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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-16961
PRIDE PETROLEUM SERVICES, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 76-0069030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 CITY WEST BOULEVARD, SUITE 400
HOUSTON, TEXAS 77042
(Address of principal executive offices) (Zip Code)
(713) 789-1400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practical date.
Outstanding at
Class of Common Stock May 14, 1997
--------------------- ---------------
no par 46,547,842 shares
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<PAGE>
PRIDE PETROLEUM SERVICES, INC.
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet
March 31, 1997 and December 31, 1996 ............................ 4
Consolidated Statement of Operations -
Three months ended March 31, 1997 and 1996 ...................... 5
Consolidated Statement of Cash Flows -
Three months ended March 31, 1997 and 1996 ...................... 6
Notes to Unaudited Consolidated Financial Statements ............... 7
Report of Independent Accountants .................................. 13
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ................................ 14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders ........... 20
Item 6. Exhibits and Reports on Form 8-K .............................. 20
Signatures ............................................................ 21
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Page 3
<PAGE>
PRIDE PETROLEUM SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents ..................... $ 35,442 $ 10,310
Short-term investments ........................ 247 460
Trade receivables, net of allowance
for doubtful accounts of $298 and
$292, respectively ......................... 145,299 99,531
Parts and supplies ............................ 25,569 27,642
Deferred income taxes ......................... 2,414 1,778
Other current assets .......................... 31,489 16,686
------------ ------------
Total current assets .................... 240,460 156,407
------------ ------------
PROPERTY AND EQUIPMENT, at cost .................. 803,013 514,903
ACCUMULATED DEPRECIATION ......................... (59,496) (139,654)
------------ ------------
Net property and equipment .............. 743,517 375,249
------------ ------------
OTHER ASSETS
Investments in and advances to affiliates ..... 9,586 --
Goodwill and other intangibles, net ........... 2,689 3,134
Other ......................................... 12,689 7,272
------------ ------------
Total other assets ...................... 24,964 10,406
------------ ------------
$ 1,008,941 $ 542,062
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable .............................. $ 63,534 $ 32,488
Accrued expenses .............................. 109,330 25,215
Short-term borrowings ......................... 20,968 3,300
Current portion of long-term debt ............. 40,257 32,682
Current portion of long-term lease
obligations ................................ 4,851 --
------------ ------------
Total current liabilities ............... 238,940 93,685
------------ ------------
OTHER LONG-TERM LIABILITIES ...................... 22,595 12,134
LONG-TERM DEBT, net of current portion ........... 150,933 106,508
LONG-TERM LEASE OBLIGATIONS, net of
current portion ................................ 30,663 --
CONVERTIBLE SUBORDINATED DEBENTURES .............. 52,500 80,500
DEFERRED INCOME TAXES ............................ 52,173 47,438
MINORITY INTEREST ................................ 1,761 --
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, no par value; 100,000,000
shares authorized; 42,073,562 and
28,571,876 shares issued and 42,019,342
and 28,517,656 shares outstanding,
respectively ............................... 1 1
Paid-in capital ............................... 343,666 143,581
Treasury stock, at cost ....................... (191) (191)
Retained earnings ............................. 115,900 58,406
------------ ------------
Total shareholders' equity .............. 459,376 201,797
------------ ------------
$ 1,008,941 $ 542,062
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4
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PRIDE PETROLEUM SERVICES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
------------ ------------
REVENUES ....................................... $ 131,376 $ 66,235
OPERATING COSTS ................................ 91,087 47,946
------------ ------------
Gross Margin ................................ 40,289 18,289
DEPRECIATION AND AMORTIZATION .................. 10,074 4,774
SELLING, GENERAL AND ADMINISTRATIVE ............ 15,018 8,157
------------ ------------
Earnings from operations .............. 15,197 5,358
OTHER INCOME (EXPENSE)
Other income (expense) ...................... 78,751 227
Interest income ............................. 509 774
Interest expense ............................ (3,431) (2,554)
------------ ------------
Total other income (expense), net ..... 75,829 (1,553)
------------ ------------
EARNINGS BEFORE MINORITY INTEREST
AND INCOME TAXES ............................. 91,026 3,805
MINORITY INTEREST .............................. 74 --
------------ ------------
EARNINGS BEFORE INCOME TAXES ................... 90,952 3,805
INCOME TAX PROVISION ........................... 33,458 1,025
------------ ------------
NET EARNINGS ................................... $ 57,494 $ 2,780
============ ============
NET EARNINGS PER SHARE:
Primary ..................................... $ 1.72 $ .11
Fully diluted ............................... $ 1.46 $ .11
WEIGHTED AVERAGE COMMON SHARES AND
COMMON SHARE EQUIVALENTS OUTSTANDING:
Primary ..................................... 33,464 26,094
Fully diluted ............................... 39,745 31,051
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5
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PRIDE PETROLEUM SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
---------------------------
1997 1996
------------ ------------
OPERATING ACTIVITIES
Net earnings .................................. $ 57,494 $ 2,780
Adjustments to reconcile net earnings to
net cash provided by operating activities -
Depreciation and amortization .............. 10,074 4,774
Gain on sale of assets ..................... (83,457) (109)
Effect of exchange rates ................... (4) 43
Deferred tax provision (benefit) ........... (1,401) 319
Minority interest .......................... 74 --
Changes in assets and liabilities,
net of effects of acquisitions -
Trade receivables ....................... 11,711 (179)
Parts and supplies ...................... 91 (1,072)
Other current assets .................... (3,883) (3,415)
Accounts payable ........................ (2,100) 6,707
Accrued expenses and other .............. (21,696) (4,545)
------------ ------------
Net cash provided by
operating activities .............. 10,295 5,303
------------ ------------
INVESTING ACTIVITIES
Purchase of net assets of acquired
entities, including acquisition
costs, less cash acquired .................. (119,784) --
Purchases of property and equipment ........... (22,958) (14,732)
Proceeds from sales of property
and equipment .............................. 135,426 371
Proceeds from sales of short-term
investments ................................ 415 2,560
Purchases of short-term investments ........... (203) --
Other ......................................... (754) (34)
------------ ------------
Net cash used in
investing activities .............. (7,858) (11,835)
------------ ------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock ........ 579 1,126
Proceeds from issuance of convertible
subordinated debentures .................... -- 77,585
Proceeds from debt borrowings ................. 46,534 3,965
Reduction of debt ............................. (24,906) (10,821)
Other ......................................... 488 41
------------ ------------
Net cash provided by
financing activities .............. 22,695 71,896
------------ ------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS ............................... 25,132 65,364
CASH AND CASH EQUIVALENTS,
beginning of period ............................ 10,310 9,295
------------ ------------
CASH AND CASH EQUIVALENTS,
end of period .................................. $ 35,442 $ 74,659
============ ============
The accompanying notes are an integral part of the consolidated financial
statements.
Page 6
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PRIDE PETROLEUM SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The unaudited consolidated financial statements included herein have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, pursuant to such rules and
regulations. These unaudited consolidated financial statements should be read in
conjunction with Pride Petroleum Services, Inc.'s (the "Company's") audited
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996. Certain
reclassifications have been made to prior year amounts to conform with the
current year presentation.
The unaudited consolidated financial information included herein reflects
all adjustments, consisting only of normal recurring adjustments, which are
necessary, in the opinion of management, for a fair presentation of the
Company's financial position, results of operations and cash flows for the
interim periods presented. The results of operations for the interim periods
presented herein are not necessarily indicative of the results to be expected
for full years.
2. COMMITMENTS AND CONTINGENCIES
The Company is routinely involved in litigation incidental to its
business, which often involves claims for significant monetary amounts, some of
which would not be covered by insurance. In the opinion of management, none of
the existing litigation will have any material adverse effect on the Company's
financial position or results of operations.
As of March 31, 1997 and December 31, 1996, the Company had accrued
approximately $4,918,000 and $4,853,000, respectively, for its share of
estimated insured claims liabilities, of which $3,696,000 and $3,713,000,
respectively, was included in current liabilities and $1,222,000 and $1,140,000,
respectively, was included in other long-term liabilities in the accompanying
unaudited consolidated balance sheet. As of March 31, 1997, the Company had
letters of credit outstanding totaling $7,867,000. These letters of credit
principally guarantee the funding of the Company's share of insured claims.
3. ACQUISITIONS AND DISPOSITIONS
In February 1997, the Company sold substantially all of the assets used in
its U.S. land-based well servicing operations for $135,650,000 in cash. After
federal and state income taxes of approximately $42,100,000, repayment of
$3,877,000 of indebtedness collateralized by certain of the assets sold and
$65,000 of interest accrued thereon, and prepayment of $3,960,000 of lease
payments on transferred assets subject to operating leases, the net proceeds to
the Company were $85,648,000. The Company recognized a gain on the sale of
$83,553,000, which amount is included in other income on the accompanying
unaudited consolidated statement of operations.
Page 7
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PRIDE PETROLEUM SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
In March 1997, the Company acquired the operating subsidiaries of
Forasol-Foramer N.V. (collectively, "Forasol") for aggregate consideration of
$283,554,000, consisting of $113,222,000 in cash and 11,099,191 shares of common
stock valued at $170,332,000, based on the approximate market value of the
common stock prior to the date of the agreement of $15.50 per share. The
acquisition of Forasol was recorded using the purchase method of accounting. The
operating results of Forasol have been included in the Company's consolidated
results of operations from the date of acquisition.
The assets acquired and liabilities assumed in the Forasol acquisition,
based on the Company's preliminary purchase price allocation, were as follows:
ASSETS (LIABILITIES)
--------------------
(IN THOUSANDS)
Cash and cash equivalents .... $ 13,438
Trade receivables ............ 57,479
Deferred income taxes ........ 1,083
Other current assets ......... 14,924
Property and equipment ....... 377,819
Investment in affiliates ..... 9,586
Other assets ................. 4,919
Accounts payable ............. (33,214)
Accrued expenses ............. (60,468)
Short-term borrowings ........ (15,354)
Long-term debt ............... (31,361)
Long-term lease obligations .. (35,514)
Deferred income taxes ........ (15,569)
Minority interest ............ (2,124)
------------
$ 285,644
============
Unaudited pro forma results of operations assuming the acquisition of
Forasol and the sale of the Company's U.S. land-based well servicing operations
had occurred on January 1, 1996, are as follows:
THREE MONTHS ENDED MARCH 31,
--------------------------
1997 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
------------ ------------
Revenues ..................... $ 155,580 $ 84,666
Net earnings (loss) .......... $ 57,242 $ (4,851)
Earnings (loss) per share -
Primary ................... $ 1.37 $ (.13)
Fully diluted ............. $ 1.20 $ (.10)
The pro forma results of operations presented above do not purport to be
indicative of the results of operations of the Company that might have occurred
if such transactions had occurred as of January 1, 1996 nor are they indicative
of future results.
Page 8
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PRIDE PETROLEUM SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
4. DEBT
SHORT-TERM BORROWINGS
The company has agreements with several banks for short-term lines of
credit denominated in U.S. dollars, French francs and Argentine pesos. The
facilities are renewable annually and bear interest at variable rates based on
LIBOR for the U.S. dollar and Argentine peso denominated facilities, and PIBOR
for the French franc denominated facilities. The interest rates on such
borrowings at March 31, 1997 range from 4.5% to 7.0%.
LONG-TERM DEBT
Long-term debt at March 31, 1997 and December 31, 1996 consists of the
following:
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
(IN THOUSANDS)
Collateralized term loans ................... $ 60,414 $ 46,169
Limited-recourse collateralized term loans .. 38,037 38,935
Note payable to sellers ..................... 20,000 23,000
Eximbank notes payable ...................... 8,694 8,900
Notes payable ............................... 10,345 4,033
Acquisition note payable .................... -- 3,877
Secured bank facility ....................... -- 14,276
Revolving credit facility ................... 45,000 --
Loan obligations to customers ............... 8,700 --
------------ ------------
191,190 139,190
Less: current portion ....................... 40,257 32,682
------------ ------------
$ 150,933 $ 106,508
============ ============
During 1994, the Company entered into long-term financing arrangements
with two Japanese trading companies in connection with the construction and
operation of two drilling/workover barge rigs. The term loans are collateralized
by the barge rigs and related charter contracts. The loans are being repaid from
the proceeds of the related charter contracts in equal monthly installments of
principal and interest through July 2004. In addition, a portion of contract
proceeds is being held in trust to assure that timely payment of future debt
service obligations is made. At March 31, 1997, $2,435,000 of such contract
proceeds, which amount is included in cash and cash equivalents on the
accompanying unaudited consolidated balance sheet, are being held in trust as
security for the lenders, and are not presently available for use by the
Company.
Page 9
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PRIDE PETROLEUM SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
In March 1997, the Company entered into a senior secured revolving credit
facility with a group of banks (the "Credit Facility") under which up to $100
million (including $25 million for letters of credit) is available. Availability
under the Credit Facility is limited to a borrowing base based on the value of
collateral. Unless the Company collateralizes its obligations by June 6, 1997
with additional offshore or domestic assets with a value of at least $40 million
("Additional Collateral"), the amount available under the Credit Facility will
be reduced to $75 million. The Credit Facility is collateralized by the accounts
receivable, inventory and intangibles of the Company and its domestic
subsidiaries, two-thirds of the stock of the Company's foreign subsidiaries and
the stock of the Company's domestic subsidiaries. The Company's domestic
subsidiaries also provide guarantees. The Credit Facility terminates on March 6,
2002 if the Additional Collateral is timely provided; otherwise it terminates on
March 6, 2000. The credit line, unless extended, will be reduced by $12.5
million in each of 2000 and 2001. Borrowings under the Credit Facility bear
interest at a variable rate based on either the prime rate or LIBOR (7.44% at
March 31, 1997).
The Credit Facility limits the ability of the Company and its subsidiaries
to incur additional indebtedness, create liens, enter into mergers and
consolidations, pay cash dividends on its capital stock, make acquisitions, sell
assets or change its business without prior consent of the lenders. Under the
Credit Facility, the Company must maintain certain financial ratios, including
(i) funded debt to pro forma EBITDA, (ii) funded debt to capitalization, (iii)
adjusted EBITDA to debt service and (iv) minimum tangible net worth. In order to
complete the public offering of Senior Notes and the acquisition of the Noble
Rigs, the Company obtained a waiver from the lenders of certain of these
covenants as well as a release of the guarantees provided by the Company's
domestic subsidiaries. In connection with such waiver and release, borrowing
availability was reduced to $15.0 million until such time as the Credit Facility
is amended or replaced. The Company is currently engaged in negotiations with
the lenders for the purpose of amending the Credit Facility in order to provide
for full restoration of the borrowing capacity thereunder.
Collateralized term loans at March 31, 1997 includes a loan with a
principal balance of $16,526,000 which was assumed in connection with the
acquisition of Forasol. The loan is payable in semiannual installments through
August 2002 and bears interest at 7.55%.
Notes payable at March 31, 1997 include financed insurance premiums, a
note payable collateralized by certain support assets and other notes payable
assumed in connection with the acquisition of Forasol.
CONVERTIBLE SUBORDINATED DEBENTURES
During the first quarter of 1997, an aggregate of $28,000,000 principal
amount of the Company's 6 1/4% convertible subordinated debentures were
converted into 2,285,712 shares of common stock. In connection therewith, the
Company paid an aggregate of $3,732,000 in cash to induce such conversions. Such
amount has been included in other expense in the accompanying unaudited
consolidated statement of operations. In addition, $917,000 of deferred offering
costs associated with the debentures converted has been charged against
additional paid-in capital in the accompanying unaudited consolidated balance
sheet.
Page 10
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5. CAPITAL LEASES
In connection with the acquisition of Forasol, the Company assumed capital
lease obligations pursuant to a sale leaseback agreement for three
tender-assisted rigs. The obligation is payable in semiannual installments
through October 2002, and bears interest at 7.67%.
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
(IN THOUSANDS)
Total capital lease obligations ... $ 35,514 $ --
Less: current portion ............. 4,851 --
------------ ------------
$ 30,663 $ --
============ ============
6. INCOME TAXES
The Company's consolidated effective income tax rate for the three months
ended March 31, 1997 was approximately 37%, as compared to approximately 27% for
the corresponding period in 1996. The increase in the effective tax rate for the
first quarter of 1997 resulted from the effects of (i) certain non-deductible
amounts, primarily $3.7 million of costs related to induced conversion of
convertible subordinated debentures, (ii) an estimated effective combined U.S.
federal and state income tax rate of 36% on the gain from the sale of the
Company's U.S. land-based well servicing operations, and (iii) an estimated
effective income tax rate of 29% on ongoing operations.
PRIDE PETROLEUM SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
7. NET EARNINGS PER SHARE
Primary net earnings per share has been computed based on the weighted
average number of common shares outstanding during the applicable period. Common
share equivalents have been included in periods in which their effect is
dilutive. Common share equivalents include the number of shares issuable upon
the exercise of stock options and warrants, less the number of shares that could
have been repurchased with the exercise proceeds, using the treasury stock
method. Fully diluted net earnings per share has been computed based on the
weighted average number of shares of common stock and common stock equivalents
outstanding during the period, as if the convertible subordinated debentures
were converted into common stock on the date of sale, after giving retroactive
effect to the elimination of interest expense, net of income tax effect,
applicable to the convertible subordinated debentures.
The following table presents information necessary to calculate fully
diluted net earnings per share:
THREE MONTHS ENDED MARCH 31,
---------------------------
1997 1996
------------ ------------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
Net earnings ................................ $ 57,494 $ 2,780
Interest on convertible subordinated
debentures ................................ 1,096 962
Income tax effect ........................... (395) (346)
------------ ------------
Net earnings applicable to
common stock ..................... $ 58,195 $ 3,396
============ ============
Weighted average number of common
shares outstanding ........................ 31,569 24,846
Additional shares assuming conversion of:
Convertible subordinated debentures ...... 6,265 4,700
Stock options and warrants ............... 1,911 1,505
------------ ------------
Weighted average common shares
and equivalents outstanding ........ 39,745 31,051
============ ============
Fully diluted net earnings per share .. $ 1.46 $ .11
============ ============
8. SUBSEQUENT EVENTS
In May 1997, the Company acquired 13 mat-supported jackup drilling rigs
(the "Noble Rigs") from Noble Drilling Corporation and certain subsidiaries for
$269,000,000 in cash. The acquisition was financed through the sale of Senior
Notes and common stock, which was concluded concurrently with the acquisition.
The Company issued $325,000,000 of 9 3/8% Senior Notes due May 1, 2007
(the "Senior Notes") in May 1997. Interest on the Senior Notes is payable
semiannually on May 1 and November 1 of each year, commencing November 1, 1997.
The Senior Notes are not redeemable prior to May 1, 2002, after which they will
be redeemable, in whole or in part, at the option of the Company at redemption
prices starting at 104.688% and declining to 100% by May 1, 2005. In the event
the Company consummates
Page 11
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PRIDE PETROLEUM SERVICES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
a public equity offering (other than the common stock offering completed
concurrently with the Senior Notes offering) on or prior to May 1, 2000, the
Company at its option may use all or a portion of the proceeds from such public
equity offering to redeem up to $108,333,000 principal amount of the Senior
Notes at a redemption price equal to 109.375% of the aggregate principal amount
thereof, together with accrued and unpaid interest to the date of redemption.
The Indenture governing the Senior Notes, as amended and supplemented (the
"Indenture"), contains provisions which limit the ability of the Company and its
subsidiaries to incur additional indebtedness, create liens, enter into mergers
and consolidations, pay cash dividends on its capital stock, make acquisitions,
sell assets or change its business.
The Company also sold 4,300,000 shares of common stock to the public at
$17.00 per share in May 1997. In addition, the Company granted the underwriters
an option, exercisable through May 31, 1997, to purchase up to an aggregate of
645,000 additional shares of common stock to cover over-allotments, if any.
Net proceeds from the combined offerings of Senior Notes and common stock
totaled approximately $386,000,000, excluding any net proceeds from exercise of
the underwriters over-allotment option. Of such net proceeds, approximately
$270,000,000 was used to finance the purchase of the Noble Rigs, including
acquisition costs, and at least $20,000,000 is expected to be used to upgrade
and equip two of the Noble Rigs awaiting refurbishment. Approximately
$45,000,000 was used to repay the balance outstanding under the Credit Facility
and approximately $30,000,000 is expected to be used to repay certain other
indebtedness. The Company intends to use excess proceeds from the offerings for
general corporate purposes, including acquisitions and capital projects.
Page 12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of Pride Petroleum Services, Inc.:
We have reviewed the accompanying consolidated balance sheet of Pride
Petroleum Services, Inc. as of March 31, 1997, and the related consolidated
statements of operations and cash flows for the three-month periods ended March
31, 1997 and 1996. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1996, and the
related consolidated statements of operations, changes in shareholders' equity,
and cash flows for the year then ended (not presented herein); and in our report
dated March 30, 1997, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
balance sheet as of December 31, 1996 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has been
derived.
COOPERS & LYBRAND L.L.P.
Houston, Texas
May 14, 1997
Page 13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the unaudited consolidated financial statements of Pride Petroleum Services,
Inc. (the "Company") as of March 31, 1997 and for the three-month periods ended
March 31, 1997 and 1996 included elsewhere herein, and with the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
GENERAL
The Company's operations and future results have been and will be
significantly affected by a series of strategic transactions that have
transformed the Company from the second largest provider of land-based workover
and related well services in the United States into a diversified drilling
contractor operating both offshore and onshore in international markets and
offshore in the U.S. Gulf of Mexico. With the sale of its domestic land-based
well servicing operations in February 1997, the Company has ceased to provide
rig services onshore in the United States. Nevertheless, as a result of its
recent acquisition activity, the Company expects to continue to experience
revenue growth.
Domestic drilling and well servicing activity historically has had a
significant correlation with changes in oil and natural gas prices.
International drilling and well servicing activity is also affected by
fluctuations in oil and natural gas prices, but historically to a lesser extent
than domestic activity. International rig services contracts are typically for
terms of one year or more, while domestic contracts are typically for one or
multiple wells. Accordingly, international rig services activities generally are
not as sensitive to short-term changes in oil and gas prices as domestic
operations.
Since 1993, the Company has entered into a number of transactions that
have significantly expanded its international and domestic offshore operations,
including the following:
o In mid-1993, the Company commenced operations in Latin America with the
acquisition of businesses operating 23 land-based rigs in Argentina and 13
land-based rigs in Venezuela.
o In June 1994, the Company acquired the largest fleet of modular platform
rigs, consisting of 22 units, in the Gulf of Mexico. Four additional
platform rigs have since been constructed and added to the fleet,
replacing four rigs which were retired. One additional rig is currently
under construction.
o In January 1995, the Company commenced operating two floating barge rigs
on Lake Maracaibo, Venezuela. The barge rigs were constructed during 1994
pursuant to ten-year operating contracts entered into with Lagoven, S.A.,
a subsidiary of the Venezuelan national oil company.
o In October 1995, the Company acquired six land-based drilling rigs in
Colombia through the acquisition of Marlin Colombia Drilling Co. Inc.
o In April 1996, the Company acquired Quitral-Co S.A.I.C. ("Quitral-Co")
from Perez Companc S.A. and other shareholders. Quitral-Co operated 23
land-based drilling and 57 land-based workover rigs in Argentina and seven
land-based drilling and 23 land-based workover rigs in Venezuela.
o In October 1996, the Company acquired Ingeser de Colombia, S.A., which
operated seven land-based drilling rigs and six land-based workover rigs
in Colombia.
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<PAGE>
o In November 1996, the Company added three land-based drilling rigs and
support assets to its operations in Argentina through the acquisition of
the assets of another contractor.
o In February 1997, the Company completed the divestiture of its domestic
land-based well servicing operations, which included 407 workover rigs
operating in Texas, California, New Mexico and Louisiana, to Dawson
Production Services, Inc. for approximately $135.7 million in cash.
o In March 1997, the Company completed the Forasol acquisition, adding two
semisubmersible rigs, three jackup rigs, seven tender-assisted rigs, four
barge rigs, and 29 land-based rigs operating in various locations in Latin
America, the Middle East, West Africa and Asia. The Company recently
acquired an additional tender-assisted rig, which has been contracted in
Asia beginning in 1998.
o In May 1997, the Company acquired 13 mat-supported jackup drilling rigs
from Noble. Nine of the rigs are currently operating in the Gulf of
Mexico, one rig is operating offshore West Africa, one is completing
refurbishment and two are stacked awaiting refurbishment.
RESULTS OF OPERATIONS
The following tables set forth selected consolidated financial information
of the Company by operating segment for the periods indicated:
THREE MONTHS ENDED MARCH 31,
------------------------------------------
1997 1996
------------------- -------------------
(IN THOUSANDS, EXCEPT PERCENTAGES)
Revenues
Domestic land ................. $ 16,485 12.6% $ 27,861 42.0%
Domestic offshore ............. 15,950 12.1 12,376 18.7
International land ............ 79,996 60.9 22,839 34.5
International offshore ........ 18,945 14.4 3,159 4.8
---------- ------ ---------- ------
Total revenues ............. 131,376 100.0 66,235 100.0
---------- ------ ---------- ------
Operating Costs
Domestic land ................. 12,776 14.0 21,827 45.5
Domestic offshore ............. 11,442 12.6 8,890 18.5
International land ............ 56,273 61.8 16,141 33.7
International offshore ........ 10,596 11.6 1,088 2.3
---------- ------ ---------- ------
Total operating costs ...... 91,087 100.0 47,946 100.0
---------- ------ ---------- ------
Gross Margins
Domestic land ................. 3,709 9.2 6,034 33.0
Domestic offshore ............. 4,508 11.2 3,486 19.1
International land ............ 23,723 58.9 6,698 36.6
International offshore ........ 8,349 20.7 2,071 11.3
---------- ------ ---------- ------
Total gross margin ......... $ 40,289 100.0% $ 18,289 100.0%
========== ====== ========== ======
Page 15
<PAGE>
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31,
1996.
REVENUES. Revenues for the three months ended March 31, 1997 increased
$65.1 million, or 98%, as compared to the corresponding period in 1996. Of this
increase, $57.2 million was a result of expansion of the Company's international
land-based operations, due prinmarily to the acquisition of Quitral-Co in April
1996 and the acquisition of Forasol in March 1997. Revenues from international
offshore operations increased $15.8 million, due primarily to the addition of
the Forasol offshore assets. Revenues attributable to domestic offshore
operations increased $3.6 million due primarily to an increased number of the
Company's offshore platform rigs working during the 1997 period. Revenues from
domestic land-based operations decreased $11.4 million, due to the sale of such
operations in February 1997.
OPERATING COSTS. Operating costs for the three months ended March 31, 1997
increased $43.1 million, or 90%, as compared to the corresponding period in
1996. Of this increase, $40.1 million was a result of expansion of the Company's
international land-based operations, due principally to the acquisitions of
Quitral-Co and Forasol, as discussed above, and $9.5 million was a result of
growth in the Company's international offshore operations, due principally to
the addition of the Forasol offshore assets. Operating costs attributable to
domestic offshore operations increased $2.6 million due primarily to an
increased number of offshore platform rigs working, as discussed above.
Operating costs for domestic land operations decreased $9.1 million, due to the
sale of such operations.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the three
months ended March 31, 1997 increased $5.3 million, or 111%, as compared to the
corresponding period in 1996, primarily as a result of the acquisitions of
Quitral-Co and Forasol and additional expansion of the Company's international
land-based and domestic offshore assets, partially offset by the sale of the
Company's domestic land-based assets.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative
expenses for the three months ended March 31, 1997 increased $6.9 million, or
84%, as compared to the corresponding period in 1996, primarily due to inclusion
of such costs for Quitral-Co and Forasol. As a percentage of revenues, total
selling, general and administrative costs were 11% for the first quarter of
1997, as compared to 12% for the first quarter of 1996.
OTHER INCOME (EXPENSE). Other income (expense) for the first quarter of
1997 includes a gain of $83.6 million from the sale of the Company's U.S.
land-based well servicing operations. The gain was partially offset by a charge
of $3.7 million relating to the induced conversion of $28.0 million principal
amount of the Company's 6 1/4% convertible subordinated debentures, and other
miscellaneous net charges . Other income (expense) for the first quarter of 1996
included net gains from asset sales, foreign exchange transactions and other
sources. Interest income decreased to $509,000 for the three months ended March
31, 1997 from $774,000 for the corresponding 1996 period due to a decrease in
cash available for investment. Interest expense for the three months ended March
31, 1997 increased by $877,000 over the corresponding 1996 period, as a result
of interest accrued on the convertible subordinated debentures and borrowings
related to the Quitral-Co acquisition and other additions to property and
equipment. During the three months ended March 31, 1997, the Company capitalized
$1.2 million of interest expense in connection with construction projects.
Page 16
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INCOME TAX PROVISION. The Company's consolidated effective income tax rate
for the three months ended March 31, 1997 was approximately 37%, as compared
to approximately 27% for the corresponding period in 1996. The increase in the
effective tax rate for the first quarter of 1997 resulted from the effects of
(i) certain non-deductible amounts, primarily $3.7 million of costs related to
induced conversion of convertible subordinated debenturs, (ii) an estimated
combined U.S. federal and state income tax rate of 36% on the gain from the sale
of the Company's U.S. land-based well servicing operations, and (iii) an
estimated effective income tax rate of 29% on ongoing operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company had net working capital of $1.5 million and $62.7 million at
March 31, 1997 and December 31, 1996, respectively. The Company's current ratio
was 1.0 to 1.0 at March 31, 1997 and 1.7 to 1.0 at December 31, 1996.
Since the end of 1996, the following transactions have had or are expected
to have a material impact on the Company's cash requirements:
o In February 1997, the Company sold substantially all of the assets used in
its domestic land-based well servicing operations for approximately $135.7
million in cash. The Company's net proceeds from the sale, after of taxes,
repayment of indebtedness collateralized by certain of the assets sold and
prepayment of terminated operating leases, were approximately $85.6
million. At March 31, 1997, the estimated income tax liability of $42.1
million is included in accrued liabilities on the accompanying unaudited
consolidated balance sheet.
o In March 1997, the Company completed the acquisition of Forasol for $113.2
million in cash and 11.1 million shares of Common Stock. The cash portion
of the purchase price was funded out of working capital, including the net
proceeds from the sale of the Company's domestic land-based well servicing
operations and borrowings of $25.7 million under the Credit Facility
described below.
o In May 1997, the Company completed the acquisition of the Noble Rigs for
$269.0 million in cash. In addition, the Company expects to spend at least
$20 million to upgrade and equip two Noble Rigs awaiting refurbishment.
The acquisition was financed through the sale of Senior Notes and common
stock, discussed below, which was concluded concurrently with the
acquisition.
In March 1997, the Company entered into a revolving credit facility with a
group of banks (the "Credit Facility") which provides for availability of up to
$100.0 million (including $25.0 million for letters of credit). Availability
under the Credit Facility is limited to a borrowing base based on the value of
collateral. Unless the Company secures its obligations by June 6, 1997 with
additional offshore or domestic assets with a value of at least $40.0 million
("Additional Collateral"), the credit line will be reduced to $75.0 million. The
Credit Facility is collateralized by the accounts receivable, inventory and
intangibles of the Company and its domestic subsidiaries, two-thirds of the
stock of the Company's foreign subsidiaries, the stock of the Company's domestic
subsidiaries and certain other assets. The Credit Facility terminates on March
6, 2002 if the Additional Collateral is timely provided; otherwise it terminates
on March 6, 2000. The credit line, unless extended, will be reduced by $12.5
million in each of 2000 and 2001.
The Credit Facility limits the ability of the Company and its subsidiaries
to incur additional indebtedness, create liens, enter into mergers and
consolidations, pay cash dividends on its capital stock, make acquisitions, sell
assets or change its business without prior consent of the lenders. Under the
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<PAGE>
Credit Facility, the Company must maintain certain financial ratios, including
(i) funded debt to pro forma EBITDA, (ii) funded debt to capitalization, (iii)
adjusted EBITDA to debt service and (iv) minimum tangible net worth. In order to
complete the public offering of Senior Notes and the acquisition of the Noble
Rigs, the Company obtained a waiver from the lenders of certain of these
covenants as well as a release of the guarantees provided by the Company's
domestic subsidiaries. In connection with such waiver and release, borrowing
availability was reduced to $15.0 million until such time as the Credit Facility
is amended or replaced. The Company is currently engaged in negotiations with
the lenders for the purpose of amending the Credit Facility in order to provide
for full restoration of the borrowing capacity thereunder.
At March 31, 1997, the Company had $45.0 million of borrowings outstanding
under the Credit Facility, of which $14.3 million was used to repay amounts
outstanding under the Company's previous credit facility and $25.7 million was
used to partially fund the acquisition of Forasol. Borrowings under the Credit
Facility bear interest at a variable rate, initially 7.44%, based on either the
prime rate or LIBOR. These borrowings were repaid in May 1997, as discussed
below.
In May 1997, the Company issued $325,000,000 of 9 3/8% Senior Notes due
May 1, 2007 (the "Senior Notes"). Interest on the Senior Notes is payable
semiannually on May 1 and November 1 of each year, commencing November 1, 1997.
The Senior Notes are not redeemable prior to May 1, 2002, after which they will
be redeemable, in whole or in part, at the option of the Company at redemption
prices starting at 104.688% and declining to 100% by May 1, 2005. In the event
the Company consummates a public equity offering (other than the common stock
offering completed concurrently with the Senior Notes offering) on or prior to
May 1, 2000, the Company at its option may use all or a portion of the proceeds
from such public equity offering to redeem up to $108,333,000 principal amount
of the Senior Notes at a redemption price equal to 109.375% of the aggregate
principal amount thereof, together with accrued and unpaid interest to the date
of redemption.
The Indenture governing the Senior Notes, as amended and supplemented (the
"Indenture"), contains provisions which limit the ability of the Company and its
subsidiaries to incur additional indebtedness, create liens, enter into mergers
and consolidations, pay cash dividends on its capital stock, make acquisitions,
sell assets or change its business.
In May 1997, the Company also sold 4,300,000 shares of common stock to the
public at $17.00 per share. In addition, the Company has granted the
underwriters an option, exercisable through May 31, 1997, to purchase up to an
aggregate of 645,000 additional shares of common stock to cover over-allotments,
if any.
Net proceeds from the combined offerings of Senior Notes and common stock
totaled approximately $386,000,000, excluding net proceeds from exercise of the
underwriters over-allotment option, if any. Of such net proceeds, approximately
$270,000,000 was used to finance the purchase of the Noble Rigs, including
acquisition costs, and at least $20,000,000 is expected to be used to upgrade
and equip two of the Noble Rigs awaiting refurbishment. Approximately
$45,000,000 was used to repay the balance outstanding under the Revolving Credit
Facility and approximately $30,000,000 is expected to be used to repay certain
other indebtedness. The Company intends to use excess proceeds from the
offerings for general corporate purposes, including acquisitions and capital
projects.
Management believes that the cash generated from the Company's operations,
together with the net proceeds from the offerings and borrowings under the
Credit Facility as amended or replaced, will
Page 18
<PAGE>
be adequate to fund its normal ongoing capital expenditure, working capital and
debt service requirements.
The Company is active in reviewing possible expansion and acquisition
opportunities relating to all of its business segments. While the Company has no
definitive agreements to acquire additional equipment, suitable opportunities
may arise in the future. The timing, size or success of any acquisition effort
and the associated potential capital commitments are unpredictable. From time to
time, the Company has one or more bids outstanding for contracts that could
require significant capital expenditures and mobilization costs. The Company
expects to fund acquisitions and project opportunities primarily through a
combination of working capital, cash flow from operations and full or limited
recourse debt or equity financing.
FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements, other than statements of historical facts, included in this
Quarterly Report on Form 10-Q that address activities, events or developments
that the Company expects, projects, believes or anticipates will or may occur in
the future, including such matters as future operating results, future capital
expenditures and investments in the acquisition and refurbishment of rigs
(including the amount and nature thereof), repayment of debt, expansion and
other development trends of the contract drilling industry, business strategies,
expansion and growth of operations and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses made
by management of the Company in light of its experience and its perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances. Such statements are
subject to a number of assumptions, risks and uncertainties, including those
discussed herein, general economic and business conditions, prices of crude oil
and natural gas, foreign exchange and currency fluctuations, the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company, changes in laws or regulations or other factors, many of which are
beyond the control of the Company. Prospective investors are cautioned that any
such statements are not guarantees of future performance and that actual results
or developments may differ materially from those projected in the
forward-looking statements.
ACCOUNTING MATTERS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS
No. 128"), SFAS No. 128, which is effective for periods ending after December
15, 1997, including interim periods, simplifies the standards for computing
earnings per share and replaces the presentation of primary earnings per share
with a presentation of basic earnings per share. Initial adoption of this
standard is not expected to have a material impact on the Company's financial
position or results of operations. Early adoption is not permitted.
Page 19
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting of shareholders of the Company was held in Houston,
Texas on March 5, 1997, for the purpose of voting on the proposal described
below. Proxies for the meeting were solicited pursuant to Section 14 (a) of the
Securities Exchange Act of 1934 and there was no solicitation in opposition to
managements solicitation.
Shareholders approved a single, unified proposal (I) to amend the
Company's Restated Articles of Incorporation to increase the number of
authorized shares of common stock from 40,000,000 to 100,000,000 and (ii) to
issue approximately 11,100,000 shares of common stock in connection with the
Company's acquisition of the operating subsidiaries of Forasol-Foramer N.V., by
the following vote:
Shares voted "For" ........... 20,315,047
Shares voted "Against" ....... 879,945
Shares "Abstaining" .......... 29,629
Shares not voted ............. 7,303,035
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits
EXHIBIT NO.
4.1 - Indenture dated as of May 1, 1997 between Pride Petroleum Services,
Inc. And The Chase Manhattan Bank, as Trustee.
4.2 - First Supplemental Indenture dated as of May 1, 1997 between Pride
Petroleum Services, Inc. And The Chase Manhattan Bank, as Trustee.
15 - Awareness Letter of Independent Accountants
(b)Reports on Form 8-K
In a Current Report on Form 8-K filed March 7, 1997, the Company announced
that it had completed the sale of substantially all of the assets used in its
U.S. land-based well servicing business to Dawson Production Services, Inc. The
Company also announced that it had entered into a definitive agreement to
acquire 12 mat-supported jackup drilling rigs and the hull of an additional
jackup drilling rig from Noble Drilling Corporation. The Current Report on Form
8-K included the required pro forma financial information.
In a Current Report on Form 8-K filed March 25, 1997, the Company
announced that it had completed the acquisition of the operating subsidiaries of
Forasol-Foramer N.V.
Page 20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PRIDE PETROLEUM SERVICES, INC.
By: RAY H. TOLSON
(RAY H. TOLSON)
Chairman of the Board and
Chief Executive Officer
By: PAUL A. BRAGG
(PAUL A. BRAGG)
President and Chief
Operating Officer
By: EARL W. MCNIEL
(EARL W. MCNIEL)
Vice President and Chief
Financial Officer
Date: May 14, 1997
Page 21
EXHIBIT 4.1
[CONFORMED]
PRIDE PETROLEUM SERVICES, INC.
AND
THE CHASE MANHATTAN BANK,
TRUSTEE
------------------------------------
INDENTURE
DATED AS OF
MAY 1, 1997
DEBT SECURITIES
<PAGE>
PRIDE PETROLEUM SERVICES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF MAY 1, 1997
------------------------
SECTION OF
TRUST INDENTURE SECTION(S) OF
ACT OF 1939 INDENTURE
SS.310 (A)(1).............................................. 609
(A)(2).............................................. 609
(A)(3).............................................. NOT APPLICABLE
(A)(4).............................................. NOT APPLICABLE
(B)................................................. 608, 610
SS.311 (A)................................................. 613
(B)................................................. 613
(C)................................................. NOT APPLICABLE
SS.312 (A)................................................. 701, 702(A)
(B)................................................. 702(B)
(C)................................................. 702(B)
SS.313 (A)................................................. 703(A)
(B)................................................. 703(A)
(C)................................................. 703(A)
(D)................................................. 703(B)
SS.314 (A)................................................. 704, 1005
(B)................................................. NOT APPLICABLE
(C)(1).............................................. 103
(C)(2).............................................. 103
(C)(3).............................................. NOT APPLICABLE
(D)................................................. NOT APPLICABLE
(E)................................................. 103
SS.315 (A)................................................. 601(A)
(B)................................................. 602
(C)................................................. 601(B)
(D)................................................. 601(C)
(D)(1).............................................. 601(A)(1)
(D)(2).............................................. 601(C)(2)
(D)(3).............................................. 601(C)(3)
(E)................................................. 513
SS.316 (A)(1)(A)........................................... 502, 511
(A)(1)(B)........................................... 512
(A)(2).............................................. NOT APPLICABLE
(A)(LAST SENTENCE).................................. 101
(B)................................................. 508
SS.317 (A)(1).............................................. 503
(A)(2).............................................. 504
(B)................................................. 1003
SS.318 (A)................................................. 108
- -------------
NOTE: THIS RECONCILIATION AND TIE SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THE INDENTURE.
<PAGE>
TABLE OF CONTENTS
PAGE
PARTIES......................................................................1
RECITALS OF THE COMPANY......................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions...................................................1
Act .................................................................2
Additional Amounts.....................................................2
Affiliate..............................................................2
Authenticating Agent...................................................2
Authorized Newspaper...................................................2
Board of Directors.....................................................2
Board Resolution.......................................................2
Book-Entry Security....................................................2
Business Day...........................................................2
Commission.............................................................3
Company................................................................3
"Company Request" and "Company Order"..................................3
Conversion Event.......................................................3
Corporate Trust Office.................................................3
Default................................................................3
Defaulted Interest.....................................................3
Depositary.............................................................3
Dollar.................................................................3
Event of Default.......................................................3
Exchange Rate..........................................................3
Holder.................................................................3
Indenture..............................................................3
interest...............................................................4
Interest Payment Date..................................................4
Judgment Currency......................................................4
Maturity...............................................................4
Officers' Certificate..................................................4
Opinion of Counsel.....................................................4
Original Issue Discount Security.......................................4
Outstanding............................................................4
Paying Agent...........................................................5
Person.................................................................5
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PAGE
Place of Payment.......................................................5
Predecessor Security...................................................5
Redemption Date........................................................6
Redemption Price.......................................................6
Registered Security....................................................6
Regular Record Date....................................................6
Required Currency......................................................6
Responsible Officer....................................................6
Securities.............................................................6
Security Register......................................................6
Special Record Date....................................................6
Stated Maturity........................................................6
Subsidiary.............................................................6
Trustee................................................................6
Trust Indenture Act....................................................7
United States..........................................................7
United States Alien....................................................7
U.S. Government Obligations............................................7
Vice President.........................................................7
Wholly Owned Subsidiary................................................7
Yield to Maturity......................................................7
SECTION 102. Incorporation by Reference of Trust Indenture Act.............7
SECTION 103. Compliance Certificates and Opinions..........................8
SECTION 104. Form of Documents Delivered to Trustee........................8
SECTION 105. Acts of Holders; Record Dates.................................9
SECTION 106. Notices, Etc., to Trustee and Company........................10
SECTION 107. Notice to Holders; Waiver....................................10
SECTION 108. Conflict With Trust Indenture Act............................11
SECTION 109. Effect of Headings and Table of Contents.....................11
SECTION 110. Successors and Assigns.......................................11
SECTION 111. Separability Clause..........................................11
SECTION 112. Benefits of Indenture........................................11
SECTION 113. Governing Law................................................12
SECTION 114. Legal Holidays...............................................12
SECTION 115. Corporate Obligation.........................................12
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally..............................................12
SECTION 202. Form of Trustee's Certificate of Authentification............13
SECTION 203. Securities in Global Form....................................13
SECTION 204. Book-Entry Securities........................................14
-ii-
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PAGE
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.........................16
SECTION 302. Denominations................................................18
SECTION 303. Execution, Authentication, Delivery and Dating...............19
SECTION 304. Temporary Securities.........................................20
SECTION 305. Registration, Registration of Transfer and Exchange..........21
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.............22
SECTION 307. Payment of Interest; Interest Rights Preserved...............23
SECTION 308. Persons Deemed Owners........................................24
SECTION 309. Cancellation.................................................25
SECTION 310. Computation of Interest......................................25
SECTION 311. CUSIP Numbers................................................25
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture......................25
SECTION 402. Application of Trust Money...................................27
SECTION 403. Discharge of Liability on Securities of Any Series...........27
SECTION 404. Reinstatement................................................28
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................................29
SECTION 502. Acceleration of Maturity; Rescission and Annulment...........30
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.....................................32
SECTION 504. Trustee May File Proofs of Claim.............................32
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons......................................33
SECTION 506. Application of Money Collected...............................33
SECTION 507. Limitation on Suits..........................................34
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.......................................35
SECTION 509. Restoration of Rights and Remedies...........................35
SECTION 510. Rights and Remedies Cumulative...............................35
SECTION 511. Delay or Omission Not Waiver.................................35
SECTION 512. Control by Holders...........................................36
SECTION 513. Waiver of Past Defaults......................................36
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<PAGE>
PAGE
SECTION 514. Undertaking for Costs........................................37
SECTION 515. Waiver of Stay or Extension Laws.............................37
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities..........................37
SECTION 602. Notice of Defaults...........................................38
SECTION 603. Certain Rights of Trustee....................................39
SECTION 604. Not Responsible for Recitals or Issuance of Securities.......40
SECTION 605. May Hold Securities..........................................40
SECTION 606. Money Held in Trust..........................................40
SECTION 607. Compensation and Reimbursement...............................40
SECTION 608. Disqualification; Conflicting Interests......................41
SECTION 609. Corporate Trustee Required; Eligibility......................42
SECTION 610. Resignation and Removal; Appointment of Successor............42
SECTION 611. Acceptance of Appointment by Successor.......................43
SECTION 612. Merger, Conversion, Consolidation or Succession to Business..44
SECTION 613. Preferential Collection of Claims Against Company............45
SECTION 614. Appointment of Authenticating Agent..........................45
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders....47
SECTION 702. Preservation of Information; Communications to Holders.......47
SECTION 703. Reports by Trustee...........................................47
SECTION 704. Reports by Company...........................................48
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.........48
SECTION 802. Successor Person Substituted.................................48
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders...........49
SECTION 902. Supplemental Indentures with Consent of Holders..............50
-iv-
<PAGE>
PAGE
SECTION 903. Execution of Supplemental Indentures.........................51
SECTION 904. Effect of Supplemental Indentures............................51
SECTION 905. Conformity With Trust Indenture Act..........................51
SECTION 906. Reference in Securities to Supplemental Indentures...........52
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest..................52
SECTION 1002. Maintenance of Office or Agency.............................52
SECTION 1003. Money for Securities Payments to be Held in Trust...........53
SECTION 1004. Existence...................................................54
SECTION 1005. Statement by Officers as to Default.........................54
SECTION 1006. Waiver of Certain Covenants.................................54
SECTION 1007. Additional Amounts..........................................55
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article....................................55
SECTION 1102. Election to Redeem; Notice to Trustee.......................56
SECTION 1103. Selection by Trustee of Securities to be Redeemed...........56
SECTION 1104. Notice of Redemption........................................56
SECTION 1105. Deposit of Redemption Price.................................57
SECTION 1106. Securities Payable on Redemption Date.......................57
SECTION 1107. Securities Redeemed in Part.................................58
SECTION 1108. Purchase of Securities......................................58
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article....................................58
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.......59
SECTION 1203. Redemption of Securities for Sinking Fund...................59
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1301. Purposes for Which Meetings May Be Called...................59
SECTION 1302. Call, Notice and Place of Meetings..........................59
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PAGE
SECTION 1303. Persons Entitled to Vote at Meetings.........................60
SECTION 1304. Quorum; Action...............................................60
SECTION 1305. Determination of Voting Rights; Conduct and
Adjournment of Meetings....................................61
SECTION 1306. Counting Votes and Recording Action of Meetings..............61
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INDENTURE, dated as of May 1, 1997 between PRIDE PETROLEUM SERVICES,
INC., a corporation duly organized and existing under the laws of the State of
Louisiana (herein called the "Company"), having its principal office at 1500
City West Blvd., Suite 400, Houston, Texas 77042, and THE CHASE MANHATTAN BANK,
as Trustee (herein called the "Trustee"), the office of the Trustee at which at
the date hereof its corporate trust business is principally administered being
450 West 33rd Street, 15th Floor, New York, New York 10001.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
This Indenture is subject to the provisions of the Trust Indenture
Act and the rules and regulations of the Commission promulgated thereunder that
are required to be part of this Indenture and, to the extent applicable, shall
be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at
the date of such computation; and
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(3) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in
Section 102.
"Act," when used with respect to any Holder, has the meaning
specified in Section 105.
"Additional Amounts" means any additional amounts that are required
by the express terms of a Security or by or pursuant to a Board Resolution,
under circumstances specified therein or pursuant thereto, to be paid by the
Company with respect to certain taxes, assessments or other governmental charges
imposed on certain Holders and that are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee pursuant to Section 614 to authenticate Securities
of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" has the meaning specified in Section 204.
"Business Day," when used with respect to any Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in that Place of Payment or the city in which the
Corporate Trust Office is located are authorized or obligated by law or
executive order to close.
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"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Controller, an Assistant Controller, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Conversion Event" has the meaning specified in Section 501.
"Corporate Trust Office" means the principal office of the Trustee
in New York, New York at which at any particular time its corporate trust
business shall be principally administered, which office at the date hereof is
that indicated in the introductory paragraph of this Indenture.
"Default" means any event, act or condition that is, or after notice
or the passage of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a global Security, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such person,
"Depositary" as used with respect to the Securities of any series shall mean the
Depositary with respect to the Securities of that series.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time shall be legal tender for the
payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Exchange Rate" has the meaning specified in Section 302.
"Holder," when used with respect to any Security, means the Person
in whose name the Security is registered in the Security Register.
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"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301 and the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument.
"interest," when used with respect to an Original Issue Discount
Security that by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 506.
"Maturity," when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Treasurer, the
Controller, the Secretary or an Assistant Treasurer, Assistant Controller or
Assistant Secretary, of the Company, and delivered to the Trustee, which
certificate shall be in compliance with Section 103 hereof.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company, rendered, if applicable, in
accordance with Section 314(c) of the Trust Indenture Act, which opinion shall
be in compliance with Section 103 hereof.
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore irrevocably deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; PROVIDED that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made; and
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(iii) Securities that have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether a
quorum is present at a meeting of Holders of Securities, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the principal amount thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 502, (b) the principal amount of a Security
denominated in a foreign currency shall be the U.S. dollar equivalent,
determined by the Company on the date of original issuance of such Security, of
the principal amount (or, in the case of an Original Issue Discount Security,
the U.S. dollar equivalent, determined on the date of original issuance of such
Security, of the amount determined as provided in (a) above), of such Security
and (c) Securities owned by the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person, which may include the Company,
authorized by the Company to pay the principal of (and premium, if any) or
interest on any one or more series of Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified in
accordance with Section 301 subject to the provisions of Section 1002.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306
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in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form established
pursuant to Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of any series means the date specified
for that purpose as contemplated by Section 301, or, if not so specified, the
last day of the calendar month preceding such Interest Payment Date if such
Interest Payment Date is the fifteenth day of the calendar month or the
fifteenth day of the calendar month preceding such Interest Payment Date if such
Interest Payment Date is the first day of a calendar month, whether or not such
day shall be a Business Day.
"Required Currency" has the meaning specified in Section 506.
"Responsible Officer," when used with respect to the Trustee, means
any officer of the Trustee with direct responsibility for the administration of
the Indenture and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on
the Registered Securities of any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means, as to any Person, a corporation more than 50% of
the outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock that ordinarily has voting power for
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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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 905.
"United States" means the United States of America (including the
States and the District of Columbia) and its "possessions," which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
"United States Alien" means any Person who, for United States
federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien or foreign fiduciary of an estate or trust, or a
foreign partnership.
"U.S. Government Obligations" has the meaning specified in Section
401.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Wholly Owned Subsidiary" means a corporation all the outstanding
voting stock (other than any directors' qualifying shares) of which is owned,
directly or indirectly, by the Company or by one or more other Wholly Owned
Subsidiaries, or by the Company and one or more other Wholly Owned Subsidiaries.
For the purposes of this definition, "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.
"Yield to Maturity," when used with respect to any Original Issue
Discount Security, means the yield to maturity, if any, set forth on the face
thereof.
SECTION 102. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"Bankruptcy Act" means the Bankruptcy Act or Title 11 of the United
States Code.
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"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by Commission rule under the Trust Indenture Act and not otherwise
defined herein have the meanings assigned to them therein.
SECTION 103. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any (including
any covenants the compliance with which constitutes a condition precedent),
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any (including any covenants the
compliance with which constitutes a condition precedent), have been complied
with, except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable such Person to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
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(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 104. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 105. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent, or the holding of any Person of a Security, shall be sufficient
for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1306.
The Company may set in advance a record date for purposes of
determining the identity of Holders of Registered Securities entitled to vote or
consent to any action by vote or
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consent authorized or permitted under this Indenture, which record date shall be
the later of 30 days prior to the first solicitation of such consent or the date
of the most recent list of Holders furnished to the Trustee prior to such
solicitation. If a record date is fixed, those persons who were Holders of
Outstanding Registered Securities at such record date (or their duly designated
proxies), and only those persons, shall be entitled with respect to such
Securities to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be Holders
after such record date. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice thereof to be
given to the Trustee in writing in the manner provided in Section 106 and to the
relevant Holders as set forth in Section 107.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security. Any Holder or subsequent Holder may revoke the request, demand,
authorization, direction, notice, consent or other Act as to his Security or
portion of his Security; PROVIDED, HOWEVER, that such revocation shall be
effective only if the Trustee receives the notice of revocation before the date
the Act becomes effective.
SECTION 106. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and
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mailed, first-class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the
Trustee by the Company, Attention:
Corporate Secretary.
SECTION 107. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of Securities of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at the address of such Holder as it appears
in the Security Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service, or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Securities by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder. In any case in which notice to Holders of
Registered Securities is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder of a Registered
Security, shall affect the sufficiency of such notice with respect to other
Holders of Registered Securities.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 108. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision hereof required to be
included in this Indenture by any of the provisions of the Trust Indenture Act,
such provision of the Trust Indenture Act shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the former provision shall be deemed to
apply to this Indenture as so modified or to be excluded.
SECTION 109. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 110. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether or not so expressed.
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SECTION 111. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 112. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent and Security Registrar, and
the Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 113. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, but without giving effect
to applicable principles of conflicts of law to the extent the application of
the laws of another jurisdiction would be required thereby.
SECTION 114. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of principal and interest (and premium and Additional
Amounts, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, PROVIDED that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
SECTION 115. CORPORATE OBLIGATION.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Securities or the obligations of the Company or the Trustee under this Indenture
or any certificate or other writing delivered in connection herewith.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities of each series shall be Registered Securities and
shall be in substantially such form or forms (including temporary or permanent
global form) as shall be established by or pursuant to a Board Resolution or in
one or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If temporary Securities of
any series are issued in global form as permitted by Section 304, the form
thereof shall be established as provided in the preceding sentence. A copy of
the Board Resolution establishing the form or forms of Securities of any series
(or any such temporary global Security) shall be delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities (or any such temporary global
Security).
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution thereof.
SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTIFICATION.
The Trustee's certificate of authentification shall be in
substantially the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By_____________________________________
AUTHORIZED OFFICER".
SECTION 203. SECURITIES IN GLOBAL FORM.
If Securities of a series are issuable in global form, as
contemplated by Section 301, then, notwithstanding clause (10) of Section 301
and the provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
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Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given
by such Person or Persons as shall be specified in such Security or in a Company
Order to be delivered to the Trustee pursuant to Section 303 or Section 304.
Subject to the provisions of Section 303 and, if applicable, Section 304, the
Trustee shall deliver and redeliver any Security in permanent global form in the
manner and upon instructions given by the Person or Persons specified in such
Security or in the applicable Company Order. If a Company Order pursuant to
Section 303 or 304 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section 103
and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to
any Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 103 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of (and
premium, if any) and interest on any Security in permanent global form shall be
made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company or of the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a global Security as shall be
specified in a written statement, if any, of the Holder of such global Security,
which is produced to the Security Registrar by such Holder.
Global Securities may be issued in either temporary or permanent
form. Permanent global Securities will be issued in definitive form.
SECTION 204. BOOK-ENTRY SECURITIES.
Notwithstanding any provision of this Indenture to the contrary:
(a) At the discretion of the Company, any Registered Security may be
issued from time to time, in whole or in part, in permanent global form
registered in the name of a Depositary, or its nominee. Each such Registered
Security in permanent global form is hereafter referred to as a "Book-Entry
Security." Subject to Section 303, upon such election, the Company shall
execute, and the Trustee or an Authenticating Agent shall authenticate and
deliver, one or more Book-Entry Securities that (i) are denominated in an amount
equal to the aggregate principal amount of the Outstanding Securities of such
series if elected in whole or such lesser amount if elected in part, (ii) are
registered in the name of the Depositary or its
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nominee, (iii) are delivered by the Trustee or an Authenticating Agent to the
Depositary or pursuant to the Depositary's instructions and (iv) bear a legend
in substantially the following form (or such other form as the Depositary and
the Company may agree upon):
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
[THE DEPOSITARY], TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF [NOMINEE OF THE DEPOSITARY] OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF [THE
DEPOSITARY] (AND ANY PAYMENT IS MADE TO [NOMINEE OF THE DEPOSITARY]
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF [THE DEPOSITARY]), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, [NOMINEE OF THE
DEPOSITARY], HAS AN INTEREST HEREIN.
(b) Any Book-Entry Security shall be initially executed and delivered as
provided in Section 303. Notwithstanding any other provision of this Indenture,
unless and until it is exchanged in whole or in part for Registered Securities
not issued in global form, a BookEntry Security may not be transferred except as
a whole by the Depositary to a nominee of such Depositary, by a nominee of such
Depositary to such Depositary or another nominee of such Depositary, or by such
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(c) If at any time the Depositary notifies the Company or the Trustee that
it is unwilling or unable to continue as Depositary for any Book-Entry
Securities, the Company shall appoint a successor Depositary, whereupon the
retiring Depositary shall surrender or cause the surrender of its Book-Entry
Security or Securities to the Trustee. The Trustee shall promptly notify the
Company upon receipt of such notice. If a successor Depositary has not been so
appointed by the effective date of the resignation of the Depositary, the
Book-Entry Securities will be issued as Registered Securities not issued in
global form, in an aggregate principal amount equal to the principal amount of
the Book-Entry Security or Securities theretofore held by the Depositary.
The Company may at any time and in its sole discretion determine
that the Securities shall no longer be Book-Entry Securities represented by a
global certificate or certificates, and will so notify the Depositary. Upon
receipt of such notice, the Depositary shall promptly surrender or cause the
surrender of its Book-Entry Security or Securities to the Trustee. Concurrently
therewith, Registered Securities not issued in global form will be issued in an
aggregate principal amount equal to the principal amount of the Book-Entry
Security or Securities theretofore held by the Depositary.
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Upon any exchange of Book-Entry Securities for Registered Securities
not issued in global form as set forth in this Section 204(c), such Book-Entry
Securities shall be cancelled by the Trustee, and Securities issued in exchange
for such Book-Entry Securities pursuant to this Section shall be registered in
such names and in such authorized denominations as the Depositary for such
Book-Entry Securities, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee or any
Authenticating Agent shall deliver such Securities to the persons in whose names
such Securities are so registered.
(d) The Company and the Trustee shall be entitled to treat the Person in
whose name any Book-Entry Security is registered as the Holder thereof for all
purposes of the Indenture and any applicable laws, notwithstanding any notice to
the contrary received by the Trustee or the Company; and the Trustee and the
Company shall have no responsibility for transmitting payments to, communication
with, notifying, or otherwise dealing with any beneficial owners of any
Book-Entry Security. Neither the Company nor the Trustee shall have any
responsibility or obligations, legal or otherwise, to the beneficial owners or
to any other party including the Depositary, except for the Holder of any
Book-Entry Security; PROVIDED HOWEVER, notwithstanding anything herein to the
contrary, (i) for the purposes of determining whether the requisite principal
amount of Outstanding Securities have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver, instruction or other action
hereunder as of any date, the Trustee shall treat any Person specified in a
written statement of the Depositary with respect to any Book-Entry Securities as
the Holder of the principal amount of such Securities set forth therein and (ii)
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or Trustee, from giving effect to any written certification, proxy or
other authorization furnished by a Depositary with respect to any Book-Entry
Securities, or impair, as between a Depositary and holders of beneficial
interests in such Securities, the operation of customary practices governing the
exercise of the rights of the Depositary as Holder of such Securities.
(e) So long as any Book-Entry Security is registered in the name of a
Depositary or its nominee, all payments of the principal of (and premium, if
any) and interest on such BookEntry Security and redemption thereof and all
notices with respect to such Book Entry Security shall be made and given,
respectively, in the manner provided in the arrangements of the Company with
such Depositary.
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
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(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107);
(3) whether Securities of the series are to be issuable as
Registered Securities, whether any Securities of the series are to be
issuable initially in temporary global form and whether any Securities of
the series are to be issuable in permanent global form, as Book-Entry
Securities or otherwise, and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in Section
305, and the Depositary for any global Security or Securities;
(4) the manner in which any interest payable on a temporary global
Security on any Interest Payment Date will be paid if other than in the
manner provided in Section 304;
(5) the date or dates on which the principal of (and premium, if
any, on) the Securities of the series is payable or the method of
determination thereof;
(6) the rate or rates, or the method of determination thereof, at
which the Securities of the series shall bear interest, if any, whether
and under what circumstances Additional Amounts with respect to such
Securities shall be payable, the date or dates from which such interest
shall accrue, the Interest Payment Dates on which such interest shall be
payable and, if other than as set forth in Section 101, the Regular Record
Date for the interest payable on any Registered Securities on any Interest
Payment Date;
(7) the place or places where, subject to the provisions of Section
1002, the principal of (and premium, if any), any interest on and any
Additional Amounts with respect to the Securities of the series shall be
payable;
(8) the period or periods within which, the price or prices (whether
denominated in cash, securities or otherwise) at which and the terms and
conditions upon which Securities of the series may be redeemed, in whole
or in part, at the option of the Company, if the Company is to have that
option, and the manner in which the Company must exercise any such option;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of
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a Holder thereof and the period or periods within which, the price or
prices (whether denominated in cash, securities or otherwise) at which and
the terms and conditions upon which Securities of the series shall be
redeemed or purchased in whole or in part pursuant to such obligation;
(10) the denomination in which any Registered Securities of that
series shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(11) the currency or currencies (including composite currencies) in
which payment of the principal of (and premium, if any), any interest on
and any Additional Amounts with respect to the Securities of the series
shall be payable if other than the currency of the United States of
America;
(12) if the principal of (and premium, if any) or interest on the
Securities of the series are to be payable, at the election of the Company
or a Holder thereof, in a currency or currencies (including composite
currencies) other than that in which the Securities are stated to be
payable, the currency or currencies (including composite currencies) in
which payment of the principal of (and premium, if any) and interest on
and any Additional Amounts with respect to Securities of such series as to
which such election is made shall be payable, and the periods within which
and the terms and conditions upon which such election is to be made;
(13) if the amount of payments of principal of (and premium, if
any), any interest on and any Additional Amounts with respect to the
Securities of the series may be determined with reference to any
commodities, currencies or indices, or values, rates or prices, the manner
in which such amounts shall be determined;
(14) if other than the entire principal amount thereof, the portion
of the principal amount of Securities of the series that shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
(15) any additional means of satisfaction and discharge of this
Indenture with respect to Securities of the series pursuant to Section
401, any additional conditions to discharge pursuant to Section 401 or 403
and the application, if any, of Section 403;
(16) any deletions or modifications of or additions to the Events of
Default set forth in Section 501 or covenants of the Company set forth in
Article Ten pertaining to the Securities of the series; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except, in the case of Registered Securities, as to denomination and except as
may otherwise be provided in or pursuant to the Board Resolution referred to
above and (subject to Section 303) set forth, or
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determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
At the option of the Company, interest on the Registered Securities
of any series that bears interest may be paid by mailing a check to the address
of any Holder as such address shall appear in the Security Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
together with such Board Resolution shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the series.
SECTION 302. DENOMINATIONS.
The Securities of each series shall be issuable in such
denominations as shall be specified as contemplated by Section 301. In the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series denominated in Dollars shall be issuable in
denominations of $1,000 and any integral multiple thereof. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, any Securities of a series denominated in a currency other than
Dollars shall be issuable in denominations that are the equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for such currency ("Exchange Rate"), as such rate
is reported or otherwise made available by the Federal Reserve Bank of New York,
on the applicable issue date for such Securities, of $1,000 and any integral
multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, its Treasurer or one of its Vice
Presidents, under its corporate seal reproduced thereon or affixed thereto
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile. Coupons
shall bear the facsimile signature of the Chairman of the Board, President,
Treasurer or any Vice President of the Company.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such Securities
as in this Indenture provided and not otherwise.
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If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive (in addition to the other documents
required by Section 103 hereof), and (subject to Section 601) shall be fully
protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute legal,
valid and binding obligations of the Company, enforceable in accordance
with their terms, except as such enforcement is subject to the effect of
bankruptcy, insolvency, fraudulent conveyance, reorganization or other
laws relating to or affecting creditors' rights, and general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner not
reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309 together
with a written statement (which need not comply with Section 103 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and dbenefits of this
Indenture.
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SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities that are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form and with such appropriate insertions, omissions,
substitutions and other variations as the officers of the Company executing such
Securities may determine, as evidenced by their execution of such Securities.
Except in the case of temporary Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
All Outstanding temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of the same series and of like tenor authenticated and delivered
hereunder.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept for each series of Securities at
one of the offices or agencies maintained pursuant to Section 1002 a register
(the register maintained in such office and in any other office or agency of the
Company in a Place of Payment being herein sometimes collectively referred to as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities of such series. The Trustee
is hereby initially appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series and of like tenor, of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered Securities of the same series and of like
tenor, of any authorized denominations and of a like aggregate principal amount,
upon surrender of the
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Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interest for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301, then without
unnecessary delay but in any event not later any shall deliver to the Trustee
definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such permanent global Security, executed by the Company.
On or after the earliest date on which such interests may be so exchanged, such
permanent global Security shall be surrendered from time to time in accordance
with instructions given to the Trustee and the Depositary (which instructions
shall be in writing but need not comply with Section 103 or be accompanied by an
Opinion of Counsel) or such other depositary as shall be specified in the
Company Order with respect thereto to the Trustee, as the Company's agent for
such purpose, to be exchanged, in whole or in part, for definitive Securities of
the same series without charge and the Trustee shall authenticate and deliver,
in exchange for each portion of such permanent global Security, a like aggregate
principal amount of other definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such permanent global Security
to be exchanged; PROVIDED, HOWEVER, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of that series is to be redeemed and ending on the relevant
Redemption Date. Promptly following any such exchange in part, such permanent
global Security marked to evidence the partial exchange shall be returned by the
Trustee to the Depositary or such other depositary referred to above in
accordance with the instructions of the Company referred to above. If a
Registered Security is issued in exchange for any portion of a permanent global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related proposed date for payest, interest or Defaulted Interest, as the case
may be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but will be
payable on such Interest Payment Date or proposed for payment, as the case may
be, only to the Person to whom interest in respect of such portion of such
permanent global Security is payable in accordance with the provisions of this
Indenture.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration
of transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be
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accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than exchange
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption and ending at
the close of business on the day of the mailing of the relevant notice of
redemption or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fee and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time
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enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.
The provisions of this e replacement or payment of mutilated,
destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest. Unless otherwise provided with respect to the Securities of
any series, payment of interest may be made at the option of the Company by
check mailed or delivered to the address of any Person entitled thereto as such
address shall appear in the Security Register.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Registered Securities of such series at
his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper, but such publication
shall not be a condition precedent to the
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establishment of such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the ate therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture, upon registration of transfer of, in exchange
for or in lieu of, any other Security, shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Registered Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of receiving
payment of principal of (and premium, if any) and (subject to Sections 305 and
307) interest on such Registered Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Registered Securities so delivered shall be promptly cancelled by the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order; PROVIDED that the Trustee shall not be required to destroy such
Securities.
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SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year comprising twelve 30-day months.
SECTION 311. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect with respect to Securities of a series, and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to Securities of such series, when
(1) either
(A) all Securities of such series theretofore authenticated
and delivered (other than (i) Securities that have been destroyed,
lost or stolen and that have been replaced or paid as provided in
Section 306, and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation;
(B) with respect to all Outstanding Securities of such series
not theretofore delivered to the Trustee for cancellation, the
Company has deposited or caused to be deposited with the Trustee as
trust funds, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, for the purpose
money or U.S. Government Obligations maturing as to principal and
interest in such amounts and at such times as will, together with
the income to accrue thereon, without consideration of any
reinvestment thereof, be sufficient to pay and discharge the entire
indebtedness on all Outstanding Securities of such series not
theretofore delivered to the Trustee for cancellation
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for principal (and premium and Additional Amounts, if any) and
interest to the Stated Maturity or any Redemption Date contemplated
by the penultimate paragraph of this Section, as the case may be; or
(C) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by
Section 301, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of
such series;
(3) the Company has complied with any other conditions specified
pursuant to Section 301 to be applicable to the discharge of Securities of
such series pursuant to this Section 401;
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to the Outstanding Securities of such
series have been complied with;
(5) if the conditions set forth in Section 401(1)(A) have not been
satisfied, and unless otherwise specified pursuant to Section 301 for the
Securities of such series, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of Securities of such
series will not recognize income, gain or loss for United States federal
income tax purposes as a result of such deposit, satisfaction and
discharge and will be subject to United States federal income tax on the
same amount and in the same manner and at the same time as would have been
the case if such deposit, satisfaction and discharge had not occurred; and
(6) no Default or Event of Default with respect to the Securities of
such issue shall have occurred and be continuing on the date of such
deposit or, in so far as clause (5) or (6) of Section 501 is concerned, at
any time in the period ending on the 91st day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
For the purposes of this Indenture, "U.S. Government Obligations"
means direct noncallable obligations of, or noncallable obligations the payment
of principal of and interest on which is guaranteed by, the United States of
America, or to the payment of which obligations or guarantees the full faith and
credit of the United States of America is pledged, or beneficial interests in a
trust the corpus of which consists exclusively of money or such obligations or a
combination thereof.
If any Outstanding Securities of such series are to be redeemed
prior to their Stated Maturity, whether pursuant to any optional redemption
provisions or in accordance with any mandatory sinking fund requirement, the
trust agreement referred to in subclause (B) of clause (1) of this Section 401
shall provide therefor and the Company shall make such
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arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
Notwithstanding the satisfaction and discharge of this Indenture
with respect to the Outstanding Securities of such series pursuant to this
Section 401, the obligations of the Company to the Trustee under Section 607,
the obligations of the Trustee to any Authenticating Agent under Section 614
and, except for a discharge pursuant to subclause (A) of clause (1) of this
Section 401, the obligations of the Company under Sections 305, 306, 404,
610(e), 701, 1001 and 1002 and the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest and Additional Amounts for the payment of which such money has
been deposited with the Trustee.
SECTION 403. DISCHARGE OF LIABILITY ON SECURITIES OF ANY SERIES.
If this Section is specified, as contemplated by Section 301, to be
applicable to Securities of any series, the Company shall be deemed to have paid
and discharged the entire indebtedness on all the Outstanding Securities of such
series, the obligation of the Company under this Indenture and the Securities of
such series to pay the principal of (and premium, if any) and interest on
Securities of such series, shall cease, terminate and be completely discharged
and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging such satisfaction and discharge, when
(1) the Company has complied with the provisions of Section 401 of
this Indenture (other than any additional conditions specified pursuant to
Sections 301 and 401(3) and except that the Opinion of Counsel referred to
in Section 401(5) shall state that it is based on a ruling by the Internal
Revenue Service or other change since the date hereof under applicable
Federal income tax law) with respect to all Outstanding Securities of such
series;
(2) the Company has delivered to the Trustee a Company Request
requesting such satisfaction and discharge;
(3) the Company has complied with any other conditions specified
pursuant to Section 301 to be applicable to the discharge of Securities of
such series pursuant to this Section 403; and
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(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the discharge of the
indebtedness on the Outstanding Securities of such series have been
complied with.
Upon the satisfaction of the conditions set forth in this Section
with respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; PROVIDED that the Company shall not be discharged
from any payment obligations in respect of Securities of such series that are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law or pursuant to Section 305 or 306.
SECTION 404. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations deposited with respect to Securities of any series in
accordance with Section 401 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture with respect to the Securities of such series and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 401 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 401; PROVIDED, HOWEVER, that if the Company has made any
payment of principal of (or premium, if any), or interest on and any Additional
Amounts with respect to any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default," wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body), unless it is either inapplicable to a particular series or it is
specifically deleted or modified in or pursuant to the supplemental indenture or
Board Resolution establishing such series of Securities or in the form of
Security for such series:
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(1) default in the payment of any interest or any Additional Amounts
upon any Security of that series when such interest or Additional Amounts
become due and payable, and continuance of such default for a period of 30
days;
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity;
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series and continuance of such
default for a period of 30 days;
(4) default in the performance or breach of any covenant of the
Company in this Indenture (other than a covenant a default in whose
performance or whose breach is elsewhere in this Section 501 specifically
dealt with or which has expressly been included in this Indenture solely
for the benefit of one or more series of Securities other than that
series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of all Outstanding Securities a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 90 consecutive days; or
(6) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it, of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the
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admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities
of that series.
Notwithstanding the foregoing provisions of this Section 501, if the
principal of (and premium, if any) or any interest on or Additional Amounts with
respect to any Security is payable in a currency or currencies (including a
composite currency) other than Dollars and such currency (or currencies) is (or
are) not available to the Company for making payment thereof due to the
imposition of exchange controls or other circumstances beyond the control of the
Company (a "Conversion Event"), the Company will be entitled to satisfy its
obligations to Holders of the Securities by making such payment in Dollars in an
amount equal to the Dollar equivalent of the amount payable in such other
currency, as determined by the Company by reference to the Exchange Rate, as
such Exchange Rate is certified for customs purposes by the Federal Reserve Bank
of New York on the date of such payment, or, if such rate is not then available,
on the basis of the most recently available Exchange Rate. Notwithstanding the
foregoing provisions of this Section 501, any payment made under such
circumstances in Dollars where the required payment is in a currency other than
Dollars will not constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, the Company
shall give written notice thereof to the Trustee; and the Trustee, promptly
after receipt of such notice, shall give notice thereof in the manner provided
in Section 107 to the Holders. Promptly after the making of any payment in
Dollars as a result of a Conversion Event, the Company shall give notice in the
manner provided in Section 107 to the Holders, setting forth the applicable
Exchange Rate and describing the calculation of such payments.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default with respect to any Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of (i) the series affected by such default (in the case
of an Event of Default described in clause (1), (2), (3) or (7) of Section 501)
or (ii) all series of Securities (subject to the immediately following sentence,
in the case of an Event of Default described in clause (4) of Section 501) may
declare the principal amount (or, if any such Securities are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of all of the Securities of the series affected by
such default or all series, as the case may be, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. If an Event of Default
described in clause (5) or (6) of Section 501 shall occur, the principal amount
of the Outstanding Securities of all series IPSO FACTO shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
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At any time after such a declaration of acceleration with respect to
Securities of any series (or of all series, as the case may be) has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities of that series (or of
all series, as the case may be), by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on, and any Additional Amounts with
respect to, all Securities of that series (or of all series, as the
case may be),
(B) the principal of (and premium, if any, on) any Securities
of that series (or of all series, as the case may be) which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in such
Securities (in the case of Original Issue Discount Securities, the
Securities' Yield to Maturity),
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest and any Additional Amounts at the
rate or rates prescribed therefor in such Securities (in the case of
Original Issue Discount Securities, the Securities' Yield to
Maturity), and
(D) all sums paid or advanced by the Trustee hereunder, the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the
Trustee under Section 607 hereof;
and
(2) all Events of Default with respect to Securities of that series
(or of all series, as the case may be), other than the nonpayment of the
principal of Securities of that series (or of all series, as the case may
be) which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 512.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any installment of interest
on, or any Additional Amounts with respect to, any Security of any series
when such interest or Additional Amounts shall have become due and payable
and such default continues for a period of 30 days, or
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(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and Additional
Amounts and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on any
overdue interest and Additional Amounts, at the rate or rates prescribed
therefor in such Securities (or in the case of Original Issue Discount
Securities, the Securities' Yield to Maturity), and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal (or lesser amount
in the case of Original Issue Discount Securities) of the Securities shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal (premium, if any), interest or Additional
Amounts) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (or
lesser amount in the case of Original Issue Discount Securities) (and
premium, if any) and interest and any Additional Amounts owing and unpaid
in respect of the Securities and to file such other papers or documents as
may be necessary or advisable to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceedings; PROVIDED, HOWEVER,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS.
All rights of action and claim under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without possession of
any of the Securities or the production thereof in any proceeding relating
thereto; any such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust; and, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, any recovery of judgment shall be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any), interest or any Additional Amounts, upon presentation of the
Securities, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest and any Additional Amounts
on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal (and premium, if any), interest and Additional Amounts,
respectively; and
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THIRD: The balance, if any, to the Company.
To the fullest extent allowed under applicable law, if for the
purpose of obtaining judgment against the Company in any court it is necessary
to convert the sum due in respect of the principal of (or premium, if any) or
interest on the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Business Day next
preceding that on which final judgment is given. Neither the Company nor the
Trustee shall be liable for any shortfall nor shall it benefit from any windfall
in payments to Holders of Securities under this Section caused by a change in
exchange rates between the time the amount of a judgment against it is
calculated as above and the time the Trustee converts the Judgment Currency into
the Required Currency to make payments under this Section to Holders of
Securities, but payment of such judgment shall discharge all amounts owed by the
Company on the claim or claims underlying such judgment.
SECTION 507. LIMITATION ON SUITS.
Subject to Section 508, no Holder of any Security of any series
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) an Event of Default with respect to Securities of such series
shall have occurred and be continuing and such Holder has previously given
written notice to the Trustee of such continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this
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Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on and any Additional Amounts with respect to such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment on or after such respective dates, and such
rights shall not be impaired or affected without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of any Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, then and in every
such case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. CONTROL BY HOLDERS.
With respect to Securities of any series, the Holders of a majority
in principal amount of the Outstanding Securities of such series shall have the
right to direct the time,
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method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, relating to
or arising under an Event of Default described in clause (1), (2), (3) or (7) of
Section 501, and with respect to all Securities the Holders of a majority in
principal amount of all Outstanding Securities shall have the right to direct
the time, method and place of conducting any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, not relating to or
arising under such an Event of Default, PROVIDED that in each such case:
(1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture or if the Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in
such direction, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
Subject to Sections 508 and 902, the Holders of a majority in
principal amount of the Outstanding Securities of any series may on behalf of
the Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, and the Holders of a
majority in principal amount of all Outstanding Securities may on behalf of the
Holders of all Securities waive any other past default hereunder and its
consequences, except in each case a default
(1) in the payment of the principal of (or premium, if any) or
interest on or any Additional Amounts with respect to any Security, or
(2) in respect of a covenant or provision hereof that under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may
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in its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant. The provisions
of this Section shall not apply to any suit instituted by the Company, by the
Trustee, by any Holder or group of Holders holding in the aggregate more than
10% in principal amount of the Outstanding Securities of any series, or by any
Holder for the enforcement of the payment of the principal of (or premium, if
any) or interest on or any Additional Amounts with respect to any Security on or
after the Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 515. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with
respect to the Securities of any series:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing with
respect to the Securities of any series, the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise,
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as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, EXCEPT that:
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series or of all series, determined as
provided in Section 511, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
indemnity satisfactory to it against such risk or liability is not
assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default or Event of
Default with respect to the Securities of any series, the Trustee shall give
notice of such Default or Event of Default known to the Trustee to all Holders
of Securities of such series in the manner provided in Section 107, unless such
Default or Event of Default shall have been cured or waived; PROVIDED, HOWEVER,
that, except in the case of a Default or Event of Default in the payment of the
principal of (or premium, if any) or interest on or any Additional Amounts with
respect to any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
PROVIDED, FURTHER, that
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in the case of any Default or Event of Default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that might
be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and,
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except for any Affiliates of the Trustee, the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(h) the Trustee shall not be charged with knowledge of any Default
or Event of Default with respect to the Securities of any series for which
it is acting as Trustee unless either (1) a Responsible Officer shall have
actual knowledge of such Default or Event of Default or (2) written notice
of such Default or Event of Default shall have been given to the Trustee
by the Company or any other obligor on such Securities or by any Holder of
such Securities; and
(i) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time compensation for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the compensation and the reasonable expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and each of its directors, officers,
employees, agents and/or representatives for, and to hold each of them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on each of their part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of the Trustee's powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section 607, the Trustee shall have a lien prior to the Securities on
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of, premium, if any, or interest, if
any, on or any Additional Amounts with respect to particular Securities.
Any expenses and compensation for any services rendered by the
Trustee after the occurrence of an Event of Default specified in clause (5) or
(6) of Section 501 shall constitute expenses and compensation for services of
administration under all applicable federal or state bankruptcy, insolvency,
reorganization or other similar laws.
The provisions of this Section 607 and any lien arising hereunder
shall survive the resignation or removal of the Trustee or the discharge of the
Company's obligations under this Indenture and the termination of this
Indenture.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 608, with respect to the Securities of any series, it
shall, within 90 days after ascertaining that it has such conflicting interest,
either eliminate such conflicting interest or resign with respect to the
Securities of that series in the manner and with the effect hereinafter
specified in this Article.
(b) In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section 608 with respect to the Securities of any
series, the Trustee shall, within 10 days after the expiration of such 90-day
period, transmit by mail to all Holders of Securities of that series, as their
names and addresses appear in the Security Register, notice of such failure.
(c) For the purposes of this Section, the term "conflicting interest"
shall have the meaning specified in Section 310(b) of the Trust Indenture Act
and the Trustee shall comply
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with Section 310(b) of the Trust Indenture Act; PROVIDED, that there shall be
excluded from the operation of Section 310(b)(1) of the Trust Indenture Act with
respect to the Securities of any series any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met. For
purposes of the preceding sentence, the optional provision permitted by the
second sentence of Section 310(b)(9) of the Trust Indenture Act shall be
applicable.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50 million and subject to supervision or examination by Federal or
State (or the District of Columbia) authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section 609, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
The Indenture shall always have a Trustee who satisfies the
requirements of Sections 310(a)(1), 310(a)(2) and 310(a)(5) of the Trust
Indenture Act.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the resigning Trustee within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
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(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder of Securities, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 513, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and such successor Trustee or Trustees
shall comply with the applicable requirements of Section 611. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
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SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture, the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, e Company or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; PROVIDED, HOWEVER, that in the case of a corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, such successor corporation shall expressly assume all of the Trustee's
liabilities hereunder. In case any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents that shall
be authorized to act on behalf of the Trustee to authenticate Securities issued
upon original issue and upon exchange, registration of transfer or partial
redemption or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia having a combined capital and surplus of not less
than $50 million or equivalent amount expressed in a foreign currency and
subject to supervision or examination by Federal or State (or the District of
Columbia) authority or authority of such country. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section 614, the combined capital and surplus of such Authenticating
Agent shall be deemed to be its combined capital and surplus as set forth in its
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most recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section 614, such Authenticating Agent shall resign immediately in the manner
and with the effect specified in this Section 614.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, PROVIDED such corporation shall be otherwise eligible
under this Section 614, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 614.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 614, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section 614, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
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"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
AS TRUSTEE
By ____________________________________,
AS AUTHENTICATING AGENT
By ____________________________________
AUTHORIZED SIGNATORY".
Notwithstanding any provision of this Section 614 to the contrary,
if at any time any Authenticating Agent appointed hereunder with respect to any
series of Securities shall not also be acting as the Security Registrar
hereunder with respect to any series of Securities, then, in addition to all
other duties of an Authenticating Agent hereunder, such Authenticating Agent
shall also be obligated (i) to furnish to the Security Registrar promptly all
information necessary to enable the Security Registrar to maintain at all times
an accurate and current Security Register and (ii) prior to authenticating any
Security denominated in a foreign currency, to ascertain from the Company the
units of such foreign currency that are required to be determined by the Company
pursuant to Section 302.
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
With respect to each series of Securities, the Company will furnish
or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after each Regular Record Date
relating to that series (or, if there is no Regular Record Date relating to that
series, on January 1 and July 1), a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of that series as
of such dates, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content, such list to be dated as of a date not more than 15 days prior
to the time such list is furnished;
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PROVIDED, that so long as the Trustee is the Security Registrar, the Company
shall not be required to furnish or cause to be furnished such a list to the
Trustee. The Company shall otherwise comply with Section 310(a) of the Trust
Indenture Act.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders of each series received by the Trustee in its
capacity as Security Registrar. The Trustee may destroy any list furnished to it
as provided in Section 701 upon receipt of a new list so furnished. The Trustee
shall otherwise comply with Section 310(a) of the Trust Indenture Act.
(b) Holders of Securities may communicate pursuant to Section 312(b) of
the Trust Indenture Act with other Holders with respect to their rights under
this Indenture or under the Securities. The Company, the Trustee, the Security
Registrar and any other Person shall have the protection of Section 312(c) of
the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with the year
1997, the Trustee shall transmit by mail to Holders a brief report dated as of
such May 15 that complies with Section 313(a) of the Trust Indenture Act. The
Trustee shall comply with Section 313(b) of the Trust Indenture Act. The Trustee
shall transmit by mail all reports as required by Sections 313(c) and 313(d) of
the Trust Indenture Act.
(b) A copy of each report pursuant to Subsection (a) of this Section 703
shall, at the time of its transmission to Holders, be filed by the Trustee with
each stock exchange upon which any Securities are listed, with the Commission
and with the Company. The Company will notify the Trustee when any Securities
are listed on any stock exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, and shall otherwise comply with Section 314(a)
of the Trust Indenture Act.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(1) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety shall be a corporation, partnership or trust and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of (and premium, if any) and interest
(including all Additional Amounts, if any) on all the Securities and the
performance of every covenant of this Indenture on the part of the Company
to be performed or observed;
(2) immediately after giving effect to such transaction, no Default
or Event of Default shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 802. SUCCESSOR PERSON SUBSTITUTED.
Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of such
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series), to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee or otherwise secure any series of the Securities or to
surrender any right or power herein conferred upon the Company;
(3) to add any additional Events of Default with respect to all or
any series of the Securities (and, if such Event of Default is applicable
to less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(4) to change or eliminate any of the provisions of this Indenture;
PROVIDED that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is adversely affected by
such change in or elimination of such provision;
(5) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301;
(6) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 401; PROVIDED,
HOWEVER, that any such action shall not adversely affect the interest of
the Holders of Securities of such series or any other series of Securities
in any material respect;
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 611(b); or
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(8) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; PROVIDED such other provisions as
may be made shall not adversely affect the interests of the Holders of
Securities of any series in any material respect.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of a majority in principal amount of
the Outstanding Securities of all series affected by such supplemental indenture
(acting as one class), by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; PROVIDED, HOWEVER,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon, any Additional
Amounts with respect thereto or any premium payable upon the redemption
thereof, or change any obligation of the Company to pay Additional Amounts
(except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change
any Place of Payment where, or the coin or currency or currencies
(including composite currencies) in which, any Security or any premium or
any interest thereon or Additional Amounts with respect thereto is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(2) reduce the percentage in principal amount of Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(3) modify any of the provisions of this Section, Section 512 or
Section 1007, except to increase any such percentage or to provide with
respect to any particular series the right to condition the effectiveness
of any supplemental indenture as to that series on the consent of the
Holders of a specified percentage of the aggregate principal amount of
Outstanding Securities of such series (which provision may be made
pursuant to Section 301 without the consent of any Holder) or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby; PROVIDED, HOWEVER, that
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this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant
changes in this Section and Section 1007, or the deletion of this proviso,
in accordance with the requirements of Sections 611(b) and 901(7).
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties, immunities or liabilities under this Indenture or
otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
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ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any), interest on and any Additional Amounts with respect to the Securities
of that series in accordance with the terms of the Securities and this
Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
If Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on or any Additional Amounts with
respect to any of the Securities of that series, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, the Company will, on or before each due date of the
principal of (and premium, if any) or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held
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in trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any), interest on or any Additional Amounts with respect
to Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any), interest on or any Additional
Amounts with respect to the Securities of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any Security of any series and remaining unclaimed for
three years after such principal (and premium, if any) or interest has become
due and payable shall, unless otherwise required by mandatory provisions of
applicable escheat, or abandoned or unclaimed property law, be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in The Borough of Manhattan, The
City of New York and in such other Authorized Newspapers as the Trustee shall
deem appropriate, notice that such money remains unclaimed and that, after a
date specified herein, which shall not on, any unclaimed balance of such
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money then remaining will, unless otherwise required by mandatory provisions of
applicable escheat, or abandoned or unclaimed property law, be repaid to the
Company.
SECTION 1004. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 1005. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof so long as
any Security is outstanding hereunder, an Officers' Certificate, complying with
Section 314(a)(4) of the Trust Indenture Act and stating that a review of the
activities of the Company during such year and of performance under this
Indenture has been made under the supervision of the signers thereof and whether
or not to the best of their knowledge, based upon such review, the Company is in
default in the performance, observance or fulfillment of any of its covenants
and other obligations under this Indenture, and if the Company shall be in
default, specifying each such default known to them and the nature and status
thereof. One of the officers signing the Officers' Certificate delivered
pursuant to this Section 1005 shall be the principal executive, financial or
accounting officer of the Company.
For purposes of this Section, such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
SECTION 1006. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 1005, or any covenant added for the
benefit of any series of Securities as contemplated by Section 301 (unless
otherwise specified pursuant to Section 301) if before or after the time for
such compliance the Holders of a majority in principal amount of the Outstanding
Securities of all series affected by such omission (acting as one class) shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
SECTION 1007. ADDITIONAL AMOUNTS.
If the Securities of a series expressly provide for the payment of
Additional Amounts, the Company will pay to the Holder of any Security of such
series Additional Amounts as expressly provided therein. Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received from the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
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Amounts provided for in this Section 1007 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section 1007 and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company shall furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities and the Company will pay to such Paying Agent the
Additional Amounts required by this Section. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless against any
loss, liability or expense reasonably incurred without negligence or bad faith
on their part arising out of or in connection with actions taken or omitted by
any of them in reliance on any Officers' Certificate furnished pursuant to this
Section 1007.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, a
reasonable period prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this
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Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed,
the particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and that may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series or of the principal amount
of global Securities of such series.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 107 to each Holder of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price,
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(6) that the redemption is for a sinking fund, if such is the case,
and
(7) the "CUSIP" number, if applicable.
A notice of redemption as contemplated by Section 107 need not
identify particular Registered Securities to be redeemed. Notice of redemption
of Securities to be redeemed at the election of the Company shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m., New York City time, on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on and any Additional Amounts with respect to all the
Securities to be redeemed on that date.
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
(and any Additional Amounts) to the Redemption Date; PROVIDED, HOWEVER, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security or, in the case of Original Issue Discount Securities,
the Securities' Yield to Maturity.
SECTION 1107. SECURITIES REDEEMED IN PART.
Any Registered Security which is to be redeemed only in part shall
be surrendered at a Place of Payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series and Stated Maturity, of any authorized denomination as requested by
such Holder,
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in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
SECTION 1108. PURCHASE OF SECURITIES.
Unless otherwise specified as contemplated by Section 301, the
Company and any Affiliate of the Company may at any time purchase or otherwise
acquire Securities in the open market or by private agreement. Such acquisition
shall not operate as or be deemed for any purpose to be a redemption of the
indebtedness represented by such Securities. Any Securities purchased or
acquired by the Company may be delivered to the Trustee and, upon such delivery,
the indebtedness represented thereby shall be deemed to be satisfied. Section
309 shall apply to all Securities so delivered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". Unless otherwise provided by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption), and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; PROVIDED that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking payment shall be reduced
accordingly.
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SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior (unless a shorter period shall be
satisfactory to the Trustee) to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivery of or by crediting Securities of that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders of Securities of any or all series may be
called at any time and from time to time pursuant to this Article to make, give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be made, given or taken by Holders
of Securities of such series.
SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1301, to be held
at such time and at such place in Houston, Texas, in The Borough of Manhattan,
The City of New York, in London or in any other location, as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 107, not less than 20 nor more than 180 days prior to the
date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in aggregate principal amount of the Outstanding
Securities of any series, shall have requested the Trustee for any such series
to call a meeting of the Holders of Securities of such series for any purpose
specified in Section 1301, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
made the first publication of the notice of such meeting within 30 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine the
time and the place in Houston, Texas, in The Borough of Manhattan, The City of
New York, or in London, for such meeting and may call
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such meeting for such purposes by giving notice thereof as provided in
Subsection (a) of this Section.
SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of Holders of Securities of
any series, a Person shall be (1) a Holder of one or more Outstanding Securities
of such series, or (2) a Person appointed by an instrument in writing as proxy
for a Holder or Holders of one or more Outstanding Securities of such series by
such Holder or Holders. The only Persons who shall be entitled to be present or
to speak at any meeting of Holders of Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 1304. QUORUM; ACTION.
The Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities of such series, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Subject to Section 1305(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1302(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly that Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series; PROVIDED, HOWEVER, that, except as limited by the proviso to Section
902, any resolution with respect to any request, demand, authorization,
direction, notice, consent or waiver which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage that is less
than a majority in aggregate principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in aggregate principal amount of the Outstanding
Securities of that series.
Except as limited by the proviso to Section 902, any resolution
passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with this Section shall be binding on all the Holders of
Securities of such series, whether or not present or represented at the meeting.
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SECTION 1305. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) The holding of Securities shall be proved in the manner
specified in Section 105 and the appointment of any proxy shall be proved in the
manner specified in Section 105. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 105 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1302(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall appoint a temporary chairman. A permanent chairman and
a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series and each
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; PROVIDED,
HOWEVER, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or as a proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1302 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to such record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that such notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter
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to have attached thereto the ballots voted at the meeting. Any record so signed
and verified shall be conclusive evidence of the matters therein stated.
* * *
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
PRIDE PETROLEUM SERVICES, INC.
[CORPORATE SEAL] By /s/ EARL W. MCNIEL
Name: Earl W. McNiel
Title: Chief Financial Officer and
Vice President
THE CHASE MANHATTAN BANK, Trustee
[CORPORATE SEAL] By /s/ G. MCFARLANE
Name: G. McFarlane
Title: Vice President
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STATE OF TEXAS ss.
ss. ss.
COUNTY OF HARRIS ss.
On the 6th day of May, 1997, before me personally came Earl W.
McNiel, to me known, who, being by me duly sworn, did depose and say that he is
Vice President of PRIDE PETROLEUM SERVICES, INC., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ PATRICIA C. WILSON
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK ss.
ss. ss:
COUNTY OF NEW YORK ss.
On the 7th day of May, 1997, before me personally came G. McFarlane,
to me known, who, being by me duly sworn, did depose and say that he is Vice
President of THE CHASE MANHATTAN BANK, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ ANNABELLE DE LUCA
Notary Public
[NOTARIAL SEAL]
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EXHIBIT A
FORM OF CERTIFICATE TO BE
GIVEN BY OWNER OF SECURITY OR BENEFICIAL OWNER OF
INTEREST IN A GLOBAL SECURITY
PRIDE PETROLEUM SERVICES, INC.
[TITLE OF SECURITIES]
(THE "SECURITIES")
This is to certify that as of the date hereof, and except as set
forth below, the above-captioned Securities that are held by the undersigned or
held by you for the account of the undersigned (i) are owned by person(s) that
are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
persons"), (ii) are owned by United States person(s) that (A) are foreign
branches of United States financial institutions (as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for
their own account or for resale, or (B) acquired Securities through foreign
branches of United States financial institutions and who hold the Securities
through such United States financial institutions on the date hereof (and in
either case (A) or (B), each such United States financial institution hereby
certifies, on its own behalf or through its agent, that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) are owned by United
States or foreign financial institution(s) for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)) and in addition if the owner of the Securities is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is to further certify
that such financial institution has not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
If the Securities are of the category contemplated in Section
230.903(c)(3) of Regulation S under the Securities Act of 1933, as amended (the
"Act"), then this e of debt securities, the Securities are beneficially owned by
(a) non-U.S. person(s) or (b) U.S. person(s) who purchased the Securities in
transactions which did not require registration under the Act; or (ii) in the
case of equity securities, the Securities are owned by (x) non-U.S. person(s)
(and such person(s) are not acquiring the Securities for the account or benefit
of U.S. person(s)) or (y) U.S. person(s) who purchased the Securities in a
transaction which did not require registration under the Act. If this
certification is being delivered in connection with the exercise of warrants
pursuant to Section 230.902(m) of Regulation S under the Act, then this is
further to certify that, except as set forth below, the Securities are being
exercised by and on behalf of non-U.S. person(s).
A-1
<PAGE>
As used in this paragraph the term "U.S. person" has the meaning given to it by
Regulation S under the Act.
As used herein, "United States" means the United States of America
(including the States and District of Columbia); and its "possessions" including
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to
the date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your operating
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to $______________ of
such interest in the above Securities in respect of which we are not able to
certify and as to which we understand exchange and delivery of definitive
Securities (or, if relevant, exercise of any rights or collection of any
interest) cannot be made until we do so certify.
We understand that this certificof the United States. In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocably
authorize you to produce this certification to any interested party in such
proceedings.
*Dated: __________________, _____
NAME OF PERSON MAKING CERTIFICATION
By:
As, or as Agent for, the
beneficial owner(s) of the
Securities to which this
Certificate relates
By:
As, or as Agent for, the financial institution (if any) through which a
United States Person acquired the Securities to which this Certificate
relates
- --------
* To be dated no earlier than the Certification Date.
EXHIBIT 4.2
[CONFORMED]
- ------------------------------------------------------------------------------
PRIDE PETROLEUM SERVICES, INC.
and
THE CHASE MANHATTAN BANK
Trustee.
---------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of May 1, 1997
---------------------
Supplementing the Indenture
dated as of
May 1, 1997
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<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE SUPPLEMENT OF THE ORIGINAL INDENTURE........................... 1
SECTION 1.1. SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE...... 1
SECTION 1.3. SUPPLEMENT TO ARTICLE FIVE OF THE ORIGINAL INDENTURE..... 17
SECTION 1.4. SUPPLEMENT TO ARTICLE EIGHT OF THE ORIGINAL INDENTURE.... 18
SECTION 1.5. SUPPLEMENT TO ARTICLE NINE OF THE ORIGINAL INDENTURE..... 19
SECTION 1.6. SUPPLEMENT TO ARTICLE TEN OF THE ORIGINAL INDENTURE...... 20
SECTION 1.7. SUPPLEMENT TO ARTICLE ELEVEN OF THE ORIGINAL INDENTURE... 28
SECTION 1.8. NEW ARTICLE FOURTEEN..................................... 29
SECTION 1.9. EFFECT OF ARTICLE ONE.................................... 34
ARTICLE TWO THE NOTES...................................................... 34
ARTICLE THREE REPRESENTATIONS OF THE COMPANY............................... 34
SECTION 3.1. AUTHORITY OF THE COMPANY................................. 34
SECTION 3.2. TRUTH OF RECITALS AND STATEMENTS......................... 34
ARTICLE FOUR CONCERNING THE TRUSTEE........................................ 35
SECTION 4.1. ACCEPTANCE OF TRUSTS..................................... 35
SECTION 4.2. NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC........... 35
ARTICLE FIVE MISCELLANEOUS PROVISIONS...................................... 35
SECTION 5.1. RELATION TO THIS INDENTURE............................... 35
SECTION 5.2. MEANING OF TERMS......................................... 35
SECTION 5.3. COUNTERPARTS OF SUPPLEMENTAL INDENTURE................... 35
SECTION 5.4. GOVERNING LAW............................................ 35
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THIS FIRST SUPPLEMENTAL INDENTURE, dated as of May 1, 1997, between Pride
Petroleum Services, Inc., a Louisiana corporation (the "Company"), and The Chase
Manhattan Bank, as Trustee (the "Trustee") under the Original Indenture referred
to below,
W I T N E S S E T H:
WHEREAS, the Company has duly authorized the issuance from time to time of
its unsecured debentures, notes or other evidences of indebtedness (the
"Securities"), which are to be issued in one or more series; and the Company has
heretofore made, executed and delivered to the Trustee its Indenture of even
date herewith (the "Original Indenture") pursuant to which the Securities are
issuable;
WHEREAS, Sections 201 and 901 of the Original Indenture provide that the
form or terms of any series of Securities may be established in an Indenture
supplemental thereto, and the Company desires to establish in this First
Supplemental Indenture both the form and terms of a series of Securities
designated as its 9 3/8% Senior Notes due 2007 (the "Notes");
WHEREAS, Section 901 of the Original Indenture further provides that under
certain conditions the Company and Trustee, may, without the consent of any
Holders, from time to time and at any time, enter into an Indenture or
Indentures supplemental thereto, for the purposes, INTER ALIA, of adding to the
covenants of the Company for the benefit of the Holders of all or any series of
Securities, and adding any additional Events of Default, and the Company desires
by means of this First Supplemental Indenture to add to its covenants for the
sole benefit of the Holders of the Notes and to add certain additional Events of
Default, also solely for the benefit of such Holders; and
WHEREAS, all things necessary to authorize the execution and delivery of
this First Supplemental Indenture, to establish the Notes as provided for in
this First Supplemental Indenture, and to make the Original Indenture, as
supplemented by this First Supplemental Indenture (the Original Indenture, as so
supplemented by this Supplemental Indenture, being sometimes referred to herein
as the "Indenture"), a valid agreement of the Company, in accordance with its
terms, have been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH
that for and in consideration of the premises and the purchase of the Notes by
the Holders, the Company and the Trustee mutually covenant and agree, solely for
the equal and proportionate benefit of the respective Holders from time to time
of the Notes, as follows:
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ARTICLE ONE
SUPPLEMENT OF THE ORIGINAL INDENTURE
SECTION 1.1. SUPPLEMENT TO ARTICLE ONE OF THE ORIGINAL INDENTURE. Section
101 of the Original Indenture is supplemented or superseded with respect to the
Notes, in the case of definitional paragraphs that may be inconsistent, by
inserting therein, in alphabetical order, the following definitional paragraphs:
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the Fair Value of the properties and assets of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under its Subsidiary Guarantee, of such Subsidiary Guarantor at such
date.
"Affiliate" of any specified Person means another Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction other than a Sale
and Lease-Back Transaction that results in the creation or incurrence of (a) a
Capital Lease Obligation of the Company or any Subsidiary or (b) a lease of
newly constructed assets, which lease is treated as an operating lease in
accordance with GAAP and entered into within 180 days of completion of
construction) by the Company or any Subsidiary to any Person other than the
Company or a Wholly Owned Subsidiary, in one transaction, or a series of related
transactions, of (i) any Capital Stock of any Subsidiary (except for directors'
qualifying shares or certain minority interests sold to other Persons solely due
to local law requirements that there be more than one stockholder, but which are
not in excess of what is required for such purpose) or (ii) any other Property
or assets of the Company or any Subsidiary, other than (A) sales of drill-string
components and obsolete or worn out equipment in the ordinary course of business
or other assets that, in the Company's reasonable judgment, are no longer used
or useful in the conduct of the business of the Company and its Subsidiaries,
(B) any drilling contract, charter (bareboat or otherwise) or other lease of
Property or other asset entered into by the Company or any Subsidiary in the
ordinary course of business, other than any Bargain Purchase Contract, (C) a
Restricted Payment or Permitted Investment permitted under Section 1009 hereof,
(D) a Change of Control, (E) a consolidation, merger or the disposition of all
or substantially all of the assets of the Company in compliance with Section 801
hereof, (F) any trade or exchange by the Company or any Subsidiary
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<PAGE>
of one or more drilling rigs for one or more other drilling rigs of like kind
owned or held by another Person, PROVIDED that (x) the Fair Value of the rig or
rigs traded or exchanged by the Company or such Subsidiary (including cash or
cash equivalents to be delivered by the Company or such Subsidiary) is
reasonably equivalent to the Fair Value of the drilling rig or rigs (together
with cash or cash equivalents to be received by the Company or such Subsidiary)
as determined by written appraisal by a nationally (or industry) recognized
investment banking firm or appraisal firm and (y) such exchange is approved by a
majority of the disinterested directors of the Company and (G) any transfers
that, but for this clause (G), would be Asset Sales, if (y) the Company elects
to designate such transfers as not constituting Asset Sales and (z) after giving
effect to such transfers, the aggregate Fair Market Value of the Property or
assets transferred in such transaction or any such series of related
transactions so designated by the Company does not exceed $500,000. An Asset
Sale shall include the requisition of title to, seizure of or forfeiture of any
Property or assets, or any actual or constructive total loss or an agreed or
compromised total loss of any Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, the present value (discounted
at the interest rate borne by the Notes, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease (or to the first date on which the lessee is permitted to terminate such
lease without the payment of a penalty) included in such Sale and Lease-Back
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of any date, with respect to any debt security,
the quotient obtained by dividing (i) the sum of the products of (x) the number
of years from such date to the date of each scheduled principal payment
(including any sinking fund or mandatory redemption payment requirements) of
such debt security multiplied in each case by (y) the amount of such principal
payment by (ii) the sum of all such principal payments.
"Bargain Purchase Contract" means a drilling contract, charter (bareboat
or otherwise) or lease that provides for acquisition of Property by the other
party to such agreement during or at the end of the term thereof for less than
Fair Market Value thereof at the time such right to acquire such Property is
granted.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to acquire
an equity interest in such Person.
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<PAGE>
"Cash Proceeds" means, with respect to any Asset Sale by any Person, the
aggregate consideration received for such Asset Sale by such Person in the form
of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof), including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to such Person or any subsidiary thereof). For purposes of this
definition, "cash or cash equivalents" shall be deemed to include, for a period
not to exceed 12 months from the related Asset Sale, noncash consideration
received with respect to an Asset Sale to the extent that such noncash
consideration consists of (i) publicly traded debt securities of a Person, which
securities are rated as "BBB-" or higher by Standard & Poor's Ratings Services
("S&P") and "Baa3" or higher by Moody's Investors Service, Inc. ("Moody's"), or
(ii) other Indebtedness of a Person if (x) the lowest rated long-term, unsecured
debt obligation issued by such Person is rated "BBB-" or higher by S&P and
"Baa3" or higher by Moody's or (y) in the case of other Indebtedness, the
payment of such other Indebtedness is secured by an irrevocable letter of credit
issued by a commercial bank having capital and surplus in excess of $100 million
and long-term unsecured debt obligations rated at least "A-" by S&P and "A3" by
Moody's.
"Change of Control" means (i) a determination by the Company that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended ("Exchange Act")) has become the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
more than 50% of the Voting Stock of the Company; (ii) the Company is merged
with or into or consolidated with another corporation and, immediately after
giving effect to the merger or consolidation, less than 50% of the outstanding
voting securities entitled to vote generally in the election of directors or
persons who serve similar functions of the surviving or resulting entity are
then beneficially owned (within the meaning of Rule 13d-3 of the Exchange Act)
in the aggregate by (x) the stockholders of the Company immediately prior to
such merger or consolidation, or (y) if the record date has been set to
determine the stockholders of the Company entitled to vote on such merger or
consolidation, the stockholders of the Company as of such record date; (iii) the
Company, either individually or in conjunction with one or more Subsidiaries,
sells, conveys, transfers or leases, or the Subsidiaries sell, convey, transfer
or lease, all or substantially all of the assets of the Company and the
Subsidiaries, taken as a whole (either in one transaction or a series of related
transactions), including Capital Stock of the Subsidiaries, to any Person (other
than a Wholly Owned Subsidiary); (iv) the liquidation or dissolution of the
Company; or (v) the first day on which a majority of the individuals who
constitute the Board of Directors are not Continuing Directors.
"Consolidated Current Liabilities" of any Person means, as of any date,
the total liabilities (including tax and other proper accruals) of such Person
and its subsidiaries (other than Non-Recourse Subsidiaries) on a consolidated
basis at such date which may properly be classified as current liabilities in
accordance with GAAP.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio
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of (i) the aggregate amount of EBITDA of the Company for the latest four fiscal
quarters for which financial information in respect thereof is available
immediately prior to the applicable Transaction Date (the "Determination
Period") to (ii) the aggregate Consolidated Interest Expense of the Company that
is anticipated to accrue during a period consisting of the fiscal quarter in
which the Transaction Date occurs and the three fiscal quarters immediately
subsequent thereto (based upon the pro forma amount and maturity of, and
interest payments in respect of, Indebtedness of the Company and its
consolidated Subsidiaries expected by the Company to be outstanding on the
Transaction Date and reasonably anticipated by the Company to be outstanding
from time to time during such period), assuming for the purposes of this
measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as of
the Transaction Date, PROVIDED that if the Company or any of its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) is a party to any Interest
Swap Obligation which would have the effect of changing the interest rate on any
Indebtedness of the Company or any of its consolidated Subsidiaries (other than
Non-Recourse Subsidiaries) for such four-quarter period (or a portion thereof),
the resulting rate shall be used for such four-quarter period or portion
thereof; PROVIDED, HOWEVER, that any Consolidated Interest Expense of the
Company with respect to Indebtedness incurred or retired by the Company or any
of its Subsidiaries (other than Non-Recourse Subsidiaries) during the fiscal
quarter in which the Transaction Date occurscurred or retired on the first day
of the fiscal quarter in which the Transaction Date occurs; PROVIDED, FURTHER,
that if the transaction giving rise to the need to calculate the Consolidated
Interest Coverage Ratio would have the effect of increasing or decreasing EBITDA
in the future and if such increase or decrease is readily quantifiable and is
directly attributable to such transaction, EBITDA shall be calculated on a pro
forma basis as if such transaction had occurred on the first day of the four
fiscal quarters referred to in clause (i) of this definition, and if, during the
same four fiscal quarters, (x) the Company or any of its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) shall have engaged in any
Asset Sale, EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive), or increased by an amount equal to the EBITDA (if
negative), directly attributable to the assets which are the subject of such
Asset Sale for such period calculated on a pro forma basis as if such Asset Sale
and any related retirement of Indebtedness had occurred on the first day of such
period or (y) after the Issue Date, the Company or any of its consolidated
Subsidiaries (other than Non-Recourse Subsidiaries) shall have acquired any
material assets other than in the ordinary course of business, EBITDA and
Consolidated Interest Expense (if Indebtedness is incurred or assumed in
connection with such acquisition) shall be calculated on a pro forma basis as if
such acquisition and related financing had occurred on the first day of such
period.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, (A) the sum of (i) the aggregate amount of cash and
noncash interest expense (including capitalized interest) of such Person and its
subsidiaries (other than Non-Recourse Subsidiaries) for such period as
determined on a consolidated basis in accordance with GAAP in respect of
Indebtedness (including, without limitation, (v) any amortization of debt
discount, (w) net costs associated with Interest Swap Obligations (including any
amortization of discounts), (x) the interest portion of any deferred payment
obligation, (y) all accrued interest and (z) all commissions,
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discounts and other fees and charges owed with respect to letters of credit,
bankers acceptances or similar facilities paid or accrued, or scheduled to be
paid or accrued, during such period other than in respect of Non-Recourse
Indebtedness); (ii) dividends on preferred stock of such Person (and preferred
stock of its subsidiaries (other than Non-Recourse Subsidiaries) if paid to a
Person other than such Person or its subsidiaries) declared and payable in cash;
(iii) the portion of any rental obligation of such Person or its subsidiaries
(other than Non-Recourse Subsidiaries) in respect of any Capital Lease
Obligation allocable to interest expense in accordance with GAAP; (iv) the
portion of any rental obligation of such Person or its subsidiaries (other than
Non-Recourse Subsidiaries) in respect of any Sale and Lease-Back Transaction
allocable to interest expense (determined as if such were treated as a Capital
Lease Obligation); and (v) to the extent any debt of any other Person is
guaranteed by such Person or any of its subsidiaries (other than Non-Recourse
Subsidiaries), (A) the aggregate amount of interest paid, accrued or scheduled
to be paid or accrued, by such other Person during such period attributable to
any such debt, LESS (B) to the extent included in (A) above, amortization or
writeoff of deferred financing costs of such Person and its subsidiaries during
such period and any charge related or any premium or penion with redeeming or
retiring any Indebtedness of such Person and its subsidiaries prior to its
stated maturity; in the case of both (A) and (B) above, after elimination of
intercompany accounts among such Person and its subsidiaries and as determined
in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, PROVIDED that there shall be excluded therefrom, without duplication,
(i) any net income of any Non-Recourse Subsidiary, except that the Company's or
any Subsidiary's equity in the net income of such Non-Recourse Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash or cash equivalents actually distributed by such
Non-Recourse Subsidiary during such period to the Company or such subsidiary as
a dividend or other distribution, (ii) gains and losses from Asset Sales or
reserves relating thereto, (iii) items classified as extraordinary (other than
the tax benefit, if any, of the utilization of net operating loss carryforwards
or alternative minimum tax credits), (iv) the net income of any Person acquired
by such specified Person (other than a Non-Recourse Subsidiary) or any of its
subsidiaries in a pooling-of-interests transaction for any period prior to the
date of such acquisition, (v) any gain or loss, net of taxes, realized on the
termination of any employee pension benefit plan, and (vi) the net income of any
subsidiary of such specified Person to the extent that the transfer to that
Person of that income is not at the time permitted, directly or indirectly, by
any means (including by dividend, distribution, advance or loan or otherwise),
by operation of the terms of its charter or any agreement with a Person other
than with such specified Person, instrument held by a Person other than by such
specified Person, judgment, decree, order, statute, law, rule or governmental
regulations applicable to such subsidiary or its stockholders, except for any
dividends or distributions actually paid by such subsidiary to such Person.
"Consolidated Net Tangible Assets" of any Person means, as of any date,
Consolidated Tangible Assets of such Person at such date, after deducting
therefrom (without duplication of deductions) all Consolidated Current
Liabilities of such Person at such date.
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<PAGE>
"Consolidated Net Worth" of any Person means, as of any date, the sum of
the Capital Stock and additional paid-in capital plus retained earnings (or
minus accumulated deficit) of such Person and its subsidiaries on a consolidated
basis at such date, each item determined in accordance with GAAP, less amounts
attributable to Redeemable Stock of such Person or any of its subsidiaries.
"Consolidated Tangible Assets" of any Person means, as of any date, the
consolidated assets of such Person and its subsidiaries (other than Non-Recourse
Subsidiaries) at such date, after eliminating intercompany items and after
deducting from such total (i) the net book value of all assets that would be
classified as intangibles under GAAP (including, without limitation, goodwill,
organizational expenses, trademarks, trade names, copyrights, patents, licenses
and any rights in any thereof) and (ii) any prepaid expenses, deferred charges
and unamortized debt discount and expense, each such item determined in
accordance with GAAP.
"Continuing Director" means an individual who (i) is a member of the Board
of Directors of the Company and (ii) either (A) was a member of the Board of
Directors of the Company on the Issue Date or (B) whose nomination for election
or election to the Board of Directors of the Company was approved by vote of at
least 662/3% of the directors then still in office who were either directors on
the Issue Date or whose election or nomination for election was previously so
approved.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to protect
against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Determination Period" has the meaning specified under clause (i) of the
definition of "Consolidated Interest Coverage Ratio."
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such person, for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense, (v) any charge related to any premium or penalty paid in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity, and (vi) any other non-cash charges.
"Fair Market Value" means, with respect to consideration received or to be
received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company.
"Fair Value" means, with respect to any asset or Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
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<PAGE>
"Funded Indebtedness" means all Indebtedness incurred under any revolving
credit, letter of credit or working capital facility that matures by its terms,
or that is renewable at the option of any obligor therein to a date more than
one year after the date on which such Indebtedness is originally incurred.
"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
("AICPA") and statements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be designated by the AICPA, that
are applicable to the circumstances as of the date of determination; PROVIDED,
HOWEVER, that all calculations made for purposes of determining compliance with
the provisions set forth in Article 10 hereof shall utilize GAAP in effect at
the Issue Date.
"Indebtedness" as applied to any Person means, at any time, without
duplication, (i) any obligation of such Person, contingent or otherwise, for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) any obligation of such
Person for all or any part of the purchase price of Property or for the cost of
Property constructed or of improvements thereto (including any obligation under
or in connection with any letter of credit related thereto), other than accounts
payable included in current liabilities incurred in respect of Property and
services purchased in the ordinary course of business; (iv) any obligation of
such Person upon which interest charges are customarily paid (other than
accounts payable incurred in the ordinary course of business); (v) any
obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property; (vi) any obligation of such Person
issued or assumed as the deferred purchase price of Property (other than
accounts payable incurred in the ordinary course of business); (vii) any Capital
Lease Obligation; (viii) any obligation of any other Person secured by (or for
which the obligee thereof has an existing right, contingent or otherwise, to be
secured by) any Lien on Property owned or acquired, whether or not any
obligation secured thereby has been assumed, by such Person; (ix) any obligation
of such Person in respect of any letter of credit supporting any obligation of
any other Person; (x) the maximum fixed repurchase price of any Redeemable Stock
of such Person (or if such Person is a subsidiary, any preferred stock of such
Person); (xi) any Interest Swap Obligation or Currency Hedge Obligation of such
Person; and (xii) any obligation which is in economic effect a guarantee,
regardless of its characterization (other than an endorsement in the ordinary
course of business), with respect to any Indebtedness of another Person, to the
extent guaranteed. ing sentence, the maximum fixed repurchase price of any
Redeemable Stock or subsidiary preferred stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock or subsidiary preferred stock as if such Redeemable Stock or
subsidiary preferred stock were repurchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture; PROVIDED,
HOWEVER, that if such Redeemable Stock or subsidiary preferred stock is not then
permitted to be repurchased, the repurchase price shall be the book value of
such Redeemable Stock or subsidiary preferred stock. The amount of Indebtedness
of any Person at any date shall be (x) the outstanding book value at such date
of all unconditional obligations as described above and (y) the maximum
liability of any such contingent obligation at such date.
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<PAGE>
"Interest Swap Obligations" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement, interest
rate cap, collar or floor agreement or other similar agreement or arrangement
designed to protect against or manage such Person's or any of its subsidiaries'
exposure to fluctuations in interest rates.
"Investment" means with respect to any Person, any investment in another
Person, whether by means of a share purchase, capital contribution, loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures or prepayments or deposits in the
ordinary course of business) or similar credit extension constituting
Indebtedness of such other Person and any guarantee of Indebtedness of any other
Person; PROVIDED, HOWEVER, that the term "Investment" shall not include any
transaction involving the purchase or other acquisition (including by way of
merger) of Property (including Capital Stock) by the Company or any Subsidiary
in exchange for Capital Stock (other than Redeemable Stock) of the Company. The
amount of any Person's Investment shall be the original cost of such Investment
to such Person, PLUS the cost of all additions thereto paid by such Person, and
MINUS the amount of any portion of such Investment repaid to such Person in cash
as a repayment of principal or a return of capital, as the case may be, but
without any other adjustments for increases or decreases in value, or writeups,
writedowns or writeoffs with respect to such Investment in determining the
amount of any investment involving a transfer of any Property other than cash,
such Property shall be valued at its Fair Value at the time of such transfer as
determined in good faith by the board of directors (or comparable body) of the
Person making such transfer.
"Issue Date" means the date on which the Notes are first authenticated and
delivered under this Indenture.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Limited Recourse Indebtedness" means (i) Indebtedness with respect to the
two drilling/workover barge rigs owned by the Company's Venezuelan Subsidiary as
in effect on the date of this Indenture (the "Venezuelan Barge Financing") and
(ii) Indebtedness incurred to finance the purchase, acquisition, renovation or
construction of capital assets and related items (including interest added to
principal), or refinancings thereof, (a) in respect of which the recourse of the
holder of such Indebtedness is effectively limited to such capital assets and
related items or (b) in which the recourse and security are similar to (or more
favorable to the Company and its Subsidiaries than) the Venezuelan Barge
Financing.
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<PAGE>
"Maturity" means the date on which the principal of a Note becomes due and
payable as provided therein or in this Indenture, whether at the Stated Maturity
or by declaration of acceleration or otherwise.
"Net Available Proceeds" means, (a) as to any Asset Sale (other than a
Bargain Purchase Contract), the Cash Proceeds therefrom, net of all legal and
title expenses, commissions and other fees and expenses incurred, and all
Federal, state, provincial, foreign, recording and local taxes payable as a
consequence of such Asset Sale, net of all payment made to any Person other than
the Company or a Subsidiary on any Indebtedness which is secured by such assets,
in accordance with the terms of any Lien upon or with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale
and, as for any Asset Sale by a Subsidiary, net of the equity interest in such
Cash Proceeds of any holder of Capital Stock of such Subsidiary (other than the
Company or any other Subsidiary) and (b) as to any Bargain Purchase Contract, an
amount equal to (i) that portion of the rental or other payment stream arising
under a Bargain Purchase Contract that represents an amount in excess of the
Fair Market Value of the rental or other payments with respect to the pertinent
Property or other asset and (ii) the Cash Proceeds from the sale of such
Property or other asset, net of the amounts set forth in clause (a) above, in
each case as and when received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Non-Recourse Subsidiary as to which (a) neither the Company
nor any other Subsidiary (other than a Non-Recourse Subsidiary) (i) provides
credit support including any undertaking, agreement or instrument which would
constitute Indebtedness or (ii) is directly or indirectly liable for such
Indebtedness and (b) no default with respect to such Indebtedness (including any
rights which the holders thereof may have to take enforcement action against a
Non-Recourse Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Indebtedness of the Company or its Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Non-Recourse Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination will be designated a Non-Recourse Subsidiary by the
Board of Directors of the Company as provided below and (ii) any Subsidiary of a
Non-Recourse Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company as a Non-Recourse Subsidiary so long as (a) neither
the Company nor any Subsidiary is directly or indirectly liable pursuant to the
terms of any Indebtedness of such Subsidiary; (b) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Indebtedness of the Company or any Subsidiary
to declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity; (c) neither the Company
nor any Subsidiary has made an Investment in such Subsidiary unless such
Investment was made pursuant to, and in accordance with, Section 1009 hereof
(other than Investments of the type described in clause (i) of the definition of
"Permitted Investments"); and (d) such designation shall not result in the
creation or imposition of any Lien on any Property of the Company or any
Subsidiary (other than any Permitted Lien or any Lien the creation or imposition
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<PAGE>
of which shall have been in compliance with Section 1015 hereof); PROVIDED,
HOWEVER, that with respect to clause (a), the Company or a Subsidiary may be
liable for Indebtedness of a Non-Recourse Subsidiary if (x) such liability
constituted a Permitted Investment or a Restricted Payment permitted by Section
1009 hereof, in each case at the time of incurrence, or (y) the liability would
be a Permitted Investment at the time of designation of such Subsidiary as a
Non-Recourse Subsidiary. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing a Board Resolution with the
Trustee giving effect to such designation. The Board of Directors of the Company
may designate any Non-Recourse Subsidiary as a Subsidiary if, immediately
aftesignation, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Company could incur $1.00 of additional Indebtedness (not
including the incurrence of Permitted Indebtedness) under the first paragraph of
Section 1010 hereof and (iii) if any Property of the Company or any of its
Subsidiaries would upon such designation become subject to any Lien (other than
a Permitted Lien), the creation or imposition of such Lien shall have been in
compliance with Section 1015 hereof.
"Notes" means the 9 3/8% Senior Notes due 2007.
"Permitted Indebtedness" means (a) Indebtedness of the Company under the
Notes; (b) Indebtedness (and any guarantee or pledge thereof) under one or more
bank revolving credit facilities in an aggregate principal amount at any one
time outstanding not to exceed the greater of (A) $100 million and (B) an amount
equal to 10% of Consolidated Net Tangible Assets determined as of the date of
the incurrence of such Indebtedness (plus interest and fees under such
facilities), less any amounts derived from Asset Sales and applied to the
permanent reduction of Indebtedness thereunder (and a permanent reduction of the
related commitment to lend thereunder) as contemplated by Section 1013 hereof;
(c) Indebtedness of the Company or any Subsidiary under Interest Swap
Obligations, PROVIDED that (i) such Interest Swap Obligations are related to
payment obligations on Indebtedness otherwise permitted under the covenants
described in Section 1010 hereof and (ii) the notional principal amount of such
Interest Swap Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligations relate; (d) Indebtedness of
the Company or any Subsidiary under Currency Hedge Obligations, PROVIDED that
(i) such Currency Hedge Obligations are related to payment obligations on
Indebtedness otherwise permitted under the covenants described in Section 1010
hereof or to the foreign currency cash flows reasonably expected to be generated
by the Company and the Subsidiaries and (ii) the notional principal amount of
such Currency Hedge Obligations does not exceed the principal amount of the
Indebtedness and the amount of the foreign currency cash flows to which such
Currency Hedge Obligations relate; (e) Indebtedness of the Company or any
Subsidiary outstanding on the Issue Date; (f) the Subsidiary Guarantees of the
Notes (and any assumption of the obligations guaranteed thereby); (g)
Indebtedness of the Company or any Subsidiary in respect of bid performance
bonds, surety bonds, appeal bonds and letters of credit or similar arrangement
issued for the account of the Company or any Subsidiary, in each case in the
ordinary course of business; (h) Indebtedness of the Company to any Wholly Owned
Subsidiary (but only so long as it remains a Wholly Owned Subsidiary); (i)
Indebtedness of any Subsidiary (other than a Non-Recourse Subsidiary) to the
Company or any Wholly Owned Subsidiary (but only so long as it remains a Wholly
Owned
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<PAGE>
Subsidiary); (j) Indebtedness of the Company in connection with a purchase of
the Notes pursuant to a Change of Control Offer, PROVIDED that the aggregate
principal amount of such Indebtedness does not exceed 101% of the aggregate
principal amount of the Notes purchased pursuant to such Change of Control Offer
plus the related expenses of such purchase; PROVIDED, FURTHER, that such
Indebtedness (A) has an Average Life equal to or greater than the remaining
Average Life of the Notes and (B) does not mature prior to one year following
the Stated Maturity of the Notes; (k) Permitted Refinancing Indebtedness and (I)
Perg Indebtedness. So as to avoid duplication in determining the amount of
Permitted Indebtedness under any clause of this definition, guarantees of, or
obligations in respect of letters of credit supporting, Indebtedness otherwise
included in the determination of such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks having capital and surplus in excess of
$100 mullion; (b) commercial paper issued by any corporation, if such commercial
paper has credit ratings of at least A-1 by "S&P" and at least "P-I" by Moody's;
(c) U.S. Government Obligations with a maturity of four years or less; (d)
repurchase obligations for instruments of the type described in clause (c); (e)
shares of money market mutual or similar funds having assets in excess of $100
million; (f) payroll advances in the ordinary course of business; (g) other
advances and loans to officers and employees of the Company or any Subsidiary,
so long as the aggregate principal amount of such advances and loans does not
exceed $500,000 at any one time outstanding; (h) Investments represented by that
portion of the proceeds from Asset Sales (1) that is not Cash Proceeds or (2)
that is deemed to be Cash Proceeds pursuant to the second sentence of the
definition of Cash Proceeds; (i) Investments made by the Company in its Wholly
Owned Subsidiaries (or any Person that will be a Wholly Owned Subsidiary as a
result of such Investment) or by a Subsidiary in the Company or in one or more
Wholly Owned Subsidiaries (or any Person that will be a Wholly Owned Subsidiary
as a result of such Investment ); (j) Investments in stock, obligations or
securities received in settlement of debts owing to the Company or any
Subsidiary as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection or enforcement of any Lien in favor of the Company or
any Subsidiary, in each case as to debt owing to the Company or any Subsidiary
that arose in the ordinary course of business of the Company or any such
Subsidiary, provided that any stocks, obligations or securities received in
seary course of business (and received other than as a result of bankruptcy or
insolvency proceedings or upon foreclosure, perfection or enforcement of any
Lien) that are, within 30 days of receipt, converted into cash or cash
equivalents shall be treated as having been cash or cash equivalents at the time
received; (k) Investments in any Person (other than the Company or any Wholly
Owned Subsidiary) engaged in construction, ownership or operation of rigs and
related equipment pursuant to the tender of Petrobras for construction and
operation of two dynamically positioned semi-submersible rigs designated
Amethyst 2 and 3 in an aggregate amount not to exceed $35 million at any time
outstanding; and (1) Investments in any Person (other than the Company or any
Wholly Owned Subsidiary) engaged in the construction, ownership or operation of
rigs and related equipment pursuant to Lagoven, S.A.'s Call for Bids No.
96-0-016-4-0 for construction and operations of
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"Multipurpose Units" in Venezuela in an aggregate amount not to exceed $15
million at any time outstanding.
"Permitted Liens" means (a) Liens in existence on the Issue Date; (b)
Liens created for the benefit of the Notes; (c) Liens on Property of a Person
existing at the time such Person is merged or consolidated with or into the
Company or a Subsidiary (and not incurred as a result of, or in anticipation of,
such transaction), PROVIDED that such Lien relates solely to such Property and
the proceeds thereof and accessories and upgrades thereto; (d) Liens on Property
existing at the time of the acquisition thereof (and not incurred as a result
of, or in anticipation of, such transaction), PROVIDED that such Liens relate
solely to such Property and the proceeds thereof and accessories and upgrades
thereto; (e) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security
benefits, statutory obligations, bid, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (f) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens and Liens for master's and crew's
wages and other similar maritime Liens, and incurred in the ordinary course of
business; (g) zoning restrictions, easements, licenses, covenants, reservations,
restrictions on the use of real property and defects, irregularities and
deficiencies in title to real property that do not, individually or in the
aggregate, materially affect the ability of the Company or any Subsidiary to
conduct its business presently conducted; (h) Liens for taxes or assessments or
other governmental charges or levies not yet due and payable, or the validity of
which is being contested by the Company or a Subsidiary in good faith
appropriate proceedings upon stay of execution or the enforcement thereof and
for which adequate reserves in accordance with GAAP or odebtedness incurred for
the purpose of financing all or a part of the purchase price or construction
cost of Property (including the cost of upgrading or refurbishing rigs or
drillships) acquired or constructed after the Issue Date, PROVIDED that (1) the
principal amount of Indebtedness secured by such Liens shall not exceed 100% of
the lesser of cost or Fair Market Value of the Property so acquired, upgraded or
constructed plus transaction costs related thereto, (2) such Liens shall not
encumber any other assets or Property of the Company or any Subsidiary (other
than the proceeds thereof and accessions and upgrades thereto) and (3) such
Liens shall attach to such Property within 120 days of the date of the
completion of the construction or acquisition of such Property; (j) Liens
securing Capital Lease Obligations, PROVIDED that such Liens secure Capital
Lease Obligations which, when combined with (1) the outstanding secured
Indebtedness of the Company and it Subsidiaries (other than Indebtedness secured
by Liens described under clauses (b) and (i) hereof) and (2) the aggregate
amount of all other Capital Lease Obligations of the Company and Subsidiaries,
does not exceed 10% of the Company's Consolidated Net Tangible Assets; (k) Liens
to secure any extension, renewal, refinancing or refunding (or successive
extensions, renewals, refinancings or refundings), in whole or in part, of any
Indebtedness secured by Liens referred to in the foregoing clauses (a), (b), (c)
and (d), PROVIDED that such Liens do not extend to any other Property of the
Company or any Subsidiary (other than the proceeds thereof and accessions and
upgrades thereto) and the principal amount of the Indebtedness secured by such
Liens is not increased; (1) any charter or lease of drilling rigs in the
ordinary of course of business; (m) leases or subleases of real property to
other
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Persons in the ordinary course of business; (n) Liens securing Non-Recourse
Indebtedness; (o) Liens securing Permitted Indebtedness definitions thereof; (p)
judgment liens not giving rise to an Event of Default so long as any appropriate
legal proceedings which may have been only initiated for the review of such
judgment shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired; and (q) rights of set-off of
banks and other Persons.
"Permitted Non-Recourse Subsidiary Refinancing Indebtedness" means
Non-Recourse Indebtedness of any Non-Recourse Subsidiary, incurred in exchange
for, or the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Non-Recourse Indebtedness of such Subsidiary which
outstanding Non-Recourse Indebtedness was incurred in accordance with, or is
otherwise permitted by, the terms of this Indenture.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company,
incurred in exchange for, or the net proceeds of which are used to renew,
extend, refinance, refund or repurchase outstanding Indebtedness of the Company,
which outstanding Indebtedness was incurred in accordance with, or is otherwise
permitted by, the terms of this Indenture (excluding any Permitted
Indebtedness), PROVIDED that (i) if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased is PARI PASSU with or subordinated in right
of payment to the Notes, then such new Indebtedness is PARI PASSU with or
subordinated in right of payment (without regard to its being secured) to, as
the case may be, the Notes at least to the same extent as the Indebtedness being
renewed, extended, refinanced refunded or repurchased, (ii) such new
Indebtedness is scheduled to mature later than the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (iii) such new Indebtedness has
an Average Life at the time such Indebtedness is incurred that is greater than
the Average Life of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, and (iv) such new Indebtedness is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or if
the Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in excess
of the amount of liability in respect thereof determined in accordance with
GAAP) plus the amount of reasonable fees, expenses and premium, if any, incurred
by the Company or such Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of any
Subsidiary (other than a Non-Recourse Subsidiary) incurred in exchange for, or
the net proceeds of which are used to renew, extend, refinance, refund or
repurchase outstanding Indebtedness of such Subsidiary, which outstanding
Indebtedness was incurred in accordance with, or is otherwise permitted by, the
terms of this Indenture, PROVIDED that (i) such new Indebtedness is scheduled to
mature later than the Indebtedness being renewed, extended, refinanced, refunded
or repurchased, (ii) such new Indebtedness has an Average Life at the time such
Indebtedness is incurred that is greater than the Average Life of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, and
(iii) such new Indebtedness is in an aggregate principal amount (or, if such
indebtedness is issued at a price less than the principal amount thereof, the
aggregate amount of gross proceeds therefrom is) not in excess of the aggregate
principal amount then outstanding of the Indebtedness being renewed, extended,
refinanced, refunded or repurchased (or if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased was issued at a price less than
the principal amount
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thereof, then not in excess of the amount of liability in respect thereof
determined in accordance with GAAP) plus the amount of reasonable fees, expenses
and premium, if any, incurred by the Company or such Subsidiary in connection
therewith.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, excluding Capital Stock in any other Person.
"Public Equity Offering" means an underwritten public offering of Common
Stock for cash by the Company pursuant to a registration statement that has been
declared effective by the Commission (other than a registration statement on
Form S-8 or any successor form or otherwise relating to equity securities
issuable under any employee benefit plan of the Company).
"Redeemable Stock" means, with respect to any Person, any equity security
that by its terms or otherwise is required to be redeemed, or is redeemable at
the option of the holder thereof, at any time prior to one year following the
Stated Maturity of the Notes or is exchangeable into Indebtedness of such Person
or any of its subsidiaries.
"Related Business" means any business related, ancillary or complementary
to the business of the Company and its Subsidiaries on the Issue Date.
"Replacement Asset" means a Property or asset that, as determined by the
Board of Directors of the Company as evidenced by a Board Resolution, is used or
is useful in a Related Business.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or make
any distribution in respect of, or purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company or any Affiliate of the Company, or
warrants, rights or options to acquire such Capital Stock, other than (x)
dividends payable solely in the Capital Stock (other than Redeemable Stock) of
the Company or such Affiliate, as the case may be, or in warrants, rights or
options to acquire such Capital Stock and (y) dividends or distributions by a
Subsidiary to the Company or to a Wholly Owned Subsidiary; (ii) make any
principal payment on, or redeem, repurchase, defease or otherwise acquire or
retire for value, prior to any scheduled principal payment, scheduled sinking
fund payment or other stated maturity, Indebtedness of the Company or any
Subsidiary which is subordinated in right of payment to the Notes; or (iii) make
any Restricted Investment in any Person.
"Sale and Lease-Back Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a subsidiary of such Person and is thereafter leased back from
the purchaser or transferee thereof by such Person or one of its subsidiaries.
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"Senior Debt" means any Indebtedness incurred by the Company, unless the
instrument under which such Indebtedness is incurred expressly provides that it
is subordinated in right of payment to the Notes, PROVIDED that Senior Debt will
not include (a) any liability for federal, state, local or other taxes owed or
owing, (b) any Indebtedness owing to any Subsidiaries of the Company, (c) any
trade payables or (d) any Indebtedness that is incurred in violation of this
Indenture.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such Regulation is in
effect on the date hereof.
"Stated Maturity," when used with respect to a Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Subsidiary Guarantor that is subordinated in right of payment to the Notes or
the Subsidiary Guarantees, as the case may be, and does not mature prior to one
year following the Stated Maturity of the Notes.
The term "subsidiary" means, with respect to any Person, (i) any
corporation more than 50% of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries or
such Person, or by such Person and one or more other subsidiaries of such
Person, (ii) any general partnership, joint venture or similar entity, more than
50% of the outstanding partnership or similar interests of which is owned,
directly or indirectly, by such Person, or by one or more other subsidiaries of
such Person, or by such Person and one or more other subsidiaries of such Person
and (iii) any limited partnership of which such Person or any subsidiary of such
Person is a general partner.
"Subsidiary" means a subsidiary of the Company other than a Non-Recourse
Subsidiary.
"Subsidiary Guarantee" means any guarantee of the Notes by any Subsidiary
Guarantor in accordance with the provisions described under Article Fourteen
hereof.
"Subsidiary Guarantor" means (i) each of the Company's Subsidiaries, if
any, executing this Indenture and (ii) any Person that becomes a successor
guarantor of the Notes in compliance with the provisions described under Article
Fourteen hereof.
"Transaction Date" has the meaning specified within the definition of
"Consolidated Interest Coverage Ratio."
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation
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by the United States of America, which, in either case under clauses (i) or (ii)
above, are not callable or redeemable at the option of the issuer thereof; or
(iii) depository receipts issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligations or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt, PROVIDED that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation evidenced by such depository receipt.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of
the Capital Stock or other ownership interests in such Subsidiary, other than
any director's qualifying shares mandated by applicable law, is owned directly
or indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Subsidiary to transact business in such foreign jurisdiction,
provided that the Company, directly or indirectly, owns the remaining Capital
Stock or ownership interest in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the economic
benefits of ownership of such Subsidiary to substantially the same extent as if
such Subsidiary were a wholly owned Subsidiary.
SECTION 1.2. The Original Indenture is supplemented with respect to the
Notes by inserting the following provision in Article Four:
Section 405. DISCHARGE OF SUBSIDIARY GUARANTEES. The obligations of
each Subsidiary Guarantor with respect to its Subsidiary Guarantee and
under this Indenture shall be discharged automatically to the same extent
as the obligations of the Company with respect to the Notes are discharged
pursuant to this Article Four, and such obligations of each Subsidiary
Guarantor so discharged shall be subject to reinstatement pursuant to
Section 404 in the event that such obligations of the Company shall be
reinstated.
SECTION 1.3. SUPPLEMENT TO ARTICLE FIVE OF THE ORIGINAL INDENTURE. (a)
Section 501 of the Original Indenture is supplemented with respect to the Notes
by adding the following provisions (8)-(14) below:
(8) the Company fails to comply with any of its covenants or
agreements contained in Section 801 hereof or fails to make a Change of
Control Offer in
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accordance with Section 1017 hereof or an Asset Sale Offer in accordance
with Section 1013 hereof;
(9) default in the performance or breach of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in the
Notes, any Subsidiary Guarantee or this Indenture (other than a covenant
or agreement a default in performance or breach of which is specifically
dealt with) and continuance of such default or breach for a period of 30
days after written notice thereof has been mailed, by registered or
certified mail, to the Company or such Subsidiary Guarantor by the Trustee
or to the Company and the Trustee by the Holders of at least 25% of the
aggregate principal amount of the outstanding Notes;
(10) Indebtedness of the Company or any Subsidiary (other than
Non-Recourse Indebtedness or Limited Recourse Indebtedness) is not paid
when due within the applicable grace period or is accelerated by the
holders thereof and, in either case, the aggregate principal amount of
such due and unpaid or accelerated Indebtedness exceeds $ 10 million;
(11) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of any Subsidiary (other than a
Non-Recourse Subsidiary) that constitutes a Significant Subsidiary or any
group of Subsidiaries (other than Non-Recourse Subsidiaries) that, taken
together, would constitute a Significant Subsidiary, in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging such Subsidiary or Subsidiaries a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of such Subsidiary
or Subsidiaries under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such Subsidiary or Subsidiaries or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(12) the commencement by any Subsidiary (other than a Non-Recourse
Subsidiary) that constitutes a Significant Subsidiary or any group of
Subsidiaries (other than Non-Recourse Subsidiaries) that, taken together,
would constitute a Significant Subsidiary, of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case of proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of such Subsidiary or
Subsidiaries in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against such Subsidiary or Subsidiaries, or the filing by such
Subsidiary or Subsidiaries, of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by such Subsidiary or Subsidiaries to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of such
Subsidiary or Subsidiaries or of any
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substantial part of the property of such Subsidiary or Subsidiaries, or
the making by such Subsidiary or Subsidiaries of an assignment for the
benefit of creditors, or the admission by such Subsidiary or Subsidiaries
in writing of the inability of such Subsidiary or Subsidiaries to pay the
debts of such Subsidiary or Subsidiaries generally as they become due, or
the taking of corporate action by such Subsidiary or Subsidiaries in
furtherance of any such action; or
(13) the entry by a court of competent jurisdiction of one or more
judgments or orders against the Company or any Subsidiary (other than a
Non-Recourse Subsidiary) in an uninsured or unindemnified aggregate amount
in excess of $10 million which remain undischarged or unsatisfied for a
period of 60 consecutive days after the right to appeal them has expired;
or
(14) any Subsidiary Guarantee shall for any reason cease to be, or
be asserted by the Company or any Subsidiary Guarantor, as applicable, not
to be, in full force and effect (except pursuant to the release of any
such Subsidiary Guarantee in accordance with this Indenture).
(b) The second sentence of Section 502 of the Original Indenture is
superseded with respect to the Notes by the following provision:
If an Event of Default described in clause (5), (6), (11) or (12) of
Section 501 shall occur, the principal amount of the Notes IPSO FACTO
shall become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
SECTION 1.4. SUPPLEMENT TO ARTICLE EIGHT OF THE ORIGINAL INDENTURE.
Section 801 of the Original Indenture is superseded with respect to the Notes by
the following provisions:
Section 801. The Company will not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than
a merger of a Subsidiary into the Company in which the Company is the
continuing corporation), or sell, convey, assign, transfer, lease or
otherwise dispose of all or substantially all of the Property and assets
of the Company and the Subsidiaries, taken as a whole, to any Person,
unless
(i) either (a) the Company shall be the continuing corporation
or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged, or the Person
which acquires, by sale, assignment, conveyance, transfer, lease or
other disposition, all or substantially all of the Property and
assets of the Company and the Subsidiaries, taken as a whole (such
corporation or Person, the "Surviving Entity"), shall be a
corporation organized and validly existing under the laws of the
United States of America, any political subdivision thereof or any
state thereof or the District of Columbia, and shall expressly
assume, by a supplemental Indenture, the due and punctual payment of
the principal of (and premium, if any) and interest on all the Notes
and the performance of the Company's covenants and obligations under
this Indenture;
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(ii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), no Event of Default or Default shall have occurred
and be continuing or would result therefrom;
(iii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), the Company (or the Surviving Entity if the Company
is not continuing) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to such transactions;
(iv) immediately after giving effect to any such transaction
or series of transactions on a pro forma basis as if such
transaction or series of transactions had occurred on the first day
of the Determination Period, the Company (or the Surviving Entity if
the Company is not continuing) would be permitted to incur $1.00 of
additional Indebtedness pursuant to the tests described in the first
sentence under the caption Section 1010 hereof; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 1.5. SUPPLEMENT TO ARTICLE NINE OF THE ORIGINAL INDENTURE.
(a) Section 901 of the Original Indenture is supplemented with respect to
the Notes by inserting the following provisions at the end of Section 901:
(9) to provide for uncertificated Notes in addition to or in place
of certificated Notes; or
(10) to add or, except as provided in Article IV or Section 1404,
release any Subsidiary Guarantor pursuant to the terms of this Indenture,
PROVIDED that such actions will not adversely affect the interests of the
Holders in any material respect.
(b) Section 902 of the Original Indenture is supplemented with respect to
the Notes by inserting the following provisions:
(4) modify the obligations of the Company to make a Change of
Control Offer pursuant to Section 1017 hereof or an Asset Sale Offer
pursuant to Section 1013 hereof; or
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(5) subordinate in right of payment, or otherwise subordinate, the
Notes to any other Indebtedness.
SECTION 1.6. SUPPLEMENT TO ARTICLE TEN OF THE ORIGINAL INDENTURE. Article
10 of the Original Indenture is supplemented with respect to the Notes by
inserting the following sections at the end thereof:
Section 1008. TRANSACTIONS WITH AFFILIATES. Subsequent to the Issue
Date, the Company will not, and will not permit any Subsidiary to,
directly or indirectly, enter into or permit to exist any transaction or
series of related transactions, including, but not limited to, the
purchase, sale or exchange of Property, the making of any Investment, the
giving of any guarantee or the rendering of any service with any Affiliate
of the Company (other than transactions among the Company and any Wholly
Owned Subsidiaries) unless (i) such transaction or series of related
transactions is on terms no less favorable to the Company or such
Subsidiary than those that could be obtained in a comparable arm's length
transaction with a Person that is not such an Affiliate and (ii) (a) with
respect to a transaction or series of related transactions that has a Fair
Market Value in excess of $2 million but less than $5 million, the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (i)
above and (b) with respect to a transaction or series of related
transactions that has a Fair Market Value equal to or in excess of $5
million, the transaction or series of related transactions is approved by
a majority of the Board of Directors of the Company (including a majority
of the disinterested directors), which approval is set forth in a Board
Resolution certifying that such transaction or series of transactions
complies with clause (i) above. The foregoing provisions shall not be
applicable to (i) reasonable compensation, indemnification and other
benefits paid or made available to an officer, director or employee of the
Company or a Subsidiary for services rendered in such person's capacity as
an officer, director or employee (including reimbursement or advancement
of reasonable out-of-pocket expenses and provisions of directors' and
officers' liability insurance) or (ii) the making of any Restricted
Payment otherwise permitted by this Indenture.
Section 1009. LIMITATION ON RESTRICTED PAYMENTS. The Company will
not, and will not permit any Subsidiary (other than Non-Recourse
Subsidiaries) to, make any Restricted Payment, unless at the time of and
after giving effect to the proposed Restricted Payment (a) no Default
shall have occurred and be continuing (or would result therefrom), (b) the
Company could incur at least $1.00 of additional Indebtedness under the
tests described in the first sentence under Section 1010 hereof and (c)
the aggregate amount of all Restricted Payments declared or made on or
after the Issue Date by the Company or any Subsidiary (other than
Non-Recourse Subsidiaries) shall not exceed the sum of (i) 50% (or if such
Consolidated Net Income shall be a deficit, minus 100% of such deficit) of
the aggregate Consolidated
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Net Income accrued during the period beginning on the first day of the
fiscal quarter in which the Issue Date falls and ending on the last day of
the fiscal quarter ending immediately prior to the date of such proposed
Restricted Payment, plus (ii) an amount equal to the aggregate net cash
proceeds received by the Company, subsequent to the Issue Date, from the
issuance or sale (other than to a Subsidiary) of shares of its Capital
Stock (excluding Redeemable Stock and the net proceeds from the Common
Stock Offering), but including Capital Stock issued upon the exercise of
options, warrants or rights to purchase Capital Stock (other than
Redeemable Stock) of the Company) and the liability (expressed as a
positive number) in accordance with GAAP in respect of any Indebtedness of
the Company or carrying value of Redeemable Stock, which has been
converted into, exchanged for or satisfied by the issuance of shares of
Capital Stock (other than Redeemable Stock) of the Company, subsequent to
the Issue Date plus (iii) to the extent not otherwise included in
Consolidated Net Income, the net reduction in Investments in Non-Recourse
Subsidiaries resulting from dividends, repayments of loans or advances, or
otets, in each case to the Company or a Subsidiary after the Issue Date
from any Non-Recourse Subsidiary or from the redesignation of a
Non-Recourse Subsidiary as a Subsidiary (valued in each case as provided
in the definition of Investment), not to exceed in the case of any
Non-Recourse Subsidiary the total amount of Investments (other than
Permitted Investments) in such Non-Recourse Subsidiary made by the Company
and its Subsidiaries in such Non-Recourse Subsidiary after the Issue Date,
plus (iv) $50 million minus the sum of Investments described in clauses
(k) and (1) under the definition of "Permitted Investments," but in no
event to exceed $10 million.
The foregoing provisions will not prevent (A) the payment of any
dividend on Capital Stock of any class within 60 days after the date of
its declaration if at the date of declaration such payment would be
permitted by this Indenture; (B) any repurchase or redemption of Capital
Stock or Subordinated Indebtedness of the Company made by exchange for
Capital Stock of the Company (other than Redeemable Stock), or out of the
net cash proceeds from the substantially concurrent issuance or sale
(other than to a Subsidiary) of Capital Stock of the Company (other than
Redeemable Stock), PROVIDED that the net cash proceeds from such sale are
excluded from computations under clause (c)(ii) above to the extent such
proceeds are applied to purchase or redeem such Capital Stock or
Subordinated Indebtedness; and (C) any repurchase or redemption of
Subordinated Indebtedness of the Company solely in exchange for, or out of
the net cash proceeds from the substantially concurrent sale of, new
Subordinated Indebtedness of the Company, so long as such Subordinated
Indebtedness (x) is subordinated to the Notes at least to the same extent
as the Subordinated Indebtedness so exchanged, purchased or redeemed, (y)
has a stated maturity later than the stated maturity of the Subordinated
Indebtedness so exchanged, purchased or redeemed and (z) has an Average
Life at the time incurred that is greater than the remaining Average Life
of the Subordinated Indebtedness so
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exchanged, purchased or redeemed. Restricted Payments permitted to be made
as described in the preceding sentence will be excluded in calculating the
amount of Restricted Payments thereafter, except such Restricted Payments
made as described in clause (A), which will be included in calculating the
amount of Restricted Payments thereafter.
Section 1010. LIMITATION ON INDEBTEDNESS. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, create, incur,
assume, suffer to exist, guarantee or otherwise become liable, with
respect to the payment of (collectively, "incur"), any Indebtedness (other
than Non-Recourse Indebtedness), unless after giving pro forma effect to
the incurrence of such Indebtedness, the Consolidated Interest Coverage
Ratio for the Determination Period preceding the Transaction Date is at
least 2.5 to 1.0. Notwithstanding the foregoing, the Company or any
Subsidiary may incur Permitted Indebtedness. Any Indebtedness of a Person
existing at the time such Person became a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by
such Subsidiary at the time it becomes a Subsidiary.
Section 1011. LIMITATION ON SUBSIDIARY INDEBTEDNESS AND PREFERRED
STOCK. The Company will not permit any Subsidiary to incur, directly or
indirectly, any Indebtedness (other than Indebtedness of Non-Recourse
Subsidiaries) or issue any preferred stock except:
(a) Indebtedness or preferred stock issued to and held by the
Company or a Wholly Owned Subsidiary, so long as any transfer of
such Indebtedness or preferred stock to a Person other than the
Company or a Wholly Owned Subsidiary will be deemed to constitute
the issuance of such Indebtedness or preferred stock by the issuer
thereof;
(b) Indebtedness or preferred stock of a Subsidiary issued and
outstanding prior to the date on which such Subsidiary was acquired
by the Company (other than Indebtedness or preferred stock issued in
connection with or in anticipation of such acquisition);
(c) Indebtedness or preferred stock outstanding on the Issue
Date;
(d) Indebtedness described in clauses (b), (c), (d), (f) and
(g) under the definition of "Permitted Indebtedness";
(e) Permitted Subsidiary Refinancing Indebtedness of such
Subsidiary;
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<PAGE>
(f) Preferred stock issued in exchange for, or the proceeds of
which are used to refinance, repurchase or redeem, Indebtedness or
preferred stock described in clauses (b) and (c) of this paragraph
(the Retired Indebtedness or Stock), PROVIDED that the preferred
stock so issued has (i) a liquidation value not in excess of the
principal amount or liquidation value of the Retired Indebtedness or
Stock plus related expenses for redemption and issuance and (ii) a
redemption date later than the stated maturity or redemption date
(if any) of the Retired Indebtedness or Stock;
(g) Indebtedness of a Subsidiary which represents the
assumption by such Subsidiary of Indebtedness of another Subsidiary
(other than Non-Recourse Indebtedness) in connection with a merger
of such Subsidiaries, PROVIDED that no Subsidiary or any successor
(by way of merger) thereto existing on the Issue Date shall assume
or otherwise become responsible for any Indebtedness of an entity
which is not a Subsidiary on the Issue Date, except to the extent
that a Subsidiary would be permitted to incur such Indebtedness
under tills paragraph; and
(h) Indebtedness of any Subsidiary, which when taken together
with all other Indebtedness of the Subsidiaries (except Indebtedness
incurred pursuant to clauses (a), (b) and (d) of this covenant),
does not exceed at any one time outstanding the greater of (i) $230
million and (ii) 15% of Consolidated Net Tangible Assets determined
as of the date of incurrence of such Indebtedness.
Section 1012. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES. The Company will not, and will not
permit any Subsidiary (other than a Non-Recourse Subsidiary) to, directly
or indirectly, create, enter into any agreement with any Person or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind which by its terms restricts the
ability of any Subsidiary (other than a Non-Recourse Subsidiary) to (a)
pay dividends, in cash or otherwise, or make any other distributions on
its Capital Stock to the Company or any Subsidiary (other than a
Non-Recourse Subsidiary), (b) pay any Indebtedness owed to the Company or
any Subsidiary (other than a Non-Recourse Subsidiary), (c) make loans or
advances to the Company or any Subsidiary (other than a Non-Recourse
Subsidiary) or (d) transfer any of its Property or assets to the Company
or any Subsidiary (other than a Non-Recourse Subsidiary) except any
encumbrance or restriction contained in any agreement or instrument:
(i) existing on the Issue Date;
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(ii) relating to any Property or asset acquired after the
Issue Date, so long as such encumbrance or restriction relates only
to the Property or asset so acquired;
(iii) relating to any Indebtedness of any Subsidiary at the
date on which such Subsidiary was acquired by the Company or any
Subsidiary (other than Indebtedness incurred in anticipation of such
acquisition);
(iv) effecting a refinancing of Indebtedness issued pursuant
to an agreement referred to in the foregoing clauses (i) through
(iii), so long as the encumbrances and restrictions contained in any
such refinancing agreement are no more restrictive than the
encumbrances and restrictions contained in such agreements;
(v) which constitute customary provisions restricting
subletting or assignment of any lease of the Company or any
Subsidiary or provisions in agreements that restrict the assignment
of such agreement or any rights hereunder; and
(vi) which constitute restrictions on the sale or other
disposition of any Property securing Indebtedness as a result of a
Permitted Lien on such Property.
Section 1013. LIMITATION ON ASSET SALES. The Company will not engage
in, and will not permit any Subsidiary to engage in, any Asset Sale unless
(a) except in the case of (i) an Asset Sale resulting from the requisition
of tide to, seizure or forfeiture of any Property or assets or any actual
or constructive total loss or an agreed or compromised total loss or (ii)
a Bargain Purchase Contract, the Company or such Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the Property; (b) except in the case of
an Asset Sale described in clause (a), at least 75% of such consideration
consists of Cash Proceeds (or the assumption of Indebtedness of the
Company or such Subsidiary relating to the Capital Stock or Property that
was the subject of such Asset Sale and the release of the Company or such
Subsidiary from Indebtedness); (c) after giving effect to such Asset Sale,
the total non-cash consideration held by the Company from all such Asset
Sales does not exceed $10 million, and (d) the Company delivers to the
Trustee an Officers' Certificate, which Officers' Certificate shall be
conclusive, certifying that such Asset Sale complies with clauses (a), (b)
and (c); PROVIDED, HOWEVER, that the requirement set forth in clause (b)
shall not apply to an Asset Sale in which the Company exchanges (a
"Permitted Exchange") assets for assets that constitute Replacement
Assets. The Company or such Subsidiary, as the case may be, may apply the
Net Available Proceeds from each Asset Sale (x) to the acquisition of one
or more Replacement Assets, or (y) to repurchase or repay Senior
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Debt (with a permanent reduction of availability in the case of revolving
credit borrowings); PROVIDED, HOWEVER, that such acquisition or such
repurchase or repayment shall be made within 365 days after the
consummation of the relevant Asset Sale.
Any Net Available Proceeds from any Asset Sale that are not used to
so acquire Replacement Assets or to repurchase or repay Senior Debt within
365 days after consummation of the relevant Asset Sale constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10
million, the Company shall, or at any time after receipt of Excess
Proceeds, the Company may, at its option, make a pro rata offer (an "Asset
Sale Offer") to purchase from all Holders an aggregate principal amount of
Notes equal to the Excess Proceeds, at a price in cash equal to 100% of
the outstanding principal amount thereof plus accrued interest, if any, to
the purchase date, in accordance with the procedures set forth in this
Indenture. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset to zero and the Company may use any remaining
amount for general corporate purposes.
The Company will comply with any applicable tender offer rules
(including, without limitation, any applicable requirements of Rule 14e-1
under the Exchange Act) in the event that an Asset Sale Offer is required
under the circumstances described herein.
Section 1014. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The
Company will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Lease-Back Transaction (other than a Sale and
Lease-Back Transaction between NonRecourse Subsidiaries) unless (i) the
proceeds from such Sale and Lease-Back Transaction are at least equal to
the Fair Market Value of such Property being transferred and (ii) the
Company or such Subsidiary would have been permitted to enter into such
transaction under the tests described under Sections 1010, 1011 and 1015
hereof.
Section 1015. LIMITATION ON LIENS. The Company will not, and will
not permit any Subsidiary to, directly or indirectly, create, affirm,
incur, assume or suffer to exist any Liens on or with respect to any
Property of the Company or such Subsidiary or any interest therein or any
income or profits therefrom, whether owned at the Issue Date or thereafter
acquired, without effectively providing that the Notes shall be secured
equally and ratably with (or prior to) the Indebtedness so secured, other
than Permitted Liens.
Section 1016. LIMITATION ON NON-GUARANTOR SUBSIDIARIES. The Company
will not permit any Subsidiary that is not a Subsidiary Guarantor to
guarantee the
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payment of any Indebtedness of the Company unless: (i)(A) such Subsidiary
simultaneously executes and delivers a supplemental Indenture to this
Indenture providing for a Subsidiary Guarantee of the Notes by such
Subsidiary and (B), with respect to any guarantee of Subordinated
Indebtedness by a Subsidiary, any such guarantee shall be subordinated to
such Subsidiary's Subsidiary Guarantee at least to the same extent as such
Subordinated Indebtedness is subordinated to the Notes; (ii) such
Subsidiary waives, and agrees not in any manner whatsoever to exercise any
right or claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the
Company or any other Subsidiary as a result of any payment by such
Subsidiary under its Subsidiary Guarantee until such time as the
obligations guaranteed thereby are paid in full; and (iii) such Subsidiary
shall deliver to the Trustee an opinion of independent legal counsel to
the effect that such Subsidiary Guarantee has been duly executed and
authorized and constitutes a valid, binding and enforceable obligation of
such Subsidiary, except insofar as enforcement thereof may be limited by
bankruptcy, insolvency or similar laws (including, without limitation, all
laws relating to fraudulent transfers) and except insofar as enforcement
thereof is subject to general principles of equity; PROVIDED that this
covenant shall not be applicable to any guarantee of any Subsidiary that
(x) existed at the time such Person became a Subsidiary of the Company and
(y) was not incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary of the Company. Further, a pledge of assets
to secure any Indebtedness for which the pledgor is not otherwise liable
shall not be considered a guarantee.
Section 1017. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a) Upon
the occurrence of a Change of Control, each Holder of Notes shall have the
right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall mail a notice to the Trustee and each Holder
stating: (1) that the Change of Control Offer is being made pursuant to
this Section 1017 and that all Notes tendered shall be accepted for
payment; (2) the purchase price and the purchase date described below (the
"Change of Control Payment Date"); (3) that any Note not tendered shall
continue to accrue interest; (4) that, unless the Company defaults in the
payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest, if
any, after the Change of Control Payment Date; (5) that Holders electing
to have any Notes purchased pursuant to a Change of Control Offer shall be
required to surrender the Notes, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Notes completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the fifth Business Day preceding the
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Change of Control Payment Date; (6) that Holders shall be entitled to
withdraw their election if the Paying Agent receives, not later than the
close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes
delivered for purchase, and a statement that such Holder is withdrawing
his election to have the Notes purchased; and (7) that Holders whose Notes
are being purchased only in part shall be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $1,000 in principal amount or
an integral multiple thereof. If any of the Notes subject to a Change of
Control Offer is in the form of a Global Certificate, then such notice
shall be modified in form but not substance to the extent appropriate to
accord with the procedures of the Depository applicable to repurchases.
The Change of Control Offer shall remain open for at least 20 Business
Days and until the close of business on the fifth Business Day prior to
the Change of Control Payment Date. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations
are applicable in connection with the repurchase of the Notes as a result
of a Change of Control.
(b) On a date that is no earlier than 30 days nor later than 60 days
from the date that the Company mails or causes to be mailed notice of the
Change of Control to the Holders (the "Change of Control Payment Date"),
the Company shall, to the extent lawful, (i) accept for payment all Notes
or portions thereof properly tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so tendered
and (iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail or deliver to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each
such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Change of Control provisions described above shall be applicable
whether or not any other provisions of this Indenture are applicable.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in
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this Section 1017 and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 1018. REPORTS. The Company and any Subsidiary Guarantors
shall file with the Commission, to the extent such filings are accepted by
the Commission and whether or not the Company has a class of securities
registered under the Exchange Act, the annual reports, quarterly reports
and other documents that the Company and the Subsidiary Guarantors would
be required to file if the Company were subject to Section 13 or 15 of the
Exchange Act, in each case on or before the dates on which such reports
and other documents would have been required to have been filed with the
Commission if the Company had been subject to Section 13 or 15 of the
Exchange Act, beginning with the Company's fiscal year ended December 31,
1997. The Company shall also (i) file with the Trustee (with exhibits),
and provide to each Holder of Notes (without exhibits), without cost to
such Holder, copies of such reports and documents within 15 days after the
date on which the Company files such reports and documents with the
Commission or the date on which the Company would be required to file such
reports and documents if the Company were so required and (ii) if filing
such reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, supply at the
Company's cost copies of such reports and documents (including any
exhibits thereto) to any Holder of Notes promptly upon written request.
The Company shall at all times comply with Trust Indenture Act ss. 314(a).
Section 1019. TAXES. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good
faith and by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the
Notes.
Section 1020. STAY, EXTENSION AND USURY LAWS. Each of the Company
and the Subsidiary Guarantors covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture;
and each of the Company and the Subsidiary Guarantors (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 1.7. SUPPLEMENT TO ARTICLE ELEVEN OF THE ORIGINAL INDENTURE.
Article Eleven of the Original Indenture is supplemented with respect to the
Notes by inserting the following section at the end thereof:
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Section 1109. OPTIONAL REDEMPTION. The Notes will not be redeemable
at the option of the Company prior to May 1, 2002. On or after such date,
the Notes will be redeemable at the option of the Company, in whole at any
time or in part from time to time, at the following prices (expressed in
percentages of the principal amount), if redeemed during the 12 months
beginning May 1 of the years indicated below, in each case together with
interest accrued to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the
relevant interest payment date):
YEAR PERCENTAGE
2002................................ 104.688%
2003................................ 103.125%
2004................................ 101.563%
2005 and thereafter................. 100.000%
(b) If fewer than all the Notes are redeemed, selection for
redemption will be made by the Trustee, by lot or by any other means the
Trustee determines to be fair and appropriate.
(c) Notwithstanding the foregoing, at any time on or prior to May 1,
2000, the Company may redeem up to an aggregate of $108,333,000 principal
amount of Notes at a redemption price of 109.375% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date,
with the net proceeds of a Public Equity Offering (other than the Common
Stock offering concurrently with the date of original issuance of the
Notes), PROVIDED that at least $216,667,000 in aggregate principal amount
of Notes remain outstanding immediately after the occurrence of such
redemption and PROVIDED, FURTHER, that such redemption occurs within 60
days of the date of the closing of such Public Equity Offering.
SECTION 1.8. NEW ARTICLE FOURTEEN. The Original Indenture is supplemented
with respect to the Notes by inserting the following Article Fourteen:
ARTICLE FOURTEEN
SUBSIDIARY GUARANTEES
Section 1401. SUBSIDIARY GUARANTEES. Each Subsidiary Guarantor,
jointly and severally, shall unconditionally guarantee to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and
their respective successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
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overdue principal of and interest on premium and interest on the Notes, if
any, if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder shall be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same shall be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment
when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately. The Subsidiary Guarantors hereby
agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or
this Indenture, the absence of any action to enforce the same, any waiver
or consent by any Holder with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in thef the Company, any right to
require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Subsidiary Guarantee shall not
be discharged (other than in accordance with Article Four or Section 1404
of the Indenture) except by complete performance of the obligations
contained in the Notes and this Indenture. If any Holder or the Trustee is
required by any court or otherwise to return to the Company or Subsidiary
Guarantors, or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or Subsidiary
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article
Five for the purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby and (y) in the event of any
declaration of acceleration of such obligations as provided in Article
Five, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee. In order to provide for just and equitable
contribution among the Subsidiary Guarantors, in the event any payment or
distribution is made by any Subsidiary Guarantor (a "Funding Subsidiary
Guarantor") under its Subsidiary Guarantee, such Funding Subsidiary
Guarantor shall be entitled to a contribution from each other Subsidiary
Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by the Funding Subsidiarying the
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Company's obligations with respect to the Notes or any other Subsidiary
Guarantor's obligations with respect to any Subsidiary Guarantee. Each
Subsidiary Guarantor agrees that it will not be entitled to exercise any
right of subrogation or contribution in relation to the Holders of Notes
in respect of any obligations guaranteed hereby until payment in full of
all amounts guaranteed under this Section 1401.
Section 1402. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES. To
evidence its Subsidiary Guarantee set forth in Section 1401, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit B to the First Supplemental
Indenture shall be endorsed by an Officer of such Subsidiary Guarantor on
each Note thereafter authenticated and delivered by the Trustee, that a
supplement to this Indenture shall be executed on behalf of such
Subsidiary Guarantor by its duly authorized officer in accordance with
Section 1016 hereof and that such Subsidiary Guarantor shall deliver to
the Trustee an Opinion of Counsel that the foregoing have been duly
authorized, executed and delivered by such Subsidiary Guarantor and that
such Subsidiary Guarantor's Subsidiary Guarantee is a valid and legally
binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, fraudulent conveyance and other law affecting the
rights of creditors generally.
Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 1401 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on a supplement to this Indenture
or on the notation of Subsidiary Guarantee no longer holds that office at
the time the Trustee authenticates the Note on which a notation of
Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder and whether upon original issue, registration of
transfer, exchange or otherwise, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Person
that is then a Subsidiary Guarantor.
Section 1403. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS. No Subsidiary Guarantor may consolidate with or merge with
or into (whether or not such Subsidiary Guarantor is the surviving
Person), another Person whether or not affiliated with such Subsidiary
Guarantor unless:
(a) subject to the provisions of Section 1404 hereof, the
Person formed by or surviving any such consolidation or merger (if
other than such Subsidiary Guarantor) assumes all the obligations of
such Subsidiary
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Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee in respect of the
Notes, this Indenture and such Subsidiary Guarantor's Subsidiary
Guarantee;
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(c) such transaction does not violate any of Sections 1008,
1009, 1010, 1011, 1012, 1014, 1015, 1016, 1017, 1018, 1019 and 1020.
Notwithstanding the foregoing, no Subsidiary Guarantor shall be
permitted to consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person), another Person pursuant to
the preceding sentence if such consolidation or merger would not be
permitted by Article Eight hereof.
In case of any such consolidation or merger and upon the assumption
by the successor Person, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the obligations
of the Subsidiary Guarantor in respect of the Notes, this Indenture and
such Subsidiary Guarantor's Subsidiary Guarantee, such successor
corporation shall succeed to and be substituted for the Subsidiary
Guarantor with the same effect as if it had been named herein as a
Subsidiary Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of
the Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All the Subsidiary Guarantees
so issued shall in all respects have the same legal rank and benefit under
this Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles Eight and Ten hereof, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the
Company, or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company.
Section 1404. RELEASES OF SUBSIDIARY GUARANTEES. In the event of a
sale or other disposition of all or substantially all of the assets of any
Subsidiary Guarantor to a Person that is not a Subsidiary or to a
Non-Recourse Subsidiary in a transaction that does not violate any
provisions of this Indenture, by way of merger, consolidation or
otherwise, or a sale or other disposition (including, without limitation,
by foreclosure) of all of the capital stock of any Subsidiary Guarantor,
then such Subsidiary Guarantor (in the event of a sale or other
disposition (including,
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without limitation, by foreclosure), by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Subsidiary
Guarantor) or the Person acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such
Subsidiary Guarantor) shall be released and relieved of any obligations
under this Indenture and its Subsidiary Guarantee; PROVIDED that the Net
Available Proceeds of such sale or other disposition are applied in
accordance with Section 1013 hereof. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without
limitation Section 1013, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Subsidiary
Guarantor from its obligations under this Indenture and its Subsidiary
Guarantee. In the event of a release or discharge in full of all
obligations of any Subsidiary Guarantor in respect of all of its
guarantees of Indebtedness of the Company (other than the Notes), such
Subsidiary Guarantor shall, upon the written request of the Company, be
released and relieved of any obligation under this Indenture and its
Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an
Officers' Certificate to the effect that such Subsidiary Guarantor has
been released or discharged in full from all of its obligations under all
of its guarantees of Indebtedness of the Company, the Trustee shall
execute any documents reasonably required in ore of such Subsidiary
Guarantor from its obligations under this Indenture and its Subsidiary
Guarantee.
Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal
of and premium and interest on the Notes and for the other obligations of
any Subsidiary Guarantor under this Indenture.
Any Subsidiary Guarantor that is designated a Non-Recourse
Subsidiary in accordance with the terms of this Indenture shall be
released from and relieved of its obligations under this Indenture and its
Subsidiary Guarantee. Any Non-Recourse Subsidiary that ceases to be a
Non-Recourse Subsidiary shall thereupon execute a supplement to this
Indenture in accordance with the terms of this Indenture.
Section 1405. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY. For
purposes hereof, each Subsidiary Guarantor's liability shall be that
amount from time to time equal to the aggregate liability of such
Subsidiary Guarantor thereunder, but shall be limited to the lesser of (i)
the aggregate amount of the obligations of the Company under the Notes and
this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Subsidiary Guarantor "insolvent" (as such term is defined in
the federal Bankruptcy Law and in the Debtor and Creditor Law of the State
of New York) or (B) left it with unreasonably small capital at the time
its Subsidiary Guarantee of the Notes was entered into, after giving
effect to the incurrence of
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existing Indebtedness immediately prior to such time; provided that, it
shall be a presumption in any lawsuit or other proceeding in which such
Subsidiary Guarantor is a party that the amount guaranteed pursuant to its
Subsidiary Guarantee is the amount set forth in clause (i) above unless
any creditor, or representative of creditors of such Subsidiary Guarantor,
or debtor in possession or trustee in bankruptcy of such Subsidiary
Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of such Subsidiary Guarantor is limited to the amount set forth in clause
(ii). In making any determination as to the solvency or sufficiency of
capital of a Subsidiary Guarantor in accordance with the previous
sentence, the right of such Subsidiary Guarantor to contribution from
other Subsidiary Guarantors and any other rights such Subsidiary Guarantor
may have, contractual or otherwise, shall be taken into account.
Section 1406. "TRUSTEE" TO INCLUDE PAYING AGENT. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this
Article Fourteen shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such
Paying Agent were named in this Article Fourteen in place of the Trustee.
SECTION 1.9. EFFECT OF ARTICLE ONE. The supplements to the Original
Indenture set forth in Article One of this First Supplemental Indenture affect
only the provisions of the Original Indenture as such provisions relate to the
Notes, the series of Securities comprised of the Notes and the rights, remedies
and obligations of the Company, the Subsidiary Guarantors, the Holders of Notes,
the Trustee and other Persons set forth in the Original Indenture as such
rights, remedies and obligations relate to the Notes. Unless otherwise expressly
set forth in a subsequent supplement to the Original Indenture, as supplemented
hereby, the supplements to the Original Indenture contained in Article One of
this First Supplemental Indenture relate only to the series of Securities
comprised of the Notes.
ARTICLE TWO
THE NOTES
The Notes shall be issued in the form of one or more permanent global
Notes substantially in the form set forth on Exhibit A hereof, duly executed by
the Company and authenticated by the Trustee as provided in the Indenture. The
terms of the Notes set forth on Exhibit A hereto are incorporated by reference
herein as if set forth herein in their entirety.
- 35 -
<PAGE>
ARTICLE THREE
REPRESENTATIONS OF THE COMPANY
SECTION 3.1. AUTHORITY OF THE COMPANY. The Company is duly authorized to
execute and deliver this First Supplemental Indenture, and all corporate action
on its part required for the execution and delivery of this Supplemental
Indenture has been duly and effectively taken.
SECTION 3.2. TRUTH OF RECITALS AND STATEMENTS. The Company warrants that
the recitals of fact and statements contained in this First Supplemental
Indenture are true and correct, and that the recitals of fact and statements
contained in all certificates and other documents furnished thereunder will be
true and correct.
ARTICLE FOUR
CONCERNING THE TRUSTEE
SECTION 4.1. ACCEPTANCE OF TRUSTS. The Trustee accepts the trusts
hereunder and agrees to perform the same, but only upon the terms and conditions
set forth in the Original Indenture and in this First Supplemental Indenture, to
all of which the Company and the respective Holders of the Notes at any time
hereafter outstanding agree by their acceptance thereof.
SECTION 4.2. NO RESPONSIBILITY OF TRUSTEE FOR RECITALS, ETC. The recitals
and statements contained in this First Supplemental Indenture shall be taken as
the recitals and statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this First Supplemental
Indenture, except that the Trustee is duly authorized to execute and deliver
this First Supplemental Indenture.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
SECTION 5.1. RELATION TO THIS INDENTURE. The provisions of this First
Supplemental Indenture shall become effective immediately upon the execution and
delivery hereof. This First Supplemental Indenture and all the terms and
provisions herein contained shall form a part of the Original Indenture as fully
and with the same effect as if all such terms and provisions had been set forth
in the Original Indenture; PROVIDED, HOWEVER, such terms and provisions shall be
so included in this First Supplemental Indenture solely for the benefit of the
Company, the Subsidiary Guarantors, the Trustee and the Holders of the Notes.
The Original Indenture is hereby ratified and confirmed and shall remain and
continue in full force and effect in accordance with the terms and provisions
thereof, as supplemented by this First Supplemental Indenture, and the Original
Indenture and this First Supplemental Indenture shall be read, taken and
construed together as one instrument.
- 36 -
<PAGE>
SECTION 5.2. MEANING OF TERMS. Any term used in this First Supplemental
Indenture which is defined in the Original Indenture shall have the meaning
specified in the Original Indenture, unless the context shall otherwise require.
SECTION 5.3. COUNTERPARTS OF SUPPLEMENTAL INDENTURE. This First
Supplemental Indenture may be executed in several counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
instruments.
SECTION 5.4. GOVERNING LAW. This First Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York.
IN WITNESS WHEREOF, Pride Petroleum Services, Inc. has caused this First
Supplemental Indenture to be executed in its corporate name by a duly authorized
officer and The Chase Manhattan Bank has caused this Supplemental Indenture to
be executed in its corporate name by a duly authorized officer, all as of the
date first above written.
PRIDE PETROLEUM SERVICES, INC.
By: /s/ EARL W. MCNIEL
Name: EARL W. MCNIEL
Title: VICE PRESIDENT
THE CHASE MANHATTAN BANK
By: /s/ G. MCFARLANE
Name: G. MCFARLANE
Title: VICE PRESIDENT
- 37 -
<PAGE>
EXHIBIT A
(FACE OF NOTE)
9 3/8% Senior Notes due 2007
CUSIP Number ____________
No. $325,000,000
PRIDE PETROLEUM SERVICES, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on May 1, 2007.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
[SEAL]
ATTEST: PRIDE PETROLEUM SERVICES, INC.
By: By:
Name: Name:
Title: Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture:
The Chase Manhattan Bank,
as Trustee
By:
Authorized Officer
A-1
<PAGE>
Dated: May 7, 1997
A-2
<PAGE>
(BACK OF NOTE)
9 3/8% Senior Note due 2007
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
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.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. (a) Pride Petroleum Services, Inc., a Louisiana corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate of 9 3/8% per annum, which interest shall be payable in cash
semi-annually in arrears on May 1 and November 1, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"); PROVIDED that the first Interest Payment Date shall be November 1, 1997.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of original
issuance. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
2. METHOD OF PAYMENT. On each Interest Payment Date the Company will pay
interest to the Person who is the Holder of record of this Note as of the close
of business on the April 15 or October 15 immediately preceding such Interest
Payment Date, even if this Note is canceled after such record date and on or
before such Interest Payment Date. Principal, premium, if any, and interest, if
any, on this Note will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York. Such payment
shall be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Chase Manhattan Bank, the
Trustee under the Indenture, will act as Registrar and Paying Agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company, any Subsidiary Guarantor or any other of its Subsidiaries may act in
any such capacity.
A-3
<PAGE>
4. INDENTURE. The Company issued the Notes under an Indenture dated as of
May 1, 1997, as supplemented by a First Supplemental Indenture of even date
(collectively, the "Indenture") between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. The
Notes are general unsecured obligations of the Company limited in an aggregate
principal amount to $325,000,000 and will mature on May 1, 2007.
5. OPTIONAL REDEMPTION. (a) The Notes are not redeemable at the Company's
option prior to May 1, 2002. Thereafter, the Notes will be subject to redemption
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest thereon to
the applicable redemption date (subject to the right of the Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on May 1 of
the years indicated below:
YEAR PERCENTAGE
2002....................................................104.688%
2003....................................................103.125%
2004....................................................101.563%
2005 and thereafter.....................................100.000%
(b) Notwithstanding clause (a) of this Paragraph 5, prior to May 1, 2000,
the Company may, at its option, on any one or more occasions, redeem up to
$108,333,000 in aggregate principal amount of Notes at a redemption price equal
to 109.375% of the principal amount thereof, plus accrued and unpaid interest
thereon to the redemption date, with the net proceeds of a Public Equity
Offering (other than the Common Stock offering concurrently with the date of
original issuance of the Notes); PROVIDED that at least $200.0 million in
aggregate principal amount of Notes must remain outstanding immediately after
the occurrence of such redemption; and provided, further, that any such
redemption shall occur within 60 days of the date of the closing of such Public
Equity Offering.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. REPURCHASE AT OPTION OF HOLDER. (a) Upon the occurrence of a Change of
Control, each Holder of Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of purchase (the "Change of Control Payment"). Within 30 days following
any Change of Control, the Company will mail a notice to each Holder and the
Trustee describing the transaction or transactions that constitute
A-4
<PAGE>
the Change of Control and offering to repurchase Notes pursuant to the
procedures required by the Indenture and described in such notice. The Company
will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
(b) If the Company or a Subsidiary consummates any Asset Sales permitted
by the Indenture, when the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company shall make an Asset Sale Offer to purchase the maximum
principal amount of Notes to which the Asset Sale Offer applies that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the outstanding principal amount thereof plus accrued and
unpaid interest thereon to the date of purchase, in accordance with the
procedures set forth in Section 1013 of the Indenture. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes te aggregate principal amount (or accreted value,
as applicable) thereof surrendered in such Asset Sale Offer. Upon the completion
of an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes initially issued are in
the form of a permanent Global Certificate, except as provided in this
Indenture. Under certain circumstances described in the Indenture, Notes may
also be issued in the form of permanent certificated Notes in registered form
without coupons in minimum denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not register the transfer of any Notes for
a period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
A-5
<PAGE>
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes. Without
notice to or consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act, to secure the Notes or to add or
release any Subsidiary Guarantor pursuant to the terms of the Indenture;
PROVIDED that such actions will not adversely affect the interests of the
Holders in any material respect.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of the principal of or premium, if any, on the Notes; (iii) failure by
the Company to comply with the provisions of Sections 801, 1013 and 1017 of the
Indenture; (iv) failure by the Company or any Subsidiary Guarantor for 30 days
after notice from the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding to comply with any of its other
agreements in the Indeson cease to be, or be asserted by the Company or any
Subsidiary Guarantor, as applicable, not to be, in full force and effect (except
pursuant to the release of any such Subsidiary Guarantee in accordance with the
Indenture); (vi) failure by the Company or any of its Subsidiaries (other than
Non-Recourse Subsidiaries) to pay Indebtedness of the Company or any Subsidiary
(other than Non-Recourse Indebtedness or Limited Recourse Indebtedness) when due
within the applicable grace period, which Indebtedness exceeds $10 million;
(vii) the entry of a judgment in an uninsured or underdemnified aggregate amount
in excess of $10.0 million, which judgment is not paid or discharged for a
period of 60 days; and (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Subsidiaries (other than NonRecourse
Subsidiaries) that constitute a Significant Subsidiary or any group of
Subsidiaries (other than Non-Recourse Subsidiaries) that, taken together, would
constitute a Significant Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company, any Subsidiary (other than a Non-Recourse Subsidiary) that constitutes
a Significant Subsidiary or any group of Subsidiaries (other than NonRecourse
Subsidiaries) that, taken together, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes
A-6
<PAGE>
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal or interest) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Company is
required, upon becoming aware of any Default or Event of Default, to deliver to
the Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Indenture contains certain
limitations on the rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
Trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Company, as sucompany under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes, by accepting a Note, waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. SINKING FUND; ADDITIONAL AMOUNTS. There shall not be any sinking fund
with respect to the Notes. The Company shall not be obligated to pay Additional
Amounts with respect to the Notes.
A-7
<PAGE>
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Pride Petroleum Services, Inc.
1500 City West Blvd.
Suite 400
Houston, Texas 77042
Telephone No. (713) 789-1400
Telecopier No. (713) 789-1430
Attention: Robert Randall
A-8
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's Social Security or tax I.D. No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee: /*/
- ------------------------
/*/ Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 1013 or 1017 of the Indenture, check the box below:
[ ] Section 1013 [ ] Section 1017
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 1013 or Section 1017 of the Indenture, state the
amount you elect to have purchased:
$
Date: Your Signature:
(Sign exactly as your name appears on
the Note)
Tax Identification No.:
Signature Guarantee: /*/
- ---------------------
/*/ Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-10
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE
The following exchanges of a part of this Global Certificate for
Definitive Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of
Amount of decrease Amount of increase this Global Signature of
in principal Amount in Principal Amount Certificate following authorized officer of
of this Global of this Global such decrease (or Trustee or Note
DATE OF EXCHANGE Certificate Certificate increase) Custodian
- --------------------------------------------------------------------------------------------------------
<S><C><C>
</TABLE>
A-11
<PAGE>
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
Each of the Subsidiary Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Company thereunder, that: (a) the principal of and premium
and interest on the Notes shall be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on premium and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
thereunder shall be promptly paid in full or performed, all in accordance with
the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and
severally obligated to pay the same immediately.
The obligations of the Subsidiary Guarantors to the Holders of Notes and
to the Trustee pursuant to this Subsidiary Guarantee are expressly set forth in
Article 14 of the Indenture, and reference is hereby made to such Article for
the precise terms of this Subsidiary Guarantee. The terms of Article 14 of the
Indenture are incorporated herein by reference.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's obligations under the
Notes and the Indenture and shall inure to the benefit of the Trusteeors and
assigns and, in the event of any transfer or assignment of rights by any Holder
of Notes or the Trustee, the rights and privileges herein conferred upon that
party shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. Notwithstanding the
foregoing, the Subsidiary Guarantees may be discharged in accordance with
Article IV of the Indenture and any Subsidiary Guarantor that satisfies the
provisions of Section 14.04 of the Indenture shall be released of its
obligations hereunder. This is a Subsidiary Guarantee of payment and not a
guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Subsidiary
Guarantor hereunder, but shall be limited to the lesser of (i) the aggregate
amount of the Obligations of the Company under the Notes and the
B-1
<PAGE>
Indenture and (ii) the amount, if any, which would not have (A) rendered such
Subsidiary Guarantor "insolvent" (as such term is defined in the federal
Bankruptcy Law and in the Debtor and Creditor Law of the State of New York) or
(B) left it with unreasonably small capital at the time its Subsidiary Guarantee
of the Notes was entered into, after giving effect to the incurrence of existing
Indebtedness immediately prior to such time; provided that, it shall be a
presumption in any lawsuit or other proceeding in which such Subsidiary
Guarantor is a party that the amount guaranteed pursuant to its Subsidiary
Guarantee is the amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Subsidiary Guarantor, or debtor in
possession or trustetor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). The Indenture provides that, in making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with
the previous sentence, the right of such Subsidiary Guarantor to contribution
from other Subsidiary Guarantors and any other rights such Subsidiary Guarantor
may have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in that certain
Indenture dated as of May 1, 1997 between Pride Petroleum Services, Inc. and The
Chase Manhattan Bank, as Trustee, as supplemented by the First Supplemental
Indenture dated as of May 1, 1997 between Pride Petroleum Services, Inc. and The
Chase Manhattan Bank, as Trustee, unless otherwise indicated.
[Name of Subsidiary Guarantor]
By:
Name:
Title:
B-2
EXHIBIT 15
AWARENESS LETTER OF INDEPENDENT ACCOUNTANTS
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Pride Petroleum Services, Inc.
Registration Statements on Form S-8
We are aware that our report dated May 14, 1997 on our review of interim
consolidated financial information of Pride Petroleum Services, Inc. for the
periods ended March 31, 1997 and 1996 and included in this Form 10-Q is
incorporated by reference in the Company's registration statements on Form S-8
filed with the Securities and Exchange Commission on February 6, 1989 and
December 30, 1991 and Form S-3 (file no. 333-21385). Pursuant to Rule 436(C)
under the Securities Act of 1933, this report should not be considered a part of
the registration statements prepared or certified by us within the meanings of
Sections 7 and 11 of that Act.
COOPERS & LYBRAND L.L.P.
Houston, Texas
May 14, 199
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 35,442
<SECURITIES> 247
<RECEIVABLES> 145,597
<ALLOWANCES> 298
<INVENTORY> 25,569
<CURRENT-ASSETS> 240,460
<PP&E> 803,103
<DEPRECIATION> 59,496
<TOTAL-ASSETS> 1,008,941
<CURRENT-LIABILITIES> 238,940
<BONDS> 300,172
0
0
<COMMON> 1
<OTHER-SE> 459,375
<TOTAL-LIABILITY-AND-EQUITY> 1,008,941
<SALES> 131,376
<TOTAL-REVENUES> 131,376
<CGS> 116,179
<TOTAL-COSTS> 116,179
<OTHER-EXPENSES> (79,186)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,431
<INCOME-PRETAX> 90,952
<INCOME-TAX> 33,458
<INCOME-CONTINUING> 57,494
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,494
<EPS-PRIMARY> 1.72
<EPS-DILUTED> 1.46
</TABLE>
