verify such
information and is not passing upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum or any of the documents incorporated by reference in the
Offering Memorandum, on the basis of the foregoing (relying as to materiality
to a large extent on officers and other representatives of the Company), no
facts have come to his attention that lead him to believe that the Offering
Memorandum (other than the financial statements, the notes thereto and the
auditor's report thereon and the other financial, numerical, statistical and
accounting data included or incorporated by reference therein, as to which he
has not been asked to express any belief), as of its date or as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates or
representations of responsible officers of the Company and certificates of
public officials.
B-1-2
<PAGE> 26
ANNEX B-2
[Form of Opinion of Special Counsel for the Company]
Baker & Botts, L.L.P. shall have furnished to the Initial Purchasers
their written opinion, as counsel to the Company, addressed to the Initial
Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth
below:
(i) the Company has all necessary corporate power and
authority to execute and deliver each of the Transaction Documents and
to perform its obligations thereunder; and all corporate action
required to be taken for the due and proper authorization, execution
and delivery of each of the Transaction Documents and the consummation
of the transactions contemplated thereby have been duly and validly
taken;
(ii) each of the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the
extent that the indemnification provisions thereof may be
unenforceable;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company constitutes a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(iv) the Securities have been duly authorized and issued by
the Company and, assuming due authentication thereof by the Trustee
and upon payment and delivery in accordance with the Purchase
Agreement, will constitute valid and legally binding obligations of
the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law);
(v) each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum;
B-2-1
<PAGE> 27
(vi) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(vii) the Company is not an "investment company" or a company
"controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended; and
(viii) assuming the accuracy of the representations,
warranties and agreements of the Company and of the Initial Purchasers
contained in the Purchase Agreement, no registration of the Securities
under the Securities Act or qualification of the Indenture under the
Trust Indenture Act is required in connection with the issuance and
sale of the Securities by the Company and the offer, resale and
delivery of the Securities by the Initial Purchasers in the manner
contemplated by the Purchase Agreement and the Offering.
Such counsel shall also state that they have participated in
conferences with representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchasers and their counsel at which conferences the contents of the Offering
Memorandum and related matters were discussed. Although they did not
independently verify such information and are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum or any of the documents
incorporated by reference in the Offering Memorandum (except to the extent set
forth in paragraph (v) above), on the basis of the foregoing (relying as to
materiality to a large extent on officers and other representatives of the
Company), no facts have come to their attention that lead them to believe that
the Offering Memorandum (other than the financial statements, the notes thereto
and the auditor's report thereon and the other financial, numerical,
statistical and accounting data included or incorporated by reference therein,
as to which they have not been asked to comment), as of its date or as of the
Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
B-2-2
<PAGE> 28
ANNEX C
[Form of Initial Comfort Letter]
The Company shall have furnished to the Initial Purchasers a letter of
Deloitte & Touche LLP, addressed to the Initial Purchasers and dated the date
of the Purchase Agreement, in form and substance satisfactory to the Initial
Purchasers, substantially to the effect set forth below:
(i) they are independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings;
(ii) in their opinion, the audited financial statements [and
pro forma financial information] included or incorporated by reference
in the Offering Memorandum and reported on by them comply in form in
all material respects with the accounting requirements of the Exchange
Act and the related published rules and regulations of the Commission
thereunder that would apply to the Offering Memorandum if the Offering
Memorandum were a prospectus included in a registration statement on
[Form S-3] under the Securities Act (except that certain supporting
schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by the Company, the procedures of the AICPA
for a review of interim financial information as described in
Statement of Auditing Standards No. 71, reading of minutes and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters and certain other limited
procedures requested by the Initial Purchasers and described in detail
in such letter, nothing has come to their attention that causes them
to believe that (A) any unaudited financial statements included in the
Offering Memorandum do not comply as to form in all material respects
with applicable accounting requirements, or (B) any material
modifications should be made to the unaudited financial statements
included in the Offering Memorandum for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Offering Memorandum;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available
balance sheet, including reading of minutes and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, nothing has come to their attention that causes
them to believe that (A) at a specified date not more than three
business days prior to the date of such letter, there was any change
in capital stock, increase in long-term debt or decrease in net
current assets as compared with the amounts shown in the
__________________, 199__ unaudited balance sheet included or
incorporated by reference in the Offering Memorandum or (B) for the
period from _________________, 199__ to a specified date not more than
three business days prior to the date of such letter, there were any
decreases, as compared with the corresponding period in the preceding
year, in net sales, income from operations, EBITDA
C-1
<PAGE> 29
or net income, except in all instances for changes, increases or
decreases that the Offering Memorandum discloses have occurred or
which are set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the Initial
Purchasers;
(v) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the Offering
Memorandum agrees with the accounting records of the Company,
excluding any questions of legal interpretation [; and] [.]
[(vi) on the basis of a reading of the unaudited pro forma
financial information included or incorporated by reference in the
Offering Memorandum, carrying out certain specified procedures,
reading of minutes and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters and
proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial
information, nothing came to their attention which caused them to
believe that the pro forma financial information does not comply in
form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of such information.]
C-2
<PAGE> 1
EXHIBIT 4.3
BAKER HUGHES INCORPORATED
$200,000,000
6% Notes due 2009
PURCHASE AGREEMENT
February 1, 1999
NATIONSBANC MONTGOMERY SECURITIES LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Ladies and Gentlemen:
Baker Hughes Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell $200,000,000 aggregate principal amount of its 6%
Notes due 2009 (the "Securities"). The Securities will be issued pursuant to an
Indenture dated as of May 15, 1991 (the "Indenture") between the Company and
Citibank, N.A., as trustee (the "Trustee"). The Company hereby confirms its
agreement with NationsBanc Montgomery Securities LLC (the "Initial Purchaser")
concerning the purchase of the Securities from the Company by the Initial
Purchaser.
The Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company will
prepare an offering memorandum dated the date hereof (the "Offering
Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Offering Memorandum will be delivered by the Company
to the Initial Purchaser pursuant to the terms of this Agreement. Any
references herein to the Offering Memorandum shall be deemed to refer to and
include any documents incorporated by reference therein as of the date of the
Offering Memorandum, and any reference to any amendment or supplement to the
Offering Memorandum shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of the Offering Memorandum, unless otherwise noted. The Company
hereby confirms that it has authorized the use of the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchaser in accordance with Section 2.
Holders of the Securities (including the Initial Purchaser and its
direct and indirect transferees as set forth herein) will be entitled to the
benefits of an Exchange and Registration Rights Agreement, substantially in the
form attached hereto as Annex A (the "Registration Rights Agreement"), pursuant
to which the Company will agree to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Securities
Act (the "Exchange Offer Registration Statement") registering debt securities
of the Company (the "Exchange Securities") which are identical in all material
respects to the Securities (except that the Exchange
-1-
<PAGE> 2
Securities will not contain terms with respect to transfer restrictions or the
payment of additional interest) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, the Initial Purchaser on
and as of the date hereof and the Closing Date (as defined in Section 3) that:
(a) The Offering Memorandum, as of its date, did not, and on
the Closing Date, as amended or supplemented, will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation or warranty as to information
contained in or omitted from the Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchaser furnished
to the Company by or on behalf of the Initial Purchaser specifically for use
therein (the "Initial Purchaser's Information").
(b) The documents incorporated by reference in the Offering
Memorandum (the "Exchange Act Reports"), when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and any
further documents so filed and incorporated by reference in the Offering
Memorandum, when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and shall not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(c) The Offering Memorandum, as of its date, contains or
incorporates by reference all of the information that, if requested by a
prospective purchaser of the Securities, would be required to be provided to
such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities
Act.
(d) Assuming the accuracy of the representations and
warranties of the Initial Purchaser contained in Section 2 and its compliance
with the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Securities to the Initial Purchaser and the offer,
resale and delivery of the Securities by the Initial Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum, to register the
Securities under the Securities Act.
(e) The Company has all necessary corporate power and
authority to execute and deliver this Agreement, the Registration Rights
Agreement, the Securities and any supplemental indenture or other document
required under the Indenture to establish the Securities thereunder (the
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<PAGE> 3
"Supplemental Indenture") (collectively, the "Transaction Documents") and to
perform its obligations under the Indenture and the Transaction Documents; and
all corporate action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby have been duly and
validly taken.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The Registration Rights Agreement has been duly
authorized by the Company and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and except to the extent that the
enforceability of the indemnification provisions may be limited as against
public policy.
(h) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding agreement
of the Company enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at law).
(i) The Securities have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as provided in the
Indenture and the Supplemental Indenture and paid for as provided herein, will
be duly and validly issued and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(j) Each Transaction Document and the Indenture conforms in
all material respects to the description thereof contained in the Offering
Memorandum.
(k) The execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance, authentication, sale and
delivery of the Securities and compliance by the Company with the terms
thereof, the compliance by the Company with the terms of the Indenture and the
consummation of the transactions contemplated by the Transaction Documents will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or
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<PAGE> 4
any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except as would not have, in any case, a material adverse
effect on the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"); and no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order, decree,
rule or regulation is required for the execution, delivery and performance by
the Company of each of the Transaction Documents, the issuance, authentication,
sale and delivery of the Securities and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (i) which shall have been obtained or
made prior to the Closing Date, (ii) as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement, and (iii) except to the extent that the
failure to obtain such consents, approvals, authorizations, filings,
registrations or qualifications would not have a Material Adverse Effect.
(l) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Securities or suspends the sale of the
Securities in any jurisdiction; no injunction, restraining order or order of
any nature by any federal or state court of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Securities or the use of the
Offering Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries before any court or arbitrator
or any governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the issuance of
the Securities or in any manner draw into question the validity or
enforceability of any of the Transaction Documents or the Indenture or any
action taken or to be taken pursuant thereto; and the Company has complied with
any and all requests by any securities authority in any jurisdiction for
additional information to be included in the Offering Memorandum.
(m) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(n) In connection with the offering and sale of Securities in
reliance on Regulation S, neither the Company nor any of its affiliates or any
person acting on its or their behalf other than the Initial Purchaser, as to
which the Company makes no representation, has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S under the
Securities Act ("Regulation S")), and all such persons other than the Initial
Purchaser, as to which the Company makes no representation, have complied and
will comply with the offering restrictions requirement of Regulation S to the
extent applicable.
(o) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security
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<PAGE> 5
(as such term is defined in the Securities Act), which is or will be integrated
with the sale of the Securities in a manner that would require registration of
the Securities under the Securities Act.
(p) None of the Company or any of its affiliates or any other
person acting on its or their behalf other than the Initial Purchaser, as to
which the Company makes no representation, has engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(q) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, the Securities at a purchase price equal to 99.295% of the principal
amount thereof. The Company shall not be obligated to deliver any of the
Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchaser has advised the Company that it
proposes to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. The Initial
Purchaser represents and warrants to, and agrees with, the Company that (i) it
is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act and (iii) it has solicited and
will solicit offers for the Securities only from, and has offered or sold and
will offer, sell or deliver the Securities, as part of its initial offering,
only (A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined
in Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting
as fiduciary or agent, only when such person has represented to it that each
such account is a Qualified Institutional Buyer to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A and, in each
case, in transactions in accordance with Rule 144A, (B) to a limited number of
other institutional accredited investors (as such term is defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D), and (C) outside the United States
to persons other than U.S. persons in reliance on, and in accordance with,
Regulation S. The Initial Purchaser represents and warrants to, and agrees
with, the Company that it is an accredited investor within the meaning of Rule
501(a) under the Securities Act.
(c) In connection with the offer and sale of Securities in
reliance on Regulation S, the Initial Purchaser represents, warrants and agrees
that:
(i) The Securities 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
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<PAGE> 6
except pursuant to an exemption from, or in transactions not subject
to, the registration requirements of the Securities Act.
(ii) The Initial Purchaser has offered and sold the
Securities, and will offer and sell the Securities, (A) as part of
their distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Securities and
the Closing Date, only in accordance with Rule 903 of Regulation S or
Rule 144A or any other available exemption from registration under the
Securities Act.
(iii) None of the Initial Purchaser or any of its affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities,
and all such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
(iv) At or prior to the confirmation of sale of any
Securities sold in reliance on Regulation S, it will have sent to each
distributor, dealer or other person receiving a selling concession,
fee or other remuneration that purchase Securities from it during the
distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (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
(i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement
of the offering of the Securities and the date of original
issuance of the Securities, except in accordance with
Regulation S or Rule 144A or any other available exemption
from registration under the Securities Act. Terms used above
have the meanings given to them by Regulation S."
(v) It has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution or
delivery of the Securities, except with its affiliates or with the
prior written consent of the Issuers.
Terms used in this Section 2(c) have the meanings given to them by Regulation
S.
(d) The Initial Purchaser represents, warrants and agrees
that (i) it has not offered or sold and prior to the date six months after the
Closing Date will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 and the Public Offers of Securities Regulations 1995 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received
by it in connection with the issue of the Securities to a person who is of a
kind
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<PAGE> 7
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document
may otherwise lawfully be issued or passed on.
(e) The Initial Purchaser agrees that, prior to or
simultaneously with the confirmation of sale by the Initial Purchaser to any
purchaser of any of the Securities purchased by the Initial Purchaser from the
Company pursuant hereto, the Initial Purchaser shall furnish to that purchaser
a copy of the Offering Memorandum (and any amendment or supplement thereto that
the Company shall have furnished to the Initial Purchaser prior to the date of
such confirmation of sale). In addition to the foregoing, the Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the opinions to
be delivered to the Initial Purchaser pursuant to Sections 5(d) and (e),
counsel for the Company and for the Initial Purchaser, respectively, may rely
upon the accuracy of the representations and warranties of the Initial
Purchaser and its compliance with its agreements contained in this Section 2,
and the Initial Purchaser hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial
Purchaser may sell Securities to any of its affiliates and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Vinson & Elkins
L.L.P., 1001 Fannin Street, Houston, Texas, or at such other place as shall be
agreed upon by the Initial Purchaser and the Company, at 10:00 a.m., New York
City time, on February 4, 1999, or at such other time or date, not later than
seven full business days thereafter, as shall be agreed upon by the Initial
Purchaser and the Company (such date and time of payment and delivery being
referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for
the Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior
to the Closing Date or by such other means as the parties hereto shall agree
prior to the Closing Date against delivery to the Initial Purchaser of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligations of the Initial Purchaser hereunder. Upon
delivery, the Securities shall be in global form, registered in such names and
in such denominations as the Initial Purchaser shall have requested in writing
not less than two full business days prior to the Closing Date. The Company
agrees to make one or more global certificates evidencing the Securities
available for inspection by the Initial Purchaser in New York, New York at
least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with the
Initial Purchaser:
(a) at any time prior to completion of the resale of the
Securities by the Initial Purchaser: to advise the Initial Purchaser promptly
and, if requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made or incorporated by
reference in the Offering Memorandum untrue or which requires the making of any
additions to or changes in the Offering Memorandum (as amended or supplemented
from time to time) in order to make the statements therein, in the light of the
circumstances under which they were made, not
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<PAGE> 8
misleading; to advise the Initial Purchaser promptly of any order preventing or
suspending the use of the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any jurisdiction and of
the initiation or threatening of any proceeding for any such purpose; and to
use its best efforts to prevent the issuance of any such order preventing or
suspending the use of the Offering Memorandum or suspending any such
qualification and, if any such suspension is issued, to obtain the lifting
thereof at the earliest possible time;
(b) to furnish promptly to the Initial Purchaser and counsel
for the Initial Purchaser, without charge, as many copies of the Offering
Memorandum (and any amendments or supplements thereto) as may be reasonably
requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to the Initial Purchaser and
counsel for the Initial Purchaser and not to effect any such amendment or
supplement to which the Initial Purchaser shall reasonably object by notice to
the Company after a reasonable period to review; provided that the Company
shall be permitted in any case to make all applicable filings under the
Exchange Act;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of counsel for the Initial
Purchaser or counsel for the Company, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Offering Memorandum to comply with
applicable law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable law;
(e) to file all reports and definitive proxy or information
statement required to be filed by the Company with the Commission pursuant to
Section 12(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Offering Memorandum for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act;
(f) for five years from the date hereof, to furnish to the
Initial Purchaser copies of any annual reports, quarterly reports and current
reports filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission, and such
other documents, reports and information as shall be furnished by the Company
to the Trustee or to the holders of the Securities pursuant to the Indenture or
the Exchange Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchaser may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchaser may designate and to continue such qualifications in effect
for so long as required for the resale of the Securities; and to arrange for
the determination of the eligibility for investment of the Securities under the
laws of such jurisdictions as the Initial
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<PAGE> 9
Purchaser may reasonably request; provided that the Company and its
subsidiaries shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general consent to
service of process in any jurisdiction;
(h) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as such term is defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(i) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
not to, and to cause its affiliates not to, and not to authorize or knowingly
permit any person acting on their behalf to, solicit any offer to buy or offer
to sell the Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act; and
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale, contract
or disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to be applicable to the offering and sale of the
Securities as contemplated by this Agreement and the Offering Memorandum;
(j) until the Closing Date, not to offer for sale, sell,
contract to sell or otherwise dispose of, directly or indirectly, or file a
registration statement for, or announce any offer, sale, contract for sale of
or other disposition of any debt securities issued or guaranteed by the Company
or any of its subsidiaries (other than the Securities) without the prior
written consent of the Initial Purchaser;
(k) for a period of two years after the Closing Date without
the prior written consent of the Initial Purchaser, not to, and not permit any
of its affiliates (as defined in Rule 144 under the Securities Act) to, resell
any of the Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act;
(l) in connection with the offering of the Securities, until
the Initial Purchaser shall have notified the Company of the completion of the
resale of the Securities, not to, and to cause its affiliated purchasers (as
defined in Regulation M under the Exchange Act) not to, either alone or with
one or more other persons, bid for or purchase, for any account in which it or
any of its affiliated purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent, active trading in or of raising the price of
the Securities;
(m) not to, for so long as the Securities are outstanding, be
or become an open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act of 1940, as amended, and to not be or become a
closed-end investment company required to be registered, but not registered
thereunder;
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<PAGE> 10
(n) so long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) promulgated under the
Securities Act, the Company will, unless it is subject to and complies with
Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by such
holder) of such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) or a successor provision under the Securities Act; provided that
this covenant is intended to be solely for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of such
restricted securities; and
(o) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of Proceeds."
5. Conditions of Initial Purchaser's Obligations. The obligations of
the Initial Purchaser hereunder are subject to the accuracy, on and as of the
date hereof and the Closing Date, of the representations and warranties of the
Company contained herein, to the accuracy of the statements of the Company and
its officers made in any certificates delivered pursuant hereto, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to the
Initial Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchaser may
agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(b) The Initial Purchaser shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which is material or omits to state any fact which is material and is
required to be stated therein or is necessary to make the statements therein
not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of each of the Transaction
Documents and the Offering Memorandum, and all other legal matters relating to
the Transaction Documents, the Indenture and the transactions contemplated
thereby, shall be reasonably satisfactory in all material respects to the
Initial Purchaser, and the Company shall have furnished to the Initial
Purchaser all documents and information that it or its counsel may reasonably
request to enable them to pass upon such matters.
(d) Lawrence O'Donnell III, General Counsel to the Company,
and Baker & Botts, L.L.P., special counsel to the Company, shall have furnished
to the Initial Purchaser their written opinions, addressed to the Initial
Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set forth in
Annexes B-1 and B-2 hereto, respectively.
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<PAGE> 11
(e) The Initial Purchaser shall have received from Vinson &
Elkins L.L.P., counsel for the Initial Purchaser, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial Purchaser
may reasonably require, and the Company shall have furnished to such counsel
such documents and information as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchaser
a letter (the "Initial Letter") of Deloitte & Touche LLP, addressed to the
Initial Purchaser and dated the date hereof, in form and substance satisfactory
to the Initial Purchaser, substantially to the effect set forth in Annex C
hereto.
(g) The Company shall have furnished to the Initial Purchaser
a letter (the "Bring- Down Letter") of Deloitte & Touche LLP, addressed to the
Initial Purchaser and dated the Closing Date (i) confirming that they are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of Rule 101 of the Code of Professional Conduct of the AICPA
and its interpretations and rulings thereunder, (ii) stating, as of the date of
the Bring-Down Letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Offering Memorandum, as of a date not more than
three business days prior to the date of the Bring-Down Letter), that the
conclusions and findings of such accountants with respect to the financial
information and other matters covered by the Initial Letter are accurate and
(iii) confirming in all material respects the conclusions and findings set
forth in the Initial Letter.
(h) The Company shall have furnished to the Initial Purchaser
a certificate, dated the Closing Date, of its chief executive officer and its
chief financial officer stating that (A) such officers have carefully examined
the Offering Memorandum, (B) in their opinion, (i) the Offering Memorandum,
including the documents incorporated therein by reference, as of its date, did
not include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) since the date of the Offering Memorandum, no
event has occurred which should have been set forth in a supplement or
amendment to the Offering Memorandum so that the Offering Memorandum (as so
amended or supplemented) would not include any untrue statement of a material
fact and would not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (C) to the best of
their knowledge, as of the Closing Date, the representations and warranties of
the Company in this Agreement are true and correct in all material respects,
the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder on or prior to the Closing
Date, and subsequent to the date of the most recent financial statements
contained in the Offering Memorandum, there has been no material adverse change
in the financial position or results of operation of the Company or any of its
subsidiaries, or any change, or any development including a prospective change,
in or affecting the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole,
except at set forth in the Offering Memorandum.
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<PAGE> 12
(i) The Initial Purchaser shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company.
(j) The Securities shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(k) If any event shall have occurred that requires the
Company under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchaser shall have been given a reasonable opportunity to comment
thereon, and copies thereof shall have been delivered to the Initial Purchaser
reasonably in advance of the Closing Date.
(l) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the Exchange
Act by the Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchaser would materially
impair the ability of the Initial Purchaser to purchase, hold or effect resales
of the Securities as contemplated hereby.
(m) Subsequent to the execution and delivery of this
Agreement or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto), there
shall not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the Initial
Purchaser, so material and adverse as to make it impracticable or inadvisable
to proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement and the Offering Memorandum (exclusive of
any amendment or supplement thereto).
(n) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Securities; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities.
(o) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities or preferred stock by
any "nationally recognized statistical rating organization", as such term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance or
review (other than an announcement with positive implications of a possible
upgrading), its rating of the Securities or any of the Company's other debt
securities or preferred stock.
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<PAGE> 13
(p) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or in the over-the-counter
market shall have been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any such
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Company on any exchange or in
the over-the-counter market shall have been suspended or (ii) any moratorium on
commercial banking activities shall have been declared by federal or New York
state authorities or (iii) an outbreak of escalation of hostilities or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) the effect of which, in the case of clause (iii)
or (iv), is, in the judgment of the Initial Purchaser, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or the
delivery of the Securities on the terms and in the manner contemplated by this
Agreement and in the Offering Memorandum (exclusive of any amendment or
supplement thereto).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.
6. Termination. The obligations of the Initial Purchaser hereunder may
be terminated by the Initial Purchaser, in its absolute discretion, by notice
given to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(l),
(m), (n), (o) or (p) shall have occurred and be continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason permitted under this Agreement or (c) the Initial Purchaser shall
decline to purchase the Securities for any reason permitted under this
Agreement (other than pursuant to Section 5(p)), the Company shall reimburse
the Initial Purchaser for such out-of-pocket expenses (including reasonable
fees and disbursements of counsel) as shall have been reasonably incurred by
the Initial Purchaser in connection with this Agreement and the proposed
purchase and resale of the Securities.
8. Indemnification. (a) The Company shall indemnify and hold harmless
the Initial Purchaser, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
the Initial Purchaser within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 8(a) and Section 9
as the Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which the Initial Purchaser may
become subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated
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<PAGE> 14
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and shall
reimburse the Initial Purchaser promptly upon demand for any reasonable legal
or other expenses reasonably incurred by the Initial Purchaser in connection
with investigating or defending or preparing to defend against or appearing as
a third party witness in connection with any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with any Initial
Purchaser's Information.
(b) The Initial Purchaser shall indemnify and hold harmless
the Company, its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 8(b) and Section 9 as the Company),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Initial Purchaser's Information provided by it,
and shall reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party pursuant to Section 8(a) or 8(b), notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 8 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and, provided, further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defenses of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that an indemnified party shall have the right to employ its
own
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<PAGE> 15
counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice of
counsel to the indemnified party) between the indemnified party and the
indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm of attorneys (in addition to any local counsel) at any one
time for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 8(a) and 8(b),
shall use all reasonable efforts to cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
The obligations of the Company and the Initial Purchaser in this
Section 8 and in Section 9 are in addition to any other liability that the
Company or the Initial Purchaser, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchaser on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Initial Purchaser on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchaser on the other with respect to such
-15-
<PAGE> 16
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Securities purchased under this Agreement (before
deducting expenses) received by or on behalf of the Company, on the one hand,
and the total discounts and commissions received by the Initial Purchaser with
respect to the Securities purchased under this Agreement, on the other, bear to
the total gross proceeds from the sale of the Securities under this Agreement.
The relative fault 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 the Company or
information supplied by the Company on the one hand or to any Initial
Purchaser's Information on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Initial Purchaser agree
that it would not be just and equitable if contributions pursuant to this
Section 9 were to be determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 9 shall be deemed to include, for purposes of
this Section 9, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
9, the Initial Purchaser shall not be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by
the Initial Purchaser with respect to the Securities purchased by it under this
Agreement exceeds the amount of any damages which the Initial Purchaser has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 8 and 9 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Company and the Initial
Purchaser. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 10, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
11. Expenses. The Company agrees with the Initial Purchaser to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (c) the fees and expenses of the
Company's independent accountants; (d) any fees charged by rating agencies for
rating the Securities; (e) the fees and expenses of the Trustee and any paying
agent (including related fees and expenses of any counsel to such parties); (f)
all expenses and application fees incurred in connection with the approval of
the Securities for book-entry transfer by DTC; and (g) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement which are not otherwise specifically provided for in this
Section 11; provided, however, that the Initial Purchaser shall pay its own
costs and expenses (except as
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<PAGE> 17
provided in this Section 11 and in Section 7), the costs incident to the
printing and distribution of the Offering Memorandum and any amendments or
supplements thereto, the costs of legal counsel for the Initial Purchaser and
the Company and the costs of certain roadshow presentations.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchaser contained in this Agreement or made by or on behalf of the Company or
the Initial Purchaser pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities
and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any of their respective affiliates, officers, directors, employees,
representatives, agents or controlling persons.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent
by mail or telecopy transmission to NationsBanc Montgomery Securities LLC, 100
North Tryon Street, Charlotte, North Carolina 28255, Attention: Legal
Department (telecopier no.: (704) 386-6453); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the Offering
Memorandum, Attention: General Counsel (telecopier no.: (713) 439-8472);
provided that any notice to the Initial Purchaser pursuant to Section 8(c)
shall also be delivered or sent by mail to the Initial Purchaser at its address
set forth on the signature page hereof. Any such statements, requests, notices
or agreements shall take effect at the time of receipt thereof.
14. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
15. Initial Purchaser's Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchaser's
Information consists solely of the statements contained in the second
paragraph, the third sentence of the ninth paragraph as to intention to make a
market, and the tenth and eleventh paragraphs under the heading "Plan of
Distribution" in the Offering Memorandum.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
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<PAGE> 18
18. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
parties hereto.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
-18-
<PAGE> 19
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the Initial
Purchaser in accordance with its terms.
Very truly yours,
BAKER HUGHES INCORPORATED
By: /s/ LAWRENCE O'DONNELL, III
-----------------------------------
Name: Lawrence O'Donnell, III
Title: Vice President
Accepted:
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ PHILLIP R. BENNETT
----------------------------------
Authorized Signatory
Vice President
Address for notices pursuant to Section 8(c):
NC1-007-07-01
NationsBank Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255
Attention: Legal Department
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<PAGE> 20
ANNEX A
[Form of Exchange and Registration Rights Agreement]
<PAGE> 21
ANNEX B-1
[Form of Opinion of General Counsel to the Company]
Lawrence O'Donnell III shall have furnished to the Initial Purchaser
his written opinion, as General Counsel to the Company, addressed to the
Initial Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set forth
below:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
substantial property or the conduct of its businesses requires such
qualification, and has all power and authority necessary to own or
hold its properties and to conduct the businesses in which it is
engaged (except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a Material
Adverse Effect);
(ii) the Company has an authorized capitalization as set
forth or incorporated by reference in the Offering Memorandum;
(iii) such counsel does not have actual knowledge of any
current or pending legal or governmental actions, suits or proceedings
which (A) would be required to be described in the Offering Memorandum
if the Offering Memorandum were a prospectus included in a
registration statement on Form S-3 which are not described as so
required or (B) questions the validity or enforceability of any of the
Transaction Documents or the Indenture or any action taken or to be
taken pursuant thereto;
(iv) the execution, delivery and performance of each of the
Transaction Documents and the issuance and sale of the Securities and
compliance with the terms thereof and of the Indenture will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of
any governmental agency or body or any court having jurisdiction over
the Company, any of its subsidiaries or their respective properties,
or the certificate of incorporation or by-laws of the Company or any
of its subsidiaries or, to such counsel's knowledge, any agreement or
instrument that relates to the borrowing of funds or that is filed as
an exhibit to any document incorporated by reference in the Offering
Memorandum to which the Company or any of its subsidiaries is bound or
to which any of the properties of the Company or any of its
subsidiaries is subject, except for such breach, violation or default
that would not have a Material Adverse Effect; and
(v) the Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they were filed with the Commission
appeared on their face to comply as to form in all material respects
B-1-1
<PAGE> 22
with the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
Such counsel shall also state that he has participated in conferences
with representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Initial Purchaser and its
counsel at which conferences the contents of the Offering Memorandum and
related matters were discussed. Although he did not independently verify such
information and is not passing upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum or any of the documents incorporated by reference in the
Offering Memorandum, on the basis of the foregoing (relying as to materiality
to a large extent on officers and other representatives of the Company), no
facts have come to his attention that lead him to believe that the Offering
Memorandum (other than the financial statements, the notes thereto and the
auditor's report thereon and the other financial, numerical, statistical and
accounting data included or incorporated by reference therein, as to which he
has not been asked to express any belief), as of its date or as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates or
representations of responsible officers of the Company and certificates of
public officials.
B-1-2
<PAGE> 23
ANNEX B-2
[Form of Opinion of Special Counsel for the Company]
Baker & Botts, L.L.P. shall have furnished to the Initial Purchaser
their written opinion, as counsel to the Company, addressed to the Initial
Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set forth
below:
(i) the Company has all necessary corporate power and
authority to execute and deliver each of the Transaction Documents and
to perform its obligations thereunder; and all corporate action
required to be taken for the due and proper authorization, execution
and delivery of each of the Transaction Documents and the consummation
of the transactions contemplated thereby have been duly and validly
taken;
(ii) each of the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the
extent that the indemnification provisions thereof may be
unenforceable;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company constitutes a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(iv) the Securities have been duly authorized and issued by
the Company and, assuming due authentication thereof by the Trustee
and upon payment and delivery in accordance with the Purchase
Agreement, will constitute valid and legally binding obligations of
the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law);
(v) each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum;
B-2-1
<PAGE> 24
(vi) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(vii) the Company is not an "investment company" or a company
"controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended; and
(viii) assuming the accuracy of the representations,
warranties and agreements of the Company and of the Initial Purchaser
contained in the Purchase Agreement, no registration of the Securities
under the Securities Act or qualification of the Indenture under the
Trust Indenture Act is required in connection with the issuance and
sale of the Securities by the Company and the offer, resale and
delivery of the Securities by the Initial Purchaser in the manner
contemplated by the Purchase Agreement and the Offering Memorandum.
Such counsel shall also state that they have participated in
conferences with representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchaser and its counsel at which conferences the contents of the Offering
Memorandum and related matters were discussed. Although they did not
independently verify such information and are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum or any of the documents
incorporated by reference in the Offering Memorandum (except to the extent set
forth in paragraph (v) above), on the basis of the foregoing (relying as to
materiality to a large extent on officers and other representatives of the
Company), no facts have come to their attention that lead them to believe that
the Offering Memorandum (other than the financial statements, the notes thereto
and the auditor's report thereon and the other financial, numerical,
statistical and accounting data included or incorporated by reference therein,
as to which they have not been asked to comment), as of its date or as of the
Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
B-2-2
<PAGE> 25
ANNEX C
[Form of Initial Comfort Letter]
The Company shall have furnished to the Initial Purchaser a letter of
Deloitte & Touche LLP, addressed to the Initial Purchaser and dated the date of
the Purchase Agreement, in form and substance satisfactory to the Initial
Purchaser, substantially to the effect set forth below:
(i) they are independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings;
(ii) in their opinion, the audited financial statements [and
pro forma financial information] included or incorporated by reference
in the Offering Memorandum and reported on by them comply in form in
all material respects with the accounting requirements of the Exchange
Act and the related published rules and regulations of the Commission
thereunder that would apply to the Offering Memorandum if the Offering
Memorandum were a prospectus included in a registration statement on
[Form S-3] under the Securities Act (except that certain supporting
schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by the Company, the procedures of the AICPA
for a review of interim financial information as described in
Statement of Auditing Standards No. 71, reading of minutes and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters and certain other limited
procedures requested by the Initial Purchaser and described in detail
in such letter, nothing has come to their attention that causes them
to believe that (A) any unaudited financial statements included in the
Offering Memorandum do not comply as to form in all material respects
with applicable accounting requirements, or (B) any material
modifications should be made to the unaudited financial statements
included in the Offering Memorandum for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Offering Memorandum;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available
balance sheet, including reading of minutes and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, nothing has come to their attention that causes
them to believe that (A) at a specified date not more than three
business days prior to the date of such letter, there was any change
in capital stock, increase in long-term debt or decrease in net
current assets as compared with the amounts shown in the
__________________, 199__ unaudited balance sheet included or
incorporated by reference in the Offering Memorandum or (B) for the
period from _________________, 199__ to a specified date not more than
three business days prior to the date of such letter, there were any
decreases, as compared with the corresponding period in the preceding
year, in net sales, income from operations, EBITDA
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<PAGE> 26
or net income, except in all instances for changes, increases or
decreases that the Offering Memorandum discloses have occurred or
which are set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the Initial
Purchaser;
(v) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the Offering
Memorandum agrees with the accounting records of the Company,
excluding any questions of legal interpretation [; and] [.]
[(vi) on the basis of a reading of the unaudited pro forma
financial information included or incorporated by reference in the
Offering Memorandum, carrying out certain specified procedures,
reading of minutes and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters and
proving the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the pro forma financial
information, nothing came to their attention which caused them to
believe that the pro forma financial information does not comply in
form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of such information.]
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<PAGE> 1
EXHIBIT 4.4
BAKER HUGHES INCORPORATED
$100,000,000
5.80% Notes due 2003
PURCHASE AGREEMENT
February 5, 1999
J.P. MORGAN SECURITIES INC.
60 Wall Street, 13th Floor
New York, New York 10260
Ladies and Gentlemen:
Baker Hughes Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell $100,000,000 aggregate principal amount of its 5.80%
Notes due 2003 (the "Securities"). The Securities will be issued pursuant to an
Indenture dated as of May 15, 1991 (the "Indenture") between the Company and
Citibank, N.A., as trustee (the "Trustee"). The Company hereby confirms its
agreement with J.P. Morgan Securities Inc. (the "Initial Purchaser") concerning
the purchase of the Securities from the Company by the Initial Purchaser.
The Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company will
prepare an offering memorandum dated the date hereof (the "Offering
Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Offering Memorandum will be delivered by the Company
to the Initial Purchaser pursuant to the terms of this Agreement. Any
references herein to the Offering Memorandum shall be deemed to refer to and
include any documents incorporated by reference therein as of the date of the
Offering Memorandum, and any reference to any amendment or supplement to the
Offering Memorandum shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the date of the Offering Memorandum, unless otherwise noted. The Company
hereby confirms that it has authorized the use of the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchaser in accordance with Section 2.
Holders of the Securities (including the Initial Purchaser and its
direct and indirect transferees as set forth herein) will be entitled to the
benefits of an Exchange and Registration Rights Agreement, substantially in the
form attached hereto as Annex A (the "Registration Rights Agreement"), pursuant
to which the Company will agree to file with the Securities and Exchange
Commission (the "Commission") (i) a registration statement under the Securities
Act (the "Exchange Offer Registration Statement") registering debt securities
of the Company (the "Exchange Securities") which are identical in all material
respects to the Securities (except that the Exchange
<PAGE> 2
Securities will not contain terms with respect to transfer restrictions or the
payment of additional interest) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement").
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with, the Initial Purchaser on
and as of the date hereof and the Closing Date (as defined in Section 3) that:
(a) The Offering Memorandum, as of its date, did not, and on
the Closing Date, as amended or supplemented, will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation or warranty as to information
contained in or omitted from the Offering Memorandum in reliance upon and in
conformity with written information relating to the Initial Purchaser furnished
to the Company by or on behalf of the Initial Purchaser specifically for use
therein (the "Initial Purchaser's Information").
(b) The documents incorporated by reference in the Offering
Memorandum (the "Exchange Act Reports"), when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder and
none of such documents contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and any
further documents so filed and incorporated by reference in the Offering
Memorandum, when such documents are filed with the Commission, will conform in
all material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and shall not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(c) The Offering Memorandum, as of its date, contains or
incorporates by reference all of the information that, if requested by a
prospective purchaser of the Securities, would be required to be provided to
such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities
Act.
(d) Assuming the accuracy of the representations and
warranties of the Initial Purchaser contained in Section 2 and its compliance
with the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Securities to the Initial Purchaser and the offer,
resale and delivery of the Securities by the Initial Purchaser in the manner
contemplated by this Agreement and the Offering Memorandum, to register the
Securities under the Securities Act.
(e) The Company has all necessary corporate power and
authority to execute and deliver this Agreement, the Registration Rights
Agreement, the Securities and any supplemental indenture or other document
required under the Indenture to establish the Securities thereunder (the
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<PAGE> 3
"Supplemental Indenture") (collectively, the "Transaction Documents") and to
perform its obligations under the Indenture and the Transaction Documents; and
all corporate action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby have been duly and
validly taken.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The Registration Rights Agreement has been duly
authorized by the Company and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company enforceable against the Company in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law) and except to the extent that the
enforceability of the indemnification provisions may be limited as against
public policy.
(h) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding agreement
of the Company enforceable against the Company in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors' rights generally and by general
equitable principles (whether considered in a proceeding in equity or at law).
(i) The Securities have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered as provided in the
Indenture and the Supplemental Indenture and paid for as provided herein, will
be duly and validly issued and will constitute valid and legally binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(j) Each Transaction Document and the Indenture conforms in
all material respects to the description thereof contained in the Offering
Memorandum.
(k) The execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance, authentication, sale and
delivery of the Securities and compliance by the Company with the terms
thereof, the compliance by the Company with the terms of the Indenture and the
consummation of the transactions contemplated by the Transaction Documents will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or
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<PAGE> 4
any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any judgment, order, decree, rule or
regulation of any court or arbitrator or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except as would not have, in any case, a material adverse
effect on the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"); and no consent, approval, authorization or order
of, or filing or registration with, any such court or arbitrator or
governmental agency or body under any such statute, judgment, order, decree,
rule or regulation is required for the execution, delivery and performance by
the Company of each of the Transaction Documents, the issuance, authentication,
sale and delivery of the Securities and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (i) which shall have been obtained or
made prior to the Closing Date, (ii) as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided in
the Registration Rights Agreement, and (iii) except to the extent that the
failure to obtain such consents, approvals, authorizations, filings,
registrations or qualifications would not have a Material Adverse Effect.
(l) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Securities or suspends the sale of the
Securities in any jurisdiction; no injunction, restraining order or order of
any nature by any federal or state court of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Securities or the use of the
Offering Memorandum in any jurisdiction; no action, suit or proceeding is
pending against or, to the best knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries before any court or arbitrator
or any governmental agency, body or official, domestic or foreign, which could
reasonably be expected to interfere with or adversely affect the issuance of
the Securities or in any manner draw into question the validity or
enforceability of any of the Transaction Documents or the Indenture or any
action taken or to be taken pursuant thereto; and the Company has complied with
any and all requests by any securities authority in any jurisdiction for
additional information to be included in the Offering Memorandum.
(m) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act.
(n) In connection with the offering and sale of Securities in
reliance on Regulation S, neither the Company nor any of its affiliates or any
person acting on its or their behalf other than the Initial Purchaser, as to
which the Company makes no representation, has engaged or will engage in any
directed selling efforts (as such term is defined in Regulation S under the
Securities Act ("Regulation S")), and all such persons other than the Initial
Purchaser, as to which the Company makes no representation, have complied and
will comply with the offering restrictions requirement of Regulation S to the
extent applicable.
(o) Neither the Company nor any of its affiliates has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any security
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<PAGE> 5
(as such term is defined in the Securities Act), which is or will be integrated
with the sale of the Securities in a manner that would require registration of
the Securities under the Securities Act.
(p) None of the Company or any of its affiliates or any other
person acting on its or their behalf other than the Initial Purchaser, as to
which the Company makes no representation, has engaged, in connection with the
offering of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(q) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
2. Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, the Securities at a purchase price equal to 99.252% of the principal
amount thereof. The Company shall not be obligated to deliver any of the
Securities except upon payment for all of the Securities to be purchased as
provided herein.
(b) The Initial Purchaser has advised the Company that it
proposes to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. The Initial
Purchaser represents and warrants to, and agrees with, the Company that (i) it
is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act and (iii) it has solicited and
will solicit offers for the Securities only from, and has offered or sold and
will offer, sell or deliver the Securities, as part of its initial offering,
only (A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined
in Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting
as fiduciary or agent, only when such person has represented to it that each
such account is a Qualified Institutional Buyer to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A and, in each
case, in transactions in accordance with Rule 144A, (B) to a limited number of
other institutional accredited investors (as such term is defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D), and (C) outside the United States
to persons other than U.S. persons in reliance on, and in accordance with,
Regulation S. The Initial Purchaser represents and warrants to, and agrees
with, the Company that it is an accredited investor within the meaning of Rule
501(a) under the Securities Act.
(c) In connection with the offer and sale of Securities in
reliance on Regulation S, the Initial Purchaser represents, warrants and agrees
that:
(i) The Securities 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
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<PAGE> 6
except pursuant to an exemption from, or in transactions not subject
to, the registration requirements of the Securities Act.
(ii) The Initial Purchaser has offered and sold the
Securities, and will offer and sell the Securities, (A) as part of
their distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Securities and
the Closing Date, only in accordance with Rule 903 of Regulation S or
Rule 144A or any other available exemption from registration under the
Securities Act.
(iii) None of the Initial Purchaser or any of its affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities,
and all such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
(iv) At or prior to the confirmation of sale of any
Securities sold in reliance on Regulation S, it will have sent to each
distributor, dealer or other person receiving a selling concession,
fee or other remuneration that purchase Securities from it during the
distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of
1933, as amended (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 (i) as part of their distribution
at any time or (ii) otherwise until 40 days
after the later of the commencement of the
offering of the Securities and the date of
original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or
any other available exemption from registration
under the Securities Act. Terms used above have
the meanings given to them by Regulation S."
(v) It has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution or
delivery of the Securities, except with its affiliates or with the
prior written consent of the Issuers.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) The Initial Purchaser represents, warrants and agrees
that (i) it has not offered or sold and prior to the date six months after the
Closing Date will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 and the Public Offers of Securities Regulations 1995 with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom; and (iii) it has only issued or passed
on and will only issue or pass on in the United Kingdom any document received
by it in connection with the issue of the Securities to a person who is of a
kind
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<PAGE> 7
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document
may otherwise lawfully be issued or passed on.
(e) The Initial Purchaser agrees that, prior to or
simultaneously with the confirmation of sale by the Initial Purchaser to any
purchaser of any of the Securities purchased by the Initial Purchaser from the
Company pursuant hereto, the Initial Purchaser shall furnish to that purchaser
a copy of the Offering Memorandum (and any amendment or supplement thereto that
the Company shall have furnished to the Initial Purchaser prior to the date of
such confirmation of sale). In addition to the foregoing, the Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the opinions to
be delivered to the Initial Purchaser pursuant to Sections 5(d) and (e),
counsel for the Company and for the Initial Purchaser, respectively, may rely
upon the accuracy of the representations and warranties of the Initial
Purchaser and its compliance with its agreements contained in this Section 2,
and the Initial Purchaser hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial
Purchaser may sell Securities to any of its affiliates and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Vinson & Elkins
L.L.P., 1001 Fannin Street, Houston, Texas, or at such other place as shall be
agreed upon by the Initial Purchaser and the Company, at 10:00 a.m., New York
City time, on February 10, 1999, or at such other time or date, not later than
seven full business days thereafter, as shall be agreed upon by the Initial
Purchaser and the Company (such date and time of payment and delivery being
referred to herein as the "Closing Date").
(b) On the Closing Date, payment of the purchase price for
the Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior
to the Closing Date or by such other means as the parties hereto shall agree
prior to the Closing Date against delivery to the Initial Purchaser of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligations of the Initial Purchaser hereunder. Upon
delivery, the Securities shall be in global form, registered in such names and
in such denominations as the Initial Purchaser shall have requested in writing
not less than two full business days prior to the Closing Date. The Company
agrees to make one or more global certificates evidencing the Securities
available for inspection by the Initial Purchaser in New York, New York at
least 24 hours prior to the Closing Date.
4. Further Agreements of the Company. The Company agrees with the
Initial Purchaser:
(a) at any time prior to completion of the resale of the
Securities by the Initial Purchaser: to advise the Initial Purchaser promptly
and, if requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made or incorporated by
reference in the Offering Memorandum untrue or which requires the making of any
additions to or changes in the Offering Memorandum (as amended or supplemented
from time to time) in order to make the statements therein, in the light of the
circumstances under which they were made, not
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<PAGE> 8
misleading; to advise the Initial Purchaser promptly of any order preventing or
suspending the use of the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any jurisdiction and of
the initiation or threatening of any proceeding for any such purpose; and to
use its best efforts to prevent the issuance of any such order preventing or
suspending the use of the Offering Memorandum or suspending any such
qualification and, if any such suspension is issued, to obtain the lifting
thereof at the earliest possible time;
(b) to furnish promptly to the Initial Purchaser and counsel
for the Initial Purchaser, without charge, as many copies of the Offering
Memorandum (and any amendments or supplements thereto) as may be reasonably
requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to the Initial Purchaser and
counsel for the Initial Purchaser and not to effect any such amendment or
supplement to which the Initial Purchaser shall reasonably object by notice to
the Company after a reasonable period to review; provided that the Company
shall be permitted in any case to make all applicable filings under the
Exchange Act;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur or condition exist
as a result of which it is necessary, in the opinion of counsel for the Initial
Purchaser or counsel for the Company, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Offering Memorandum to comply with
applicable law, to promptly prepare such amendment or supplement as may be
necessary to correct such untrue statement or omission or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable law;
(e) to file all reports and definitive proxy or information
statement required to be filed by the Company with the Commission pursuant to
Section 12(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Offering Memorandum for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act;
(f) for five years from the date hereof, to furnish to the
Initial Purchaser copies of any annual reports, quarterly reports and current
reports filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission, and such
other documents, reports and information as shall be furnished by the Company
to the Trustee or to the holders of the Securities pursuant to the Indenture or
the Exchange Act or any rule or regulation of the Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchaser may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchaser may designate and to continue such qualifications in effect
for so long as required for the resale of the Securities; and to arrange for
the determination of the eligibility for investment of the Securities under the
laws of such jurisdictions as the Initial
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<PAGE> 9
Purchaser may reasonably request; provided that the Company and its
subsidiaries shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general consent to
service of process in any jurisdiction;
(h) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as such term is defined in the Securities Act) which could be
integrated with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(i) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
not to, and to cause its affiliates not to, and not to authorize or knowingly
permit any person acting on their behalf to, solicit any offer to buy or offer
to sell the Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act; and
not to offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale, contract
or disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to be applicable to the offering and sale of the
Securities as contemplated by this Agreement and the Offering Memorandum;
(j) until the Closing Date, not to offer for sale, sell,
contract to sell or otherwise dispose of, directly or indirectly, or file a
registration statement for, or announce any offer, sale, contract for sale of
or other disposition of any debt securities issued or guaranteed by the Company
or any of its subsidiaries (other than the Securities) without the prior
written consent of the Initial Purchaser;
(k) for a period of two years after the Closing Date without
the prior written consent of the Initial Purchaser, not to, and not permit any
of its affiliates (as defined in Rule 144 under the Securities Act) to, resell
any of the Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act;
(l) in connection with the offering of the Securities, until
the Initial Purchaser shall have notified the Company of the completion of the
resale of the Securities, not to, and to cause its affiliated purchasers (as
defined in Regulation M under the Exchange Act) not to, either alone or with
one or more other persons, bid for or purchase, for any account in which it or
any of its affiliated purchasers has a beneficial interest, any Securities, or
attempt to induce any person to purchase any Securities; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent, active trading in or of raising the price of
the Securities;
(m) not to, for so long as the Securities are outstanding, be
or become an open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under Section 8 of
the Investment Company Act of 1940, as amended, and to not be or become a
closed-end investment company required to be registered, but not registered
thereunder;
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<PAGE> 10
(n) so long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) promulgated under the
Securities Act, the Company will, unless it is subject to and complies with
Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by such
holder) of such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) or a successor provision under the Securities Act; provided that
this covenant is intended to be solely for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of such
restricted securities; and
(o) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of Proceeds."
5. Conditions of Initial Purchaser's Obligations. The obligations of
the Initial Purchaser hereunder are subject to the accuracy, on and as of the
date hereof and the Closing Date, of the representations and warranties of the
Company contained herein, to the accuracy of the statements of the Company and
its officers made in any certificates delivered pursuant hereto, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or
supplements thereto) shall have been printed and copies distributed to the
Initial Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchaser may
agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
(b) The Initial Purchaser shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which is material or omits to state any fact which is material and is
required to be stated therein or is necessary to make the statements therein
not misleading.
(c) All corporate proceedings and other legal matters
incident to the authorization, form and validity of each of the Transaction
Documents and the Offering Memorandum, and all other legal matters relating to
the Transaction Documents, the Indenture and the transactions contemplated
thereby, shall be reasonably satisfactory in all material respects to the
Initial Purchaser, and the Company shall have furnished to the Initial
Purchaser all documents and information that it or its counsel may reasonably
request to enable them to pass upon such matters.
(d) Lawrence O'Donnell III, General Counsel to the Company,
and Baker & Botts, L.L.P., special counsel to the Company, shall have furnished
to the Initial Purchaser their written opinions, addressed to the Initial
Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set forth in
Annexes B-1 and B-2 hereto, respectively.
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<PAGE> 11
(e) The Initial Purchaser shall have received from Vinson &
Elkins L.L.P., counsel for the Initial Purchaser, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial Purchaser
may reasonably require, and the Company shall have furnished to such counsel
such documents and information as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchaser
a letter (the "Comfort Letter") of Deloitte & Touche LLP, addressed to the
Initial Purchaser and dated the Closing Date, in form and substance
satisfactory to the Initial Purchaser, substantially to the effect set forth in
Annex C hereto.
(g) [Intentionally omitted]
(h) The Company shall have furnished to the Initial Purchaser
a certificate, dated the Closing Date, of its chief executive officer and its
chief financial officer stating that (A) such officers have carefully examined
the Offering Memorandum, (B) in their opinion, (i) the Offering Memorandum,
including the documents incorporated therein by reference, as of its date, did
not include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) since the date of the Offering Memorandum, no
event has occurred which should have been set forth in a supplement or
amendment to the Offering Memorandum so that the Offering Memorandum (as so
amended or supplemented) would not include any untrue statement of a material
fact and would not omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (C) to the best of
their knowledge, as of the Closing Date, the representations and warranties of
the Company in this Agreement are true and correct in all material respects,
the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder on or prior to the Closing
Date, and subsequent to the date of the most recent financial statements
contained in the Offering Memorandum, there has been no material adverse change
in the financial position or results of operation of the Company or any of its
subsidiaries, or any change, or any development including a prospective change,
in or affecting the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a whole,
except at set forth in the Offering Memorandum.
(i) The Initial Purchaser shall have received a counterpart
of the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of the Company.
(j) The Securities shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(k) If any event shall have occurred that requires the
Company under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchaser shall have been given a reasonable
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<PAGE> 12
opportunity to comment thereon, and copies thereof shall have been delivered to
the Initial Purchaser reasonably in advance of the Closing Date.
(l) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the Exchange
Act by the Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchaser would materially
impair the ability of the Initial Purchaser to purchase, hold or effect resales
of the Securities as contemplated hereby.
(m) Subsequent to the execution and delivery of this
Agreement or, if earlier, the dates as of which information is given in the
Offering Memorandum (exclusive of any amendment or supplement thereto), there
shall not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the effect of
which, in any such case described above, is, in the judgment of the Initial
Purchaser, so material and adverse as to make it impracticable or inadvisable
to proceed with the sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement and the Offering Memorandum (exclusive of
any amendment or supplement thereto).
(n) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Securities; and no injunction, restraining order or
order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance or sale of the Securities.
(o) Subsequent to the execution and delivery of this
Agreement (i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities or preferred stock by
any "nationally recognized statistical rating organization", as such term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance or
review (other than an announcement with positive implications of a possible
upgrading), its rating of the Securities or any of the Company's other debt
securities or preferred stock.
(p) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or in the over-the-counter
market shall have been suspended or limited, or minimum prices shall have been
established on any such exchange or market by the Commission, by any such
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Company on any exchange or in
the over-the-counter market shall have been suspended or (ii) any moratorium on
commercial banking activities shall have been declared by federal or New York
state authorities or (iii) an outbreak of escalation of hostilities or a
declaration by the United States of a national emergency or war or (iv) a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial
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<PAGE> 13
markets in the United States shall be such) the effect of which, in the case of
clause (iii) or (iv), is, in the judgment of the Initial Purchaser, so material
and adverse as to make it impracticable or inadvisable to proceed with the sale
or the delivery of the Securities on the terms and in the manner contemplated
by this Agreement and in the Offering Memorandum (exclusive of any amendment or
supplement thereto).
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.
6. Termination. The obligations of the Initial Purchaser hereunder may
be terminated by the Initial Purchaser, in its absolute discretion, by notice
given to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Section 5(l),
(m), (n), (o) or (p) shall have occurred and be continuing.
7. Reimbursement of Initial Purchaser's Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason permitted under this Agreement or (c) the Initial Purchaser shall
decline to purchase the Securities for any reason permitted under this
Agreement (other than pursuant to Section 5(p)), the Company shall reimburse
the Initial Purchaser for such out-of-pocket expenses (including reasonable
fees and disbursements of counsel) as shall have been reasonably incurred by
the Initial Purchaser in connection with this Agreement and the proposed
purchase and resale of the Securities.
8. Indemnification. (a) The Company shall indemnify and hold harmless
the Initial Purchaser, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls
the Initial Purchaser within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 8(a) and Section 9
as the Initial Purchaser), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of the Securities), to which the Initial Purchaser may
become subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and shall reimburse the Initial Purchaser
promptly upon demand for any reasonable legal or other expenses reasonably
incurred by the Initial Purchaser in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Initial Purchaser's Information.
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<PAGE> 14
(b) The Initial Purchaser shall indemnify and hold harmless
the Company, its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 8(b) and Section 9 as the Company),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Initial Purchaser's Information provided by it,
and shall reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending or
preparing to defend against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party pursuant to Section 8(a) or 8(b), notify the
indemnifying party in writing of the claim or the commencement of that action;
provided, however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 8 except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and, provided, further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defenses of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that an indemnified party shall have the right to employ its
own counsel in any such action, but the fees, expenses and other charges of
such counsel for the indemnified party will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based upon advice of counsel to the indemnified
party) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such
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<PAGE> 15
action within a reasonable time after receiving notice of the commencement of
the action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm of attorneys (in addition to any local counsel) at any one
time for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 8(a) and 8(b),
shall use all reasonable efforts to cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
The obligations of the Company and the Initial Purchaser in this
Section 8 and in Section 9 are in addition to any other liability that the
Company or the Initial Purchaser, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
9. Contribution. If the indemnification provided for in Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or 8(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchaser on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Initial Purchaser on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchaser on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities purchased under this Agreement (before deducting expenses)
received by or on behalf of the Company, on the one hand, and the total
discounts and commissions received by the Initial Purchaser with respect to the
Securities purchased under this Agreement, on the other, bear to the total
gross proceeds from the sale of the Securities under this Agreement. The
relative fault 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 the Company or information
supplied by the Company on the one hand or to any Initial Purchaser's
Information on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Initial
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<PAGE> 16
Purchaser agree that it would not be just and equitable if contributions
pursuant to this Section 9 were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 9 shall be deemed to include, for
purposes of this Section 9, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 9, the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by the Initial Purchaser with respect to the Securities purchased by
it under this Agreement exceeds the amount of any damages which the Initial
Purchaser has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchaser, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except as provided in
Sections 8 and 9 with respect to affiliates, officers, directors, employees,
representatives, agents and controlling persons of the Company and the Initial
Purchaser. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 10, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.
11. Expenses. The Company agrees with the Initial Purchaser to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (b) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (c) the fees and expenses of the
Company's independent accountants; (d) any fees charged by rating agencies for
rating the Securities; (e) the fees and expenses of the Trustee and any paying
agent (including related fees and expenses of any counsel to such parties); (f)
all expenses and application fees incurred in connection with the approval of
the Securities for book-entry transfer by DTC; and (g) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement which are not otherwise specifically provided for in this
Section 11; provided, however, that the Initial Purchaser shall pay its own
costs and expenses (except as provided in this Section 11 and in Section 7),
the costs incident to the printing and distribution of the Offering Memorandum
and any amendments or supplements thereto, the costs of legal counsel for the
Initial Purchaser and the Company and the costs of certain roadshow
presentations.
12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchaser contained in this Agreement or made by or on behalf of the Company or
the Initial Purchaser pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities
and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement
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<PAGE> 17
or any investigation made by or on behalf of any of them or any of their
respective affiliates, officers, directors, employees, representatives, agents
or controlling persons.
13. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by
mail or telecopy transmission to J.P. Morgan Securities Inc., 60 Wall Street,
13th Floor, New York, New York 10260, Attention: Transaction Execution Group
(telecopier no.: (212) 648-5151); or
(b) if to the Company, shall be delivered or sent by mail or
telecopy transmission to the address of the Company set forth in the Offering
Memorandum, Attention: General Counsel (telecopier no.: (713) 439-8472).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
14. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
15. Initial Purchaser's Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchaser's
Information consists solely of the statements contained in the second
paragraph, the third sentence of the ninth paragraph as to intention to make a
market, and the tenth and eleventh paragraphs under the heading "Plan of
Distribution" in the Offering Memorandum.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
18. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
parties hereto.
19. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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<PAGE> 18
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and the Initial
Purchaser in accordance with its terms.
Very truly yours,
BAKER HUGHES INCORPORATED
By: /s/ LAWRENCE O'DONNELL, III
--------------------------------------
Name: Lawrence O'Donnell, III
Title: Vice President
Accepted:
J.P. MORGAN SECURITIES INC.
By: /s/ ROBERT MCMINN
--------------------------------
Robert McMinn
Vice President
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<PAGE> 19
ANNEX A
[Form of Exchange and Registration Rights Agreement]
<PAGE> 20
ANNEX B-1
[Form of Opinion of General Counsel to the Company]
Lawrence O'Donnell III shall have furnished to the Initial Purchaser
his written opinion, as General Counsel to the Company, addressed to the
Initial Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set forth
below:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which its ownership or lease of
substantial property or the conduct of its businesses requires such
qualification, and has all power and authority necessary to own or
hold its properties and to conduct the businesses in which it is
engaged (except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a Material
Adverse Effect);
(ii) the Company has an authorized capitalization as set
forth or incorporated by reference in the Offering Memorandum;
(iii) such counsel does not have actual knowledge of any
current or pending legal or governmental actions, suits or proceedings
which (A) would be required to be described in the Offering Memorandum
if the Offering Memorandum were a prospectus included in a
registration statement on Form S-3 which are not described as so
required or (B) questions the validity or enforceability of any of the
Transaction Documents or the Indenture or any action taken or to be
taken pursuant thereto;
(iv) the execution, delivery and performance of each of the
Transaction Documents and the issuance and sale of the Securities and
compliance with the terms thereof and of the Indenture will not result
in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of
any governmental agency or body or any court having jurisdiction over
the Company, any of its subsidiaries or their respective properties,
or the certificate of incorporation or by-laws of the Company or any
of its subsidiaries or, to such counsel's knowledge, any agreement or
instrument that relates to the borrowing of funds or that is filed as
an exhibit to any document incorporated by reference in the Offering
Memorandum to which the Company or any of its subsidiaries is bound or
to which any of the properties of the Company or any of its
subsidiaries is subject, except for such breach, violation or default
that would not have a Material Adverse Effect; and
(v) the Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they were filed with the Commission
appeared on their face to comply as to form in all material respects
B-1-1
<PAGE> 21
with the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder.
Such counsel shall also state that he has participated in conferences
with representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Initial Purchaser and its
counsel at which conferences the contents of the Offering Memorandum and
related matters were discussed. Although he did not independently verify such
information and is not passing upon, and does not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum or any of the documents incorporated by reference in the
Offering Memorandum, on the basis of the foregoing (relying as to materiality
to a large extent on officers and other representatives of the Company), no
facts have come to his attention that lead him to believe that the Offering
Memorandum (other than the financial statements, the notes thereto and the
auditor's report thereon and the other financial, numerical, statistical and
accounting data included or incorporated by reference therein, as to which he
has not been asked to express any belief), as of its date or as of the Closing
Date, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates or
representations of responsible officers of the Company and certificates of
public officials.
B-1-2
<PAGE> 22
ANNEX B-2
[Form of Opinion of Special Counsel for the Company]
Baker & Botts, L.L.P. shall have furnished to the Initial Purchaser
their written opinion, as counsel to the Company, addressed to the Initial
Purchaser and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchaser, substantially to the effect set forth
below:
(i) the Company has all necessary corporate power and
authority to execute and deliver each of the Transaction Documents and
to perform its obligations thereunder; and all corporate action
required to be taken for the due and proper authorization, execution
and delivery of each of the Transaction Documents and the consummation
of the transactions contemplated thereby have been duly and validly
taken;
(ii) each of the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding agreement of
the Company enforceable against the Company in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the
extent that the indemnification provisions thereof may be
unenforceable;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company constitutes a valid and legally binding
agreement of the Company enforceable against the Company in accordance
with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law);
(iv) the Securities have been duly authorized and issued by
the Company and, assuming due authentication thereof by the Trustee
and upon payment and delivery in accordance with the Purchase
Agreement, will constitute valid and legally binding obligations of
the Company entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms, except to the
extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and by general equitable principles (whether considered in a
proceeding in equity or at law);
(v) each Transaction Document conforms in all material
respects to the description thereof contained in the Offering
Memorandum;
B-2-1
<PAGE> 23
(vi) the Indenture conforms in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder;
(vii) the Company is not an "investment company" or a company
"controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended; and
(viii) assuming the accuracy of the representations,
warranties and agreements of the Company and of the Initial Purchaser
contained in the Purchase Agreement, no registration of the Securities
under the Securities Act or qualification of the Indenture under the
Trust Indenture Act is required in connection with the issuance and
sale of the Securities by the Company and the offer, resale and
delivery of the Securities by the Initial Purchaser in the manner
contemplated by the Purchase Agreement and the Offering Memorandum.
Such counsel shall also state that they have participated in
conferences with representatives of the Company, representatives of the
independent public accountants for the Company, representatives of the Initial
Purchaser and its counsel at which conferences the contents of the Offering
Memorandum and related matters were discussed. Although they did not
independently verify such information and are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum or any of the documents
incorporated by reference in the Offering Memorandum (except to the extent set
forth in paragraph (v) above), on the basis of the foregoing (relying as to
materiality to a large extent on officers and other representatives of the
Company), no facts have come to their attention that lead them to believe that
the Offering Memorandum (other than the financial statements, the notes thereto
and the auditor's report thereon and the other financial, numerical,
statistical and accounting data included or incorporated by reference therein,
as to which they have not been asked to comment), as of its date or as of the
Closing Date, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
B-2-2
<PAGE> 24
ANNEX C
[Form of Comfort Letter]
The Company shall have furnished to the Initial Purchaser a letter of
Deloitte & Touche LLP, addressed to the Initial Purchaser and dated the Closing
Date, in form and substance satisfactory to the Initial Purchaser,
substantially to the effect set forth below:
(i) they are independent certified public accountants with
respect to the Company within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings;
(ii) in their opinion, the audited financial statements
included or incorporated by reference in the Offering Memorandum and
reported on by them comply in form in all material respects with the
accounting requirements of the Exchange Act and the related published
rules and regulations of the Commission thereunder that would apply to
the Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-3 under the Securities
Act (except that certain supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by the Company, the procedures of the AICPA
for a review of interim financial information as described in
Statement of Auditing Standards No. 71, reading of minutes and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters and certain other limited
procedures requested by the Initial Purchaser and described in detail
in such letter, nothing has come to their attention that causes them
to believe that (A) any unaudited financial statements included in the
Offering Memorandum do not comply as to form in all material respects
with applicable accounting requirements, or (B) any material
modifications should be made to the unaudited financial statements
included in the Offering Memorandum for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
included in the Offering Memorandum;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available
balance sheet, including reading of minutes and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters, nothing has come to their attention that causes
them to believe that (A) at a specified date not more than three
business days prior to the date of such letter, there was any change
in capital stock, increase in long-term debt or decrease in net
current assets as compared with the amounts shown in the September 30,
1998 unaudited balance sheet included or incorporated by reference in
the Offering Memorandum or (B) for the period from October 1, 1998 to
a specified date not more than three business days prior to the date
of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in net sales, income from
operations, EBITDA or net income, except in all
C-1
<PAGE> 25
instances for changes, increases or decreases that the Offering
Memorandum discloses have occurred or which are set forth in such
letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless said
explanation is not deemed necessary by the Initial Purchaser; and
(v) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company) set forth in the Offering
Memorandum agrees with the accounting records of the Company,
excluding any questions of legal interpretation.
C-2
<PAGE> 1
EXHIBIT 4.5
BAKER HUGHES INCORPORATED
$725,000,000
6 1/4% Notes due 2009
6 7/8% Notes due 2029
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
January 11, 1999
CHASE SECURITIES INC.
SALOMON SMITH BARNEY INC.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
NATIONSBANC MONTGOMERY SECURITIES LLC
c/o Chase Securities Inc.
270 Park Avenue, 8th floor
New York, New York 10017
Ladies and Gentlemen:
Baker Hughes Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell to Chase Securities Inc. ("CSI") and, Salomon Smith
Barney Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated and
NationsBanc Montgomery Securities LLC (together with CSI, the "Initial
Purchasers"), upon the terms and subject to the conditions set forth in a
purchase agreement dated January 11, 1999 (the "Purchase Agreement"), $325
million aggregate principal amount of its 6 1/4% Notes due 2009 and $400
million aggregate principal amount of its 6 7/8% Notes due 2029 (collectively,
the "Securities"). Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company agrees with the Initial Purchasers, for the
benefit of the holders (including the Initial Purchasers) of the Securities,
the Exchange Securities (as defined herein) and the Private Exchange Securities
(as defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall (i) prepare and, not later
than 90 days following the date of original issuance of the Securities (the
"Issue Date"), file with the Commission a registration statement (the "Exchange
Offer Registration Statement") on an appropriate form under the Securities Act
with respect to a proposed offer to the Holders of each series of the
Securities (the "Registered Exchange Offer") to issue and deliver to such
Holders, in exchange for the Securities of such series, a like aggregate
principal amount of debt securities of such series of the Company (the
"Exchange Securities") that are identical in all material respects to
<PAGE> 2
such Securities, except for the transfer restrictions or the payment of
additional interest relating to the Securities, (ii) use its reasonable best
efforts to cause the Exchange Offer Registration Statement to become effective
under the Securities Act no later than 150 days after the Issue Date and the
Registered Exchange Offer to be consummated no later than 180 days after the
Issue Date and (iii) keep the Exchange Offer Registration Statement effective
for not less than 30 days (or longer, if required by applicable law) after the
date on which notice of the Registered Exchange Offer is mailed to the Holders
(such period being called the "Exchange Offer Registration Period"). The
Exchange Securities will be issued under the Indenture, including the
Supplemental Indenture, or an indenture (the "Exchange Securities Indenture")
between the Company and the Trustee or such other bank or trust company that is
reasonably satisfactory to the Initial Purchasers, as trustee (the "Exchange
Securities Trustee"), such indenture to be identical in all material respects
to the Indenture, including the Supplemental Indenture, except for the transfer
restrictions relating to the Securities (as described above).
Upon the effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities of a series for Exchange Securities of such series
(assuming that such Holder (a) is not an affiliate of the Company or an
Exchanging Dealer (as defined herein) not complying with the requirements of
the next sentence, (b) is not an Initial Purchaser holding Securities that
have, or that are reasonably likely to have, the status of an unsold allotment
in an initial distribution, (c) acquires the Exchange Securities in the
ordinary course of such Holder's business and (d) has no arrangements or
understandings with any person to participate in the distribution of the
Exchange Securities) and to trade such Exchange Securities from and after their
receipt without any limitations or restrictions under the Securities Act and
without material restrictions under the securities laws of the several states
of the United States. The Company, the Initial Purchasers and each Exchanging
Dealer acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, each Holder that is a
broker-dealer electing to exchange Securities, acquired for its own account as
a result of market-making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover, in Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer.
If, prior to the consummation of the Registered Exchange Offer, any Holder
holds any Securities of a series acquired by it that have, or that are
reasonably likely to be determined to have, the status of an unsold allotment
in an initial distribution, or any Holder is not entitled to participate in the
Registered Exchange Offer, the Company shall, upon the request of any such
Holder, simultaneously with the delivery of the Exchange Securities of such
series in the Registered Exchange Offer, issue and deliver to any such Holder,
in exchange for the Securities of such series held by such Holder (the "Private
Exchange"), a like aggregate principal amount of debt securities of the Company
(the "Private Exchange Securities") that are identical in all material respects
to the Exchange Securities of such series, except for the transfer restrictions
relating to such Private Exchange Securities. The Private Exchange Securities
of such series will be issued under the same indenture as the Exchange
Securities of such series, and the Company shall use its reasonable best
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<PAGE> 3
efforts to cause the Private Exchange Securities of such series to bear the
same CUSIP number as the Exchange Securities of such series.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date on which notice of
the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York City time, on the last business day on which
the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are applicable
to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange Offer
and any Private Exchange, as the case may be, the Company shall, with respect
to each series of Securities:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer and the Private Exchange;
(b) deliver to the Trustee for cancellation all Securities so accepted
for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder, Exchange
Securities or Private Exchange Securities of such series, as the case may be,
equal in principal amount to the Securities of such Holder so accepted for
exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any
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<PAGE> 4
Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
With respect to each series of Securities, the Indenture or the Exchange
Securities Indenture, as the case may be, shall provide that the Securities,
the Exchange Securities and the Private Exchange Securities shall vote and
consent together on all matters as one class and that none of the Securities,
the Exchange Securities or the Private Exchange Securities will have the right
to vote or consent as a separate class on any matter.
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Securities surrendered in exchange therefor or, if no interest has been paid on
the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of
the Registered Exchange Offer (i) any Exchange Securities received by such
Holder will be acquired in the ordinary course of business, (ii) such Holder
will have no arrangements or understanding with any person to participate in
the distribution of the Securities or the Exchange Securities within the
meaning of the Securities Act and (iii) such Holder is not an affiliate of the
Company or, if it is such an affiliate, such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
2. Shelf Registration. With respect to each series of Securities, if (i)
because of any change in law or applicable interpretations thereof by the
Commission's staff the Company is not permitted to effect the Registered
Exchange Offer as contemplated by Section 1 hereof, or (ii) any Securities
validly tendered pursuant to the Registered Exchange Offer are not exchanged
for Exchange Securities within 180 days after the Issue Date, or (iii) any
Initial Purchaser so requests with respect to Securities or Private Exchange
Securities not eligible to be exchanged for Exchange Securities in the
Registered Exchange Offer and held by it following the consummation of the
Registered Exchange Offer, or (iv) any applicable law or interpretations do not
permit any Holder (other than an Initial Purchaser) to participate in the
Registered Exchange Offer, or (v) any Holder that participates in the
Registered Exchange Offer does not receive freely transferable Exchange
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<PAGE> 5
Securities, other than restrictions imposed on Exchanging Dealers, in exchange
for tendered Securities, or (vi) the Company so elects, then the following
provisions shall apply:
(a) The Company shall use its reasonable best efforts to file as
promptly as practicable with the Commission, and thereafter shall use its
reasonable best efforts to cause to be declared effective, a shelf registration
statement on an appropriate form under the Securities Act relating to the offer
and sale of the Transfer Restricted Securities (as defined below) by the
Holders thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a "Shelf
Registration Statement" and, together with any Exchange Offer Registration
Statement, a "Registration Statement"); provided that with respect to Exchange
Securities or Private Exchange Securities received by an Initial Purchaser in
exchange for Securities constituting any portion of an unsold allotment, the
Company may, if permitted by current interpretations by the Commission's staff,
file a post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Regulation S-K Items 507 and/or 508, as
applicable, in satisfaction of its obligations under this Section 2(a) with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf Registration Statement.
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders of Transfer Restricted
Securities for a period ending on the earlier of (i) two years from the Issue
Date or such shorter period that will terminate when all the Transfer
Restricted Securities covered by the Shelf Registration Statement have been
sold pursuant thereto and (ii) the date on which the Securities become eligible
for resale without volume restrictions pursuant to Rule 144 under the
Securities Act (in any such case, such period being called the "Shelf
Registration Period"). The Company will have the ability to suspend the
availability of the Shelf Registration Statement for no more than 45
consecutive days or no more than an aggregate of 90 days during any consecutive
twelve-month period if it determines, in its reasonable judgment, upon advice
of counsel, that the continued effectiveness and use of the Shelf Registration
Statement would (x) require the disclosure of material information which the
Company has a bona fide business reason for preserving as confidential, or (y)
interfere with any financing, acquisition, corporate reorganization or other
material transaction involving the Company (the "Suspension Period"). A
Suspension Period shall commence on and include the date that the Company gives
notice that the Shelf Registration Statement is no longer effective or the
prospectus included therein is no longer usable for offers and sales of
Securities, Private Exchange Securities and Exchange Securities and shall end
on the date when each Holder of Securities, Private Exchange Securities and
Exchange Securities covered by such registration statement either receives the
copies of the supplemented or amended prospectus contemplated by Section 4(j)
hereof or is advised in writing by the Company that use of the prospectus may
be resumed.
(c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included
therein in reliance upon or in conformity with written information furnished to
the Company by or on behalf of any
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<PAGE> 6
Holder specifically for use therein (the "Holders' Information")) does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (iii) any prospectus forming part of any Shelf Registration
Statement, and any supplement to such prospectus (in either case, other than
with respect to Holders' Information), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations under Section 1 or Section 2, as applicable, and that
it would not be feasible to ascertain the extent of such damages. Accordingly,
with respect to each series of Securities, if (i) the applicable Registration
Statement is not filed with the Commission on or prior to 90 days after the
Issue Date, (ii) the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, is not declared effective within
150 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of Commission's staff, if later, within 90 days after
publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 180 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of Commission's staff, if later, within 90 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof and without regard to any Suspension Period) without
being succeeded within 60 days by an additional Registration Statement filed
and declared effective (each such event referred to in clauses (i) through
(iv), a "Registration Default"), the interest rate borne by the Securities
shall be increased by one-fourth of one percent (0.25%) per annum as liquidated
damages, during the period of one or more such Registration Defaults, which
rate will increase by an additional one-fourth of one percent (0.25%) per annum
if such Registration Default has not been cured within 90 days of the
occurrence thereof and continuing until all Registration Defaults have been
cured; provided that the aggregate amount of any such increase in the interest
rate on the Securities shall in no event exceed one-half of one percent (0.50%)
per annum. As used herein, the term "Transfer Restricted Securities" means (i)
each Security until the date on which such Security has been exchanged for a
freely transferable Exchange Security in the Registered Exchange Offer, (ii)
each Security or Private Exchange Security until the date on which it has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iii) each Security or Private
Exchange Security until the date on which it is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act. Notwithstanding anything to the contrary in
this Section 3(a), the Company shall not be required to pay liquidated damages
to a Holder of Transfer Restricted Securities if such Holder failed to comply
with its obligations to make the representations set forth in the second to
last paragraph of Section 1 or failed to provide the information required to be
provided by it, if any, pursuant to Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent under
the Indenture immediately upon the happening of each and every Registration
Default. The Company shall pay the liquidated damages due on the Transfer
Restricted Securities by depositing with the
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<PAGE> 7
Paying Agent (which may not be the Company for these purposes), in trust, for
the benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on
the next interest payment date specified by the Indenture and the Securities,
sums sufficient to pay the liquidated damages then due. The liquidated damages
due shall be payable on each interest payment date specified by the Indenture
and the Securities to the record holder entitled to receive the interest
payment to be made on such date. Each obligation to pay liquidated damages
shall be deemed to accrue from and including the date of the applicable
Registration Default.
(c) The parties hereto agree that the liquidated damages provided for
in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration Statement,
the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration Statement
and each amendment thereof and each supplement, if any, to the prospectus
included therein and shall use its reasonable best efforts to reflect in each
such document, when so filed with the Commission, such comments as any Initial
Purchaser may reasonably propose; (ii) include the information to the effect
set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange
Offer Procedures" section and the "Purpose of the Exchange Offer" section and
in Annex C hereto in the "Plan of Distribution" section of the prospectus
forming a part of the Exchange Offer Registration Statement, and include the
information set forth in Annex D hereto in the Letter of Transmittal delivered
pursuant to the Registered Exchange Offer; and (iii) if requested by any
Initial Purchaser, include the information required by Items 507 or 508 of
Regulation S-K, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement.
(b) The Company shall advise each Initial Purchaser, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such person,
confirm such advice in writing (which advice pursuant to clauses (ii)-(v)
hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto has
been filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements
to any Registration Statement or the prospectus included therein or for
additional information;
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<PAGE> 8
(iii) of the issuance by the Commission of any stop order suspending
the effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities, the Exchange
Securities or the Private Exchange Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus included therein
in order that the statements therein are not misleading and do not omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
(c) The Company will use its reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules and, if any such Holder so requests in writing, all
exhibits thereto (including those, if any, incorporated by reference).
(e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of such prospectus
or any amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) The Company will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any,
incorporated by reference).
(g) The Company will, during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable, promptly deliver to each Initial
Purchaser, each Exchanging Dealer and such other persons that are required to
deliver a prospectus following the Registered Exchange Offer, without charge,
as many copies of the final prospectus included in the Exchange Offer
Registration Statement or the Shelf Registration Statement and any amendment or
supplement thereto as such Initial Purchaser, Exchanging Dealer or other
persons may reasonably request; and the Company consents to the use of such
prospectus or any amendment or supplement thereto by any such Initial
Purchaser, Exchanging Dealer or other persons, as applicable, as aforesaid.
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<PAGE> 9
(h) Prior to the effective date of any Registration Statement, the
Company will use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities, Exchange Securities or Private
Exchange Securities included therein and their respective counsel in connection
with the registration or qualification of, such Securities, Exchange Securities
or Private Exchange Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holder reasonably requests in
writing and do any and all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of the Securities, Exchange
Securities or Private Exchange Securities covered by such Registration
Statement; provided that the Company will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.
(i) The Company will cooperate with the Holders of Securities,
Exchange Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities, Exchange
Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders thereof may request
in writing prior to sales of Securities, Exchange Securities or Private
Exchange Securities pursuant to such Registration Statement.
(j) If (i) any event contemplated by Section 4(b)(ii) through (v)
occurs during the period for which the Company is required to maintain an
effective Registration Statement or (ii) any Suspension Period remains in
effect more than 45 consecutive days or more than 90 days in any twelve-month
period, the Company will promptly prepare and file with the Commission a
post-effective amendment to the Registration Statement or a supplement to the
related prospectus or file any other required document so that, as thereafter
delivered to purchasers of the Securities, Exchange Securities or Private
Exchange Securities from a Holder, the prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities, the
Exchange Securities and the Private Exchange Securities, as the case may be,
and provide the applicable trustee with printed certificates for the
Securities, the Exchange Securities or the Private Exchange Securities, as the
case may be, in a form eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all applicable rules and regulations
of the Commission and will make generally available to its security holders as
soon as practicable after the effective date of the applicable Registration
Statement an earning statement satisfying the provisions of Section 11(a) of
the Securities Act; provided that in no event shall such earning statement be
delivered later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statement shall cover such 12-month period.
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<PAGE> 10
(m) The Company will cause the Indenture or the Exchange Securities
Indenture, as the case may be, to be qualified under the Trust Indenture Act as
required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from
time to time reasonably require for inclusion in such Shelf Registration
Statement, and the Company may exclude from such registration the Transfer
Restricted Securities of any Holder that fails to furnish such information
within a reasonable time after receiving such request.
(o) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder
will discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(j) or until advised in writing (the "Advice") by the
Company that the use of the applicable prospectus may be resumed. If the
Company shall give any notice under Section 4(b)(ii) through (v) during the
period that the Company is required to maintain an effective Registration
Statement (the "Effectiveness Period"), such Effectiveness Period shall be
extended by the number of days during such period from and including the date
of the giving of such notice to and including the date when each seller of
Transfer Restricted Securities covered by such Registration Statement shall
have received (x) the copies of the supplemental or amended prospectus
contemplated by Section 4(j) (if an amended or supplemental prospectus is
required) or (y) the Advice (if no amended or supplemental prospectus is
required).
(p) In the case of a Shelf Registration Statement, the Company shall
enter into such customary agreements (including, if requested, an underwriting
agreement in customary form) and take all such other action, if any, as Holders
of a majority in aggregate principal amount of the Securities, Exchange
Securities and Private Exchange Securities being sold or the managing
underwriters (if any) shall reasonably request in order to facilitate any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement.
(q) In the case of a Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold and any underwriter participating in any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries and (ii) use its reasonable best efforts to have its officers,
directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative, Special Counsel or any such
underwriter (an "Inspector") in connection with such Shelf Registration
Statement; provided, however, that any information that is designated by the
Company as confidential shall be kept confidential by the Holders or any such
Inspector, unless such disclosure is made in connection with a court proceeding
or required by law or is disclosed upon
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<PAGE> 11
request or demand of any regulatory authority having jurisdiction over such
Holder or Inspector, or such information becomes available to the public
generally or through a third party without an accompanying obligation of
confidentiality.
(r) In the case of a Shelf Registration Statement, the Company shall,
if requested by Holders of a majority in aggregate principal amount of the
Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use its reasonable best efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Securities, Exchange Securities or Private Exchange Securities, as
applicable, in customary form consistent with opinions rendered in the initial
offering of the Securities, (ii) its officers to execute and deliver all
customary documents and certificates reasonably requested by Holders of a
majority in aggregate principal amount of the Securities, Exchange Securities
and Private Exchange Securities being sold, their Special Counsel or the
managing underwriters (if any) and (iii) its independent public accountants to
provide a comfort letter or letters in customary form, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72.
5. Registration Expenses. The Company will bear all expenses incurred in
connection with the performance of its obligations under Sections 1, 2, 3 and 4
and the Company will reimburse the Initial Purchasers and the Holders for the
reasonable fees and disbursements of one firm of attorneys (in addition to any
local counsel) chosen by the Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities to be sold pursuant to each Registration Statement (the "Special
Counsel") acting for the Initial Purchasers or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement or
in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, any such Initial Purchaser or Exchanging
Dealer), its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and
against any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of Securities, Exchange
Securities or Private Exchange Securities), to which that Holder may become
subject, whether commenced or threatened, under the Securities Act, the
Exchange Act, any other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any such Registration Statement or
any prospectus forming part thereof or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Holder promptly upon demand for any
reasonable legal or other expenses reasonably incurred by that Holder in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any
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<PAGE> 12
such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Holders' Information; and provided,
further, that with respect to any such untrue statement in or omission from any
related preliminary prospectus, the indemnity agreement contained in this
Section 6(a) shall not inure to the benefit of any Holder from whom the person
asserting any such loss, claim, damage, liability or action received
Securities, Exchange Securities or Private Exchange Securities to the extent
that such loss, claim, damage, liability or action of or with respect to such
Holder results from the fact that both (A) a copy of the final prospectus was
not sent or given to such person at or prior to the written confirmation of the
sale of such Securities, Exchange Securities or Private Exchange Securities to
such person and (B) the untrue statement in or omission from the related
preliminary prospectus giving rise to such loss, claim, damage, liability or
action was corrected in the final prospectus unless, in either case, such
failure to deliver the final prospectus was a result of non-compliance by the
Company with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6(b) and
Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement
or alleged untrue statement of a material fact contained in any such
Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with any Holders'
Information furnished to the Company by such Holder, and shall reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that no such Holder shall be liable for any indemnity claims hereunder in
excess of the amount of net proceeds received by such Holder from the sale of
Securities, Exchange Securities or Private Exchange Securities pursuant to such
Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an
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<PAGE> 13
indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there
may be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying
party has not in fact employed counsel reasonably satisfactory to the
indemnified party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be
at the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm of
attorneys (in addition to any local counsel) at any one time for all such
indemnified party or parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 6(a) and 6(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the defense of
any such action or claim. No indemnifying party shall be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
7. Contribution. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company from the offering and sale of the
Securities, on the one hand, and a Holder with respect to the sale by such
Holder of Securities, Exchange Securities or Private Exchange Securities, on
the other, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such
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<PAGE> 14
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 on the one
hand and such Holder on the other with respect to the statements or omissions
that resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations.. The relative
benefits received by the Company on the one hand and a Holder on the other with
respect to such offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
(before deducting expenses) received by or on behalf of the Company, on the one
hand, bear to the total proceeds received by such Holder with respect to its
sale of Securities, Exchange Securities or Private Exchange Securities, on the
other. The relative fault 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 the
Company or information supplied by the Company on the one hand or to any
Holders' Information supplied by such Holder on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The parties hereto agree
that it would not be just and equitable if contributions pursuant to this
Section 7 were to be determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 7 shall be deemed to include, for purposes of
this Section 7, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
7, an indemnifying party that is a Holder of Securities, Exchange Securities or
Private Exchange Securities shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities, Exchange
Securities or Private Exchange Securities sold by such indemnifying party to
any purchaser exceeds the amount of any damages which such indemnifying party
has otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Rules 144 and 144A. The Company shall use its reasonable best efforts
to file the reports required to be filed by it under the Securities Act and the
Exchange Act in a timely manner and, if at any time the Company is not required
to file such reports, it will, upon the written request of any Holder of
Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A. The Company covenants that it will take such further action as
any Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
any Holder of Transfer Restricted Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such
requirements. Notwithstanding the foregoing, nothing in this Section 8 shall be
deemed to require the Company to register any of its securities pursuant to the
Exchange Act.
9. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker
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<PAGE> 15
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
such Transfer Restricted Securities included in such offering, subject to the
consent of the Company (which shall not be unreasonably withheld or delayed),
and such Holders shall be responsible for all underwriting commissions and
discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and
(ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained, with respect to a series of Securities, the written consent of
Holders of a majority in aggregate principal amount of the Securities, the
Exchange Securities and the Private Exchange Securities of such series, taken
as a single class. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Securities, Exchange Securities or Private Exchange
Securities are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders may be given by
Holders of a majority in aggregate principal amount of the Securities, the
Exchange Securities and the Private Exchange Securities being sold by such
Holders pursuant to such Registration Statement.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 10(b),
which address initially is, with respect to each Holder, the address of
such Holder maintained by the Registrar under the Indenture, with a copy
in like manner to Chase Securities Inc., Salomon Smith Barney Inc., J.P.
Morgan Securities Inc., Morgan Stanley & Co. Incorporated and NationsBanc
Montgomery Securities LLC;
(2) if to an Initial Purchaser, initially at its address set forth in
the Purchase Agreement; and
(3) if to the Company, initially at the address of the Company set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
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<PAGE> 16
(c) Successors And Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) 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.
(e) Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(h) Remedies. In the event of a breach by the Company or by any Holder
of any of their obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights
granted by law, including recovery of damages (other than the recovery of
damages for a breach by the Company of its obligations under Sections 1 or 2
hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. The Company represents, warrants and
agrees that (i) it has not entered into, shall not, on or after the date of
this Agreement, enter into any agreement that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any agreement which
remains in effect granting any registration rights with respect to any of its
debt securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in
aggregate principal amount of the then outstanding Transfer Restricted
Securities, it shall not grant to any person the right to request the Company
to register any debt securities of the Company under the Securities Act unless
the rights so granted are not in conflict or inconsistent with the provisions
of this Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders of Transfer Restricted Securities in
such capacity) shall have the right to include any securities of the Company in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities.
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<PAGE> 17
(k) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable best efforts to find and employ
an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
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<PAGE> 18
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Initial Purchasers.
Very truly yours,
BAKER HUGHES INCORPORATED
By: /s/ LAWRENCE O'DONNELL, III
------------------------------
Name: Lawrence O'Donnell, III
Title: Vice President
Accepted:
CHASE SECURITIES INC.
By: /s/ WILLIAM D. ROGERS
----------------------
Authorized Signatory
SALOMON SMITH BARNEY INC.
By: /s/ JEFFREY HAMILTON
----------------------
Authorized Signatory
J.P. MORGAN SECURITIES INC.
By: /s/ ROBERT McMINN
----------------------
Authorized Signatory
MORGAN STANLEY & CO. INCORPORATED
By: /s/ STEPHEN M. TRAUBER
----------------------
Authorized Signatory
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ ADONIS HEMBRICK
----------------------
Authorized Signatory
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<PAGE> 19
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. 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 Securities received in
exchange for Securities where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that, for a period of 180 days after the
Expiration Date (as defined herein), it will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution"
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<PAGE> 20
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account
in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".
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<PAGE> 21
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. 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 Securities received
in exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until _______________, 199_,
all dealers effecting transactions in the Exchange Securities may be required
to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers
for their own account pursuant to the Registered 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
Securities 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 at 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 or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to
the Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date 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 to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one
counsel for the Holders of the Securities) other than commissions or
concessions of any broker-dealers and will indemnify the Holders of the
Securities (including any broker-dealers) against certain liabilities,
including liabilities under the Securities Act.
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<PAGE> 22
ANNEX D
[ ] 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:
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Address:
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If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
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<PAGE> 1
EXHIBIT 4.6
BAKER HUGHES INCORPORATED
$200,000,000
6% Notes due 2009
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
February 4, 1999
NATIONSBANC MONTGOMERY SECURITIES LLC
100 North Tryon Street
Charlotte, North Carolina 28255
Ladies and Gentlemen:
Baker Hughes Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell to NationsBanc Montgomery Securities LLC (the
"Initial Purchaser"), upon the terms and subject to the conditions set forth in
a purchase agreement dated February 1, 1999 (the "Purchase Agreement"), $200
million aggregate principal amount of its 6% Notes due 2009 (the "Securities").
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Purchase Agreement.
As an inducement to the Initial Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchaser thereunder, the Company agrees with the Initial Purchaser, for the
benefit of the holders (including the Initial Purchaser) of the Securities, the
Exchange Securities (as defined herein) and the Private Exchange Securities (as
defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall (i) prepare and, not
later than 90 days following the date of original issuance of the Securities
(the "Issue Date"), file with the Commission a registration statement (the
"Exchange Offer Registration Statement") on an appropriate form under the
Securities Act with respect to a proposed offer to the Holders of the Securities
(the "Registered Exchange Offer") to issue and deliver to such Holders, in
exchange for the Securities, a like aggregate principal amount of debt
securities of the Company (the "Exchange Securities") that are identical in all
material respects to such Securities, except for the transfer restrictions or
the payment of additional interest relating to the Securities, (ii) use its
reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act no later than 150 days after the Issue
Date and the Registered Exchange Offer to be consummated no later than 180 days
after the Issue Date and (iii) keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date on which notice of the Registered Exchange Offer is mailed to the
Holders (such period being called the "Exchange Offer Registration Period"). The
Exchange Securities will be issued
<PAGE> 2
under the Indenture, including the Supplemental Indenture, or an indenture (the
"Exchange Securities Indenture") between the Company and the Trustee or such
other bank or trust company that is reasonably satisfactory to the Initial
Purchaser, as trustee (the "Exchange Securities Trustee"), such indenture to be
identical in all material respects to the Indenture, including the Supplemental
Indenture, except for the transfer restrictions relating to the Securities (as
described above).
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not the Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business and (d) has
no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, the Initial Purchaser and
each Exchanging Dealer acknowledge that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, each Holder that is a
broker-dealer electing to exchange Securities, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover, in Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer.
If, prior to the consummation of the Registered Exchange Offer, any
Holder holds any Securities acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Company shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Company (the "Private Exchange
Securities") that are identical in all material respects to the Exchange
Securities, except for the transfer restrictions relating to such Private
Exchange Securities. The Private Exchange Securities will be issued under the
same indenture as the Exchange Securities, and the Company shall use its
reasonable best efforts to cause the Private Exchange Securities to bear the
same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
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<PAGE> 3
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date on which
notice of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of New
York;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York City time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange Offer
and any Private Exchange, as the case may be, the Company shall:
(a) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(b) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as
the case may be, promptly to authenticate and deliver to each Holder, Exchange
Securities or Private Exchange Securities, as the case may be, equal in
principal amount to the Securities of such Holder so accepted for exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
The Indenture or the Exchange Securities Indenture, as the case may be,
shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
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Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Securities surrendered in exchange therefor or, if no interest has been paid on
the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) any Securities validly tendered pursuant to the Registered
Exchange Offer are not exchanged for Exchange Securities within 180 days after
the Issue Date, or (iii) the Initial Purchaser so requests with respect to
Securities or Private Exchange Securities not eligible to be exchanged for
Exchange Securities in the Registered Exchange Offer and held by it following
the consummation of the Registered Exchange Offer, or (iv) any applicable law or
interpretations do not permit any Holder (other than the Initial Purchaser) to
participate in the Registered Exchange Offer, or (v) any Holder that
participates in the Registered Exchange Offer does not receive freely
transferable Exchange Securities, other than restrictions imposed on Exchanging
Dealers, in exchange for tendered Securities, or (vi) the Company so elects,
then the following provisions shall apply:
(a) The Company shall use its reasonable best efforts to file
as promptly as practicable with the Commission, and thereafter shall use its
reasonable best efforts to cause to be declared effective, a shelf registration
statement on an appropriate form under the Securities Act relating to the offer
and sale of the Transfer Restricted Securities (as defined below) by the Holders
thereof from time to time in accordance with the methods of distribution set
forth in such registration statement (hereafter, a "Shelf Registration
Statement" and, together with any Exchange Offer Registration Statement, a
"Registration Statement"); provided that with respect to Exchange
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<PAGE> 5
Securities or Private Exchange Securities received by the Initial Purchaser in
exchange for Securities constituting any portion of an unsold allotment, the
Company may, if permitted by current interpretations by the Commission's staff,
file a post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Regulation S-K Items 507 and/or 508, as
applicable, in satisfaction of its obligations under this Section 2(a) with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf Registration Statement.
(b) The Company shall use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders of Transfer Restricted
Securities for a period ending on the earlier of (i) two years from the Issue
Date or such shorter period that will terminate when all the Transfer Restricted
Securities covered by the Shelf Registration Statement have been sold pursuant
thereto and (ii) the date on which the Securities become eligible for resale
without volume restrictions pursuant to Rule 144 under the Securities Act (in
any such case, such period being called the "Shelf Registration Period"). The
Company will have the ability to suspend the availability of the Shelf
Registration Statement for no more than 45 consecutive days or no more than an
aggregate of 90 days during any consecutive twelve-month period if it
determines, in its reasonable judgment, upon advice of counsel, that the
continued effectiveness and use of the Shelf Registration Statement would (x)
require the disclosure of material information which the Company has a bona fide
business reason for preserving as confidential, or (y) interfere with any
financing, acquisition, corporate reorganization or other material transaction
involving the Company (the "Suspension Period"). A Suspension Period shall
commence on and include the date that the Company gives notice that the Shelf
Registration Statement is no longer effective or the prospectus included therein
is no longer usable for offers and sales of Securities, Private Exchange
Securities and Exchange Securities and shall end on the date when each Holder of
Securities, Private Exchange Securities and Exchange Securities covered by such
registration statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 4(j) hereof or is advised in writing by the
Company that use of the prospectus may be resumed.
(c) Notwithstanding any other provisions hereof, the Company
will ensure that (i) any Shelf Registration Statement and any amendment thereto
and any prospectus forming part thereof and any supplement thereto complies in
all material respects with the Securities Act and the rules and regulations of
the Commission thereunder, (ii) any Shelf Registration Statement and any
amendment thereto (in either case, other than with respect to information
included therein in reliance upon or in conformity with written information
furnished to the Company by or on behalf of any Holder specifically for use
therein (the "Holders' Information")) does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Shelf Registration Statement, and any supplement to such
prospectus (in either case, other than with respect to Holders' Information),
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations under
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<PAGE> 6
Section 1 or Section 2, as applicable, and that it would not be feasible to
ascertain the extent of such damages. Accordingly, if (i) the applicable
Registration Statement is not filed with the Commission on or prior to 90 days
after the Issue Date, (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective
within 150 days after the Issue Date (or in the case of a Shelf Registration
Statement required to be filed in response to a change in law or the applicable
interpretations of Commission's staff, if later, within 90 days after
publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 180 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of Commission's staff, if later, within 90 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof and without regard to any Suspension Period) without being
succeeded within 60 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the interest rate borne by the Securities shall be
increased by one-fourth of one percent (0.25%) per annum as liquidated damages,
during the period of one or more such Registration Defaults, which rate will
increase by an additional one-fourth of one percent (0.25%) per annum if such
Registration Default has not been cured within 90 days of the occurrence thereof
and continuing until all Registration Defaults have been cured; provided that
the aggregate amount of any such increase in the interest rate on the Securities
shall in no event exceed one-half of one percent (0.50%) per annum. As used
herein, the term "Transfer Restricted Securities" means (i) each Security until
the date on which such Security has been exchanged for a freely transferable
Exchange Security in the Registered Exchange Offer, (ii) each Security or
Private Exchange Security until the date on which it has been effectively
registered under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) each Security or Private Exchange Security until
the date on which it is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
Notwithstanding anything to the contrary in this Section 3(a), the Company shall
not be required to pay liquidated damages to a Holder of Transfer Restricted
Securities if such Holder failed to comply with its obligations to make the
representations set forth in the second to last paragraph of Section 1 or failed
to provide the information required to be provided by it, if any, pursuant to
Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent
under the Indenture immediately upon the happening of each and every
Registration Default. The Company shall pay the liquidated damages due on the
Transfer Restricted Securities by depositing with the Paying Agent (which may
not be the Company for these purposes), in trust, for the benefit of the Holders
thereof, prior to 10:00 a.m., New York City time, on the next interest payment
date specified by the Indenture and the Securities, sums sufficient to pay the
liquidated damages then due. The liquidated damages due shall be payable on each
interest payment date specified by the Indenture and the Securities to the
record holder entitled to receive the interest payment to be made on such date.
Each obligation to pay liquidated damages shall be deemed to accrue from and
including the date of the applicable Registration Default.
(c) The parties hereto agree that the liquidated damages
provided for in this Section 3 constitute a reasonable estimate of and are
intended to constitute the sole damages that will
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<PAGE> 7
be suffered by Holders of Transfer Restricted Securities by reason of the
failure of (i) the Shelf Registration Statement or the Exchange Offer
Registration Statement to be filed, (ii) the Shelf Registration Statement to
remain effective or (iii) the Exchange Offer Registration Statement to be
declared effective and the Registered Exchange Offer to be consummated, in each
case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its reasonable best efforts to reflect
in each such document, when so filed with the Commission, such comments as the
Initial Purchaser may reasonably propose; (ii) include the information to the
effect set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section and in Annex C hereto in the "Plan of Distribution" section of the
prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; and (iii) if requested by
the Initial Purchaser, include the information required by Items 507 or 508 of
Regulation S-K, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement.
(b) The Company shall advise the Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration Statement
or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities, the
Exchange Securities or the Private Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the making of
any changes in any Registration Statement or the prospectus included
therein in order that the statements therein
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<PAGE> 8
are not misleading and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(c) The Company will use its reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) The Company will furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The Company will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents to the use of such
prospectus or any amendment or supplement thereto by each of the selling Holders
of Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) The Company will furnish to the Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if the Initial Purchaser or any Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) The Company will, during the Exchange Offer Registration
Period or the Shelf Registration Period, as applicable, promptly deliver to the
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the Exchange
Offer Registration Statement or the Shelf Registration Statement and any
amendment or supplement thereto as the Initial Purchaser or such Exchanging
Dealer or other persons may reasonably request; and the Company consents to the
use of such prospectus or any amendment or supplement thereto by the Initial
Purchaser or such Exchanging Dealer or other persons, as applicable, as
aforesaid.
(h) Prior to the effective date of any Registration Statement,
the Company will use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities, Exchange Securities or Private
Exchange Securities included therein and their respective counsel in connection
with the registration or qualification of, such Securities, Exchange Securities
or Private Exchange Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holder reasonably requests in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities, Exchange Securities or
Private Exchange Securities covered by such Registration Statement; provided
that the Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified
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<PAGE> 9
or to take any action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject.
(i) The Company will cooperate with the Holders of Securities,
Exchange Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities, Exchange
Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders thereof may request in writing prior
to sales of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Registration Statement.
(j) If (i) any event contemplated by Section 4(b)(ii) through
(v) occurs during the period for which the Company is required to maintain an
effective Registration Statement or (ii) any Suspension Period remains in effect
more than 45 consecutive days or more than 90 days in any twelve-month period,
the Company will promptly prepare and file with the Commission a post-effective
amendment to the Registration Statement or a supplement to the related
prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Securities, Exchange Securities or Private Exchange
Securities from a Holder, the prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the
Securities, the Exchange Securities and the Private Exchange Securities, as the
case may be, and provide the applicable trustee with printed certificates for
the Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(l) The Company will comply with all applicable rules and
regulations of the Commission and will make generally available to its security
holders as soon as practicable after the effective date of the applicable
Registration Statement an earning statement satisfying the provisions of Section
11(a) of the Securities Act; provided that in no event shall such earning
statement be delivered later than 45 days after the end of a 12-month period (or
90 days, if such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
applicable Registration Statement, which statement shall cover such 12-month
period.
(m) The Company will cause the Indenture or the Exchange
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act as required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Company may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
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(o) In the case of a Shelf Registration Statement, each Holder
of Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder
will discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(j) or until advised in writing (the "Advice") by the
Company that the use of the applicable prospectus may be resumed. If the Company
shall give any notice under Section 4(b)(ii) through (v) during the period that
the Company is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Company
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities,
Exchange Securities and Private Exchange Securities being sold or the managing
underwriters (if any) shall reasonably request in order to facilitate any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement.
(q) In the case of a Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold and any underwriter participating in any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries and (ii) use its reasonable best efforts to have its officers,
directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative, Special Counsel or any such
underwriter (an "Inspector") in connection with such Shelf Registration
Statement; provided, however, that any information that is designated by the
Company as confidential shall be kept confidential by the Holders or any such
Inspector, unless such disclosure is made in connection with a court proceeding
or required by law or is disclosed upon request or demand of any regulatory
authority having jurisdiction over such Holder or Inspector, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality.
(r) In the case of a Shelf Registration Statement, the Company
shall, if requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use its reasonable best efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Securities, Exchange Securities or Private Exchange Securities, as
applicable, in customary form consistent with opinions rendered in the initial
offering of the Securities, (ii) its officers to execute and deliver all
customary documents and certificates reasonably requested by Holders of a
majority in aggregate
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<PAGE> 11
principal amount of the Securities, Exchange Securities and Private Exchange
Securities being sold, their Special Counsel or the managing underwriters (if
any) and (iii) its independent public accountants to provide a comfort letter or
letters in customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72.
5. Registration Expenses. The Company will bear all expenses incurred
in connection with the performance of its obligations under Sections 1, 2, 3 and
4 and the Company will reimburse the Initial Purchaser and the Holders for the
reasonable fees and disbursements of one firm of attorneys (in addition to any
local counsel) chosen by the Holders of a majority in aggregate principal amount
of the Securities, the Exchange Securities and the Private Exchange Securities
to be sold pursuant to each Registration Statement (the "Special Counsel")
acting for the Initial Purchaser or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by the Initial Purchaser or an Exchanging Dealer, as
applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, the Initial Purchaser or any such Exchanging
Dealer), its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of Securities, Exchange
Securities or Private Exchange Securities), to which that Holder may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and shall
reimburse each Holder promptly upon demand for any reasonable legal or other
expenses reasonably incurred by that Holder in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Holders' Information; and provided,
further, that with respect to any such untrue statement in or omission from any
related preliminary prospectus, the indemnity agreement contained in this
Section 6(a) shall not inure to the benefit of any Holder from whom the person
asserting any such loss, claim, damage, liability or action received Securities,
Exchange Securities or Private Exchange Securities to the extent that such loss,
claim, damage, liability or action of or with respect to such Holder results
from the fact that both (A) a copy of the final prospectus was not sent or given
to such person at or prior to the written confirmation of the sale of such
Securities, Exchange Securities or Private Exchange Securities to such person
and (B) the untrue statement in or omission from the related preliminary
prospectus giving rise to such loss, claim, damage, liability or action was
corrected in the final prospectus unless, in either case,
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<PAGE> 12
such failure to deliver the final prospectus was a result of non-compliance by
the Company with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each
Holder shall indemnify and hold harmless the Company, its affiliates, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section
6(b) and Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Company by such Holder, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Securities, Exchange
Securities or Private Exchange Securities pursuant to such Shelf Registration
Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the
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<PAGE> 13
indemnified party has reasonably concluded (based upon advice of counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
7. Contribution. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company from the offering and sale of the Securities,
on the one hand, and a Holder with respect to the sale by such Holder of
Securities, Exchange Securities or Private Exchange Securities, on the other, or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and such Holder on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by or on behalf of the
Company, on the one hand, bear to the total proceeds received by such Holder
with respect to its sale of Securities, Exchange Securities or Private Exchange
Securities, on the other. The relative fault 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 the Company or information supplied by the Company on the one hand or
to any Holders' Information supplied by such Holder on the other, the
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<PAGE> 14
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 7 were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7 shall be deemed to include, for
purposes of this Section 7, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 7, an indemnifying party that is a Holder of Securities, Exchange
Securities or Private Exchange Securities shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Securities, Exchange Securities or Private Exchange Securities sold by such
indemnifying party to any purchaser exceeds the amount of any damages which such
indemnifying party has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
8. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder
of Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A. The Company covenants that it will take such further action as any
Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
any Holder of Transfer Restricted Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
9. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
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 such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
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<PAGE> 15
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities, Exchange
Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
10(b), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture,
with a copy in like manner to NationsBanc Montgomery Securities LLC;
(2) if to the Initial Purchaser, initially at its address set
forth in the Purchase Agreement; and
(3) if to the Company, initially at the address of the Company
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding
upon the Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number
of counterparts (which may be delivered in original form or by telecopier) 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.
(e) Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
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<PAGE> 16
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(h) Remedies. In the event of a breach by the Company or by
any Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages (other than the recovery of
damages for a breach by the Company of its obligations under Sections 1 or 2
hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. The Company represents,
warrants and agrees that (i) it has not entered into, shall not, on or after the
date of this Agreement, enter into any agreement that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any agreement which
remains in effect granting any registration rights with respect to any of its
debt securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities, it
shall not grant to any person the right to request the Company to register any
debt securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) shall have the right to include any securities of
the Company in any Shelf Registration or Registered Exchange Offer other than
Transfer Restricted Securities.
(k) Severability. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
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<PAGE> 17
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchaser.
Very truly yours,
BAKER HUGHES INCORPORATED
By: /s/ LAWRENCE O'DONNELL, III
----------------------------------------
Name: Lawrence O'Donnell, III
Title: Vice President
Accepted:
NATIONSBANC MONTGOMERY
SECURITIES LLC
By /s/ PHILLIP R. BENNETT
-------------------------------
Authorized Signatory
Vice President
<PAGE> 18
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. 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 Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
A-1
<PAGE> 19
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
B-1
<PAGE> 20
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
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 Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until _______________,
199_, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered 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
Securities 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 at 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 or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date 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 to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
C-1
<PAGE> 21
ANNEX D
[ ] 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:
----------------------------------------------------
----------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
D-1
<PAGE> 1
EXHIBIT 4.7
BAKER HUGHES INCORPORATED
$100,000,000
5.80% Notes due 2003
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
February 10, 1999
J.P. MORGAN SECURITIES INC.
60 Wall Street, 13th Floor
New York, New York 10260
Ladies and Gentlemen:
Baker Hughes Incorporated, a Delaware corporation (the "Company"),
proposes to issue and sell to J.P. Morgan Securities Inc. (the "Initial
Purchaser"), upon the terms and subject to the conditions set forth in a
purchase agreement dated February 5, 1999 (the "Purchase Agreement"), $100
million aggregate principal amount of its 5.80% Notes due 2003 (the
"Securities"). Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
As an inducement to the Initial Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchaser thereunder, the Company agrees with the Initial Purchaser, for the
benefit of the holders (including the Initial Purchaser) of the Securities, the
Exchange Securities (as defined herein) and the Private Exchange Securities (as
defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall (i) prepare and, not
later than 90 days following the date of original issuance of the Securities
(the "Issue Date"), file with the Commission a registration statement (the
"Exchange Offer Registration Statement") on an appropriate form under the
Securities Act with respect to a proposed offer to the Holders of the Securities
(the "Registered Exchange Offer") to issue and deliver to such Holders, in
exchange for the Securities, a like aggregate principal amount of debt
securities of the Company (the "Exchange Securities") that are identical in all
material respects to such Securities, except for the transfer restrictions or
the payment of additional interest relating to the Securities, (ii) use its
reasonable best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act no later than 150 days after the Issue
Date and the Registered Exchange Offer to be consummated no later than 180 days
after the Issue Date and (iii) keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date on which notice of the Registered Exchange Offer is mailed to the
Holders (such period being called the "Exchange Offer Registration Period"). The
Exchange Securities will be issued
<PAGE> 2
under the Indenture, including the Supplemental Indenture, or an indenture (the
"Exchange Securities Indenture") between the Company and the Trustee or such
other bank or trust company that is reasonably satisfactory to the Initial
Purchaser, as trustee (the "Exchange Securities Trustee"), such indenture to be
identical in all material respects to the Indenture, including the Supplemental
Indenture, except for the transfer restrictions relating to the Securities (as
described above).
Upon the effectiveness of the Exchange Offer Registration Statement,
the Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not the Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business and (d) has
no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Company, the Initial Purchaser and
each Exchanging Dealer acknowledge that, pursuant to current interpretations by
the Commission's staff of Section 5 of the Securities Act, each Holder that is a
broker-dealer electing to exchange Securities, acquired for its own account as a
result of market-making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing substantially the information set forth in Annex A hereto on the
cover, in Annex B hereto in the "Exchange Offer Procedures" section and the
"Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer.
If, prior to the consummation of the Registered Exchange Offer, any
Holder holds any Securities acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Company shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Company (the "Private Exchange
Securities") that are identical in all material respects to the Exchange
Securities, except for the transfer restrictions relating to such Private
Exchange Securities. The Private Exchange Securities will be issued under the
same indenture as the Exchange Securities, and the Company shall use its
reasonable best efforts to cause the Private Exchange Securities to bear the
same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part
of the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
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<PAGE> 3
(b) keep the Registered Exchange Offer open for not less than
30 days (or longer, if required by applicable law) after the date on which
notice of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The City of New
York;
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York City time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are
applicable to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange Offer
and any Private Exchange, as the case may be, the Company shall:
(a) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(b) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as
the case may be, promptly to authenticate and deliver to each Holder, Exchange
Securities or Private Exchange Securities, as the case may be, equal in
principal amount to the Securities of such Holder so accepted for exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
The Indenture or the Exchange Securities Indenture, as the case may be,
shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
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<PAGE> 4
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Securities surrendered in exchange therefor or, if no interest has been paid on
the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Exchange Offer Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) any Securities validly tendered pursuant to the Registered
Exchange Offer are not exchanged for Exchange Securities within 180 days after
the Issue Date, or (iii) the Initial Purchaser so requests with respect to
Securities or Private Exchange Securities not eligible to be exchanged for
Exchange Securities in the Registered Exchange Offer and held by it following
the consummation of the Registered Exchange Offer, or (iv) any applicable law or
interpretations do not permit any Holder (other than the Initial Purchaser) to
participate in the Registered Exchange Offer, or (v) any Holder that
participates in the Registered Exchange Offer does not receive freely
transferable Exchange Securities, other than restrictions imposed on Exchanging
Dealers, in exchange for tendered Securities, or (vi) the Company so elects,
then the following provisions shall apply:
(a) The Company shall use its reasonable best efforts to file
as promptly as practicable with the Commission, and thereafter shall use its
reasonable best efforts to cause to be declared effective, a shelf registration
statement on an appropriate form under the Securities Act relating to the offer
and sale of the Transfer Restricted Securities (as defined below) by the Holders
thereof from time to time in accordance with the methods of distribution set
forth in such registration statement (hereafter, a "Shelf Registration
Statement" and, together with any Exchange Offer Registration Statement, a
"Registration Statement"); provided that with respect to Exchange
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<PAGE> 5
Securities or Private Exchange Securities received by the Initial Purchaser in
exchange for Securities constituting any portion of an unsold allotment, the
Company may, if permitted by current interpretations by the Commission's staff,
file a post-effective amendment to the Exchange Offer Registration Statement
containing the information required by Regulation S-K Items 507 and/or 508, as
applicable, in satisfaction of its obligations under this Section 2(a) with
respect thereto, and any such Exchange Offer Registration Statement, as so
amended, shall be referred to herein as, and governed by the provisions herein
applicable to, a Shelf Registration Statement.
(b) The Company shall use its reasonable best efforts to keep
the Shelf Registration Statement continuously effective in order to permit the
prospectus forming part thereof to be used by Holders of Transfer Restricted
Securities for a period ending on the earlier of (i) two years from the Issue
Date or such shorter period that will terminate when all the Transfer Restricted
Securities covered by the Shelf Registration Statement have been sold pursuant
thereto and (ii) the date on which the Securities become eligible for resale
without volume restrictions pursuant to Rule 144 under the Securities Act (in
any such case, such period being called the "Shelf Registration Period"). The
Company will have the ability to suspend the availability of the Shelf
Registration Statement for no more than 45 consecutive days or no more than an
aggregate of 90 days during any consecutive twelve-month period if it
determines, in its reasonable judgment, upon advice of counsel, that the
continued effectiveness and use of the Shelf Registration Statement would (x)
require the disclosure of material information which the Company has a bona fide
business reason for preserving as confidential, or (y) interfere with any
financing, acquisition, corporate reorganization or other material transaction
involving the Company (the "Suspension Period"). A Suspension Period shall
commence on and include the date that the Company gives notice that the Shelf
Registration Statement is no longer effective or the prospectus included therein
is no longer usable for offers and sales of Securities, Private Exchange
Securities and Exchange Securities and shall end on the date when each Holder of
Securities, Private Exchange Securities and Exchange Securities covered by such
registration statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 4(j) hereof or is advised in writing by the
Company that use of the prospectus may be resumed.
(c) Notwithstanding any other provisions hereof, the Company
will ensure that (i) any Shelf Registration Statement and any amendment thereto
and any prospectus forming part thereof and any supplement thereto complies in
all material respects with the Securities Act and the rules and regulations of
the Commission thereunder, (ii) any Shelf Registration Statement and any
amendment thereto (in either case, other than with respect to information
included therein in reliance upon or in conformity with written information
furnished to the Company by or on behalf of any Holder specifically for use
therein (the "Holders' Information")) does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Shelf Registration Statement, and any supplement to such
prospectus (in either case, other than with respect to Holders' Information),
does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations under
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<PAGE> 6
Section 1 or Section 2, as applicable, and that it would not be feasible to
ascertain the extent of such damages. Accordingly, if (i) the applicable
Registration Statement is not filed with the Commission on or prior to 90 days
after the Issue Date, (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective
within 150 days after the Issue Date (or in the case of a Shelf Registration
Statement required to be filed in response to a change in law or the applicable
interpretations of Commission's staff, if later, within 90 days after
publication of the change in law or interpretation), (iii) the Registered
Exchange Offer is not consummated on or prior to 180 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
180 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of Commission's staff, if later, within 90 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof and without regard to any Suspension Period) without being
succeeded within 60 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the interest rate borne by the Securities shall be
increased by one-fourth of one percent (0.25%) per annum as liquidated damages,
during the period of one or more such Registration Defaults, which rate will
increase by an additional one-fourth of one percent (0.25%) per annum if such
Registration Default has not been cured within 90 days of the occurrence thereof
and continuing until all Registration Defaults have been cured; provided that
the aggregate amount of any such increase in the interest rate on the Securities
shall in no event exceed one-half of one percent (0.50%) per annum. As used
herein, the term "Transfer Restricted Securities" means (i) each Security until
the date on which such Security has been exchanged for a freely transferable
Exchange Security in the Registered Exchange Offer, (ii) each Security or
Private Exchange Security until the date on which it has been effectively
registered under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) each Security or Private Exchange Security until
the date on which it is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.
Notwithstanding anything to the contrary in this Section 3(a), the Company shall
not be required to pay liquidated damages to a Holder of Transfer Restricted
Securities if such Holder failed to comply with its obligations to make the
representations set forth in the second to last paragraph of Section 1 or failed
to provide the information required to be provided by it, if any, pursuant to
Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent
under the Indenture immediately upon the happening of each and every
Registration Default. The Company shall pay the liquidated damages due on the
Transfer Restricted Securities by depositing with the Paying Agent (which may
not be the Company for these purposes), in trust, for the benefit of the Holders
thereof, prior to 10:00 a.m., New York City time, on the next interest payment
date specified by the Indenture and the Securities, sums sufficient to pay the
liquidated damages then due. The liquidated damages due shall be payable on each
interest payment date specified by the Indenture and the Securities to the
record holder entitled to receive the interest payment to be made on such date.
Each obligation to pay liquidated damages shall be deemed to accrue from and
including the date of the applicable Registration Default.
(c) The parties hereto agree that the liquidated damages
provided for in this Section 3 constitute a reasonable estimate of and are
intended to constitute the sole damages that will
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<PAGE> 7
be suffered by Holders of Transfer Restricted Securities by reason of the
failure of (i) the Shelf Registration Statement or the Exchange Offer
Registration Statement to be filed, (ii) the Shelf Registration Statement to
remain effective or (iii) the Exchange Offer Registration Statement to be
declared effective and the Registered Exchange Offer to be consummated, in each
case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Initial Purchaser,
prior to the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its reasonable best efforts to reflect
in each such document, when so filed with the Commission, such comments as the
Initial Purchaser may reasonably propose; (ii) include the information to the
effect set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section and in Annex C hereto in the "Plan of Distribution" section of the
prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; and (iii) if requested by
the Initial Purchaser, include the information required by Items 507 or 508 of
Regulation S-K, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement.
(b) The Company shall advise the Initial Purchaser, each
Exchanging Dealer and the Holders (if applicable) and, if requested by any such
person, confirm such advice in writing (which advice pursuant to clauses
(ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto
has been filed with the Commission and when such Registration Statement
or any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities, the
Exchange Securities or the Private Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the making of
any changes in any Registration Statement or the prospectus included
therein in order that the statements therein
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<PAGE> 8
are not misleading and do not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(c) The Company will use its reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(d) The Company will furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The Company will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included in
such Shelf Registration Statement and any amendment or supplement thereto as
such Holder may reasonably request; and the Company consents to the use of such
prospectus or any amendment or supplement thereto by each of the selling Holders
of Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.
(f) The Company will furnish to the Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if the Initial Purchaser or any Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).
(g) The Company will, during the Exchange Offer Registration
Period or the Shelf Registration Period, as applicable, promptly deliver to the
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the Exchange
Offer Registration Statement or the Shelf Registration Statement and any
amendment or supplement thereto as the Initial Purchaser or such Exchanging
Dealer or other persons may reasonably request; and the Company consents to the
use of such prospectus or any amendment or supplement thereto by the Initial
Purchaser or such Exchanging Dealer or other persons, as applicable, as
aforesaid.
(h) Prior to the effective date of any Registration Statement,
the Company will use its reasonable best efforts to register or qualify, or
cooperate with the Holders of Securities, Exchange Securities or Private
Exchange Securities included therein and their respective counsel in connection
with the registration or qualification of, such Securities, Exchange Securities
or Private Exchange Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any such Holder reasonably requests in writing
and do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Securities, Exchange Securities or
Private Exchange Securities covered by such Registration Statement; provided
that the Company will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified
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<PAGE> 9
or to take any action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so subject.
(i) The Company will cooperate with the Holders of Securities,
Exchange Securities or Private Exchange Securities to facilitate the timely
preparation and delivery of certificates representing Securities, Exchange
Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders thereof may request in writing prior
to sales of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Registration Statement.
(j) If (i) any event contemplated by Section 4(b)(ii) through
(v) occurs during the period for which the Company is required to maintain an
effective Registration Statement or (ii) any Suspension Period remains in effect
more than 45 consecutive days or more than 90 days in any twelve-month period,
the Company will promptly prepare and file with the Commission a post-effective
amendment to the Registration Statement or a supplement to the related
prospectus or file any other required document so that, as thereafter delivered
to purchasers of the Securities, Exchange Securities or Private Exchange
Securities from a Holder, the prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(k) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the
Securities, the Exchange Securities and the Private Exchange Securities, as the
case may be, and provide the applicable trustee with printed certificates for
the Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(l) The Company will comply with all applicable rules and
regulations of the Commission and will make generally available to its security
holders as soon as practicable after the effective date of the applicable
Registration Statement an earning statement satisfying the provisions of Section
11(a) of the Securities Act; provided that in no event shall such earning
statement be delivered later than 45 days after the end of a 12-month period (or
90 days, if such period is a fiscal year) beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
applicable Registration Statement, which statement shall cover such 12-month
period.
(m) The Company will cause the Indenture or the Exchange
Securities Indenture, as the case may be, to be qualified under the Trust
Indenture Act as required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Company may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
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<PAGE> 10
(o) In the case of a Shelf Registration Statement, each Holder
of Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder
will discontinue disposition of such Transfer Restricted Securities until such
Holder's receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(j) or until advised in writing (the "Advice") by the
Company that the use of the applicable prospectus may be resumed. If the Company
shall give any notice under Section 4(b)(ii) through (v) during the period that
the Company is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by the
number of days during such period from and including the date of the giving of
such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Company
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities,
Exchange Securities and Private Exchange Securities being sold or the managing
underwriters (if any) shall reasonably request in order to facilitate any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement.
(q) In the case of a Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold and any underwriter participating in any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement, all relevant financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries and (ii) use its reasonable best efforts to have its officers,
directors, employees, accountants and counsel supply all relevant information
reasonably requested by such representative, Special Counsel or any such
underwriter (an "Inspector") in connection with such Shelf Registration
Statement; provided, however, that any information that is designated by the
Company as confidential shall be kept confidential by the Holders or any such
Inspector, unless such disclosure is made in connection with a court proceeding
or required by law or is disclosed upon request or demand of any regulatory
authority having jurisdiction over such Holder or Inspector, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality.
(r) In the case of a Shelf Registration Statement, the Company
shall, if requested by Holders of a majority in aggregate principal amount of
the Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use its reasonable best efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Securities, Exchange Securities or Private Exchange Securities, as
applicable, in customary form consistent with opinions rendered in the initial
offering of the Securities, (ii) its officers to execute and deliver all
customary documents and certificates reasonably requested by Holders of a
majority in aggregate
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<PAGE> 11
principal amount of the Securities, Exchange Securities and Private Exchange
Securities being sold, their Special Counsel or the managing underwriters (if
any) and (iii) its independent public accountants to provide a comfort letter or
letters in customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72.
5. Registration Expenses. The Company will bear all expenses incurred
in connection with the performance of its obligations under Sections 1, 2, 3 and
4 and the Company will reimburse the Initial Purchaser and the Holders for the
reasonable fees and disbursements of one firm of attorneys (in addition to any
local counsel) chosen by the Holders of a majority in aggregate principal amount
of the Securities, the Exchange Securities and the Private Exchange Securities
to be sold pursuant to each Registration Statement (the "Special Counsel")
acting for the Initial Purchaser or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by the Initial Purchaser or an Exchanging Dealer, as
applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, the Initial Purchaser or any such Exchanging
Dealer), its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of Securities, Exchange
Securities or Private Exchange Securities), to which that Holder may become
subject, whether commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any such Registration Statement or any prospectus
forming part thereof or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and shall
reimburse each Holder promptly upon demand for any reasonable legal or other
expenses reasonably incurred by that Holder in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with any Holders' Information; and provided,
further, that with respect to any such untrue statement in or omission from any
related preliminary prospectus, the indemnity agreement contained in this
Section 6(a) shall not inure to the benefit of any Holder from whom the person
asserting any such loss, claim, damage, liability or action received Securities,
Exchange Securities or Private Exchange Securities to the extent that such loss,
claim, damage, liability or action of or with respect to such Holder results
from the fact that both (A) a copy of the final prospectus was not sent or given
to such person at or prior to the written confirmation of the sale of such
Securities, Exchange Securities or Private Exchange Securities to such person
and (B) the untrue statement in or omission from the related preliminary
prospectus giving rise to such loss, claim, damage, liability or action was
corrected in the final prospectus unless, in either case,
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<PAGE> 12
such failure to deliver the final prospectus was a result of non-compliance by
the Company with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each
Holder shall indemnify and hold harmless the Company, its affiliates, their
respective officers, directors, employees, representatives and agents, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section
6(b) and Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Company by such Holder, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that no such Holder
shall be liable for any indemnity claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Securities, Exchange
Securities or Private Exchange Securities pursuant to such Shelf Registration
Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the
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<PAGE> 13
indemnified party has reasonably concluded (based upon advice of counsel to the
indemnified party) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood that the indemnifying party or parties shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees, disbursements and other charges of more than one
separate firm of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
7. Contribution. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company from the offering and sale of the Securities,
on the one hand, and a Holder with respect to the sale by such Holder of
Securities, Exchange Securities or Private Exchange Securities, on the other, or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and such Holder on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Securities (before deducting expenses) received by or on behalf of the
Company, on the one hand, bear to the total proceeds received by such Holder
with respect to its sale of Securities, Exchange Securities or Private Exchange
Securities, on the other. The relative fault 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 the Company or information supplied by the Company on the one hand or
to any Holders' Information supplied by such Holder on the other, the
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<PAGE> 14
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 7 were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7 shall be deemed to include, for
purposes of this Section 7, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 7, an indemnifying party that is a Holder of Securities, Exchange
Securities or Private Exchange Securities shall not be required to contribute
any amount in excess of the amount by which the total price at which the
Securities, Exchange Securities or Private Exchange Securities sold by such
indemnifying party to any purchaser exceeds the amount of any damages which such
indemnifying party has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
8. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the written request of any Holder
of Transfer Restricted Securities, make publicly available other information so
long as necessary to permit sales of such Holder's securities pursuant to Rules
144 and 144A. The Company covenants that it will take such further action as any
Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including, without
limitation, the requirements of Rule 144A(d)(4)). Upon the written request of
any Holder of Transfer Restricted Securities, the Company shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
9. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
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 such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
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10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities, Exchange
Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of a majority in aggregate
principal amount of the Securities, the Exchange Securities and the Private
Exchange Securities being sold by such Holders pursuant to such Registration
Statement.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
10(b), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture,
with a copy in like manner to J.P. Morgan Securities Inc. at its
address set forth in the Purchase Agreement;
(2) if to the Initial Purchaser, initially at its address set
forth in the Purchase Agreement; and
(3) if to the Company, initially at the address of the Company
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding
upon the Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number
of counterparts (which may be delivered in original form or by telecopier) 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.
(e) Definition of Terms. For purposes of this Agreement, (a)
the term "business day" means any day on which the New York Stock Exchange, Inc.
is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule
405 under the Securities Act and (c) except where otherwise expressly provided,
the term "affiliate" has the meaning set forth in Rule 405 under the Securities
Act.
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<PAGE> 16
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(h) Remedies. In the event of a breach by the Company or by
any Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law, including recovery of damages (other than the recovery of
damages for a breach by the Company of its obligations under Sections 1 or 2
hereof for which liquidated damages have been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. The Company represents,
warrants and agrees that (i) it has not entered into, shall not, on or after the
date of this Agreement, enter into any agreement that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any agreement which
remains in effect granting any registration rights with respect to any of its
debt securities to any person and (iii) without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities, it
shall not grant to any person the right to request the Company to register any
debt securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) shall have the right to include any securities of
the Company in any Shelf Registration or Registered Exchange Offer other than
Transfer Restricted Securities.
(k) Severability. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated,
and the parties hereto shall use their reasonable best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal,
void or unenforceable.
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<PAGE> 17
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchaser.
Very truly yours,
BAKER HUGHES INCORPORATED
By: /s/ LAWRENCE O'DONNELL, III
---------------------------------------
Name: Lawrence O'Donnell, III
Title: Vice President
Accepted:
J.P. MORGAN SECURITIES INC.
By /s/ ROBERT McMINN
--------------------------------
Robert McMinn
Vice President
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<PAGE> 18
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. 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 Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."
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ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
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ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
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 Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until _______________,
199_, all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered 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
Securities 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 at 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 or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date 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 to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
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ANNEX D
[ ] 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:
----------------------------------
----------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
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EXHIBIT 4.8
BAKER HUGHES INCORPORATED
6 1/4% Notes due 2009
6 7/8% Notes due 2029
Two series of Securities are hereby established pursuant to Section
301 of the Indenture dated as of May 15, 1991 (the "Indenture") between Baker
Hughes Incorporated (the "Company") and Citibank, N.A. (the "Trustee"), as
successor trustee to Morgan Guaranty Trust Company of New York, as follows:
1. Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Indenture.
2. The title of the 6 1/4% Notes due 2009 shall be "6 1/4% Notes due
2009" (the "2009 Notes"), and the title of the 6 7/8% Notes due 2029 shall be
"6 7/8% Notes due 2029" (the "2029 Notes" and, together with the 2009 Notes,
the "Notes").
3. The limit upon the aggregate principal amount of the 2009 Notes and
the 2029 Notes that may be authenticated and delivered under the Indenture
(except for Notes of such series authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes of such series
pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture and except for
any Notes of such series that, pursuant to Section 303 of the Indenture, are
deemed never to have been authenticated and delivered thereunder) is
$325,000,000 and $400,000,000, respectively.
4. The Notes shall be issued as Registered Securities only.
5. The date on which the principal of the 2009 Notes and the 2029
Notes is payable shall be January 15, 2009 and January 15, 2029, respectively.
6. The rate at which the 2009 Notes shall bear interest shall be 6 1/4%
per annum, and the rate at which the 2029 Notes shall bear interest shall be
6 7/8% per annum. The date from which interest shall accrue for the Notes of
each series shall be January 14, 1999. The Interest Payment Dates on which
such interest shall be payable shall be January 15 and July 15 of each year,
commencing July 15, 1999. The Regular Record Date for interest payable on the
Notes on any Interest Payment Date shall be the January 1 or July 1, as the case
may be, next preceding such Interest Payment Date. No additional amounts with
respect to the Notes shall be payable.
7. The place or places where the principal of, premium (if any) on and
interest on the Notes shall be payable shall be the office or agency of the
Company maintained for that purpose, initially the Corporate Trust Office of
the Trustee, in New York City, and any other office or agency maintained by the
Company for such purpose. Payments in respect of Notes in the form of
Book-Entry Securities (including principal, premium, if any, and interest)
shall be made by wire
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transfer of immediately available funds to the accounts specified by the Holder
of such Notes. In all other cases, at the option of the Company, payment of
interest on any Notes may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register for such
Notes.
8. The Notes are subject to redemption, in whole or in part, at any
time and from time to time, at the option of the Company, upon not less than 30
nor more than 60 days' prior notice as provided in the Indenture, on any
Redemption Date at a Redemption Price equal to the greater of (i) 100% of the
principal amount of the Notes to be redeemed and (ii) the sum of the present
values of the Remaining Scheduled Payments thereon, discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 20 basis points for the 2009
Notes and 30 basis points for the 2029 Notes, in each case plus accrued
interest thereon to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate
per annum equal to the semi-annual equivalent yield to maturity (computed as of
the second Business Day immediately preceding such Redemption Date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the applicable series of Notes.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) as of
the third Business Day preceding such Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such Business Day, (a) the
average of the Reference Treasury Dealer Quotations for such Redemption Date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (b) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of Chase Securities Inc. (and
its successors), Salomon Smith Barney Inc. (and its successors) and two other
nationally recognized investment banking firms that are Primary Treasury
Dealers specified from time to time by the Company; provided, however, that if
any of the foregoing shall cease to be a primary U.S. Government
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<PAGE> 3
securities dealer (a "Primary Treasury Dealer"), the Company shall substitute
therefor another nationally recognized investment banking firm that is a
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer as of 3:30 p.m., New
York time, on the third Business Day preceding such Redemption Date.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
Interest Payment Date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such Redemption Date.
9. The Company shall have no obligation to redeem, purchase or repay
Notes pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof.
10. The Notes of each series shall be issued upon original issuance in
whole in the form of one or more Book-Entry Securities (the "Book-Entry
Notes"). Each Book-Entry Note shall represent such of the Outstanding Notes as
shall be specified therein and 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 Book-Entry Note to reflect the amount, or any
increase or decrease in the amount, of Outstanding Notes represented thereby
shall be made by the Trustee in accordance with written instructions or such
other written form of instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any Person having a beneficial interest
in the Book-Entry Note.
Any Book-Entry Note shall be exchangeable pursuant to Sections 305,
906 and 1107 of the Indenture for Notes registered in the name of, and a
transfer of a Book-Entry Note of any series may be registered to, any Person
other than the Depository for such Note or its nominee only if (i) the Company,
after notification thereof by such Depositary, notifies the Trustee in writing
that such Depository is unwilling or unable to continue as Depository for such
Book-Entry Note or such Depository ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor
Depositary is not appointed by the Company within 90 days of such notice or
cessation, (ii) the Company executes and delivers to the Trustee a Company
Order that such Book-Entry Note shall be so exchangeable and the transfer
thereof so registrable or (iii) there shall have occurred and be continuing an
Event of Default, or an event which after notice of lapse of time would be an
Event of Default, with respect to the Notes of such series, and the Security
Registrar has received a request from the Depositary to issue Notes of such
series in lieu of all or a portion of
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<PAGE> 4
that Book-Entry Note (in which case the Company shall deliver Notes of such
series within 30 days of such request).
The Depository Trust Company is hereby designated as the Depositary
with respect to the Book-Entry Notes of each series under the Indenture.
11. The provisions of Sections 1302 and 1303 of the Indenture shall be
applicable to the Notes.
12. The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Annex A hereto (the "Form of Note").
13. Legends.
(i) Except as permitted by the following paragraphs (ii) and (iii),
each certificate evidencing the Notes shall bear a legend (the "Private
Placement Legend") substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION AND THE REGISTRATION REQUIREMENTS OF ANY APPLICABLE
STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE ("THE RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH BAKER HUGHES
INCORPORATED (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THE SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING
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<PAGE> 5
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT ("INSTITUTIONAL ACCREDITED INVESTOR")
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each certificate evidencing Book-Entry Notes shall bear the legend set forth on
the face of the Form of Note.
(ii) Upon any sale or transfer of a Transfer Restricted Security (as
defined in the Exchange and Registration Rights Agreement dated as of January
14, 1999 (the "Registration Rights Agreement") among the Company and the
Initial Purchasers named therein), including any Transfer Restricted Security
in the form of a Book Entry Note, pursuant to Rule 144 under the Securities Act
of 1933, as amended (the "Securities Act"), or an effective registration
statement under the Securities Act, which shall be certified to the Trustee and
Security Registrar upon which each may conclusively rely:
(a) in the case of any Transfer Restricted Security in definitive
form, the Security Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Note in definitive form that does
not bear the Private Placement Legend and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(b) in the case of any Transfer Restricted Security in the form of a
Book-Entry Note, such Transfer Restricted Security shall not be required
to bear the Private Placement Legend if all other interests in such
Book-Entry Security have been or are concurrently being sold or
transferred pursuant to Rule 144 under the Securities Act or pursuant to
an effective registration statement under the Securities Act, but such
Transfer Restricted Security shall continue to be subject to the
provisions of Sections 204 and 305 of the Indenture and this paragraph 13.
(iii) Notwithstanding the foregoing, upon consummation of the
Registered Exchange Offer (as defined in the Registration Rights Agreement),
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 303 of the Indenture, the Trustee
A-5
<PAGE> 6
shall authenticate Notes ("Exchange Notes") in exchange for Notes accepted for
exchange in the Registered Exchange Offer, which Exchange Notes shall not bear
the Private Placement Legend, and the Security Registrar shall rescind any
restriction on the transfer of such Exchange Notes, in each case unless the
Holder of Notes accepted for exchange in the Registered Exchange Offer is
either (A) a broker-dealer tendering Notes acquired directly from the Company,
(B) a Person participating in the Registered Exchange Offer for purposes of
distributing the Exchange Notes or (C) a Person who is an "affiliate" (as
defined in Rule 144 under the Securities Act) of the Company. The Company shall
identify to the Trustee such Holders of the Notes in a written certification
signed by an Officer of the Company and, absent certification from the Company
to such effect, the Trustee shall assume that there are no such Holders.
14. Transfer and Exchange.
(i) Transfer and Exchange of Notes in Definitive Form. In addition to
the requirements set forth in Section 305 of the Indenture, Notes in definitive
form that are Transfer Restricted Securities presented or surrendered for
registration of transfer or exchange pursuant to Section 305 of the Indenture
shall be accompanied by the following additional information and documents, as
applicable, upon which the Security Registrar may conclusively rely:
(a) if such Transfer Restricted Securities are being delivered to the
Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that effect
(in substantially the form of Annex B hereto); or
(b) if such Transfer Restricted Securities are being transferred (1)
to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act or
(2) pursuant to an exemption from registration in accordance with Rule 144
under the Securities Act (and based upon an opinion of counsel if the
Company or the Trustee so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a certification to that
effect from such Holder (in substantially the form of Annex B hereto); or
(c) if such Transfer Restricted Securities are being transferred to
an institutional "accredited investor," within the meaning of Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
pursuant to a private placement exemption from the registration
requirements of the Securities Act, a certification to that effect from
such Holder (in substantially the form of Annex B hereto) and a
certification from the applicable transferee (in substantially the form of
Annex C hereto) and an opinion of counsel to that effect if the Company or
the Trustee so requests; or
(d) if such Transfer Restricted Securities are being transferred
pursuant to an exemption from registration in accordance with Rule 904 of
Regulation S under the Securities Act, certifications to that effect from
such Holder (in substantially the form of
A-6
<PAGE> 7
Annexes B and D hereto) and an opinion of counsel to that effect if the
Company or the Trustee so requests; or
(e) if such Transfer Restricted Securities are being transferred in
reliance on and in compliance with another exemption from the registration
requirements of the Securities Act, a certification to that effect from
such Holder (in substantially the form of Annex B hereto) and an opinion
of counsel to that effect if the Company or the Trustee so requests.
(ii) Transfer and Exchange of Book-Entry Securities. The transfer and
exchange of Book-Entry Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with Section 305 of the Indenture and
paragraphs 10, 13 and 14 hereof (including the restrictions on transfer set
forth therein and herein) and the rules and procedures of the Depositary
therefor, which shall include restrictions on transfer comparable to those set
forth therein and herein to the extent required by the Securities Act.
A-7
<PAGE> 8
ANNEX A
[FACE OF SECURITY]
[Rule 144A Book-Entry Security]
[Regulation S Book-Entry Security]
[Accredited Investor Book-Entry Security]
[THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN OR PURSUANT TO THE INDENTURE,
AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES. THE DEPOSITORY TRUST COMPANY
("DTC") SHALL ACT AS THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE
COMPANY AND THE SECURITY REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER 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.]*
Number $
------------------ ------------
BAKER HUGHES INCORPORATED
[6 1/4% NOTE DUE 2009] [6 7/8% NOTE DUE 2029]
CUSIP
------------
BAKER HUGHES INCORPORATED, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company," which includes
any successor Person under the Indenture hereinafter referred to), FOR VALUE
RECEIVED, hereby PROMISES TO PAY TO _________________________________, or
registered assigns, the principal sum of ______________________ Dollars[, or
such greater or lesser amount as is indicated on the Schedule of Exchanges of
Securities hereto,]* on January 15, [2009] [2029], and to pay interest thereon
from January 14, 1999 or from the most recent Interest Payment Date to which
interest has been paid or _____________________
* To be included in a Book-Entry Security.
AA-1
<PAGE> 9
duly provided for, semi-annually on January 15 and July 15 in each year,
commencing July 15, 1999, at the rate of [6 1/4%] [6 7/8%] per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest payment, which shall be the January
1 or July 1 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of and premium, if any, and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in New York City, 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. Payments in respect of this Security, if in the form of a
Book-Entry Security, shall be made by wire transfer of immediately available
funds to the accounts specified by the Holder of this Security. In all other
cases, at the option of the Company, payment of interest on this Security may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND THE REGISTRATION
REQUIREMENTS OF ANY APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE ("THE RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER
AA-2
<PAGE> 10
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH BAKER
HUGHES INCORPORATED (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THE SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
("INSTITUTIONAL ACCREDITED INVESTOR") ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
AA-3
<PAGE> 11
Dated:
BAKER HUGHES INCORPORATED
[SEAL] By:
--------------------------------
Name:
Title:
Attest:
- -------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
CITIBANK, N.A.,
as Trustee
By
-------------------------
Authorized Officer
AA-4
<PAGE> 12
[REVERSE OF SECURITY]
BAKER HUGHES INCORPORATED
[6 1/4% NOTE DUE 2009] [6 7/8% NOTE DUE 2029]
This Security is one of a duly authorized issue of securities (herein
called the "Securities"), issued and to be issued in one or more series under
an Indenture, dated as of May 15, 1991 (herein called the "Indenture"), between
the Company and Citibank, N.A. (herein called the "Trustee," which term
includes any successor trustee under the Indenture), as successor trustee to
Morgan Guaranty Trust Company of New York, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate principal amount to [$325,000,000] [$400,000,000].
The Securities of this series shall be subject to redemption at the option
of the Company prior to maturity as set forth pursuant to the Indenture. The
Securities of this series shall not be subject to a sinking fund requirement.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the principal of all the Securities of this series may
be declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in aggregate principal amount of all
Securities at the time Outstanding to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of this series at the time Outstanding, on
behalf of the Holders of all Securities of this series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not
less than 25%
AA-5
<PAGE> 13
in principal amount of the Outstanding Securities of this series shall have
made written requests, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding
Securities of this series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days; provided, however,
that such limitations do not apply to a suit instituted by the Holder hereof
for the enforcement of payment of the principal of or interest on this Security
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in New York City, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security is overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
By its acceptance of any Security bearing a legend restricting transfer,
each Holder of such a Security acknowledges the restrictions on transfer of
such Security set forth in the officers' certificate executed pursuant to
Section 301 of the Indenture in respect of the Securities and such legend and
agrees that it will transfer such Security only as provided in such officers'
certificate and the Indenture. In addition to the rights provided to Holders of
Securities under the Indenture, Holders shall have all the rights set forth in
the Exchange and Registration Rights Agreement, dated as of January 14, 1999,
among the Company and the Initial Purchasers named therein.
AA-6
<PAGE> 14
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by entireties ------------------
JT TEN - as joint tenants with right of (Cust)
survivorship and not as tenants
in common Custodian for
-------------------------
(Minor)
under Uniform Gifts to
Minors Act of
-------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------
- -------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
- -------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- -------------------------------------------------------------------------------
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated Registered Holder
--------------------------- -------------------------
AA-7
<PAGE> 15
SCHEDULE OF EXCHANGES OF SECURITIES*
The following exchanges of a part of this Book-Entry Security for other
Securities have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of of this Book-Entry Signature of
Decrease in Principal Increase in Principal Security following authorized officer
Amount of this Amount of this such decrease of Trustee or
Date of Exchange Book-Entry Security Book-Entry Security (or increase) Security Custodian
---------------- ------------------- ------------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------
* To be included in a Book-Entry Security.
AA-8
<PAGE> 16
ANNEX B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: [6 1/4% Notes due 2009] [6 7/8% Notes due 2029] of Baker Hughes Incorporated
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 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 the Transferor is familiar with the
Indenture relating to the above-captioned Notes and that 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.
[ ] Such Note is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in accordance with Rule 144A under the Securities Act
or (ii) pursuant to an exemption from registration in accordance with Rule 904
of Regulation S under the Securities Act (and in the case of clause (ii), based
upon an opinion of counsel if the Company or the Trustee so requests, together
with a certification in substantially the form of Exhibit D to the Indenture).
[ ] Such Note is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests) or (ii)
pursuant to an effective registration statement under the Securities Act.
[ ] Such Note is being transferred to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests), together with a
certification in substantially the form of Exhibit C to the Indenture, and, to
the knowledge of the Transferor, such institutional accredited investor to whom
such Note is to be transferred is not an "affiliate" (as defined in Rule 144
under the Securities Act) of the Company.
[ ] Such Note is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company or the Trustee so
requests).
- --------
** Fill in blank or check appropriate box, as applicable.
AB-1
<PAGE> 17
---------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------------------------
Name:
Title:
Address:
Date:
----------------------
AB-2
<PAGE> 18
ANNEX C
FORM OF TRANSFEREE LETTER OF REPRESENTATION
TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Houston, Texas 77027-5177
Attention: General Counsel
Ladies and Gentlemen:
In connection with our proposed purchase of $ _________ aggregate
principal amount of [6 1/4% Notes due 2009] [6 7/8% Notes due 2029] (the
"Notes") of Baker Hughes Incorporated, a Delaware corporation (the "Company"):
1. We understand that the Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under any other
applicable securities laws, and may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Notes to offer, sell or otherwise
transfer such Notes prior to (x) the date which is two years after the later of
the date of original issue and the last date that the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) or (y)
such later date, if any, as may be required by applicable law (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement that has been declared effective by the Securities and
Exchange Commission (the "SEC") under the Securities Act, (c) for so long as
the Notes are eligible for resale pursuant to Rule 144A under the Securities
Act, to a person we reasonably believe is a qualified institutional buyer under
Rule 144A (a "QIB") that purchases for its own account or for the account of a
QIB to whom notice is given that the transfer is being made in reliance on Rule
144A, (d) pursuant to offers and sales to non-U.S. persons that occur outside
the United States within the meaning of Regulation S under the Securities Act,
(e) to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an
"Institutional Accredited Investor") purchasing the Notes for its own account
or for the account of another Institutional Accredited Investor, in each case
in a minimum principal amount of the Notes of $250,000, for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act or (f) pursuant to any
other available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of our property and the property of such investor account or
accounts be at all times within our or their control and to compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (e) above
prior to the Resale Restriction Termination Date, the transferor shall deliver
to the Company and the Trustee a letter from the transferee substantially in
the form of this letter, which shall provide, among other things, that the
transferee is an Institutional Accredited Investor that is acquiring such Notes
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act. We
acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer pursuant to clause (d), (e) or (f)
AC-1
<PAGE> 19
prior to the Resale Restriction Termination Date of the Notes to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
2. We are an Institutional Accredited Investor purchasing for our own
account or for the account of another Institutional Accredited Investor.
3. We are acquiring the Notes purchased by us for our own account, or
for one or more accounts as to each of which we exercise sole investment
discretion, for investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of investment in the Notes. We
invest in or purchase securities similar to the Notes in the normal course of
our business. We are aware that we, and all accounts for which we are acting,
may be required to bear the economic risk of an investment in the Notes for an
indefinite period of time, and we, and all accounts for which we are acting,
are able to bear the such risk for an indefinite period.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
Name of Transferee:
-----------------------------
By:
-------------------------------------------
Date:
-------------------------------------------
Upon transfer the Notes would be registered in the name of the new
beneficial owner as follows:
Name:
--------------------------
Address:
-----------------------
-----------------------
Taxpayer ID No:
--------------------------
AC-2
<PAGE> 20
ANNEX D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
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Citibank, N.A., as Security Registrar
111 Wall Street
New York, New York 10043
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of certain [6 1/4% Notes due
2009] [6 7/8% Notes due 2029] (the "Notes") of Baker Hughes Incorporated (the
"Company"), we represent that:
(i) the offer of the Notes was not made to a person in the United
States;
(ii) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(a) or Rule 904(a)
of Regulation S under the U.S. Securities Act of 1933, as applicable; and
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
--------------------------------------
[Name]
--------------------------------------
By:
Name:
Title:
Address:
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EXHIBIT 4.9
BAKER HUGHES INCORPORATED
6% Notes due 2009
A series of Securities is hereby established pursuant to
Section 301 of the Indenture dated as of May 15, 1991 (the "Indenture") between
Baker Hughes Incorporated (the "Company") and Citibank, N.A. (the "Trustee"), as
successor trustee to Morgan Guaranty Trust Company of New York, as follows:
1. Each capitalized term used but not defined herein shall
have the meaning assigned to such term in the Indenture.
2. The title of the 6% Notes due 2009 shall be "6% Notes due
2009" (the "Notes").
3. The limit upon the aggregate principal amount of the Notes
that may be authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107
of the Indenture and except for any Notes that, pursuant to Section 303 of the
Indenture, are deemed never to have been authenticated and delivered thereunder)
is $200,000,000.
4. The Notes shall be issued as Registered Securities only.
5. The date on which the principal of the Notes is payable
shall be February 15, 2009.
6. The rate at which the Notes shall bear interest shall be 6%
per annum. The date from which interest shall accrue for the Notes shall be
February 4, 1999. The Interest Payment Dates on which such interest shall be
payable shall be February 15 and August 15 of each year, commencing August 15,
1999. The Regular Record Date for interest payable on the Notes on any Interest
Payment Date shall be the February 1 or August 1, as the case may be, next
preceding such Interest Payment Date. No additional amounts with respect to the
Notes shall be payable.
7. The place or places where the principal of, premium (if
any) on and interest on the Notes shall be payable shall be the office or agency
of the Company maintained for that purpose, initially the Corporate Trust Office
of the Trustee, in New York City, and any other office or agency maintained by
the Company for such purpose. Payments in respect of Notes in the form of
Book-Entry Securities (including principal, premium, if any, and interest) shall
be made by wire transfer of immediately available funds to the accounts
specified by the Holder of such Notes. In all other cases, at the option of the
Company, payment of interest on any Notes may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register for such Notes.
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8. The Notes are subject to redemption, in whole or in part,
at any time and from time to time, at the option of the Company, upon not less
than 30 nor more than 60 days' prior notice as provided in the Indenture, on any
Redemption Date at a Redemption Price equal to the greater of (i) 100% of the
principal amount of the Notes to be redeemed and (ii) the sum of the present
values of the Remaining Scheduled Payments thereon, discounted to the Redemption
Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 20 basis points, plus accrued interest thereon
to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date,
the rate per annum equal to the semi-annual equivalent yield to maturity
(computed as of the second Business Day immediately preceding such Redemption
Date) of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
as of the third Business Day preceding such Redemption Date, as set forth in the
daily statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (a) the average
of the Reference Treasury Dealer Quotations for such Redemption Date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (b) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of NationsBanc
Montgomery Securities LLC (and its successors) and three other nationally
recognized investment banking firms that are Primary Treasury Dealers specified
from time to time by the Company; provided, however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
nationally recognized investment banking firm that is a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its
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principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer as of 3:30 p.m., New York time, on the third Business Day preceding such
Redemption Date.
"Remaining Scheduled Payments" means, with respect to each
Note to be redeemed, the remaining scheduled payments of the principal thereof
and interest thereon that would be due after the related Redemption Date but for
such redemption; provided, however, that, if such Redemption Date is not an
Interest Payment Date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such Redemption Date.
9. The Company shall have no obligation to redeem, purchase or
repay Notes pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof.
10. The Notes shall be issued upon original issuance in whole
in the form of one or more Book-Entry Securities (the "Book-Entry Notes"). Each
Book-Entry Note shall represent such of the Outstanding Notes as shall be
specified therein and 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 Book-Entry Note to reflect the amount, or any increase or
decrease in the amount, of Outstanding Notes represented thereby shall be made
by the Trustee in accordance with written instructions or such other written
form of instructions as is customary for the Depositary, from the Depositary or
its nominee on behalf of any Person having a beneficial interest in the
Book-Entry Note.
Any Book-Entry Note shall be exchangeable pursuant to Sections
305, 906 and 1107 of the Indenture for Notes registered in the name of, and a
transfer of a Book-Entry Note may be registered to, any Person other than the
Depository for such Note or its nominee only if (i) the Company, after
notification thereof by such Depositary, notifies the Trustee in writing that
such Depository is unwilling or unable to continue as Depository for such
Book-Entry Note or such Depository ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor
Depositary is not appointed by the Company within 90 days of such notice or
cessation, (ii) the Company executes and delivers to the Trustee a Company Order
that such Book-Entry Note shall be so exchangeable and the transfer thereof so
registrable or (iii) there shall have occurred and be continuing an Event of
Default, or an event which after notice of lapse of time would be an Event of
Default, with respect to the Notes, and the Security Registrar has received a
request from the Depositary to issue Notes in lieu of all or a portion of that
Book-Entry Note (in which case the Company shall deliver Notes within 30 days of
such request).
The Depository Trust Company is hereby designated as the
Depositary with respect to the Book-Entry Notes under the Indenture.
11. The provisions of Sections 1302 and 1303 of the Indenture
shall be applicable to the Notes.
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12. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Annex A hereto (the "Form of Note").
13. Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each certificate evidencing the Notes shall bear a legend (the "Private
Placement Legend") substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION AND THE REGISTRATION REQUIREMENTS OF ANY
APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
("THE RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
BAKER HUGHES INCORPORATED (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER
WAS THE OWNER OF THE SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL
ACCREDITED INVESTOR") ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE
IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
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REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each certificate evidencing Book-Entry Notes shall bear the legend set forth on
the face of the Form of Note.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (as defined in the Exchange and Registration Rights Agreement dated as
of February 4, 1999 (the "Registration Rights Agreement") between the Company
and the Initial Purchaser named therein), including any Transfer Restricted
Security in the form of a Book Entry Note, pursuant to Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), or an effective
registration statement under the Securities Act, which shall be certified to the
Trustee and Security Registrar upon which each may conclusively rely:
(a) in the case of any Transfer Restricted Security in
definitive form, the Security Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Note in definitive
form that does not bear the Private Placement Legend and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(b) in the case of any Transfer Restricted Security in the
form of a Book-Entry Note, such Transfer Restricted Security shall not
be required to bear the Private Placement Legend if all other interests
in such Book-Entry Security have been or are concurrently being sold or
transferred pursuant to Rule 144 under the Securities Act or pursuant
to an effective registration statement under the Securities Act, but
such Transfer Restricted Security shall continue to be subject to the
provisions of Sections 204 and 305 of the Indenture and this paragraph
13.
(iii) Notwithstanding the foregoing, upon consummation of the
Registered Exchange Offer (as defined in the Registration Rights Agreement), the
Company shall issue and, upon receipt of an authentication order in accordance
with Section 303 of the Indenture, the Trustee shall authenticate Notes
("Exchange Notes") in exchange for Notes accepted for exchange in the Registered
Exchange Offer, which Exchange Notes shall not bear the Private Placement
Legend, and the Security Registrar shall rescind any restriction on the transfer
of such Exchange Notes, in each case unless the Holder of Notes accepted for
exchange in the Registered Exchange Offer is either (A) a broker-dealer
tendering Notes acquired directly from the Company, (B) a Person participating
in the Registered Exchange Offer for purposes of distributing the Exchange Notes
or (C) a Person who is an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company. The Company shall identify to the Trustee such
Holders of the Notes in a written certification signed by
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an Officer of the Company and, absent certification from the Company to such
effect, the Trustee shall assume that there are no such Holders.
14. Transfer and Exchange.
(i) Transfer and Exchange of Notes in Definitive Form. In
addition to the requirements set forth in Section 305 of the Indenture, Notes in
definitive form that are Transfer Restricted Securities presented or surrendered
for registration of transfer or exchange pursuant to Section 305 of the
Indenture shall be accompanied by the following additional information and
documents, as applicable, upon which the Security Registrar may conclusively
rely:
(a) if such Transfer Restricted Securities are being delivered
to the Security Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such Holder to that
effect (in substantially the form of Annex B hereto); or
(b) if such Transfer Restricted Securities are being
transferred (1) to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A under
the Securities Act or (2) pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act (and based upon an
opinion of counsel if the Company or the Trustee so requests) or (3)
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Holder (in substantially
the form of Annex B hereto); or
(c) if such Transfer Restricted Securities are being
transferred to an institutional "accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of Annex B
hereto) and a certification from the applicable transferee (in
substantially the form of Annex C hereto) and an opinion of counsel to
that effect if the Company or the Trustee so requests; or
(d) if such Transfer Restricted Securities are being
transferred pursuant to an exemption from registration in accordance
with Rule 904 of Regulation S under the Securities Act, certifications
to that effect from such Holder (in substantially the form of Annexes B
and D hereto) and an opinion of counsel to that effect if the Company
or the Trustee so requests; or
(e) if such Transfer Restricted Securities are being
transferred in reliance on and in compliance with another exemption
from the registration requirements of the Securities Act, a
certification to that effect from such Holder (in substantially the
form of Annex B hereto) and an opinion of counsel to that effect if the
Company or the Trustee so requests.
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(ii) Transfer and Exchange of Book-Entry Securities. The
transfer and exchange of Book-Entry Notes or beneficial interests therein shall
be effected through the Depositary, in accordance with Section 305 of the
Indenture and paragraphs 10, 13 and 14 hereof (including the restrictions on
transfer set forth therein and herein) and the rules and procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth therein and herein to the extent required by the Securities Act.
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ANNEX A
[FACE OF SECURITY]
[Rule 144A Book-Entry Security]
[Regulation S Book-Entry Security]
[Accredited Investor Book-Entry Security]
[THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN OR PURSUANT TO THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES. THE DEPOSITORY TRUST COMPANY ("DTC") SHALL ACT AS
THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE
SECURITY REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER 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.]*
Number ___________ $___________
BAKER HUGHES INCORPORATED
6% NOTE DUE 2009
CUSIP ___________
BAKER HUGHES INCORPORATED, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which includes any successor Person under the Indenture hereinafter referred
to), FOR VALUE RECEIVED, hereby PROMISES TO PAY TO
_________________________________, or registered assigns, the principal sum of
______________________ Dollars[, or such greater or lesser amount as is
indicated on the Schedule of Exchanges of Securities hereto,]* on February 15,
2009, and to pay interest thereon from February 4, 1999 or from the most recent
Interest Payment Date to which interest has been paid or
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* To be included in a Book-Entry Security.
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duly provided for, semi-annually on February 15 and August 15 in each year,
commencing August 15, 1999, at the rate of 6% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest payment, which shall be the
February 1 or August 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
Payment of the principal of and premium, if any, and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in New York City, 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. Payments in respect of this Security, if in the form of a Book-
Entry Security, shall be made by wire transfer of immediately available funds to
the accounts specified by the Holder of this Security. In all other cases, at
the option of the Company, payment of interest on this Security may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND THE
REGISTRATION REQUIREMENTS OF ANY APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE ("THE RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
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THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH BAKER
HUGHES INCORPORATED (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THE SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL
ACCREDITED INVESTOR") ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
BAKER HUGHES INCORPORATED
[SEAL] By:
---------------------------------------
Name:
Title:
Attest:
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Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
CITIBANK, N.A.,
as Trustee
By
-------------------------
Authorized Officer
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[REVERSE OF SECURITY]
BAKER HUGHES INCORPORATED
6% NOTE DUE 2009
This Security is one of a duly authorized issue of securities
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of May 15, 1991 (herein called the "Indenture"),
between the Company and Citibank, N.A. (herein called the "Trustee," which term
includes any successor trustee under the Indenture), as successor trustee to
Morgan Guaranty Trust Company of New York, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to $200,000,000.
The Securities of this series shall be subject to redemption
at the option of the Company prior to maturity as set forth pursuant to the
Indenture. The Securities of this series shall not be subject to a sinking fund
requirement.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this
series shall occur and be continuing, the principal of all the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of all Securities at the time Outstanding to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities of this series at the time
Outstanding, on behalf of the Holders of all Securities of this series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Security of this series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series, the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series shall have made written requests, and
AA-5
<PAGE> 13
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal amount of the Outstanding Securities of this series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not apply
to a suit instituted by the Holder hereof for the enforcement of payment of the
principal of or interest on this Security on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in New York City, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
By its acceptance of any Security bearing a legend restricting
transfer, each Holder of such a Security acknowledges the restrictions on
transfer of such Security set forth in the officers' certificate executed
pursuant to Section 301 of the Indenture in respect of the Securities and such
legend and agrees that it will transfer such Security only as provided in such
officers' certificate and the Indenture. In addition to the rights provided to
Holders of Securities under the Indenture, Holders shall have all the rights set
forth in the Exchange and Registration Rights Agreement, dated as of February 4,
1999, between the Company and the Initial Purchaser named therein.
AA-6
<PAGE> 14
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by entireties ---------------
JT TEN - as joint tenants with right of (Cust)
survivorship and not as Custodian for
tenants in common ---------------------
(Minor)
under Uniform Gifts to
Minors Act of
---------------------
(State)
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------------
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated
---------------------------------- ----------------------------
Registered Holder
AA-7
<PAGE> 15
SCHEDULE OF EXCHANGES OF SECURITIES*
The following exchanges of a part of this Book-Entry Security for other
Securities have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of of this Book-Entry Signature of
Decrease in Principal Increase in Principal Security following authorized officer
Amount of this Amount of this such decrease of Trustee or
Date of Exchange Book-Entry Security Book-Entry Security (or increase) Security Custodian
---------------- ------------------- ------------------- ----------------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------
* To be included in a Book-Entry Security.
AA-8
<PAGE> 16
ANNEX B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 6% Notes due 2009 of Baker Hughes Incorporated
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
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 the Transferor is familiar with
the Indenture relating to the above-captioned Notes and that 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.
[ ] Such Note is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in accordance with Rule 144A under the Securities Act
or (ii) pursuant to an exemption from registration in accordance with Rule 904
of Regulation S under the Securities Act (and in the case of clause (ii), based
upon an opinion of counsel if the Company or the Trustee so requests, together
with a certification in substantially the form of Exhibit D to the Indenture).
[ ] Such Note is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests) or (ii)
pursuant to an effective registration statement under the Securities Act.
[ ] Such Note is being transferred to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests), together with a
certification in substantially the form of Exhibit C to the Indenture, and, to
the knowledge of the Transferor, such institutional accredited investor to whom
such Note is to be transferred is not an "affiliate" (as defined in Rule 144
under the Securities Act) of the Company.
[ ] Such Note is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company or the Trustee so
requests).
- --------
** Fill in blank or check appropriate box, as applicable.
AB-1
<PAGE> 17
---------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------
Name:
Title:
Address:
Date:
----------------------
AB-2
<PAGE> 18
ANNEX C
FORM OF TRANSFEREE LETTER OF REPRESENTATION
TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Houston, Texas 77027-5177
Attention: General Counsel
Ladies and Gentlemen:
In connection with our proposed purchase of $ _________
aggregate principal amount of 6% Notes due 2009 (the "Notes") of Baker Hughes
Incorporated, a Delaware corporation (the "Company"):
1. We understand that the Notes have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or under any
other applicable securities laws, and may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Notes to offer, sell or otherwise
transfer such Notes prior to (x) the date which is two years after the later of
the date of original issue and the last date that the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) or (y)
such later date, if any, as may be required by applicable law (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement that has been declared effective by the Securities and
Exchange Commission (the "SEC") under the Securities Act, (c) for so long as the
Notes are eligible for resale pursuant to Rule 144A under the Securities Act, to
a person we reasonably believe is a qualified institutional buyer under Rule
144A (a "QIB") that purchases for its own account or for the account of a QIB to
whom notice is given that the transfer is being made in reliance on Rule 144A,
(d) pursuant to offers and sales to non-U.S. persons that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an "Institutional
Accredited Investor") purchasing the Notes for its own account or for the
account of another Institutional Accredited Investor, in each case in a minimum
principal amount of the Notes of $250,000, for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
and the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes is
proposed to be made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver to the Company and the Trustee a
letter from the transferee substantially in the form of this letter, which shall
provide, among other things, that the transferee is an Institutional Accredited
Investor that is acquiring such Notes for investment purposes and not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We acknowledge that the Company and the Trustee reserve
the right prior to any offer, sale or other transfer pursuant to clause (d), (e)
or (f)
AC-1
<PAGE> 19
prior to the Resale Restriction Termination Date of the Notes to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
2. We are an Institutional Accredited Investor purchasing for
our own account or for the account of another Institutional Accredited Investor.
3. We are acquiring the Notes purchased by us for our own
account, or for one or more accounts as to each of which we exercise sole
investment discretion, for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of investment in the
Notes. We invest in or purchase securities similar to the Notes in the normal
course of our business. We are aware that we, and all accounts for which we are
acting, may be required to bear the economic risk of an investment in the Notes
for an indefinite period of time, and we, and all accounts for which we are
acting, are able to bear the such risk for an indefinite period.
4. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
Name of Transferee:
-----------------------------
By:
---------------------------------------------
Date:
-------------------------------------------
Upon transfer the Notes would be registered in the name of the
new beneficial owner as follows:
Name:
----------------------------
Address:
----------------------------
----------------------------
Taxpayer ID No:
-----------------------
AC-2
<PAGE> 20
ANNEX D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
-------------, ----
Citibank, N.A., as Security Registrar
111 Wall Street
New York, New York 10043
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of certain 6% Notes due
2009 (the "Notes") of Baker Hughes Incorporated (the "Company"), we represent
that:
(i) the offer of the Notes was not made to a person in the
United States;
(ii) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(a) or
Rule 904(a) of Regulation S under the U.S. Securities Act of 1933, as
applicable; and
(iv) the transaction is not part of a plan or scheme to evade
the registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and
you are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
-------------------------------
[Name]
By:
-----------------------------
Name:
Title:
Address:
AD-1
<PAGE> 1
EXHIBIT 4.10
BAKER HUGHES INCORPORATED
5.80% Notes due 2003
A series of Securities is hereby established pursuant to
Section 301 of the Indenture dated as of May 15, 1991 (the "Indenture") between
Baker Hughes Incorporated (the "Company") and Citibank, N.A. (the "Trustee"), as
successor trustee to Morgan Guaranty Trust Company of New York, as follows:
1. Each capitalized term used but not defined herein shall
have the meaning assigned to such term in the Indenture.
2. The title of the 5.80% Notes due 2003 shall be "5.80% Notes
due 2003" (the "Notes").
3. The limit upon the aggregate principal amount of the Notes
that may be authenticated and delivered under the Indenture (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107
of the Indenture and except for any Notes that, pursuant to Section 303 of the
Indenture, are deemed never to have been authenticated and delivered thereunder)
is $100,000,000.
4. The Notes shall be issued as Registered Securities only.
5. The date on which the principal of the Notes is payable
shall be February 15, 2003.
6. The rate at which the Notes shall bear interest shall be
5.80% per annum. The date from which interest shall accrue for the Notes shall
be February 10, 1999. The Interest Payment Dates on which such interest shall be
payable shall be February 15 and August 15 of each year, commencing August 15,
1999. The Regular Record Date for interest payable on the Notes on any Interest
Payment Date shall be the February 1 or August 1, as the case may be, next
preceding such Interest Payment Date. No additional amounts with respect to the
Notes shall be payable.
7. The place or places where the principal of, premium (if
any) on and interest on the Notes shall be payable shall be the office or agency
of the Company maintained for that purpose, initially the Corporate Trust Office
of the Trustee, in New York City, and any other office or agency maintained by
the Company for such purpose. Payments in respect of Notes in the form of
Book-Entry Securities (including principal, premium, if any, and interest) shall
be made by wire transfer of immediately available funds to the accounts
specified by the Holder of such Notes. In all other cases, at the option of the
Company, payment of interest on any Notes may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register for such Notes.
A-1
<PAGE> 2
8. The Company shall have no right to redeem the Notes, in
whole or in part, at its option prior to maturity.
9. The Company shall have no obligation to redeem, purchase or
repay Notes pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof.
10. The Notes shall be issued upon original issuance in whole
in the form of one or more Book-Entry Securities (the "Book-Entry Notes"). Each
Book-Entry Note shall represent such of the Outstanding Notes as shall be
specified therein and 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 Book-Entry Note to reflect the amount, or any increase or
decrease in the amount, of Outstanding Notes represented thereby shall be made
by the Trustee in accordance with written instructions or such other written
form of instructions as is customary for the Depositary, from the Depositary or
its nominee on behalf of any Person having a beneficial interest in the
Book-Entry Note.
Any Book-Entry Note shall be exchangeable pursuant to Sections
305, 906 and 1107 of the Indenture for Notes registered in the name of, and a
transfer of a Book-Entry Note may be registered to, any Person other than the
Depository for such Note or its nominee only if (i) the Company, after
notification thereof by such Depositary, notifies the Trustee in writing that
such Depository is unwilling or unable to continue as Depository for such
Book-Entry Note or such Depository ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, as amended, and a successor
Depositary is not appointed by the Company within 90 days of such notice or
cessation, (ii) the Company executes and delivers to the Trustee a Company Order
that such Book-Entry Note shall be so exchangeable and the transfer thereof so
registrable or (iii) there shall have occurred and be continuing an Event of
Default, or an event which after notice of lapse of time would be an Event of
Default, with respect to the Notes, and the Security Registrar has received a
request from the Depositary to issue Notes in lieu of all or a portion of that
Book-Entry Note (in which case the Company shall deliver Notes within 30 days of
such request).
The Depository Trust Company is hereby designated as the
Depositary with respect to the Book-Entry Notes under the Indenture.
11. The provisions of Sections 1302 and 1303 of the Indenture
shall be applicable to the Notes.
12. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Annex A hereto (the "Form of Note").
A-2
<PAGE> 3
13. Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each certificate evidencing the Notes shall bear a legend (the "Private
Placement Legend") substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, SUCH REGISTRATION AND THE REGISTRATION REQUIREMENTS OF ANY
APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
("THE RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
BAKER HUGHES INCORPORATED (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER
WAS THE OWNER OF THE SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL
ACCREDITED INVESTOR") ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE
IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
A-3
<PAGE> 4
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
Each certificate evidencing Book-Entry Notes shall bear the legend set forth on
the face of the Form of Note.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (as defined in the Exchange and Registration Rights Agreement dated as
of February 10, 1999 (the "Registration Rights Agreement") between the Company
and the Initial Purchaser named therein), including any Transfer Restricted
Security in the form of a Book Entry Note, pursuant to Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), or an effective
registration statement under the Securities Act, which shall be certified to the
Trustee and Security Registrar upon which each may conclusively rely:
(a) in the case of any Transfer Restricted Security in
definitive form, the Security Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Note in definitive
form that does not bear the Private Placement Legend and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(b) in the case of any Transfer Restricted Security in the
form of a Book-Entry Note, such Transfer Restricted Security shall not
be required to bear the Private Placement Legend if all other interests
in such Book-Entry Security have been or are concurrently being sold or
transferred pursuant to Rule 144 under the Securities Act or pursuant
to an effective registration statement under the Securities Act, but
such Transfer Restricted Security shall continue to be subject to the
provisions of Sections 204 and 305 of the Indenture and this paragraph
13.
(iii) Notwithstanding the foregoing, upon consummation of the
Registered Exchange Offer (as defined in the Registration Rights Agreement), the
Company shall issue and, upon receipt of an authentication order in accordance
with Section 303 of the Indenture, the Trustee shall authenticate Notes
("Exchange Notes") in exchange for Notes accepted for exchange in the Registered
Exchange Offer, which Exchange Notes shall not bear the Private Placement
Legend, and the Security Registrar shall rescind any restriction on the transfer
of such Exchange Notes, in each case unless the Holder of Notes accepted for
exchange in the Registered Exchange Offer is either (A) a broker-dealer
tendering Notes acquired directly from the Company, (B) a Person participating
in the Registered Exchange Offer for purposes of distributing the Exchange Notes
or (C) a Person who is an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Company. The Company shall identify to the Trustee such
Holders of the Notes in a written certification signed by an Officer of the
Company and, absent certification from the Company to such effect, the Trustee
shall assume that there are no such Holders.
A-4
<PAGE> 5
14. Transfer and Exchange.
(i) Transfer and Exchange of Notes in Definitive Form. In
addition to the requirements set forth in Section 305 of the Indenture, Notes in
definitive form that are Transfer Restricted Securities presented or surrendered
for registration of transfer or exchange pursuant to Section 305 of the
Indenture shall be accompanied by the following additional information and
documents, as applicable, upon which the Security Registrar may conclusively
rely:
(a) if such Transfer Restricted Securities are being delivered
to the Security Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such Holder to that
effect (in substantially the form of Annex B hereto); or
(b) if such Transfer Restricted Securities are being
transferred (1) to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A under
the Securities Act or (2) pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act (and based upon an
opinion of counsel if the Company or the Trustee so requests) or (3)
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Holder (in substantially
the form of Annex B hereto); or
(c) if such Transfer Restricted Securities are being
transferred to an institutional "accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of Annex B
hereto) and a certification from the applicable transferee (in
substantially the form of Annex C hereto) and an opinion of counsel to
that effect if the Company or the Trustee so requests; or
(d) if such Transfer Restricted Securities are being
transferred pursuant to an exemption from registration in accordance
with Rule 904 of Regulation S under the Securities Act, certifications
to that effect from such Holder (in substantially the form of Annexes B
and D hereto) and an opinion of counsel to that effect if the Company
or the Trustee so requests; or
(e) if such Transfer Restricted Securities are being
transferred in reliance on and in compliance with another exemption
from the registration requirements of the Securities Act, a
certification to that effect from such Holder (in substantially the
form of Annex B hereto) and an opinion of counsel to that effect if the
Company or the Trustee so requests.
(ii) Transfer and Exchange of Book-Entry Securities. The
transfer and exchange of Book-Entry Notes or beneficial interests therein shall
be effected through the Depositary, in accordance with Section 305 of the
Indenture and paragraphs 10, 13 and 14 hereof (including the restrictions on
transfer set forth therein and herein) and the rules and procedures of the
Depositary
A-5
<PAGE> 6
therefor, which shall include restrictions on transfer comparable to those set
forth therein and herein to the extent required by the Securities Act.
A-6
<PAGE> 7
ANNEX A
[FACE OF SECURITY]
[Rule 144A Book-Entry Security]
[Regulation S Book-Entry Security]
[Accredited Investor Book-Entry Security]
[THIS SECURITY IS A BOOK-ENTRY SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN OR PURSUANT TO THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT IN
SUCH LIMITED CIRCUMSTANCES. THE DEPOSITORY TRUST COMPANY ("DTC") SHALL ACT AS
THE DEPOSITARY UNTIL A SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE
SECURITY REGISTRAR. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER 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.]*
Number $
----------- -----------
BAKER HUGHES INCORPORATED
5.80% NOTE DUE 2003
CUSIP
-----------
BAKER HUGHES INCORPORATED, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company,"
which includes any successor Person under the Indenture hereinafter referred
to), FOR VALUE RECEIVED, hereby PROMISES TO PAY TO ____________________________,
or registered assigns, the principal sum of ______________________ Dollars[, or
such greater or lesser amount as is indicated on the Schedule of Exchanges of
Securities hereto,]* on February 15, 2003, and to pay interest thereon from
February 10, 1999 or from the most recent Interest Payment Date to which
interest has been paid or
- -----------------------------
* To be included in a Book-Entry Security.
AA-1
<PAGE> 8
duly provided for, semi-annually on February 15 and August 15 in each year,
commencing August 15, 1999, at the rate of 5.80% per annum, until the principal
hereof is paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest payment, which shall be the
February 1 or August 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture.
Payment of the principal of and premium, if any, and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in New York City, 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. Payments in respect of this Security, if in the form of a Book-
Entry Security, shall be made by wire transfer of immediately available funds to
the accounts specified by the Holder of this Security. In all other cases, at
the option of the Company, payment of interest on this Security may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND THE
REGISTRATION REQUIREMENTS OF ANY APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE ("THE RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
AA-2
<PAGE> 9
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH BAKER
HUGHES INCORPORATED (THE "ISSUER") OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THE SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT ("INSTITUTIONAL
ACCREDITED INVESTOR") ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF ANOTHER INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
AA-3
<PAGE> 10
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
BAKER HUGHES INCORPORATED
[SEAL] By:
--------------------------------------
Name:
Title:
Attest:
- -----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
CITIBANK, N.A.,
as Trustee
By
---------------------------------
Authorized Officer
AA-4
<PAGE> 11
[REVERSE OF SECURITY]
BAKER HUGHES INCORPORATED
5.80% NOTE DUE 2003
This Security is one of a duly authorized issue of securities
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of May 15, 1991 (herein called the "Indenture"),
between the Company and Citibank, N.A. (herein called the "Trustee," which term
includes any successor trustee under the Indenture), as successor trustee to
Morgan Guaranty Trust Company of New York, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof, limited in aggregate principal
amount to $100,000,000.
The Securities of this series shall not be subject to
redemption at the option of the Company prior to maturity. The Securities of
this series shall not be subject to a sinking fund requirement.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this
series shall occur and be continuing, the principal of all the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of all Securities at the time Outstanding to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities of this series at the time
Outstanding, on behalf of the Holders of all Securities of this series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Security of this series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to this series, the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series shall have made written requests, and
AA-5
<PAGE> 12
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal amount of the Outstanding Securities of this series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not apply
to a suit instituted by the Holder hereof for the enforcement of payment of the
principal of or interest on this Security on or after the respective due dates
expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in New York City, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
By its acceptance of any Security bearing a legend restricting
transfer, each Holder of such a Security acknowledges the restrictions on
transfer of such Security set forth in the officers' certificate executed
pursuant to Section 301 of the Indenture in respect of the Securities and such
legend and agrees that it will transfer such Security only as provided in such
officers' certificate and the Indenture. In addition to the rights provided to
Holders of Securities under the Indenture, Holders shall have all the rights set
forth in the Exchange and Registration Rights Agreement, dated as of February
10, 1999, between the Company and the Initial Purchaser named therein.
AA-6
<PAGE> 13
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by entireties ----------------------
JT TEN - as joint tenants with right of (Cust)
survivorship and not as
tenants in common Custodian for
----------------------------
(Minor)
under Uniform Gifts to
Minors Act of
----------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------------
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated
------------------------------ -----------------------------------------
Registered Holder
AA-7
<PAGE> 14
SCHEDULE OF EXCHANGES OF SECURITIES*
The following exchanges of a part of this Book-Entry Security for other
Securities have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of of this Book-Entry Signature of
Decrease in Principal Increase in Principal Security following authorized officer
Amount of this Amount of this such decrease of Trustee or
Date of Exchange Book-Entry Security Book-Entry Security (or increase) Security Custodian
---------------- ------------------- ------------------- ------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------
* To be included in a Book-Entry Security.
AA-8
<PAGE> 15
ANNEX B
FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 5.80% Notes due 2003 of Baker Hughes Incorporated
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
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 the Transferor is familiar with
the Indenture relating to the above-captioned Notes and that 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.
[ ] Such Note is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in accordance with Rule 144A under the Securities Act
or (ii) pursuant to an exemption from registration in accordance with Rule 904
of Regulation S under the Securities Act (and in the case of clause (ii), based
upon an opinion of counsel if the Company or the Trustee so requests, together
with a certification in substantially the form of Exhibit D to the Indenture).
[ ] Such Note is being transferred (i) pursuant to an exemption from
registration in accordance with Rule 144 under the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests) or (ii)
pursuant to an effective registration statement under the Securities Act.
[ ] Such Note is being transferred to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests), together with a
certification in substantially the form of Exhibit C to the Indenture, and, to
the knowledge of the Transferor, such institutional accredited investor to whom
such Note is to be transferred is not an "affiliate" (as defined in Rule 144
under the Securities Act) of the Company.
[ ] Such Note is being transferred in reliance on and in compliance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company or the Trustee so
requests).
- ----------------
** Fill in blank or check appropriate box, as applicable.
AB-1
<PAGE> 16
-----------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------------
Name:
Title:
Address:
Date:
-------------------------------
AB-2
<PAGE> 17
ANNEX C
FORM OF TRANSFEREE LETTER OF REPRESENTATION
TO BE DELIVERED BY INSTITUTIONAL ACCREDITED INVESTORS
Baker Hughes Incorporated
3900 Essex Lane, Suite 1200
Houston, Texas 77027-5177
Attention: General Counsel
Ladies and Gentlemen:
In connection with our proposed purchase of $ _________
aggregate principal amount of 5.80% Notes due 2003 (the "Notes") of Baker Hughes
Incorporated, a Delaware corporation (the "Company"):
1. We understand that the Notes have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), or under any
other applicable securities laws, and may not be sold except as permitted in the
following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Notes to offer, sell or otherwise
transfer such Notes prior to (x) the date which is two years after the later of
the date of original issue and the last date that the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) or (y)
such later date, if any, as may be required by applicable law (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement that has been declared effective by the Securities and
Exchange Commission (the "SEC") under the Securities Act, (c) for so long as the
Notes are eligible for resale pursuant to Rule 144A under the Securities Act, to
a person we reasonably believe is a qualified institutional buyer under Rule
144A (a "QIB") that purchases for its own account or for the account of a QIB to
whom notice is given that the transfer is being made in reliance on Rule 144A,
(d) pursuant to offers and sales to non-U.S. persons that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an "Institutional
Accredited Investor") purchasing the Notes for its own account or for the
account of another Institutional Accredited Investor, in each case in a minimum
principal amount of the Notes of $250,000, for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
and the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes is
proposed to be made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver to the Company and the Trustee a
letter from the transferee substantially in the form of this letter, which shall
provide, among other things, that the transferee is an Institutional Accredited
Investor that is acquiring such Notes for investment purposes and not with a
view to, or for offer or sale in connection with, any
AC-1
<PAGE> 18
distribution in violation of the Securities Act. We acknowledge that the Company
and the Trustee reserve the right prior to any offer, sale or other transfer
pursuant to clause (d), (e) or (f) prior to the Resale Restriction Termination
Date of the Notes to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and the
Trustee.
2. We are an Institutional Accredited Investor purchasing for
our own account or for the account of another Institutional Accredited Investor.
3. We are acquiring the Notes purchased by us for our own
account, or for one or more accounts as to each of which we exercise sole
investment discretion, for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of investment in the
Notes. We invest in or purchase securities similar to the Notes in the normal
course of our business. We are aware that we, and all accounts for which we are
acting, may be required to bear the economic risk of an investment in the Notes
for an indefinite period of time, and we, and all accounts for which we are
acting, are able to bear the such risk for an indefinite period.
4. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
Name of Transferee:
----------------------
By:
--------------------------------------
Date:
------------------------------------
Upon transfer the Notes would be registered in the name of the
new beneficial owner as follows:
Name:
------------------------------
Address:
---------------------------
Taxpayer ID No:
--------------------
AC-2
<PAGE> 19
ANNEX D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
-------------, ----
Citibank, N.A., as Security Registrar
111 Wall Street
New York, New York 10043
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of certain 5.80% Notes
due 2003 (the "Notes") of Baker Hughes Incorporated (the "Company"), we
represent that:
(i) the offer of the Notes was not made to a person in the
United States;
(ii) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(a) or
Rule 904(a) of Regulation S under the U.S. Securities Act of 1933, as
applicable; and
(iv) the transaction is not part of a plan or scheme to evade
the registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and
you are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S under the U.S. Securities Act of 1933.
Very truly yours,
-----------------------------------------
[Name]
By:
--------------------------------------
Name:
Title:
Address:
<PAGE> 1
[LETTERHEAD OF BAKER & BOTTS, L.L.P.]
014377.0112 April 13, 1999
Baker Hughes Incorporated
3900 Essex Lane
Houston, Texas 77027
Gentlemen:
As set forth in the Registration Statement on Form S-4 (the "Registration
Statement") to be filed by Baker Hughes Incorporated, a Delaware corporation
(the "Company"), with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), relating to the
registration under the Act of $100 million principal amount of 5.80% Notes due
2003, $200 million principal amount of 6% Notes due 2009, $325 million
principal amount of 6 1/4% Notes due 2009 and $400 million principal amount of
6 7/8% Notes due 2029 (collectively, the "New Notes") to be offered by the
Company in exchange (the "Exchange Offer") for a like principal amount of its
issued and outstanding 5.80% Notes due 2003, 6% Notes due 2009, 6 1/4% Notes due
2009 and 6 7/8% Notes due 2029 (collectively, the "Old Notes"), we are passing
upon certain legal matters in connection with the New Notes for the Company. The
New Notes are to be issued under an Indenture dated as of May 15, 1991 (the
"Indenture") between the Company and Citibank, N.A., as successor trustee to
Morgan Guaranty Trust Company of New York, pursuant to the terms of each series
of the New Notes as established pursuant to resolutions duly adopted by the
Board of Directors of the Company. At your request, this opinion is being
furnished to you for filing as Exhibit 5.1 to the Registration Statement.
In our capacity as your counsel in the connection referred to above, we
have examined the Restated Certificate of Incorporation and Bylaws of the
Company, each as amended to date, and the originals, or copies certified or
otherwise identified, of corporate records of the Company, including minute
books of the Company as furnished to us by the Company, certificates of public
officials and of representatives of the Company, statutes and other instruments
and documents as a basis for the opinions hereinafter expressed.
Based on our examination as aforesaid, we are of the opinion that, when
the New Notes have been duly executed, authenticated and delivered in
accordance with the provisions of the Indenture and issued in exchange for Old
Notes pursuant to, and in accordance with the terms of, the Exchange Offer as
contemplated in the Registration Statement, the New Notes will constitute
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that the
enforceability thereof may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other laws relating to or affecting
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
<PAGE> 2
Baker Hughes Incorporated -2- April 13, 1999
We hereby consent to the filing of this opinion of counsel as Exhibit 5.1
to the Registration Statement and to the reference to our Firm under the
heading "Legal Matters" in the prospectus forming a part of the Registration
Statement. In giving this consent, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
JDK/TRF
<PAGE> 1
EXHIBIT 12.1
BAKER HUGHES INCORPORATED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED YEAR ENDED SEPTEMBER 30,
December 31, December 31,
1998 1997 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing operations
before income taxes, extraordinary items and
accounting changes $ (281.1) $ 179.2 $ 364.3 $ 415.5 $ 308.3 $ 294.4
Plus fixed charges 212.5 38.0 142.8 126.1 126.6 144.5
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations
before income taxes, extraordinary items and
accounting changes as adjusted $ (68.6) $ 217.2 $ 507.1 $ 541.6 $ 434.9 $ 438.9
========== ========== ========== ========== ========== ==========
Fixed charges:
Interest expense $ 149.0 $ 24.5 $ 91.4 $ 87.9 $ 89.1 $ 106.4
Interest portion of rental expense 63.5 13.5 51.4 38.2 37.5 38.1
---------- ---------- ---------- ---------- ---------- ----------
Total fixed charges $ 212.5 $ 38.0 $ 142.8 $ 126.1 $ 126.6 $ 144.5
========== ========== ========== ========== ========== ==========
RATIO OF EARNINGS TO FIXED CHARGES(1) -- 5.72x 3.55x 4.30x 3.44x 3.04x
========== ========== ========== ========== ========== ==========
</TABLE>
(1) For the year ended December 31, 1998, earnings were inadequate to cover
fixed charges by $493.6 million.
Page 1
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Baker Hughes Incorporated on Form S-4 of our report dated February 17, 1999,
(which report expresses an unqualified opinion and includes an explanatory
paragraph relating to the Company's change in its method of accounting for
impairment of long-lived assets to be disposed of effective October 1, 1996 to
conform with Statement of Financial Accounting Standards No. 121) which is
incorporated by reference in the Annual Report on Form 10-K of Baker Hughes
Incorporated for the year ended December 31, 1998 and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
Houston, Texas
April 13, 1999
<PAGE> 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) ____
------------------------
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
399 Park Avenue, New York, New York 13-5266470
(Address of principal executive office) (I.R.S. employer identification no.)
10043
(Zip Code)
-----------------------
BAKER HUGHES INCORPORATED
(Exact name of obligor as specified in its charter)
Delaware 76-0207995
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
3900 Essex Lane
Houston, Texas 77027-5177
(Address of principal executive offices) (Zip Code)
-------------------------
Debt Securities
(Title of the 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.
<TABLE>
<CAPTION>
Name Address
<S> <C>
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, N.Y.
Federal Deposit Insurance Corporation Washington, D.C.
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibit 1 - Copy of Articles of Association of the Trustee, as now in
effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983).
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement No.
2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise corporate
trust powers. (Exhibit 3 to T-1 to Registration Statement No.
2-55519).
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1
to Registration Statement No. 33-34988).
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section 321(b) of
the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration
Statement No. 33-19227).
Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A.
(as of December 31, 1998 - attached).
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., 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 duly
authorized, all in The City of New York and State of New York, on the 13th day
of April, 1999.
CITIBANK, N.A.
By /s/ FLORENCE MILLS
-------------------------
Florence Mills
Senior Trust Officer
<PAGE> 4
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
Citibank, N.A.
of New York in the State of New York, at the close of business on December 31,
1998, published in response to call made by Comptroller of the Currency, under
Title 12, United States Code, Section 161. Charter Number 1461 Comptroller of
the Currency Northeastern District.
ASSETS
<TABLE>
<CAPTION>
THOUSANDS
OF DOLLARS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ..... $ 8,052,000
Interest-bearing balances .............................. 15,782,000
Held-to-maturity securities ................................ 0
Available-for-sale securities .............................. 37,330,000
Federal funds sold and securities purchased under
agreements to resell ................................... 8,039,000
Loans and lease financing receivables:
Loans and Leases, net of unearned income ............... $ 182,508,000
LESS: Allowance for loan and lease losses .............. 4,709,000
---------------
Loans and leases, net of unearned income, allowance,
and reserve ............................................ $ 177,799,000
Trading assets ............................................. 31,683,000
Premises and fixed assets (including capitalized leases) ... 4,022,000
Other real estate owned .................................... 458,000
Investments in unconsolidated
subsidiaries and associated companies .................. 1,154,000
Customers' liability to this bank
on acceptances outstanding ............................. 1,281,000
Intangible assets .......................................... 3,504,000
Other assets ............................................... 11,791,000
---------------
TOTAL ASSETS ............................................... $ 300,895,000
===============
LIABILITIES
Deposits:
In domestic offices .................................... $ 39,355,000
Noninterest-bearing .................................... $ 13,199,000
Interest-bearing ....................................... 26,156,000
---------------
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ....................... 163,573,000
Noninterest-bearing .................................... 10,803,000
Interest-bearing ....................................... 152,770,000
---------------
Federal funds purchased and
securities sold under agreements to repurchase ......... 9,752,000
Trading liabilities ........................................ 30,753,000
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less .......... 13,308,000
With a remaining maturity of more than one year
through three years .................................... 1,528,000
With a remaining maturity of more than three years ..... 2,110,000
Bank's liability on acceptances executed and outstanding ... 1,382,000
Subordinated notes and debentures .......................... 6,600,000
Other liabilities .......................................... 12,802,000
---------------
TOTAL LIABILITIES .......................................... $ 281,163,000
===============
EQUITY CAPITAL
Perpetual preferred stock and related surplus .............. 0
Common stock ............................................... $ 751,000
Surplus .................................................... 9,397,000
Undivided profits and capital reserves ..................... 10,356,000
Net unrealized holding gains (losses)
on available-for-sale securities ....................... (113,000)
Cumulative foreign currency translation adjustments......... (659,000)
---------------
TOTAL EQUITY CAPITAL ....................................... $ 19,732,000
---------------
TOTAL LIABILITIES, LIMITED LIFE PREFERRED STOCK, AND
EQUITY CAPITAL ......................................... $ 300,895,000
===============
</TABLE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare that
this Report of Condition is true and correct to the best of my knowledge and
belief.
ROGER W. TRUPIN
CONTROLLER
We, the undersigned directors, attest to the correctness of this Report of
Condition. We declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions and
is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
<PAGE> 1
EXHIBIT 99.1
BAKER HUGHES INCORPORATED
LETTER OF TRANSMITTAL
FOR
TENDER OF ALL OUTSTANDING
<TABLE>
<S> <C> <C> <C>
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 in 6 7/8% NOTES DUE 2029
IN EXCHANGE FOR IN EXCHANGE FOR EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED REGISTERED
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 6 7/8% NOTES DUE 2029
</TABLE>
- -------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________
___, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED
IN SUCH EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE FOR SUCH EXCHANGE OFFER.
- -------------------------------------------------------------------------------
DELIVER TO THE EXCHANGE AGENT:
CITIBANK, N.A.
800-422-2066
<TABLE>
<S> <C> <C>
BY COURIER: BY MAIL (REGISTERED OR CERTIFIED BY HAND:
MAIL RECOMMENDED):
c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc. 111 Wall Street
400 Sette Drive Post Office Box 7073 5th Floor Receive Window
Paramus,New Jersey 07652 Paramus, New Jersey 07653 New York, New York
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(201) 262-3240
Attention: Dayle Grayson
Confirm by Telephone:
(201) 262-6633
-------------------
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 THE LETTER OF TRANSMITTAL
IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the
prospectus dated ______ ___, 1999 of Baker Hughes Incorporated (the "Company")
and this letter of transmittal. These two documents together constitute the
Company's offer to exchange its 5.80% Notes due 2003, 6% Notes due 2009, 6 1/4%
Notes due 2009 and 6 7/8% Notes due 2029 (collectively, the "New Notes"), the
issuance of which has been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of its issued and
outstanding 5.80% Notes due 2003, 6% Notes due 2009, 6 1/4% Notes due 2009 and
6 7/8% Notes due 2029 (collectively, the "Old Notes"), respectively, which offer
consists of separate, independent offers to exchange the New Notes of each
series for Old Notes of that series (each an "Exchange Offer" and sometimes
collectively referred to herein as the "Exchange Offer").
The Company reserves the right, at any time or from time to time, to
extend the period of time during which an Exchange Offer for the Old Notes of a
series is open, at its discretion, in which event the term "Expiration Date"
with respect to such series shall mean the latest date to which such Exchange
Offer is extended. The Company reserves the right to extend such period for each
series independently. The Company shall notify Citibank, N.A. (the "Exchange
<PAGE> 2
Agent") of any extension by oral or written notice and shall make a public
announcement thereof no later than 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 of a
series (i) if certificates of Old Notes of such series are to be forwarded
herewith or (ii) if delivery of Old Notes of such series is to be made by
book-entry transfer to the account maintained by the Exchange Agent at The
Depository Trust Company (the "DTC") pursuant to the procedures set forth in the
prospectus under the caption "The Exchange Offer -- Book-Entry Transfer" and an
"agent's message" is not delivered as described in the prospectus under the
caption "The Exchange Offer -- Procedures for Tendering -- Tendering Though
DTC's Automated Tender Offer Program." Tenders by book-entry transfer may also
be made by delivering an agent's message in lieu of this letter of transmittal.
Holders of Old Notes of a series whose Old Notes are not immediately available,
or who are unable to deliver their Old Notes, this letter of transmittal and all
other documents required hereby to the Exchange Agent on or prior to the
Expiration Date for the Exchange Offer for that series, 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 2. DELIVERY OF DOCUMENTS TO THE DTC DOES NOT
CONSTITUTe DELIVERY TO THE EXCHANGE AGENT.
The term "holder" with respect to the Exchange Offer for Old Notes of a
series means any person in whose name such Old Notes are registered on the books
of the Company, any person who holds such Old Notes and has obtained a properly
completed bond power from the registered holder or any participant in the DTC
system whose name appears on a security position listing as the holder of such
Old Notes and who desires to deliver such Old Notes by book-entry transfer at
DTC. The undersigned has completed, executed and delivered this letter of
transmittal to indicate the action the undersigned desires to take with respect
to such Exchange Offer. Holders who wish to tender their Old Notes must complete
this letter of transmittal in its entirety (unless such Old Notes are to be
tendered by book-entry transfer and an agent's message is delivered in lieu
hereof).
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 of each series to which this letter of
transmittal relates. If the space below is inadequate, list the title of the
series, the registered numbers and principal amounts on a separate signed
schedule and affix the list to this letter of transmittal.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- ---------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Old Note(s) Tendered
Holder(s) Exactly as Name(s) ------------------------------------------------------------------------------------
Appear(s) on Old Notes
(Please Fill In, If Blank)
Aggregate Principal Principal
Title of Registered Amount Represented Amount
Series* Number(s)** by Note(s) Tendered***
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
Total
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Either "5.80% Notes due 2003," "6% Notes due 2009," "6 1/4% Notes due 2009"
or "6 7/8% Notes due 2029."
** 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.
2
<PAGE> 3
[ ] CHECK HERE IF TENDERED OLD NOTES ARE ENCLOSED HEREWITH.
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE
EXCHANGE AGENT WITH THE DTC (FOR USE BY ELIGIBLE INSTITUTIONS ONLY):
Name of Tendering
Institution:
------------------------------------------------------------------
DTC Account
Number(s):
------------------------------------------------------------------
Transaction Code
Number(s):
------------------------------------------------------------------
[ ] CHECK HERE AND COMPLETE THE FOLLOWING IF TENDERED OLD NOTES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY EITHER ENCLOSED
HEREWITH OR PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT (COPY ATTACHED)
(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:
-----------------------------------------------------------
DTC Account Number(s) (if delivered by
book-entry transfer):
----------------------------------------------------------
Transaction Code Number(s) (if delivered by
book-entry transfer):
----------------------------------------------------------
Name of Tendering Institution (if delivered by
book-entry transfer):
----------------------------------------------------------
[ ] CHECK HERE AND COMPLETE THE FOLLOWING 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:
-----------------------------------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New 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 acknowledges that it
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
3
<PAGE> 4
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 of any series tendered in
accordance with this letter of transmittal, the undersigned hereby exchanges,
assigns and transfers to, or upon the order of, the Company all right, title and
interest in and to such Old Notes tendered for exchange hereby. The undersigned
hereby irrevocably constitutes and appoints the Exchange Agent the true and
lawful agent and attorney-in-fact for the undersigned (with full knowledge that
said Exchange Agent also acts as the agent for 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 DTC, 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 New 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 acknowledges that the Exchange Offer is being made in
reliance upon interpretations set forth in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation (available May 13, 1988), Morgan
Stanley & Co. Incorporated (available June 5, 1991), Mary Kay Cosmetics, Inc.
(available June 5, 1991) and similar no-action letters (the "Prior No-Action
Letters"), that the New 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 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 New Notes are acquired in the ordinary course
of such holders' business and such holders are not engaging in, do not intend to
engage in and have no arrangement or understanding with any person to
participate in a distribution of such New Notes. The SEC has not, however,
considered the Exchange Offer in the context of a no-action letter, and there
can be no assurance that the staff of the SEC would make a similar determination
with respect to the Exchange Offer as in other circumstances.
The undersigned hereby further represents to the Company that (i) any
New Notes received are being acquired in the ordinary course of business of the
person receiving such New Notes, whether or not the undersigned, (ii) neither
the undersigned nor any such other person has an arrangement or understanding
with any person to participate in the distribution of the Old Notes or the New
Notes within the meaning of the Securities Act and (iii) neither the holder nor
any such other person is an "affiliate," as defined in Rule 405 under the
Securities Act, of the Company or, if it is such an affiliate, it will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable.
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New 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 acknowledges that it
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. The undersigned acknowledges that if the undersigned is
tendering Old Notes in the Exchange Offer with the intention of participating in
any manner in a distribution of the New Notes (i) the undersigned cannot rely on
the position of the staff of the SEC set forth in the Prior 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 New 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,
4
<PAGE> 5
and (ii) failure to comply with such requirements in such instance could result
in the undersigned incurring liability under the Securities Act for which the
undersigned is not indemnified by the Company.
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 DTC.
For purposes of an Exchange Offer for Old Notes of a series, the
Company shall be deemed to have accepted for exchange validly tendered Old Notes
of such series 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 such Exchange Offer for any reason will be returned, without
expense, to the undersigned as promptly as practicable after the Expiration Date
for such Exchange Offer.
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 successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives.
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.
The Exchange Offer is subject to certain conditions set forth in the
prospectus under the caption "The Exchange Offer -- Conditions to the Exchange
Offer." The undersigned recognizes that as a result of these conditions (which
may be waived, in whole or in part, by the Company), the Company may not be
required to exchange any of the Old Notes tendered hereby.
Unless otherwise indicated under "Special Issuance Instructions,"
please issue the New 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 (or, in the case of a book-entry delivery of Old Notes,
please credit the account indicated above maintained at the DTC). Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail or
deliver the New 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 New 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) (or
account(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.
5
<PAGE> 6
- -------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY (i) if Old Notes in a principal amount not tendered, or New
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 DTC other than the DTC Account Number set forth
above. Issue New Notes and/or Old Notes to:
Name:
---------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(include Zip Code)
- -------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
(Please Type or Print)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6)
To be completed ONLY if Old Notes in a principal amount not tendered, or New
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
New Notes and/or Old Notes to:
Name:
---------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(include Zip Code)
- -------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
(Please Type or Print)
- -------------------------------------------------------------------------------
o Credit unexchanged Old Notes delivered by book-entry transfer to the DTC
set forth below:
DTC Account Number:
------------------------------------------------------------
6
<PAGE> 7
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 Below)
- ->
-----------------------------------------------------------------------------
- ->
-----------------------------------------------------------------------------
(Signature(s) of Registered Holder(s) of Old Notes)
Dated_____________, 1999
(The above lines must be signed by the registered holder(s) of Old Notes as your
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:
------------------------------------------------
Taxpayer Identification or Social Security 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________________, 1999
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES OR AGENT'S
MESSAGE AND BOOK-ENTRY CONFIRMATIONS. All physically delivered Old Notes of a
series or any confirmation of a book-entry transfer to the Exchange Agent's
account at the DTC of Old Notes of a series 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 (or an agent's message in
lieu 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 for the Exchange Offer for
such series, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. 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 (a) whose Old Notes are not immediately available, (b) who cannot
deliver their Old Notes, this letter of transmittal or any other documents
required hereby to the Exchange Agent prior to the applicable Expiration Date or
(c) who are unable to comply with the applicable procedures under the DTC's
Automated Tender Offer Program 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 applicable 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) or a properly transmitted agent's message
and notice of guaranteed 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 three New York Stock Exchange trading
days after such Expiration Date, this letter of transmittal (or facsimile hereof
or an agent's message in lieu hereof) together with the Old Notes in proper form
for transfer (or a Book-Entry Confirmation) and any other documents required
hereby, will be deposited by the Eligible Institution with the Exchange Agent;
and (iii) this letter of transmittal (or facsimile hereof or an agent's message
in lieu hereof) together with the certificates for all physically tendered 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 three New York Stock Exchange trading days after such 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 applicable 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 fifth 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
8
<PAGE> 9
entire principal amount of all Old Notes is not tendered, then Old Notes for the
principal amount of Old Notes not tendered and New Notes issued in exchange for
any Old Notes accepted will be returned to the holder as promptly as practicable
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(s) must correspond exactly 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 DTC, 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(s) of Old Notes listed and tendered hereby and the New 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(s), the said holder(s)
need not and should not endorse any tendered Old Notes, nor provide a separate
bond power. In any other case, such holder(s) 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) 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.
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 DTC WHOSE NAME APPEARS ON A SECURITY
POSITION LISTING AS THE OWNER OF THE TENDERED OLD NOTES) AND THE NEW NOTES ARE
TO BE ISSUED DIRECTLY TO SUCH REGISTERED HOLDER(s) (OR, IF SIGNED BY A
PARTICIPANT IN THE DTC, DEPOSITED TO SUCH PARTICIPANT'S ACCOUNT AT THE DTC) 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 ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders should
indicate, in the applicable box or boxes, the name and address to which New
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. Holders tendering Old Notes by book-entry
transfer may request that Old Notes not exchanged be credited to such account
maintained at the DTC as such noteholder may designate hereon. If no such
instructions are given, such Old Notes not exchanged will be returned to the
name and address (or account number) of the person signing this letter of
transmittal.
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, New 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 and the Exchange Agent
will retain possession of an amount of New Notes with a face amount at least
equal to the amount of such transfer taxes due by such tendering holder pending
receipt by the Exchange Agent of the amount of such taxes.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that a
holder of any Old Notes or New Notes 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
9
<PAGE> 10
TIN, the holder may be subject to a $50 penalty imposed by the Internal Revenue
Service and backup withholding of 31% on interest payments on the New Notes.
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 New Notes will be registered in more than one name or will not be in the
name of the actual owner, consult the instructions on Internal Revenue Service
Form W-9, which may be obtained from the Exchange Agent, for information on
which TIN to report.
Certain foreign individuals and entities will not be subject to backup
withholding or information reporting if they submit a Form W-8, signed under
penalties of perjury, attesting to their foreign status. A Form W-8 can be
obtained from the Exchange Agent.
If such holder does not have a TIN, such holder should consult the
instructions on Form W-9 concerning applying for a TIN, check the box in Part 3
of the Substitute Form W-9, write "applied for" in lieu of its TIN and sign and
date the form and the Certificate of Awaiting Taxpayer Identification Number.
Checking this box, writing "applied for" on the form and signing such
certificate means that such holder has already applied for a TIN or that such
holder intends to apply for one in the near future. If such holder does not
provide its TIN to the Company within 60 days, backup withholding will begin and
continue until such holder furnishes its TIN to the Company.
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, 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 might, in the opinion of the Company's counsel, be unlawful.
The Company also reserves the absolute right to waive any conditions of the
Exchange Offer or defects or irregularities of tenders as to particular Old
Notes. The Company's interpretation of the terms and conditions of the Exchange
Offer (including 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 respect 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 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. This
letter of transmittal and related documents cannot be processed until the
procedures for replacing lost, stolen or destroyed Old Notes have been followed.
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."
10
<PAGE> 11
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF OR
AN AGENT'S MESSAGE IN LIEU 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 DATE.
11
<PAGE> 12
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT ---------------------------
FORM W-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW SOCIAL SECURITY NUMBER
OR
---------------------------
EMPLOYER IDENTIFICATION NUMBER
- ----------------------------------------- -------------------------------------------------- ----------------------------------
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 HAVE
CHECKED THE BOX IN PART 3 AND EXECUTED THE
CERTIFICATE OF AWAITING TAXPAYER
IDENTIFICATION NUMBER BELOW) AND
(2) I AM NOT SUBJECT TO BACK WITHOLDING EITHER PLEASE COMPLETE THE CERTIFICATE OF
- ----------------------------------------- BECAUSE I HAVE NOT BEEN NOTIFIED BY THE AWAITING TAXPAYER IDENTIFICATION
NAME INTERNAL REVENUE SERVICE ("IRS") THAT I AM NUMBER BELOW.
- ----------------------------------------- SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF
ADDRESS (NUMBER AND STREET) FAILURE TO REPORT ALL INTEREST OR DIVIDENDS,
- ----------------------------------------- OR BECAUSE THE IRS HAS NOTIFIED ME THAT I AM
CITY, STATE AND ZIP CODE NO LONGER SUBJECT TO BACKUP WITHHOLDING.
-------------------------------------------------- ----------------------------------
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYOR'S REQUEST FOR TAXPAYER CERTIFICATE INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2) IN PART 2 ABOVE IF YOU HAVE
IDENTIFICATION NUMBER (TIN) 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 ARE 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 ________________________, 1999
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU
WITH RESPECT TO THE NEW NOTES.
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 TO THE PAYOR WITHIN 60
DAYS, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD
UNTIL I PROVIDE A NUMBER.
, 1999
- --------------------------- ------------------
SIGNATURE DATE
- -------------------------------------------------------------------------------
12
<PAGE> 1
EXHIBIT 99.2
BAKER HUGHES INCORPORATED
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF ALL OUTSTANDING
<TABLE>
<S> <C> <C> <C>
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 in 6 7/8% NOTES DUE 2029
IN EXCHANGE FOR IN EXCHANGE FOR EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED REGISTERED
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 6 7/8% NOTES DUE 2029
</TABLE>
This form, or one substantially equivalent hereto, must be used by a
holder to accept the Exchange Offer of Baker Hughes Incorporated (the "Company")
and to tender 5.80% Notes due 2003, 6% Notes due 2009, 6 1/4% Notes due 2009 or
6 7/8% Notes due 2029 (collectively, 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 _________
___, 1999 and in Instruction 2 to the related letter of transmittal. Any holder
who wishes to tender Old Notes of a series pursuant to such guaranteed delivery
procedures must ensure that Citibank, N.A., as exchange agent (the "Exchange
Agent"), receives this notice of guaranteed delivery, properly completed and
duly executed, prior to the Expiration Date (as defined below) of the Exchange
Offer for such series. Capitalized terms used but not defined herein have the
meanings ascribed to them in the letter of transmittal.
- -------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________
___, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED
IN SUCH EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE FOR SUCH EXCHANGE OFFER.
- -------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
CITIBANK, N.A.
800-422-2066
<TABLE>
<S> <C> <C>
BY COURIER: BY MAIL (REGISTERED OR CERTIFIED BY HAND:
MAIL RECOMMENDED):
c/o Citicorp Data Distribution, Inc. c/o Citicorp Data Distribution, Inc. 111 Wall Street
400 Sette Drive Post Office Box 7073 5th Floor Receive Window
Paramus, New Jersey 07652 Paramus, New Jersey 07653 New York, New York
</TABLE>
BY FACSIMILE TRANSMISSION (ELIGIBLE INSTITUTIONS ONLY):
(201) 262-3240
Attention: Dayle Grayson
Confirm by Telephone:
(201) 262-6633
---------------------
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
NOTICE OF GUARANTEED DELIVERY SHOULD BE READ CAREFULLY BEFORE THE NOTICE OF
GUARANTEED DELIVERY IS COMPLETED.
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 in the box provided on
the letter of transmittal for guarantee of signatures.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, in accordance with the
Company's offer, 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 of the series set forth below
pursuant to the guaranteed delivery procedures set forth in the prospectus under
the caption "The Exchange Offer -- Guaranteed Delivery Procedures" and in
Instruction 2 of the letter of transmittal.
The undersigned hereby tenders the Old Notes of the series listed
below:
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
Certificate Number(s) (if
Title of known) of Old Notes Aggregate Principal Aggregate Principal
Series* or Account Number at the DT C Amount Represented Amount Tendered
- ------------------------ ------------------------------- ------------------------------ -----------------------------
- ------------------------ ------------------------------- ------------------------------ -----------------------------
PLEASE SIGN AND COMPLETE
Names of Record Holder(s): Signature(s):
--------------------------------------- ----------------------------------
- ------------------------------------------------------------------ ------------------------------------------------
Address:
----------------------------------------------------------
- ------------------------------------------------------------------
Area Code and Telephone Number(s):
Dated: , 1999
- ------------------------------------------------------------------ -----------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
* Either "5.80% Notes due 2003," "6% Notes due 2009," "6 1/4% Notes due
2009" or "6 7/8% Notes due 2029."
---------------------
THIS NOTICE OF GUARANTEED DELIVERY MUST BE SIGNED BY THE REGISTERED
HOLDER(S) OF OLD NOTES EXACTLY AS THE NAME(S) OF SUCH PERSON(S) APPEAR(S) 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:
2
<PAGE> 3
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Capacity:
- -------------------------------------------------------------------------------
Address(es):
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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.,
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 Securities Exchange Act of 1934, hereby guarantees deposit
with the Exchange Agent of the letter of transmittal (or facsimile thereof or
agent's message in lieu thereof), together with the Old Notes of the series
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 DTC
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 three New York Stock Exchange
trading days following the Expiration Date for such series.
<TABLE>
<S> <C>
Name of Firm:
--------------------------------------- -----------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
---------------------------------------------
(INCLUDE ZIP CODE) Name:
------------------------------------------------
Area Code and Tel. Number: Title:
- ------------------------------------------------------ ------------------------------------------------
(PLEASE TYPE OR PRINT)
Date: , 1999
-----------------------------------------
</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> 4
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 (or facsimile
hereof or an agent's message and notice of guaranteed delivery in lieu hereof)
and any other documents required by this notice of guaranteed delivery with
respect to the Old Notes of a series must be received by the Exchange Agent at
its address set forth herein prior to the Expiration Date of the Exchange Offer
for such series. Delivery of such notice of guaranteed delivery may be made by
facsimile transmission, mail or hand delivery. 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 (or facsimile hereof) is signed by the registered holder(s)
of the Old Notes referred to herein, the signature(s) must correspond exactly
with the name(s) as written on the face of the Old Notes without alteration,
enlargement or any change whatsoever. If this notice of guaranteed delivery (or
facsimile hereof) is signed by a participant in the DTC whose name appears on a
security position listing as the owner of the Old Notes, the signature must
correspond with the name as it appears on the security position listing as the
owner of the Old Notes.
If this notice of guaranteed delivery (or facsimile hereof) is signed
by a person other than the registered holder(s) of any Old Notes listed or a
participant of the DTC, this notice of guaranteed delivery must be accompanied
by appropriate bond powers, signed as the name(s) of the registered holder(s)
appear(s) on the Old Notes or signed as the name(s) of the participant appears
on the DTC's security position listing.
If this notice of guaranteed delivery (or facsimile hereof) 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 herewith evidence
satisfactory to the Exchange Agent 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 and this
notice of guaranteed delivery may be directed to the Exchange Agent at the
address set forth on the cover page hereof. Holders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Exchange Offer.
4
<PAGE> 1
EXHIBIT 99.3
BAKER HUGHES INCORPORATED
LETTER TO
DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING
<TABLE>
<S> <C> <C> <C>
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 in 6 7/8% NOTES DUE 2029
IN EXCHANGE FOR IN EXCHANGE FOR EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED REGISTERED
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 6 7/8% NOTES DUE 2029
</TABLE>
- -------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________
___, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED
IN SUCH EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE FOR SUCH EXCHANGE OFFER.
- -------------------------------------------------------------------------------
To Depository Trust Company Participants:
We are enclosing herewith the material listed below relating to the
offer by Baker Hughes Incorporated (the "Company") to exchange its 5.80% Notes
due 2003, 6% Notes due 2009, 6 1/4% Notes due 2009 and 6 7/8% Notes due 2029
(collectively, the "New Notes"), the issuance of which has been registered under
the Securities Act of 1933, as amended (the "Securities Act"), for a like
principal amount of its issued and outstanding 5.80% Notes due 2003, 6% Notes
due 2009, 6 1/4% Notes due 2009 and 6 7/8% Notes due 2029 (collectively, the
"Old Notes"), respectively, which offer consists of separate, independent offers
to exchange the New Notes of each series for Old Notes of that series (each an
"Exchange Offer" and sometimes collectively referred to herein as the "Exchange
Offer"), upon the terms and subject to the conditions set forth in the Company's
prospectus dated _______ ___, 1999 and the related letter of transmittal.
We are enclosing copies of the following documents:
1. Prospectus dated _______ ___, 1999
2. Letter of transmittal (together with accompanying
Substitute Form W-9 Guidelines)
3. Notice of guaranteed delivery
4. Letter that may be sent to your clients for whose account
you hold Old Notes in your name or in the name of your nominee, with
space provided for obtaining such client's instruction with regard to
the Exchange Offer.
We urge you to contact your clients promptly. Please note that each
Exchange Offer will expire at 5:00 p.m., New York City time, on _________ ___,
1999, unless extended.
No Exchange Offer for Old Notes of a series is conditioned upon any
minimum aggregate principal amount of Old Notes of such series being tendered
for exchange or upon the consummation of any other Exchange Offer.
Pursuant to the letter of transmittal, each holder of Old Notes will
represent to the Company that (i) any New Notes received are being acquired in
the ordinary course of business of the person receiving such New Notes, (ii)
such person does not have an arrangement or understanding with any person to
participate in the distribution of the Old Notes or the New Notes within the
meaning of the Securities Act and (iii) such person is not an "affiliate," as
defined in Rule 405 under the Securities Act, of the Company or, if it is such
an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. In addition, each
holder of Old Notes will represent to the Company that (i) if such person is not
a broker-dealer, it is not engaged in, and does not intend to
<PAGE> 2
engage in, a distribution of New Notes and (ii) if such person is a
broker-dealer that will receive New 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 deliver a prospectus in connection with any resale
of such New Notes; however, by so acknowledging and by delivering a prospectus,
it will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
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 person (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 us.
Very truly yours,
CITIBANK, N.A.
2
<PAGE> 1
EXHIBIT 99.4
BAKER HUGHES INCORPORATED
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING
<TABLE>
<S> <C> <C> <C>
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 in 6 7/8% NOTES DUE 2029
IN EXCHANGE FOR IN EXCHANGE FOR EXCHANGE FOR IN EXCHANGE FOR
REGISTERED REGISTERED REGISTERED REGISTERED
5.80% NOTES DUE 2003 6% NOTES DUE 2009 6 1/4% NOTES DUE 2009 6 7/8% NOTES DUE 2029
</TABLE>
- -------------------------------------------------------------------------------
EACH EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________
___, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). OUTSTANDING NOTES TENDERED
IN SUCH EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK
CITY TIME, ON THE EXPIRATION DATE FOR SUCH EXCHANGE OFFER.
- -------------------------------------------------------------------------------
To Our Clients:
We are enclosing with this letter a prospectus dated ______ ___, 1999
of Baker Hughes Incorporated (the "Company") and the related letter of
transmittal. These two documents together constitute the Company's offer to
exchange its 5.80% Notes due 2003, 6% Notes due 2009, 6 1/4% Notes due 2009 and
6 7/8% Notes due 2029 (collectively, the "New Notes"), the issuance of which has
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), for a like principal amount of its issued and outstanding 5.80% Notes due
2003, 6% Notes due 2009, 6 1/4% Notes due 2009 and 6 7/8% Notes due 2029
(collectively, the "Old Notes"), respectively, which offer consists of separate,
independent offers to exchange the New Notes of each series for Old Notes of
that series (each an "Exchange Offer" and sometimes collectively referred to
herein as the "Exchange Offer").
No Exchange Offer for Old Notes of a series is conditioned upon any
minimum aggregate principal amount of Old Notes of such series being tendered
for exchange or upon the consummation of any other Exchange Offer.
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 contained in the letter of transmittal.
Pursuant to the letter of transmittal, each holder of Old Notes will
represent to the Company that (i) any New Notes received are being acquired in
the ordinary course of business of the person receiving such New Notes, (ii)
such person does not have an arrangement or understanding with any person to
participate in the distribution of the Old Notes or the New Notes within the
meaning of the Securities Act and (iii) such person is not an "affiliate," as
defined in Rule 405 under the Securities Act, of the Company or, if it is such
an affiliate, it will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable. In addition, each
holder of Old Notes will represent to the Company that (i) if such person is not
a broker-dealer, it is not engaged in, and does not intend to engage in, a
distribution of New Notes and (ii) if such person is a broker-dealer that will
receive New 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 deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, it will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
Very truly yours,
<PAGE> 2
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
APPLICABLE EXPIRATION DATE.
INSTRUCTION TO
BOOK-ENTRY TRANSFER PARTICIPANT
To Participant of the DTC:
The undersigned hereby acknowledges receipt and review of the
prospectus dated ______ ___, 1999 of Baker Hughes Incorporated (the "Company")
and the related letter of transmittal. These two documents together constitute
the Company's offer to exchange its 5.80% Notes due 2003, 6% Notes due 2009, 6
1/4% Notes due 2009 and 6 7/8% Notes due 2029 (collectively, the "New Notes"),
the issuance of which has been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of its issued and
outstanding 5.80% Notes due 2003, 6% Notes due 2009, 6 1/4% Notes due 2009 and
6 7/8% Notes due 2029 (collectively, the "Old Notes"), respectively, which offer
consists of separate, independent offers to exchange the New Notes of each
series for Old Notes of that series (each "an Exchange Offer" and sometimes
collectively referred to herein as "the Exchange Offer").
This will instruct you, the registered holder and DTC participant, as
to the action to be taken by you relating to the Exchange Offer for the Old
Notes held by you for the account of the undersigned.
The aggregate principal amount of the Old Notes of each series held by
you for the account of the undersigned is (fill in amount):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Title of Series Principal Amount
- -------------------------------------------------------------------------------
<S> <C>
5.80% Notes due 2003
- -------------------------------------------------------------------------------
6% Notes due 2009
- -------------------------------------------------------------------------------
6 1/4% Notes due 2009
- -------------------------------------------------------------------------------
6 7/8% Notes due 2029
- -------------------------------------------------------------------------------
</TABLE>
WITH RESPECT TO THE EXCHANGE OFFER, THE UNDERSIGNED HEREBY INSTRUCTS
YOU (CHECK APPROPRIATE BOX):
[ ] TO TENDER ALL OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED.
[ ] TO TENDER THE FOLLOWING AMOUNT OF OLD NOTES HELD BY YOU FOR THE ACCOUNT
OF THE UNDERSIGNED:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Title of Series Principal Amount Tendered
- -------------------------------------------------------------------------------
<S> <C>
5.80% Notes due 2003
- -------------------------------------------------------------------------------
6% Notes due 2009
- -------------------------------------------------------------------------------
6 1/4% Notes due 2009
- -------------------------------------------------------------------------------
6 7/8% Notes due 2029
- -------------------------------------------------------------------------------
</TABLE>
[ ] NOT TO TENDER ANY OLD NOTES HELD BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED.
<PAGE> 3
IF NO BOX IS CHECKED, A SIGNED AND RETURNED INSTRUCTION TO BOOK-ENTRY
TRANSFER PARTICIPANT WILL BE DEEMED TO INSTRUCT YOU TO TENDER ALL OLD NOTES HELD
BY YOU FOR THE ACCOUNT OF THE UNDERSIGNED.
If the undersigned instructs you to tender the Old Notes of a series
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 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)
any New Notes received are being acquired in the ordinary course of business of
the undersigned; (ii) the undersigned does not have an arrangement or
understanding with any person to participate in the distribution of the Old
Notes or the New Notes within the meaning of the Securities Act; (iii) the
undersigned is not an "affiliate," as defined in Rule 405 under the Securities
Act, of the Company or, if it is such an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable; (iv) if the undersigned is not a broker-dealer, it is not
engaged in, and does not intend to engage in, a distribution of New Notes and
(v) if the undersigned is a broker-dealer that will receive New 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 deliver a
prospectus in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
SIGN HERE
Name of beneficial owner(s):
---------------------------------------------------
Signature(s):
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Name(s) (please print):
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Address:
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Telephone Number:
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Taxpayer Identification or Social Security Number:
-----------------------------
Date:
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