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, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-13289
PRIDE INTERNATIONAL, 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.)
5847 SAN FELIPE, SUITE 3300
HOUSTON, TEXAS 77057
(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.
Common Stock, no par value Outstanding at May 11, 1998
50,075,548
<PAGE>
PRIDE INTERNATIONAL, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Consolidated Balance Sheet
March 31, 1998 and December 31, 1997........................... 4
Consolidated Statement of Operations -
Three months ended March 31, 1998 and 1997..................... 5
Consolidated Statement of Cash Flows -
Three months ended March 31, 1998 and 1997..................... 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 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 INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents....................................... $ 48,152 $ 73,539
Short-term investments.......................................... 2,296 856
Trade receivables, net.......................................... 202,509 194,973
Parts and supplies.............................................. 30,796 26,899
Deferred income taxes........................................... 2,252 2,252
Prepaid expenses and other current assets....................... 48,479 35,691
---------- ---------
Total current assets..................................... 334,484 334,210
---------- ---------
PROPERTY AND EQUIPMENT, at cost..................................... 1,381,794 1,273,327
ACCUMULATED DEPRECIATION............................................ (117,982) (101,680)
---------- ---------
Net property and equipment............................... 1,263,812 1,171,647
---------- ---------
OTHER ASSETS
Investments in and advances to affiliates....................... 3,368 9,092
Goodwill and other intangibles, net............................. 3,571 3,623
Other........................................................... 23,772 22,929
---------- ---------
Total other assets....................................... 30,711 35,644
---------- ---------
$1,629,007 $1,541,501
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable................................................ $ 115,915 $ 101,318
Accrued expenses................................................ 66,356 58,412
Short-term borrowings........................................... 19,612 21,055
Current portion of long-term debt............................... 35,976 39,356
Current portion of long-term lease obligations.................. 10,583 10,336
---------- ---------
Total current liabilities................................ 248,442 230,477
---------- ---------
OTHER LONG-TERM LIABILITIES......................................... 38,335 28,911
LONG-TERM DEBT, net of current portion.............................. 470,741 435,100
LONG-TERM LEASE OBLIGATIONS, net of current portion................. 35,755 36,275
CONVERTIBLE SUBORDINATED DEBENTURES................................. 52,500 52,500
DEFERRED INCOME TAXES............................................... 75,465 72,313
MINORITY INTEREST................................................... 768 768
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, no par value; 100,000,000 shares authorized;
50,124,768 and 50,097,120 shares issued and 50,070,548
and 50,042,900 shares outstanding, respectively ............ 1 1
Paid-in capital................................................. 523,356 522,946
Treasury stock, at cost......................................... (191) (191)
Retained earnings............................................... 183,835 162,401
---------- ---------
Total shareholders' equity............................... 707,001 685,157
---------- ---------
$1,629,007 $1,541,501
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
Page 4
<PAGE>
PRIDE INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
1998 1997
---------- ---------
REVENUES ............................................. $ 213,686 $ 131,376
OPERATING COSTS......................................... 136,493 91,087
---------- ---------
Gross Margin........................................ 77,193 40,289
DEPRECIATION AND AMORTIZATION........................... 18,815 10,074
SELLING, GENERAL AND ADMINISTRATIVE..................... 20,857 15,018
---------- ---------
Earnings from operations..................... 37,521 15,197
---------- ---------
OTHER INCOME (EXPENSE)
Other income (expense).............................. (166) 78,677
Interest income..................................... 1,299 509
Interest expense.................................... (10,471) (3,431)
---------- ---------
Total other income (expense), net............ (9,338) 75,755
---------- ---------
EARNINGS BEFORE INCOME TAXES............................ 28,183 90,952
INCOME TAX PROVISION ................................... 6,749 33,458
---------- ---------
NET EARNINGS............................................ $ 21,434 $ 57,494
========== =========
NET EARNINGS PER SHARE:
Basic............................................... $ .43 $ 1.82
Diluted............................................. $ .40 $ 1.49
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic............................................... 50,058 31,569
Diluted............................................. 55,312 39,046
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5
<PAGE>
PRIDE INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
---------- ----------
OPERATING ACTIVITIES
Net earnings ....................................... $ 21,434 $ 57,494
Adjustments to reconcile net earnings to net
cash provided by operating activities -
Depreciation and amortization .................. 18,815 10,074
Gain on sale of assets ......................... (119) (83,457)
Effect of exchange rates ....................... (158) (4)
Deferred tax provision (benefit) ............... 3,152 (1,401)
Changes in assets and liabilities, net of
effects of acquisitions -
Trade receivables ........................... (7,536) 11,711
Parts and supplies .......................... (3,897) 91
Prepaid expenses and other current assets ... (12,788) (3,809)
Other assets ................................ (1,872) --
Accounts payable ............................ 2,751 (2,100)
Accrued expenses ............................ 7,944 21,696
--------- ---------
Net cash provided by operating activities 27,726 10,295
--------- ---------
INVESTING ACTIVITIES
Purchase of net assets of acquired entities,
including acquisition costs, less cash acquired . -- (119,784)
Purchases of property and equipment ................ (92,329) (23,712)
Proceeds from sales of property and equipment ...... 276 135,426
Proceeds from sales of short-term investments ...... 753 415
Purchases of short-term investments ................ (2,193) (203)
--------- ---------
Net cash used in investing activities ... (93,493) (7,858)
--------- ---------
FINANCING ACTIVITIES
Proceeds from issuance of common stock ............. -- 579
Proceeds from exercise of stock options ............ 410 488
Proceeds from debt borrowings ...................... 50,962 46,534
Reduction of debt .................................. (10,992) (24,906)
--------- ---------
Net cash provided by financing activities 40,380 22,695
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ... (25,387) 25,132
CASH AND CASH EQUIVALENTS, beginning of period ......... 73,539 10,310
--------- ---------
CASH AND CASH EQUIVALENTS, end of period ............... $ 48,152 $ 35,442
========= =========
The accompanying notes are an integral part of the consolidated
financial statements.
Page 6
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PRIDE INTERNATIONAL, 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 International, 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, 1997. 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. 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 as of
March 31, 1998 ranged from 6.25% to 9.00%.
LONG-TERM DEBT
Long-term debt as of March 31, 1998 and December 31, 1997 consisted of the
following:
MARCH 31, DECEMBER 31,
1998 1997
---------- --------
(UNAUDITED)
(IN THOUSANDS)
Senior Notes ....................................... $325,000 $325,000
Collateralized term loans .......................... 76,185 79,009
Limited-recourse collateralized term
loans ............................................ 34,222 35,210
Other notes payable:
Note payable to sellers ......................... 8,000 11,000
Eximbank notes payable .......................... 6,327 6,533
Notes payable ................................... 12,456 13,667
Loan obligations to customers ................... 3,988 4,037
Other debt ......................................... 25,539 --
Credit Facility .................................... 15,000 --
-------- --------
506,717 474,456
Current portion of long-term debt .................. 35,976 39,356
-------- --------
Long-term debt, net of current
portion ................................... $470,741 $435,100
======== ========
Page 7
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PRIDE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SENIOR NOTES
In May 1997, the Company issued $325,000,000 of 9.375% Senior Notes due May
1, 2007 (the "Senior Notes"). Interest on the Senior Notes is payable
semi-annually 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 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 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.
COLLATERALIZED TERM LOANS
In April 1996, the Company completed two separate financing arrangements
with lending institutions pursuant to which it borrowed an aggregate amount of
$40,000,000 and an additional $6,500,000 in November 1996. The collateralized
term loans bore interest initially at a floating rate of prime plus 0.5% and are
repayable in monthly installments of principal and interest over a period of
five to six years. In December 1996, the Company elected to convert the interest
payable to a fixed rate basis. As a result, the collateralized term loans
currently bear interest at fixed rates ranging from 7.95% to 8.50% per annum.
The loans are collateralized by certain of the Company's domestic offshore rig
fleet and ancillary equipment. The loan agreements include restrictive financial
covenants with respect to cash flow coverage and tangible net worth.
In connection with the March 1997 Forasol acquisition, the Company assumed
certain borrowing arrangements with various banks, including a $20 million bank
loan, payable in semi-annual installments each August and February through 2002.
The loan bears interest at a stated rate of six-month LIBOR plus a margin
ranging from 1.25% to 2.50%. In conjunction with this loan, Forasol
simultaneously entered into an interest rate swap agreement with a notional
amount of $20 million, which fixed the rate of interest on this loan at 7.55%
over the term of the debt agreement. A semisubmersible rig is pledged as
security for this loan. The Company also assumed a $30 million bank loan,
collateralized by another semisubmersible rig, payable in semi-annual
installments beginning May 1997 through 2003, which bears interest at a rate of
LIBOR plus a margin ranging from 1.00% to 2.00%.
LIMITED RECOURSE COLLATERALIZED TERM LOANS
During 1994, the Company entered into long-term financing arrangements with
two Japanese trading companies in connection with the construction and operation
of two floating barge rigs. The term loans bear interest at 9.6% and 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. As of March 31, 1998, $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 8
<PAGE>
PRIDE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED)
OTHER NOTES PAYABLE
Other notes payable consists of an acquisition note payable to sellers,
Eximbank loans for the purchase and import of goods manufactured in the United
States into other countries, notes payable in connection with financed insurance
premiums and miscellaneous loan obligations to customers.
CREDIT FACILITY
In March 1997, the Company entered into a senior secured revolving credit
facility with a group of banks (as amended and restated in December 1997, 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 fair market value of collateral. 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 in
December 2000. Borrowings under the Credit Facility bears interest at a variable
rate based on either the prime rate or LIBOR. As of March 31, 1998, $15 million
was outstanding under the Credit Facility at an interest rate of 7.4%.
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.
OTHER DEBT
Other debt includes certain foreign short-term borrowing relating to its
acquisition of certain equipment to be installed on the PRIDE AFRICA, the
ultra-deepwater drillship referred to in Note 5. The Company intends to
refinance these short-term borrowings to long-term and has obtained a commitment
from a group of banks to provide up to $110.0 million in loans to finance this
acquisition. The loans will be secured by such equipment and will bear interest
at a rate of LIBOR plus 1.25% per annum. The Company has agreed to sell such
equipment to the joint venture formed to construct, own and operate the rig on
or before the date Elf Exploration Angola accepts delivery of the rig under
charter, which is anticipated to be mid-1999, and expects to repay such loan
from such sales proceeds. The joint venture intends to draw on its financing
agreement described above to finance its payment to the Company.
CONVERTIBLE SUBORDINATED DEBENTURES
In January 1996, the Company completed a public sale of $80,500,000
principal amount of 6 1/4% convertible subordinated debentures. The debentures,
which are due February 15, 2006, are convertible into common stock of the
Company at a price of $12.25 per share. The debentures are redeemable at the
option of the Company, in whole or in part, at any time on or after March 1,
1999, at an initial redemption price of 103.125% of the principal amount and
declining to 100.0% of the principal amount by February 15, 2002. Interest is
payable semi-annually on February 15 and August 15 of each year. During 1997, an
aggregate of $28,000,000 principal amount of the debentures was converted into
2,285,712 shares of common stock.
Page 9
<PAGE>
In April 1998, the Company completed a public sale of zero coupon
convertible subordinated debentures. The net proceeds to the Company in
connection with the sale, after deducting underwriting discounts and offering
expenses, amounted to approximately $222,600,000. The debentures, which mature
on April 24, 2018, are convertible into common stock of the Company at a
conversion rate of 13.794 shares of common stock per $1,000 principal amount at
maturity. At the maturity date, the accreted principal value of the debenture
would be $588,145,000. The Company will become obligated to purchase the
debentures, at the option of the holders, in whole or in part, on April 24,
2003, 2008 and 2013 at a price per debenture of $494.52, $625.35 and $790.79,
respectively, settled either in cash, common stock or a combination thereof. In
addition, the Company will become obligated to purchase the debentures on or
prior to April 24, 2003, at a price equal to the issue price plus accrued
original issue discount in the event of a change of control of the Company. On
or subsequent to April 24, 2003, the debentures are redeemable at the option of
the Company, in whole or in part, for cash at a price equal to the issue price
plus accrued original issue discount.
3. INCOME TAXES
The Company's consolidated effective income tax rate for the three months
ended March 31, 1998 was approximately 23.9%, as compared to approximately 36.8%
for the corresponding period in 1997. The decrease in the effective tax rate for
the first three months of 1998 resulted from the effects of the inclusion of the
Forasol acquisition, which has a majority of its international operations in low
tax jurisdictions. The 1997 first quarter included a gain of $83.6 million on
the sale of the U.S. land operations that was taxed at 36% and certain
non-deductible amounts, primarily $3.7 million of costs related to induced
conversion of convertible subordinated debentures.
4. NET EARNINGS AND EARNINGS PER SHARE
Other income (expense), earnings before income taxes and net earnings for
the three months ended March 31, 1997 include a pretax gain on the divestiture
of the Company's U.S. land-based well servicing business of $83.6 million. The
gain was partially offset by nonrecurring charges totaling $4.2 million, net of
estimated income taxes, relating principally to the induced conversion of $28.0
million principal amount of the Company's convertible subordinated debentures.
Excluding such nonrecurring items, net earnings for the three months ended March
31, 1997 were $8.2 million, or $.23 per share on a diluted basis.
Basic net earnings per share has been computed based on the weighted average
number of shares of common stock outstanding during the applicable period.
Diluted net earnings per share has been computed based on the weighted average
number of shares of common stock and potential common stock 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.
Page 10
<PAGE>
The following table presents information necessary to calculate basic and
diluted net earnings per share:
THREE MONTHS ENDED
MARCH 31,
------------------
1998 1997
-------- --------
(IN THOUSANDS,
EXCEPT
PER SHARE AMOUNTS)
Net earnings (numerator) ............................. $ 21,434 $ 57,494
Interest expense on convertible subordinated
debentures .......................................... 866 962
Income tax effect .................................... (312) (346)
-------- --------
Adjusted net earnings (numerator) .................. $ 21,988 $ 58,110
======== ========
Weighted average number of common shares outstanding
(denominator) ....................................... 50,058 31,569
Convertible subordinated debentures .................. 4,285 6,265
Stock options and warrants ........................... 969 1,212
-------- --------
Adjusted weighted average shares outstanding
(denominator) ................................... 55,312 39,046
======== ========
Basic net earnings per share .................. $ .43 $ 1.82
======== ========
Diluted net earnings per share ................ $ .40 $ 1.49
======== ========
5. 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
Company's existing litigation will have a material adverse effect on the
Company's financial position or results of operations.
During 1997, the Company entered into a joint venture to construct, own and
operate the PRIDE AFRICA, an ultra-deepwater drillship currently under
construction in South Korea. The drillship is contracted to work offshore Angola
for a term of five years. It is anticipated that the drillship will commence
operations in mid-1999. Subsequent to December 31, 1997, the joint venture
entered into a financing arrangement with a group of banks providing that
approximately $198 million of the drillship's estimated construction cost of
$235 million will be financed by loans that are, upon delivery of the drillship,
without recourse to the joint venture participants. The Company estimates that
its equity investment in the project will be approximately $16 million, which
will represent a 51% ownership interest.
Also during 1997, a newly organized special purpose subsidiary of the
Company agreed to participate in joint ventures to construct, own and operate
six Amethyst-class dynamically positioned semisubmersible drilling rigs. The
rigs will be operated under charter and service contracts with initial terms of
six to eight years. The total estimated cost to construct, equip and mobilize
the six rigs is approximately $1 billion, approximately 90% of which is expected
to be provided from the proceeds of project finance obligations without recourse
to the joint venture participants. Delivery of the rigs is expected during late
1999 and 2000. The Company estimates that its equity investment in the project
will be approximately $30 million, which will represent a 30% ownership
interest.
In March 1998, the Company contracted to purchase, for approximately $85
million, a dynamically positioned, self-propelled semisubmersible drilling rig.
The rig is currently working offshore Brazil under a charter and service
contract that expires in 2001. The Company expects to close the acquisitions in
the second quarter of 1998.
Page 11
<PAGE>
PRIDE INTERNATIONAL, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -(CONTINUED)
In April 1998, the Company entered into a letter of intent for a second
ultra-deepwater drillship to operate offshore Angola under a three-year contract
with two one-year options. The drillship is being built in South Korea and at a
cost of approximately $235 million. The Company expects to conclude a joint
venture to construct, own and operate the drillship and also to arrange
nonrecourse financing. The Company estimates that its equity investment in the
project will be approximately $16 million, which will represent a 51% ownership
interest.
Page 13
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of Pride International, Inc.:
We have reviewed the accompanying consolidated balance sheet of Pride
International, Inc. as of March 31, 1998, and the related consolidated
statements of operations and cash flows for the three-month periods ended March
31, 1998 and 1997. 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, 1997, 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 16, 1998, 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, 1997 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, 1998
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 International, Inc. (the
"Company") as of March 31, 1998 and for the three-month periods ended March 31,
1998 and 1997 included elsewhere herein, and with the Company's Annual Report on
Form 10-K for the year ended December 31, 1997. The following information
contains forward-looking statements. For a discussion of certain limitations
inherent in such statements, see "--Forward-Looking Statements."
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.
International drilling and well servicing activity is affected by
fluctuations in oil and 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 well 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 During 1993 and 1994, the Company made entry-level acquisitions in
Argentina, Venezuela and the Gulf of Mexico.
o In January 1995, the Company commenced operating two barge rigs on Lake
Maracaibo, Venezuela. The barge rigs were constructed during 1994
pursuant to ten-year operating contracts entered into with Petroleos de
Venezuela, S.A., the Venezuelan national oil company.
o In April 1996, the Company acquired Quitral-Co S.A.I.C. ("Quitral-Co")
from Perez Companc S.A. and other shareholders. The 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
operated by Quitral-Co were combined with the Company's existing
land-based operations in those countries. The Company has further
expanded international operations by deploying more than 40 rigs from
its former U.S. land-based fleet to Argentina and Venezuela, and by
acquiring four rigs from an Argentine competitor.
o In October 1996, the Company expanded its Colombian operations to 20
rigs through the acquisition of Ingeser de Colombia, S.A., which
operated seven land-based drilling rigs and six land-based workover rigs
in Colombia.
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
in Texas, California, New Mexico and Louisiana.
Page 14
<PAGE>
o In March 1997, the Company completed the acquisition of the operating
subsidiaries of Forasol-Foramer N.V. (collectively, "Forasol"), adding
two semisubmersible rigs, three jackup rigs, seven tender-assisted rigs,
four barge rigs and 29 land-based rigs operating in various locations in
South America, Africa, the Middle East and Southeast Asia.
o In May 1997, the Company purchased 13 mat-supported jackup drilling
rigs, 11 of which are currently operating in the Gulf of Mexico, one of
which is currently operating in West Africa and one of which is
operating in Malaysia.
o In April 1997, the Company purchased a tender-assisted rig, which has
been upgraded and deployed to Southeast Asia. In October 1997, the
Company purchased an independent-leg, cantilevered jackup rig capable of
operating in water depths of up to 300 feet, which is currently under
contract in Southeast Asia.
RESULTS OF OPERATIONS
The following table sets forth selected consolidated financial information
of the Company by operating segment for the periods indicated:
THREE MONTHS ENDED MARCH 31,
1998 1997
------------------- -----------
(IN THOUSANDS, EXCEPT PERCENTAGES)
Revenues
International land................. $ 108,633 50.8% $ 79,996 60.9%
International offshore............. 59,751 28.0 18,945 14.4
United States land................. - - 16,485 12.6
United States offshore............. 45,302 21.2 15,950 12.1
--------- ------ --------- -----
Total revenues................. 213,686 100.0 131,376 100.0
--------- ------ --------- -----
Operating Costs
International land................. 77,576 56.8 56,273 61.8
International offshore............. 33,637 24.7 10,596 11.6
United States land................. - - 12,776 14.0
United States offshore............. 25,280 18.5 11,442 12.6
--------- ------ --------- -----
Total operating costs.......... 136,493 100.0 91,087 100.0
--------- ------ --------- -----
Gross Margin
International land................. 31,057 40.2 23,723 58.9
International offshore............. 26,114 33.8 8,349 20.7
United States land................. - - 3,709 9.2
United States offshore............. 20,022 26.0 4,508 11.2
--------- ------ --------- -----
Total gross margin............. $ 77,193 100.0% $ 40,289 100.0%
========= ===== ========= =====
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31,
1997.
REVENUES. Revenues for the three months ended March 31, 1998 increased $82.3
million, or 62.6%, as compared to the corresponding period in 1997. Of this
increase, $28.6 million was a result of expansion of the Company's international
land-based operations, due primarily to the acquisition of Forasol in March
1997. Revenues from international offshore operations increased $40.8 million,
due primarily to the addition of the Forasol offshore assets. Revenues
attributable to domestic offshore operations increased $29.4 million due
primarily to the addition of the 13 mat-supported jackup rigs.
Page 15
<PAGE>
OPERATING COSTS. Operating costs for the three months ended March 31, 1998
increased $45.4 million, or 49.8%, as compared to the corresponding period in
1997. Of this increase, $21.3 million was a result of expansion of the Company's
international land-based operations, due principally to the acquisition of
Forasol, as discussed above, and $23 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 $13.8 million due primarily to costs associated with the
mat-supported jackup rigs. Operating costs for domestic land operations
decreased $12.8 million, due to the sale of such operations.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization for the three
months ended March 31, 1998 increased $8.7 million, or 86.7%, as compared to the
corresponding period in 1997, primarily as a result of the acquisition of
Forasol and the 13 mat-supported jackup drilling rigs 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, 1998 increased $5.8 million, or
38.8%, as compared to the corresponding period in 1997, primarily due to
inclusion of such costs for Forasol. As a percentage of revenues, total selling,
general and administrative costs were 9.7% for the first quarter of 1998, as
compared to 11% for the first quarter of 1997.
OTHER INCOME (EXPENSE). Other income (expense) for the first quarter of 1997
included a gain of $83.6 million from the sale of the Company's U.S. land-based
well servicing operations in February 1997. 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 convertible subordinated debentures and other
charges.
Interest income was $1.29 million for the three months ended March 31, 1998
up from $509,000 for the corresponding 1997 period due to an increase in cash
available for investment. Interest expense for the three months ended March 31,
1998 increased by $7.0 million over the corresponding 1997 period, as a result
of increased borrowings. During the three months ended March 31, 1998, the
Company capitalized $3.3 million of interest expense in connection with
construction projects.
INCOME TAX PROVISION. The Company's consolidated effective income tax rate
for the three months ended March 31, 1998 was approximately 23.9%, as compared
to approximately 36.8% for the corresponding period in 1997. The decrease in the
effective tax rate for the first quarter of 1998 resulted from the effects of
the inclusion of the Forasol acquisition, which has a majority of its
international operations in low tax jurisdictions. The 1997 first quarter
included a gain of $83.6 million on the sale of the U.S. land operations that
was taxed at 36%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had net working capital of $86.0 million and $103.7 million at
March 31, 1998 and December 31, 1997, respectively. The Company's current ratio
was 1.3 at March 31, 1998 and 1.5 at December 31, 1997.
In March 1997, the Company entered into a revolving credit facility with a
group of banks (as amended and restated in December 1997, 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. 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 in December 2000.
Borrowings under the Credit Facility bear interest at a variable rate based on
either the prime rate or LIBOR.
Page 16
<PAGE>
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. As of March
31, 1998, borrowings totaling $15.0 million were outstanding under the Credit
Facility.
In March 1998, the Company contracted to purchase, for approximately $85.0
million, the M.S.V. AMETHYST (the "AMETHYST 1"), a dynamically positioned,
self-propelled semisubmersible drilling rig capable of working in water depths
of up to 4,000 feet. The rig, which is equipped to provide offshore drilling,
deepwater well intervention and maintenance services, and pipeline construction
services, is currently working offshore Brazil for Petroleo Brasilerio S.A.
("Petrobras") under a charter and service contract that expires in 2001. The
Company expects to close this acquisition in the second quarter of 1998 and to
fund approximately $65.0 million of the purchase price from cash and the balance
through the issuance of a note convertible into common stock.
A newly organized, special purpose subsidiary of the Company is
participating in joint ventures to construct, own and operate six Amethyst-class
dynamically positioned semisubmersible drilling rigs. The rigs, which will be
larger, enhanced versions of the AMETHYST 1, will be operated under charter and
service contracts with Petrobras having initial terms of six to eight years. The
total estimated cost to construct, equip and mobilize the six rigs is
approximately $1 billion, approximately 90% of which is expected to be provided
from the proceeds of project finance obligations of the ventures without
recourse to the joint venture participants. Delivery of the rigs is expected
during late 1999 and 2000. The Company estimates that its equity investment in
the project will be approximately $30.0 million, which will represent a 30%
ownership interest.
A subsidiary of the Company has entered into a joint venture to construct,
own and operate the PRIDE AFRICA, an ultra-deepwater drillship currently under
construction in South Korea. The PRIDE AFRICA, which will be capable of
operating in water depths of up to 10,000 feet, is contracted to work for Elf
Exploration Angola for a term of five years. It is anticipated that the PRIDE
AFRICA will commence operations in mid-1999. The joint venture has entered into
a financing arrangement with a group of banks providing that approximately
$198.0 million of the estimated construction cost of $235.0 million will be
financed by loans that are, upon delivery of the drillship, without recourse to
the joint venture participants. The Company estimates that its equity investment
in the project will be approximately $16.0 million, which will represent a 51%
ownership interest.
The Company has obtained a commitment from a group of banks to provide up
to $110.0 million in loans to finance its acquisition of certain equipment to be
installed on the PRIDE AFRICA. The loans will be collateralized by such
equipment and will bear interest at a rate of LIBOR plus 1.25% per annum. The
Company has agreed to sell such equipment to the joint venture formed to
construct, own and operate the rig on or before the date Elf Exploration Angola
accepts delivery of the rig under charter, which is anticipated to be mid-1999,
and expects to repay such loan from such sales proceeds. The joint venture
intends to draw on its financing agreement described above to finance its
payment to the Company.
The Company has entered into a letter of intent with Elf Exploration Angola
for a second ultra-deepwater drillship to operate offshore Angola under a
three-year contract with two one-year options. The PRIDE EUROPE will be
substantially similar in design to the PRIDE AFRICA, and will be built in South
Korea at a cost of approximately $235.0 million. The Company expects to conclude
a joint venture similar to the PRIDE AFRICA joint venture to construct, own and
operate the PRIDE EUROPE and similar non-recourse financing. The Company
estimates that its equity investment in the project will be approximately $16.0
million, which will represent a 51% ownership interest.
Page 17
<PAGE>
In April 1998, the Company completed a public sale of zero coupon
convertible subordinated debentures ("Zero Coupon Debentures"). The net proceeds
to the Company in connection with the sale, after deducting underwriting
discounts and offering expenses, amounted to approximately $222.6 million. Of
such net proceeds approximately $63.3 million will be used to fund the cash
portion of the purchase price of the semisubmersible rig AMETHYST 1,
approximately $30.0 million will be used to fund the Company's investments in
the Amethyst joint ventures and approximately $32.0 million will be used to fund
the Company's equity investments in the PRIDE AFRICA and the PRIDE EUROPE.
Approximately $15.0 million was used to repay the balance outstanding under the
Company's Credit Facility at March 31, 1998. The Company intends to use the
excess proceeds from the offering for general corporate purposes, including
acquisitions and capital projects. The Zero Coupon Debentures, which mature on
April 24, 2018, are convertible into common stock of the Company at a conversion
rate of 13.794 shares of common stock per $1,000 principal amount at maturity.
At the maturity date, the accreted principal value of the Zero Coupon Debentures
would be $588.1 million.
The sale of the Zero Coupon Debentures was made under a "shelf" registration
statement under the Securities Act of 1933 pursuant to which the Company may
issue up to $500.0 million initial offering price of securities consisting of
any combination of debt securities, common stock and preferred stock of the
Company. Management believes that the cash generated from the Company's
operations, together with the net proceeds from the Zero Coupon Debentures
offering and borrowings under the Credit Facility will be adequate to fund the
rig acquisition and equity investments discussed above and the Company's normal
ongoing capital expenditures, 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 other than those discussed
above, 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.
ACCOUNTING MATTERS
The Company will adopt Statement of Financial Accounting Standards ("FAS")
No. 132 "Employers' Disclosures about Pensions and Other Postretirement
Benefits", and FAS No. 131 "Disclosures about Segments of an Enterprise and
Related Information" for the year ended December 31, 1998. The Company does not
anticipate that the adoption of these disclosure standards will have a material
impact on its consolidated financial statements. FAS No. 130 "Reporting
Comprehensive Income" was adopted during the quarter ended March 31, 1998 and
had no impact on the Company's financial position, results of operations or cash
flows.
YEAR 2000 MATTERS
Year 2000 issues result from the inability of computer programs or
computerized equipment to accurately calculate, store or use a date subsequent
to December 31, 1999. The erroneous date can be interpreted in a number of
different ways; typically the year 2000 is represented as the year 1900. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices or engage in similar normal business. The Company is
in the process of implementing new financial reporting, operational reporting
and computer systems. The first phase of implementation was completed in
February 1998. The remaining phases are scheduled for implementation and
completion within the next two years. In addition, the Company is assessing the
use of less critical software systems and various types of equipment. The
Company is using both internal and external resources to complete tasks and
perform testing necessary to address the year 2000 issues. The Company believes
that the potential impact, if any, of these systems not being year 2000
compliant will at most require employees to manually complete otherwise
automated tasks or calculations and that it should not affect the Company's
ability to continue its operating activities.
Page 18
<PAGE>
The Company has initiated formal communication with its significant
suppliers, business partners and customers to determine the extent to which the
Company is vulnerable to those third parties' failure to correct their own year
2000 issues. There can be no assurances that the systems of other companies on
which the Company's systems rely will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company.
FORWARD-LOOKING STATEMENTS
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, and Section 21E of the Securities
Exchange Act of 1934, as amended. 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
capital expenditures and investments in the construction, acquisition and
refurbishment of rigs (including the amount and nature thereof and the timing of
completion thereof), 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, general economic and business conditions, prices of oil and
gas, foreign exchange controls and currency fluctuations, the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company, changes in laws or regulations, the ability to obtain shipyard
contracts and other factors, many of which are beyond the control of the
Company. Any such statements are not guarantees of future performance, and
actual results or developments may differ materially from those projected in the
forward-looking statements.
Page 19
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT NO.
4.1 -- Indenture, dated as of April 1, 1998, between Pride
International, Inc. and Marine Midland Bank, as
Trustee, relating to subordinated debt securities.
4.2 -- First Supplemental Indenture, dated as of April 24,
1998, between Pride International, Inc. and Marine
Midland Bank, as Trustee, relating to Zero Coupon
Convertible Subordinated Debentures Due 2018.
15 -- Awareness Letter of Coopers & Lybrand L.L.P.
27 -- Financial Data Schedule
(b) Reports on Form 8-K
In a Current Report on Form 8-K dated March 20, 1998, the Company filed
pursuant to Item 7 of Form 8-K the following: (i) the historical statement of
revenues and direct/allocated operating expenses of the mat-supported jackup rig
operations of Noble Drilling Corporation for the year ended December 31, 1996
and the three months ended March 31, 1997, and the notes thereto; (ii) the
consolidated financial statements Forasol-Foramer N.V. as of and for the years
ended December 31, 1996, 1995 and 1994, and the notes thereto; and (iii) the
unaudited pro forma statement of operations of the Company for the year ended
December 31, 1997, and the notes thereto.
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 INTERNATIONAL, 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
By: M. TERRY MAY
(M. TERRY MAY)
Chief Accounting Officer
Date: May 14, 1998
EXHIBIT 4.1
[Conformed]
PRIDE INTERNATIONAL, INC.
and
MARINE MIDLAND BANK,
Trustee
INDENTURE
Dated as of
April 1, 1998
SUBORDINATED DEBT SECURITIES
<PAGE>
PRIDE INTERNATIONAL, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF APRIL 1, 1998
------------------------
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.
-2-
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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
Agent Members..........................................................2
Authenticating Agent...................................................2
Authorized Newspaper...................................................2
Board of Directors.....................................................2
Board Resolution.......................................................2
Business Day...........................................................2
Capital Stock..........................................................3
Capitalized Lease Obligation...........................................3
Commission.............................................................3
Company................................................................3
Company Request........................................................3
Company Order..........................................................3
Conversion Event.......................................................3
Corporate Trust Office.................................................3
Default................................................................3
Defaulted Interest.....................................................3
Depositary.............................................................3
Designated Senior Indebtedness,........................................3
Disqualified Capital Stock.............................................4
Dollar.................................................................4
Event of Default.......................................................4
Exchange Rate..........................................................4
Holder.................................................................4
Indebtedness...........................................................4
Indenture..............................................................5
interest...............................................................5
Interest Payment Date..................................................5
Interest Swap and Hedging Obligation...................................5
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PAGE
Judgment Currency......................................................5
Junior security........................................................5
Maturity...............................................................5
Officers' Certificate..................................................5
Opinion of Counsel.....................................................5
Original Issue Discount Security.......................................6
Outstanding............................................................6
Paying Agent...........................................................7
Payment Default........................................................7
Payment Notice.........................................................7
Person.................................................................7
Place of Payment.......................................................7
Predecessor Security...................................................7
Qualified Capital Stock................................................7
Redemption Date........................................................7
Redemption Price.......................................................7
Regular Record Date....................................................7
Required Currency......................................................7
Responsible Officer....................................................7
Securities.............................................................8
Security Custodian.....................................................8
Security Register......................................................8
Security Registrar.....................................................8
Senior Indebtedness....................................................8
Special Record Date....................................................8
Stated Maturity........................................................8
Subsidiary.............................................................8
Trustee................................................................8
Trust Indenture Act....................................................9
United States..........................................................9
United States Alien....................................................9
U.S. Government Obligations............................................9
Vice President.........................................................9
Wholly Owned Subsidiary................................................9
Yield to Maturity......................................................9
SECTION 102. Incorporation by Reference of Trust Indenture Act.............9
SECTION 103. Compliance Certificates and Opinions.........................10
SECTION 104. Form of Documents Delivered to Trustee.......................10
SECTION 105. Acts of Holders; Record Dates................................11
SECTION 106. Notices, Etc., to Trustee and Company........................12
SECTION 107. Notice to Holders; Waiver....................................12
SECTION 108. Conflict With Trust Indenture Act............................13
SECTION 109. Effect of Headings and Table of Contents.....................13
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PAGE
SECTION 110. Successors and Assigns.......................................13
SECTION 111. Separability Clause..........................................13
SECTION 112. Benefits of Indenture........................................13
SECTION 113. Governing Law................................................14
SECTION 114. Legal Holidays...............................................14
SECTION 115. Corporate Obligation.........................................14
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally..............................................14
SECTION 202. Form of Trustee's Certificate of Authentication..............15
SECTION 203. Securities in Global Form....................................15
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.........................18
SECTION 302. Denominations................................................21
SECTION 303. Execution, Authentication, Delivery and Dating...............21
SECTION 304. Temporary Securities.........................................22
SECTION 305. Registration, Registration of Transfer and Exchange..........23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.............24
SECTION 307. Payment of Interest; Interest Rights Preserved...............24
SECTION 308. Persons Deemed Owners........................................26
SECTION 309. Cancellation.................................................26
SECTION 310. Computation of Interest......................................26
SECTION 311. CUSIP Numbers................................................26
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture......................27
SECTION 402. Application of Trust Money...................................28
SECTION 403. Discharge of Liability on Securities of Any Series...........29
SECTION 404. Reinstatement................................................29
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PAGE
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................................30
SECTION 502. Acceleration of Maturity; Rescission and Annulment...........32
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee......................................................33
SECTION 504. Trustee May File Proofs of Claim.............................34
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
or Coupons...................................................34
SECTION 506. Application of Money Collected...............................35
SECTION 507. Limitation on Suits..........................................35
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.................................................36
SECTION 509. Restoration of Rights and Remedies...........................36
SECTION 510. Rights and Remedies Cumulative...............................37
SECTION 511. Delay or Omission Not Waiver.................................37
SECTION 512. Control by Holders...........................................37
SECTION 513. Waiver of Past Defaults......................................37
SECTION 514. Undertaking for Costs........................................38
SECTION 515. Waiver of Stay or Extension Laws.............................38
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities..........................39
SECTION 602. Notice of Defaults...........................................40
SECTION 603. Certain Rights of Trustee....................................40
SECTION 604. Not Responsible for Recitals or Issuance of Securities.......41
SECTION 605. May Hold Securities..........................................42
SECTION 606. Money Held in Trust..........................................42
SECTION 607. Compensation and Reimbursement...............................42
SECTION 608. Disqualification; Conflicting Interests......................43
SECTION 609. Corporate Trustee Required; Eligibility......................43
SECTION 610. Resignation and Removal; Appointment of Successor............44
SECTION 611. Acceptance of Appointment by Successor.......................45
SECTION 612. Merger, Conversion, Consolidation or Succession to Business..46
SECTION 613. Preferential Collection of Claims Against Company............46
SECTION 614. Appointment of Authenticating Agent..........................46
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PAGE
ARTICLE SEVEN
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders....48
SECTION 702. Preservation of Information; Communications to Holders.......49
SECTION 703. Reports by Trustee...........................................49
SECTION 704. Reports by Company...........................................49
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.........50
SECTION 802. Successor Person Substituted.................................50
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders...........51
SECTION 902. Supplemental Indentures with Consent of Holders..............52
SECTION 903. Execution of Supplemental Indentures.........................53
SECTION 904. Effect of Supplemental Indentures............................53
SECTION 905. Conformity With Trust Indenture Act..........................53
SECTION 906. Reference in Securities to Supplemental Indentures...........53
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest..................54
SECTION 1002. Maintenance of Office or Agency.............................54
SECTION 1003. Money for Securities Payments to be Held in Trust...........54
SECTION 1004. Existence...................................................56
SECTION 1005. Statement by Officers as to Default.........................56
SECTION 1006. Waiver of Certain Covenants.................................56
SECTION 1007. Additional Amounts..........................................56
-v-
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PAGE
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article....................................57
SECTION 1102. Election to Redeem; Notice to Trustee.......................57
SECTION 1103. Selection by Trustee of Securities to be Redeemed...........58
SECTION 1104. Notice of Redemption........................................58
SECTION 1105. Deposit of Redemption Price.................................59
SECTION 1106. Securities Payable on Redemption Date.......................59
SECTION 1107. Securities Redeemed in Part.................................59
SECTION 1108. Purchase of Securities......................................60
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article....................................60
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.......60
SECTION 1203. Redemption of Securities for Sinking Fund...................61
ARTICLE THIRTEEN
SUBORDINATION
SECTION 1301. Securities Subordinated to Senior Indebtedness...............61
SECTION 1302. No Payment on Securities in Certain Circumstances............61
SECTION 1303. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization...63
SECTION 1304. Subrogation to Rights of Holders of Senior Indebtedness......64
SECTION 1305. Obligations of the Company Unconditional.....................64
SECTION 1306. Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice.........................................65
SECTION 1307. Application by Trustee of Amounts Deposited with It..........65
SECTION 1308. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness....................65
SECTION 1309. Trustee to Effectuate Subordination of Securities............66
SECTION 1310. Right of Trustee to Hold Senior Indebtedness.................66
SECTION 1311. Article Thirteen Not to Prevent Events of Default............66
SECTION 1312. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.................................................66
SECTION 1313. Article Applicable to Paying Agent...........................67
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PAGE
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called....................67
SECTION 1402. Call, Notice and Place of Meetings...........................67
SECTION 1403. Persons Entitled to Vote at Meetings.........................68
SECTION 1404. Quorum; Action...............................................68
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.....................................................69
SECTION 1406. Counting Votes and Recording Action of Meetings..............69
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INDENTURE, dated as of April 1, 1998, between PRIDE INTERNATIONAL,
INC., a corporation duly organized and existing under the laws of the State of
Louisiana (herein called the "Company"), having its principal office at 5847 San
Felipe, Suite 3300, Houston, Texas 77057, and MARINE MIDLAND 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 140
Broadway, 12th Floor, New York, New York 10005.
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
subordinated 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.
"Agent Members" has the meaning specified in Section 203.
"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.
"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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"Capital Stock" means, with respect to any Person, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that Person.
"Capitalized Lease Obligation" means rental obligations under a
lease that are required to be capitalized for financial reporting purposes in
accordance with generally accepted accounting principles, and the amount of
Indebtedness represented by such obligations shall be the capitalized amount of
such obligations, as determined in accordance with generally accepted accounting
principles.
"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 whole or in part in global form, the Person designated as
Depositary by the Company pursuant to Section 301 with respect to the Securities
of such series, 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.
"Designated Senior Indebtedness," unless otherwise provided with
respect to the Securities of a series as contemplated by Section 301, means any
Senior Indebtedness that (i) in the
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instrument evidencing the same or the assumption or guarantee thereof (or
related documents to which the Company is a party) is expressly designated as
"Designated Senior Indebtedness" for purposes of this Indenture or (unless
otherwise provided) the Indenture dated as of January 26, 1996 by and between
the Company and Marine Midland Bank, as trustee, and (ii) satisfies such other
conditions as may be provided with respect to the Securities of such series;
PROVIDED that such instruments or documents may place limitations and conditions
on the right of such Senior Indebtedness to exercise the rights of Designated
Senior Indebtedness.
"Disqualified Capital Stock" means, when used with respect to the
Securities of any series, (a) except as set forth in (b), with respect to any
Person, Capital Stock of such Person that, by its terms or by the terms of any
security into which it is convertible, exercisable or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by such
Person or any Subsidiary of such Person, in whole or in part, on or prior to the
Stated Maturity of the Securities of such series, and (b) with respect to any
Subsidiary of such Person (including with respect to any Subsidiary of the
Company), any Capital Stock other than any common stock with no preference,
privileges, or redemption or repayment provisions.
"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.
"Indebtedness" of any Person, unless otherwise provided with respect
to the Securities of a series as contemplated by Section 301, means, without
duplication, the following (whether currently outstanding or hereafter incurred
or created): (i) all liabilities and obligations, contingent or otherwise, of
any such Person (a) in respect of borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (b) evidenced by bonds, notes, debentures or similar instruments, (c)
representing the balance deferred and unpaid of the purchase price of any
property or services, except such as would constitute trade payables to trade
creditors in the ordinary course of business that are not more than 90 days past
their original due date, (d) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks, (e) for the payment of money relating
to a Capitalized Lease Obligation or (f) evidenced by a letter of credit or a
reimbursement obligation of such Person with respect to any letter of credit;
(ii) all net obligations of such Person under Interest Swap and Hedging
Obligations; (iii) all liabilities of others of the kind described in the
preceding clause (i) or (ii) that such Person has guaranteed or that is
otherwise its legal liability and all obligations to purchase, redeem or acquire
any Capital Stock; and (iv) any and all deferrals, renewals, extensions,
refinancings, refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the
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kind described in any of the preceding clauses (i), (ii) or (iii), or this
clause (iv), whether or not between or among the same parties.
"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.
"Interest Swap and Hedging Obligation" means any obligation of any
Person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such Person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such Person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Judgment Currency" has the meaning specified in Section 506.
"Junior security" of a Person means, when used with respect to the
Securities of any series, any Qualified Capital Stock of such Person or any
Indebtedness of such Person that is subordinated in right of payment to the
Securities of such series and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Securities of such series.
"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.
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"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 of a series,
means, as of the date of determination, all Securities of such series
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
(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 a
Responsible Officer of 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.
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"Paying Agent" means any Person, which may include the Company,
authorized by the Company to pay the principal of, premium (if any) or interest
on or any Additional Amounts with respect to any one or more series of
Securities on behalf of the Company.
"Payment Default" has the meaning specified in Section 1302(a).
"Payment Notice" has the meaning specified in Section 1302(b).
"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, premium (if any) or
interest on or any Additional Amounts with respect to 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 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.
"Qualified Capital Stock" means any Capital Stock of the Company
that is not Disqualified Capital Stock.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to the terms
of such Security and 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 the terms of
such Security and this Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the 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
this Indenture and also means, with
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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 Custodian" means, with respect to Securities of a series
issued in global form, the Trustee for Securities of such series, acting in its
capacity as custodian with respect to the Securities of such series, or any
successor entity thereto.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" of the Company, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 301, means (i)
all Indebtedness of the Company, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such
Indebtedness, it is provided that such Indebtedness is not superior in right of
payment to the Securities or to other Indebtedness which is PARI PASSU with or
subordinated to the Securities, and (ii) any modifications, refunding,
deferrals, renewals or extensions of any such Indebtedness or securities, notes
or other evidences of Indebtedness issued in exchange for such Indebtedness;
PROVIDED that in no event shall "Senior Indebtedness" include (a) Indebtedness
of the Company owed or owing to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company, (b)
Indebtedness to trade creditors or (c) any liability for taxes owed or owing by
the Company.
"Special Record Date" for the payment of any Defaulted Interest on
the 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 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. 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.
"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.
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"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; PROVIDED, HOWEVER, that, in the event the Trust Indenture Act of
1939 is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.
"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, as to any Person, a corporation all
the outstanding voting stock (other than any directors' qualifying shares) of
which is owned, directly or indirectly, by such Person or by one or more other
Wholly Owned Subsidiaries of such Person, or by such Person and one or more
other Wholly Owned Subsidiaries of such Person. 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.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
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"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, 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, 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
(4) a statement as to whether, 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
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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 1406.
The Company may set a record date for purposes of determining the
identity of Holders of Securities entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture. If a record date
is fixed, those Persons who were Holders of Outstanding 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
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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 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 Department, 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 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.
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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 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 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 Security, shall affect the sufficiency
of such notice with respect to other Holders of 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.
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 and holders of any Senior Indebtedness, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
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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 with
respect to such payment 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.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities of each series shall be in fully registered form and
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 of the Company 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).
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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 AUTHENTICATION.
The Trustee's certificate of authentication 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.
MARINE MIDLAND 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
Securities represented thereby may from time to time be reduced to reflect
exchanges or redemptions. 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. With
respect to the Securities of any series that are represented by a Security in
global form, the Company authorizes the execution and delivery by the Trustee of
a letter of representations or other similar agreement or instrument in the form
customarily provided for by the Depositary appointed with respect to such global
Security. Any Security in global form may be deposited with the Depositary or
its nominee, or may remain in the custody of the Security Custodian therefor
pursuant to a FAST Balance Certificate Agreement or similar agreement between
the Trustee and the Depositary. 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.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Security issued in
global form held on their behalf by
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the Depositary, or the Security Custodian as its custodian, or under such global
Security, and the Depositary may be treated by the Company, the Security
Custodian and any agent of the Company or the Trustee as the absolute owner of
such global Security for all purposes whatsoever. Notwithstanding the foregoing,
(i) the registered holder of a Security of any series issued in global form may
grant proxies and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take any action that a
Holder of such series is entitled to take under this Indenture or the Securities
of such series and (ii) nothing herein shall prevent the Company, the Security
Custodian or any agent of the Company or the Security Custodian, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or shall impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
beneficial owner of any Security.
Notwithstanding Section 305, 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 than the earliest date on which
such interests may be so exchanged, the Company 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) by the Depositary 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
definitive 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 payment of Defaulted Interest, 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 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.
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Notwithstanding Section 305, except as otherwise specified as
contemplated by Section 301, transfers of a Security issued in global form shall
be limited to transfers of such global Security in whole, but not in part, to
the Depositary, its successors or their respective nominees. Interests of
beneficial owners in a Security issued in global form may be transferred in
accordance with the rules and procedures of the Depositary. Securities of any
series shall be transferred to all beneficial owners of a global Security of
such series in exchange for their beneficial interests in that global Security
if, and only if, either (1) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the global Security of such
series and a successor Depositary is not appointed by the Company within 90 days
of such notice, (2) an Event of Default has occurred with respect to such series
and is continuing and the Security Registrar has received a request from the
Depositary or the Trustee to issue Securities of such series in lieu of all or a
portion of that global Security (in which case the Company shall deliver
Securities of such series within 30 days of such request) or (3) the Company
determines not to have the Securities of such series represented by a global
Security.
In connection with any transfer of a portion of the beneficial
interest in a global Security of any series to beneficial owners pursuant to
this Section 203, the Security Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the global Security of that
series in an amount equal to the principal amount of the beneficial interest in
the global Security of that series to be transferred, and the Company shall
execute, and the Trustee upon receipt of a Company Order for the authentication
and delivery of Securities of that series shall authenticate and deliver, one or
more Securities of the same series of like tenor and amount.
In connection with the transfer of all the beneficial interests in a
global Security of any series to beneficial owners pursuant to this Section 203,
the global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the global Security, an equal aggregate principal
amount of Securities of that series of authorized denominations.
Neither the Company nor the Trustee will have any responsibility or
liability for any aspect of the records relating to, or payments made on account
of, Securities of any series by the Depositary, or for maintaining, supervising
or reviewing any records of the Depositary relating to such Securities. Neither
the Company nor the Trustee shall be liable for any delay by the related global
Security Holder or the Depositary in identifying the beneficial owners, and each
such Person may conclusively rely on, and shall be protected in relying on,
instructions from such global Security Holder or the Depositary for all purposes
(including with respect to the registration and delivery, and the respective
principal amounts, of the Securities to be issued).
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.
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Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of,
premium (if any) and interest on and any Additional Amounts with respect to 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.
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:
(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 203, 304, 305, 306, 906 or 1107);
(3) whether 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, and, if so, whether beneficial owners
of interests in any such 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 203, and the
Depositary for any global Security or Securities of such series;
(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;
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(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 Securities on any Interest Payment
Date;
(7) the place or places where, subject to the provisions of Section
1002, the principal of, premium (if any) and 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,
if different from those set forth herein;
(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 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 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), if
other than Dollars, or the form, including equity securities, other debt
securities (including Securities), warrants or any other securities or
property of the Company or any other Person, in which payment of the
principal of, premium (if any) and interest on and any Additional Amounts
with respect to the Securities of the series shall be payable;
(12) if the principal of, premium (if any) or interest on or any
Additional Amounts with respect to 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,
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;
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(13) if the amount of payments of principal of, premium (if any) and
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, values, rates or prices or any other index or formula, 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
definitions set forth in Section 101, 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;
(17) if the Securities of the series are to be convertible into or
exchangeable for equity securities, other debt securities (including
Securities), warrants or any other securities or property of the Company
or any other Person, at the option of the Company or the Holder or upon
the occurrence of any condition or event, the terms and conditions for
such conversion or exchange; and
(18) 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 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 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 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.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Thirteen.
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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
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.
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.
If the form or terms of the Securities of a series have been
established in or pursuant to one or more Board Resolutions or any other method
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, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating that:
(a) the form of such Securities has been established in conformity
with the provisions of this Indenture;
(b) the terms of such Securities 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
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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 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 delivered hereunder and
shall never be entitled to the benefits of this Indenture.
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
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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 Securities and
of transfers of 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.
Except as set forth in Section 203 or as may be provided pursuant to
Section 301, upon surrender for registration of transfer of any 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 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, Securities of any series may be
exchanged for other Securities of the same series and of like tenor, of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the 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.
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 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 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.
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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 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 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 Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for
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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 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 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 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
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 establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the 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
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.
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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 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 Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Sections 305 and 307) interest on such 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 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 by the Trustee in accordance with its
customary procedures, unless the Trustee is otherwise directed by a Company
Order.
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.
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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 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;
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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 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 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 Company 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, 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
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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, premium (if any), interest and any 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, premium (if any) and interest on and any
Additional Amounts with respect to 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
(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
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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, premium (if any) or
interest on or 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 occasioned by the provisions of
Article Thirteen or be voluntary or involuntary or 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:
(1) default in the payment of any interest on or any Additional
Amounts with respect to 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 mandatory 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
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(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 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, 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 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 with respect to
the Securities of any series, 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
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Holders of such series. Promptly after the making of any payment in Dollars as a
result of a Conversion Event with respect to the Securities of any series, the
Company shall give notice in the manner provided in Section 107 to the Holders
of such series, 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 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.
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
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(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
(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, 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, 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, and all other amounts due the Trustee under Section 607.
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
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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 any
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, 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
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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, and any other
amounts due the Trustee under Section 607, 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.
Subject to Article Thirteen, 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, 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, premium (if any) and interest on and any Additional Amounts
with respect to 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, premium (if any), interest and Additional
Amounts, respectively; and
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, premium (if any) or
interest on or any Additional Amounts with respect to 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
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(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 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.
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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, 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
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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, 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 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, 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.
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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, 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 512, 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
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(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, 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 determine that the withholding of such
notice is in the interest of the Holders of Securities of such series; and
PROVIDED, FURTHER, that 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;
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(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, 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.
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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 in writing 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);
(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 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.
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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 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.
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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.
(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
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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.
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
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successor Trustee relates; but, on request of the 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.
(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. 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
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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 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 Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 614.
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.
MARINE MIDLAND 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 after the execution of this
Indenture, 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, premium (if any) and interest on and
any Additional Amounts with respect to 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 and treating
any indebtedness that becomes Indebtedness of the Company or a Subsidiary
of the Company as a result of such transaction as having been incurred by
the Company or such Subsidiary at the time of 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) or modify the provisions of
this Indenture with respect to the subordination of any Security in a
manner adverse to the Holder thereof;
(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 513 or
Section 1006, 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 this clause shall not be
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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, in
addition to the documents required by Section 103, 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, premium (if
any) and 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.
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, 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, premium (if any) or interest or any Additional Amounts 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 or premium (if any) or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal, premium (if
any) or interest so becoming due, such sum to be held in trust for the benefit
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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,
premium (if any) or 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 of, premium (if any) or 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, premium (if
any) or interest on or any Additional Amounts with respect to any Security of
any series and remaining unclaimed for three years after such principal, premium
(if any), interest or Additional Amounts have 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 therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will, unless otherwise required by
mandatory provisions of applicable escheat, or abandoned or unclaimed property
law, be repaid to the Company.
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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
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
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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.
Unless otherwise provided with respect to the Securities of a series
as contemplated by Section 301, 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 Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
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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 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 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 Security or Securities of the same series and
Stated Maturity, of any authorized denomination as
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requested by such Holder, 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
SUBORDINATION
SECTION 1301. SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS.
The Company and each Holder of a Security, by his acceptance
thereof, agree that (a) the payment of the principal of, premium (if any) and
interest on and any Additional Amounts with respect to each and all the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of Securities by the Company, is
subordinated, to the extent and in the manner provided in this Article Thirteen,
to the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter created, incurred,
assumed or guaranteed, and that these subordination provisions are for the
benefit of the holders of Senior Indebtedness.
This Article Thirteen shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are made obligees hereunder and
any one or more of them may enforce such provisions.
SECTION 1302. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment shall be made by the Company on account of the
principal of, premium (if any) or interest on or any Additional Amounts with
respect to the Securities of any series or to acquire any of such Securities
(including any repurchases of such Securities pursuant to the provisions hereof
or thereof at the option of the Holder of such Securities) for cash or property
(other than Junior securities of the Company), or on account of any redemption
provisions of such Securities, in the event of default in payment of any
principal of, premium (if any) or interest on any Senior Indebtedness of the
Company when the same becomes due and payable, whether at maturity
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or at a date fixed for prepayment or by declaration or otherwise (a "Payment
Default"), unless and until such Payment Default has been cured or waived or
otherwise has ceased to exist.
(b) No payment (by set-off or otherwise) may be made by or on behalf
of the Company on account of the principal of, premium (if any) or interest on
or any Additional Amounts with respect to the Securities of any series or to
acquire any of such Securities (including any repurchases of such Securities
pursuant to the provisions hereof or thereof at the option of the Holder of such
Securities) for cash or property (other than Junior securities), or on account
of the redemption provisions of such Securities, in the event of any event of
default (other than a Payment Default) with respect to any Designated Senior
Indebtedness permitting the holders of such Designated Senior Indebtedness (or a
trustee or other representative on behalf of the holders thereof) to declare
such Designated Senior Indebtedness due and payable prior to the date on which
it would otherwise have become due and payable, upon written notice thereof to
the Company and the Trustee by any holders of Designated Senior Indebtedness (or
a trustee or other representative on behalf of the holders thereof) (the
"Payment Notice"), unless and until such event of default shall have been cured
or waived or otherwise has ceased to exist; PROVIDED, that such payments may not
be prevented pursuant to this Section 1302(b) for more than 179 days after an
applicable Payment Notice has been received by the Trustee unless the Designated
Senior Indebtedness in respect of which such event of default exists has been
declared due and payable in its entirety, in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Designated
Senior Indebtedness has been paid in full. No event of default that existed or
was continuing on the date of any Payment Notice (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) may be made the
basis for the giving of a second Payment Notice, and only one such Payment
Notice may be given in any 365-day period.
(c) In furtherance of the provisions of Section 1301, in the event
that, notwithstanding the foregoing provisions of this Section 1302, any payment
or distribution of assets of the Company (other than Junior securities of the
Company) shall be received by the Trustee or the Holders of Securities of any
series at a time when such payment or distribution was prohibited by the
provisions of this Section 1302, then, unless such payment or distribution is no
longer prohibited by this Section 1302, such payment or distribution (subject to
the provisions of Section 1307) shall be received and held in trust by the
Trustee or such Holder or Paying Agent for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders or such Paying Agent, as the case may be, to the holders of Senior
Indebtedness of the Company remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
of the Company may have been issued, ratably, according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
in full after giving effect to all concurrent payments and distributions to or
for the holders of such Senior Indebtedness.
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SECTION 1303. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company or upon any
dissolution, winding up, total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, in bankruptcy, insolvency,
receivership or similar proceeding or upon assignment for the benefit of
creditors:
(a) the holders of all Senior Indebtedness of the Company shall
first be entitled to receive payments in full before the Holders of
Securities of any series are entitled to receive any payment on account of
the principal of, premium (if any) or interest on or any Additional
Amounts with respect to such Securities (other than Junior securities of
the Company);
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Junior
securities of the Company), to which the Holders of Securities of any
series or the Trustee on behalf of such Holders would be entitled, except
for the provisions of this Article Thirteen, shall be paid by the
liquidating trustee or agent or other Person making such a payment or
distribution directly to the holders of such Senior Indebtedness or their
representative, ratably according to the respective amounts of Senior
Indebtedness held or represented by each, to the extent necessary to make
payment in full of all such Senior Indebtedness remaining unpaid after
giving effect to all concurrent payments and distributions to the holders
of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Junior securities of the
Company), shall be received by the Trustee or the Holders of Securities of
any series or any Paying Agent (or, if the Company or any Affiliate of the
Company is acting as its own Paying Agent, money for any such payment or
distribution shall be segregated or held in trust) on account of the
principal of, premium (if any) or interest on or any Additional Amounts
with respect to the Securities of such series before all Senior
Indebtedness of the Company is paid in full, such payment or distribution
(subject to the provisions of Section 1307) shall be received and held in
trust by the Trustee or such Holder or Paying Agent for the benefit of the
holders of such Senior Indebtedness, or their respective representatives,
ratably according to the respective amounts of such Senior Indebtedness
held or represented by each, to the extent necessary to make payment as
provided herein of all such Senior Indebtedness remaining unpaid after
giving effect to all concurrent payments and distributions and all
provisions therefor to or for the holders of such Senior Indebtedness, but
only to the extent that as to any holder of such Senior Indebtedness, as
promptly as practical following notice from the Trustee to the holders of
such Senior Indebtedness that such prohibited payment has been received by
the Trustee, Holder(s) or Paying Agent (or has been segregated as provided
above), such holder (or a representative therefor) notifies the Trustee of
the amounts then due and owing on such Senior Indebtedness, if any, held
by such holder and only the amounts specified in such notices to the
Trustee shall be paid to the holders of such Senior Indebtedness.
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SECTION 1304. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness of the
Company as provided herein, the Holders of the Securities shall be subrogated
(to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article) to the rights of
the holders of such Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full. For the purpose of such
subrogation, no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders of the Securities
by virtue of this Article Thirteen, which otherwise would have been made to such
Holders shall, as between the Company and such Holders, be deemed to be payment
by the Company or on account of such Senior Indebtedness, it being understood
that the provisions of this Article Thirteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Thirteen shall have been applied, pursuant to the provisions of this
Article Thirteen, to the payment of amounts payable under Senior Indebtedness of
the Company, then such Holders shall be entitled to receive from the holders of
such Senior Indebtedness any payments or distributions received by such holders
of Senior Indebtedness in excess of the amount sufficient to pay all amounts
payable under or in respect of such Senior Indebtedness in full.
SECTION 1305. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company and the Holders of the Securities of any series, the obligation of the
Company, which is absolute and unconditional, to pay to such Holders the
principal of, premium (if any) and interest on and any Additional Amounts with
respect to the Securities of such series as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of such Holders and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Thirteen, of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy. Notwithstanding anything to the contrary in this Article Thirteen
or elsewhere in this Indenture or in the Securities, upon any distribution of
assets of the Company referred to in this Article Thirteen, the Trustee, subject
to the provisions of Sections 601 and 603, and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
such Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid
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or distributed thereon and all other facts pertinent thereto or to this Article
Thirteen so long as such court has been apprised of the provisions of, or the
order, decree or certificate makes reference to, the provisions of this Article
Thirteen.
SECTION 1306. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF
NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until a Responsible Officer of the Trustee or any Paying
Agent shall have received, no later than two Business Days prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 601 and 603, shall be entitled in all respects conclusively to assume
that no such fact exists.
SECTION 1307. APPLICATION BY TRUSTEE OF AMOUNTS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article Four shall be for the sole benefit of Holders of the
Securities of series for the benefit of which such amounts were deposited, and,
to the extent allocated for the payment of Securities of such series, shall not
be subject to the subordination provisions of this Article Thirteen. Otherwise,
any deposit of assets with the Trustee or the Paying Agent (whether or not in
trust) for the payment of principal of, premium (if any) or interest on or any
Additional Amounts with respect to any Securities shall be subject to the
provisions of Sections 1301, 1302, 1303 and 1304; PROVIDED that if prior to two
Business Days preceding the date on which by the terms of this Indenture any
such assets may become distributable for any purpose (including without
limitation, the payment of either principal of, premium (if any) or interest on
or any Additional Amounts with respect to any Security), the Trustee or such
Paying Agent shall not have received with respect to such assets the written
notice provided for in Section 1306, then the Trustee or such Paying Agent shall
have full power and authority to receive such assets and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such date; and
PROVIDED FURTHER that nothing contained in this Article Thirteen shall prevent
the Company from making, or the Trustee from receiving or applying, any payment
in connection with the redemption of Securities if the first publication of
notice of such redemption (whether by mail or otherwise in accordance with this
Indenture) has been made, and the Trustee has received such payment from the
Company, prior to the occurrence of any of the contingencies specified in
Section 1302 or 1303.
SECTION 1308. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination provisions contained in this Article Thirteen shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms of this
Indenture, regardless of any knowledge thereof that any such holder may have or
be otherwise
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charged with. The holders of Senior Indebtedness may extend, renew, modify or
amend the terms of the Senior Indebtedness or any security therefor and release,
sell or exchange such security and otherwise deal freely with the Company, all
without affecting the liabilities and obligations of the parties to this
Indenture or the Holders of the Securities.
SECTION 1309. TRUSTEE TO EFFECTUATE SUBORDINATION OF SECURITIES.
Each Holder of a Security by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article Thirteen and to protect the rights of the Holders of the Securities
pursuant to this Indenture, and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Securities
in the form required in said proceedings and cause said claim to be approved. If
the Trustee does not file a proper claim or proof of debt in the form required
in such proceeding prior to 30 days before the expiration of the time to file
such claim or claims, then the holders of the Senior Indebtedness or their
representative is hereby authorized to have the right to file and is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Securities. Nothing herein contained shall be deemed to authorize the Trustee or
the holders of Senior Indebtedness or their representative to authorize or
consent to or accept or adopt on behalf of any Holder of Securities any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Indebtedness or their representative to vote in respect of the claim
of any Holder of the Securities in any such proceeding.
SECTION 1310. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all of
the rights set forth in this Article Thirteen in respect of any Senior
Indebtedness at any time held by it to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder.
SECTION 1311. ARTICLE THIRTEEN NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of or premium
(if any) or interest on the Securities by reason of any provision of this
Article Thirteen shall not be construed as preventing the occurrence of a
Default or an Event of Default under Section 501 or in any way prevent the
Holders of the Securities from exercising any right hereunder other than the
right to receive payment on the Securities.
SECTION 1312. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and shall not be liable to any such holders
(other than for its willful misconduct or
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negligence) if it shall in good faith mistakenly pay over or distribute to the
Holders of the Securities or the Company or any other Person, cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article Thirteen or otherwise. Nothing in this Section 1312 shall
affect the obligation of any other such Person to hold such payment for the
benefit of, and to pay such payment over to, the holders of Senior Indebtedness
or their representative.
SECTION 1313. ARTICLE APPLICABLE TO PAYING AGENT.
In case at any time any Payment 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 Thirteen shall in such case (unless the
context shall otherwise require) be construed as extending to and including such
Payment Agent within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in place of the
Trustee; PROVIDED, HOWEVER, that this Section 1313 shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as Paying
Agent.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. 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 1402. 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 1401, 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 1401, 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
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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
such meeting for such purposes by giving notice thereof as provided in
Subsection (a) of this Section.
SECTION 1403. 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 1404. 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 1405(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1402(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
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shall be binding on all the Holders of Securities of such series, whether or not
present or represented at the meeting.
SECTION 1405. 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 1402(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 1402 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 1406. 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 1402 and, if
applicable, Section 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
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copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter 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.
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.
[SEAL] PRIDE INTERNATIONAL, INC.
Attest:
/S/ ROBERT W. RANDALL By:/S/ EARL W. MCNIEL
Robert W. Randall Earl W. McNiel
Vice President and Chief Financial
Officer
[SEAL] MARINE MIDLAND BANK, Trustee
Attest:
/S/ CHARLES E. BAUER By: /S/ FRANK J. GODINO
Charles E. Bauer Name: Frank J. Godino
Vice President Title: Vice President
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EXHIBIT 4.2
[Conformed]
PRIDE INTERNATIONAL, INC.
AND
MARINE MIDLAND BANK,
TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 24, 1998
TO
INDENTURE DATED AS OF APRIL 1, 1998
ZERO COUPON CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2018
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Terms Defined in the Original Indenture..............2
SECTION 1.2 Certain Definitions..................................2
ARTICLE TWO
THE DEBENTURES
SECTION 2.1 Debentures Form......................................5
SECTION 2.2 Designation and Amount...............................6
SECTION 2.3 Accrual of Original Issue Discount; Interest.........7
SECTION 2.4 Denominations........................................7
SECTION 2.5 Place of Payment.....................................7
ARTICLE THREE
DEFAULTS AND REMEDIES
SECTION 3.1 Additional Event of Default..........................8
SECTION 3.2 Rights of Holders to Receive Payment.................8
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
SECTION 4.1 Additional Restrictions on Supplemental Indentures...8
ARTICLE FIVE
REDEMPTION AND PURCHASES
SECTION 5.1 Redemption...........................................9
SECTION 5.2 Selection of Debentures to be Redeemed..............10
SECTION 5.3 Deposit of Redemption Price.........................10
SECTION 5.4 Purchase............................................10
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ARTICLE SIX
CONVERSION
SECTION 6.1 Conversion..........................................23
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
SECTION 7.1 Special Tax Event Conversion........................34
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 Governing Law.......................................35
SECTION 8.2 Trustee's Disclaimer................................35
SECTION 8.3 Interest Limitations................................36
EXHIBIT A FORM OF DEBENTURE..................................A-1
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FIRST SUPPLEMENTAL INDENTURE dated as of April 24, 1998 between
PRIDE INTERNATIONAL, INC., a Louisiana corporation (the "Company"), and MARINE
MIDLAND BANK, as Trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has executed and delivered to the Trustee an
Indenture, dated as of April 1, 1998 (the "Original Indenture" and as
supplemented by this First Supplemental Indenture, the "Indenture"), providing
for the issuance by the Company from time to time of its unsecured subordinated
debentures, notes or other evidences of indebtedness (the "Securities"),
issuable in one or more series;
WHEREAS, Section 901(5) of the Original Indenture permits the
execution of supplemental indentures without the consent of any Holders to
establish the form and terms of any series of Securities;
WHEREAS, Section 901(4) of the Original Indenture permits the
execution of supplemental indentures without the consent of any Holders to
change or eliminate any provision of the Original Indenture with respect to any
series of Securities when there is no Security of such series Outstanding;
WHEREAS, Sections 901(2) and 901(3) of the Original Indenture permit
the execution of supplemental indentures without the consent of any Holders to
add to the covenants of the Company for the benefit of, and to add any
additional Events of Default with respect to, all or any series of Securities;
WHEREAS, Section 301 of the Original Indenture provides that the
Company may enter into supplemental indentures to establish certain terms and
provisions of a series of Securities issued pursuant to the Original Indenture;
WHEREAS, the Company has duly authorized and desires to cause to be
issued pursuant to the Original Indenture and this First Supplemental Indenture
a series of Securities to be designated the "Zero Coupon Convertible
Subordinated Debentures Due 2018" (the "Debentures");
WHEREAS, the Company, pursuant to the foregoing authority, proposes
in and by this First Supplemental Indenture to supplement and amend the Original
Indenture insofar as it will apply to the Debentures in certain respects; and
WHEREAS, all things necessary have been done to make the Debentures,
when executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
First Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms.
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NOW, THEREFORE, the Company and the Trustee hereby agree that the
following provisions supplement the Original Indenture solely with respect to
the series of Securities that consists of the Debentures:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 TERMS DEFINED IN THE ORIGINAL INDENTURE.
Each capitalized term used but not defined in this First
Supplemental Indenture shall have the meaning assigned to such term in the
Original Indenture.
SECTION 1.2 CERTAIN DEFINITIONS.
The following definitions are hereby added to, or substituted in
lieu of definitions contained in, Section 101 of the Indenture, but only with
respect to the Debentures issued in accordance with the provisions hereof:
"Capital Stock" 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.
"Change in Control" means (i) a determination by the Company that
any person or group (as defined for purposes of Rules 13d-3 and 13d-5
promulgated under the Exchange Act, whether or not applicable) has become
the direct or indirect beneficial owner (as defined for purposes of Rules
13d-3 and 13d-5 promulgated under the Exchange Act, whether or not
applicable) of more than 50% of the Voting Stock of the Company; (ii) the
Company is merged with or into or consolidated with another Person 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 Rules 13d-3 and 13d-5 promulgated under the Exchange Act,
whether or not applicable) in the aggregate by (x) the shareholders of the
Company immediately prior to such merger or consolidation, or (y) if a
record date has been set to determine the shareholders of the Company
entitled to vote on such merger or consolidation, the shareholders 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
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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.
"Common Stock" means Common Stock, no par value, of the Company as
it exists on the date of this First Supplemental Indenture or any other
Capital Stock of the Company into which such Common Stock shall be
reclassified or changed.
"Continuing Director" means an individual who (i) is a member of the
Board of Directors and (ii) either (a) was a member of the Board of
Directors on the Issue Date or (b) whose nomination for election or
election to the Board of Directors was approved by the 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.
"Conversion Agent" means an office or agency where Debentures may be
presented for conversion pursuant to the terms and conditions of this
First Supplemental Indenture.
"Issue Date" of any Debenture means the date on which the Debenture
was originally issued or deemed issued as set forth on the face of the
Debenture.
"Issue Price" of any Debenture means, in connection with the
original issuance of such Debenture, the initial issue price at which the
Debenture is sold as set forth on the face of the Debenture.
"Legal Holiday" means a day that is not a Business Day in the Place
of Payment for the Debentures.
"Market Price" means the average of the Sale Price of the Common
Stock for the five Trading Day period ending on and including the third
Trading Day prior to the applicable Purchase Date, appropriately adjusted
to take into account the actual occurrence, during the seven Trading Days
preceding such Purchase Date, of any event described in Section 1506, 1507
or 1508; SUBJECT, HOWEVER, to the conditions set forth in Sections 1509
and 1510.
"Original Issue Discount" of any Debenture means the difference
between the Issue Price and the Principal Amount at Maturity of the
Debenture as set forth on the face of the Debenture.
"Paying Agent" means an office or agency where Debentures may be
presented for purchase or payment.
"Principal Amount at Maturity" means, with respect to any Debenture,
the principal amount due at the maturity thereof as set forth on the face
of the Debenture.
"Sale Price" of a single share of Common Stock on any Trading Day
means the closing per share sale price for the Common Stock (or, if no
closing sale price is reported, the average of the bid and ask prices or,
if more than one in either case, the average of the
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average bid and average ask prices) on such Trading Day as reported in
composite transactions for the principal United States securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed
on a United States national or regional securities exchange, as reported
by the National Association of Securities Dealers Automated Quotation
System.
"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 of
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.
"Tax Event" means that the Company shall have received an opinion
from independent tax counsel experienced in such matters to the effect
that, on or after the date of this First Supplemental Indenture, as a
result of (a) any amendment to, or change (including any prospective
change) in, the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein or (b)
any amendment to, or change in, an interpretation or application of such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority, in each case which amendment or change is enacted,
promulgated, issued or announced or which interpretation is issued or
announced or which action is taken, on or after the date of this First
Supplemental Indenture, there is more than an insubstantial risk that
interest (including Original Issue Discount) payable on the Debentures
either (i) would not be deductible on a current accrual basis or (ii)
would not be deductible under any other method, in either case in whole or
in part, by the Company (by reason of deferral, disallowance, or
otherwise) for United States federal income tax purposes.
"Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for
trading or quotation.
"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, with respect to the Company, any
Subsidiary of the Company 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
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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.
The following terms are defined in the places indicated:
TERM DEFINED IN SECTION
Average Sale Price 1501
Change in Control Purchase Date 1111 (a)
Change in Control Purchase Notice 1111 (c)
Change in Control Purchase Price 1111 (a)
Company Notice 1110 (e)
Company Notice Date 1110 (e)
Conversion Date 1502
Conversion Rate 1501
Exchange Act 1110 (d)
Ex-Dividend Time 1501
Extraordinary Cash Dividend 1508
Global Debentures 2.1
Interest Payment Date 1601
Option Exercise Date 1601
Over-Allotment Option 2.2 (b)
Purchase Date 1110 (a)
Purchase Notice 1110 (a)
Purchase Price 1110 (a)
Regular Record Date 1601
Restated Principal Amount 1601
Securities Act 1110 (d)
Tax Event Date 1601
Time of Determination 1501
ARTICLE TWO
THE DEBENTURES
SECTION 2.1 DEBENTURES FORM.
The Debentures shall be substantially in the form of EXHIBIT A
hereto, which is a part of this First Supplemental Indenture, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Original Indenture and this First
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Supplemental 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 of the Company executing
such Debentures, as evidenced by their execution of the Debentures.
The Debentures will initially be issued in permanent global form,
substantially in the form of EXHIBIT A hereto (the "Global Debentures"). Each
Global Debenture shall represent such of the Outstanding Debentures as shall be
specified therein and shall provide that it shall represent the aggregate amount
of Outstanding Debentures from time to time endorsed thereon and that the
aggregate amount of Outstanding Debentures represented thereby may from time to
time be reduced to reflect exchanges and redemptions. Any endorsement of a
Global Debenture to reflect the amount, or any increase or decrease in the
amount, of Outstanding Debentures represented thereby shall be made by the
Trustee in accordance with written instructions or such other written form of
instructions as is customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a beneficial interest in the Global
Debenture.
The Company initially appoints The Depository Trust Company and the
Trustee to act as Depositary and Securities Custodian, respectively, with
respect to the Global Debentures.
The Company initially appoints the Trustee to act as Paying Agent
with respect to the Debentures.
SECTION 2.2 DESIGNATION AND AMOUNT.
(a) The Debentures shall be entitled the "Zero Coupon Convertible
Subordinated Debentures Due 2018" of the Company.
(b) The Trustee shall authenticate and deliver Debentures for
original issue in an aggregate Principal Amount at Maturity of up to
$511,431,000 upon Company Order for the authentication and delivery of
Debentures, without any further action by the Company; PROVIDED, HOWEVER, that
in the event the Company sells any Debentures pursuant to the over-allotment
option (the "Over-Allotment Option") granted pursuant to the Underwriting
Agreement dated April 20, 1998 between the Company, Smith Barney Inc. and Morgan
Stanley & Co. Incorporated, then the Trustee shall authenticate and deliver
Debentures for original issue in an aggregate Principal Amount at Maturity of up
to $511,431,000 plus up to $76,714,000 aggregate Principal Amount at Maturity of
Debentures sold pursuant to the Over-Allotment Option upon Company Order for the
authentication and delivery of Debentures, without any further action by the
Company. The aggregate Principal Amount at Maturity of Debentures that may be
authenticated and delivered under the Indenture may not exceed the amount set
forth in the foregoing sentence, subject to the proviso therein, except for
Debentures authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Debentures pursuant to Section 203, 304, 305,
306, 906 or 1107 of the Indenture.
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(c) The Company may not issue new Debentures to replace Debentures
that it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article Fifteen.
SECTION 2.3 ACCRUAL OF ORIGINAL ISSUE DISCOUNT; INTEREST.
The Debentures shall be Original Issue Discount Securities. Original
Issue Discount shall accrue with respect to the Debentures at the rate set forth
in paragraph 1 of the Debentures, commencing on the Issue Date of the
Debentures. Except as provided in Article Sixteen, there shall be no periodic
payments of interest on the Debentures. In case of an Event of Default, the
principal amount of the Debentures that may be declared due and payable shall be
the Issue Price plus accrued Original Issue Discount (or if the Debentures have
been converted to semiannual coupon notes following a Tax Event, the Restated
Principal Amount, plus accrued and unpaid interest) to and including the date of
such default or declaration, as the case may be.
SECTION 2.4 DENOMINATIONS.
The Debentures shall be in fully registered form without coupons in
denominations of $1,000 of Principal Amount at Maturity or any integral multiple
thereof.
SECTION 2.5 PLACE OF PAYMENT.
The Place of Payment for the Debentures shall be the Borough of
Manhattan, The City of New York. Section 1002 of the Indenture is hereby
amended, but only with respect to the Debentures issued in accordance with the
provisions hereof, by replacing the first sentence thereof with the following:
The Company will maintain in the Borough of Manhattan, The City of
New York, an office or agency of the Trustee, Security Registrar, Paying
Agent and Conversion Agent where Debentures may be presented or
surrendered for payment, where Debentures may be surrendered for
registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served.
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ARTICLE THREE
DEFAULTS AND REMEDIES
SECTION 3.1 ADDITIONAL EVENT OF DEFAULT.
The following Event of Default is hereby added to Section 501 of the
Indenture, but only with respect to the Debentures issued in accordance with the
provisions hereof:
(8) the Company (i) defaults in the payment of the Principal Amount
at Maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in Control Purchase Price with respect to
any Debenture when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise, or (ii) defaults in the delivery of shares of Common
Stock (or cash in lieu of fractional interests in shares of Common Stock)
in accordance with the terms hereof when such Common Stock or cash is
required to be delivered upon conversion of a Debenture and such default
in this clause (ii) is not remedied for a period of 10 days.
SECTION 3.2 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Section 508 of the Indenture is hereby deleted in its entirety and
the following is substituted in lieu thereof, but only with respect to the
Debentures issued in accordance with the provisions hereof:
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PAYMENTS.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture shall have the right, which is absolute and unconditional,
(a) to receive payment of the Principal Amount at Maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price or interest, if any, in respect of the
Debentures held by such Holder on or after the respective due dates
expressed in the Debentures or any Redemption Date, (b) to convert such
Debentures in accordance with Article Fifteen or (c) to institute suit for
the enforcement of any such payment on or after such respective dates or
the right to convert, and such rights shall not be impaired or adversely
affected without the consent of such Holder.
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
SECTION 4.1 ADDITIONAL RESTRICTIONS ON SUPPLEMENTAL INDENTURES.
A new Section 907 is hereby added to Article Nine of the Indenture,
but only with respect to the Debentures issued in accordance with the provisions
hereof, as follows:
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SECTION 907. SUPPLEMENTAL INDENTURE WITHOUT CONSENT OF HOLDERS OF
DEBENTURES.
Notwithstanding Section 902, without the consent of each Holder
affected, an amendment or supplement to this Indenture or the Debentures
may not:
(1) make any change to the Principal Amount at Maturity of the
Debentures whose Holders must consent to an amendment or supplement;
(2) make any change in the rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Debentures, reduce the rate of interest referred to in
Section 1601 upon the occurrence of a Tax Event or extend the time for
payment of Original Issue Discount or interest, if any, on any Debenture;
(3) reduce the Principal Amount at Maturity, Conversion Rate or the
Issue Price of or extend the Stated Maturity of any Debenture;
(4) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Debenture or extend the date on which the Purchase
Price or Change in Control Purchase Price of any Debenture is payable;
(5) make any Debenture payable in money or securities other than
that stated in the Debenture;
(6) make any change that adversely affects the right to convert any
Debenture (including the right to receive cash in lieu of Common Stock);
(7) make any change that adversely affects the right to require the
Company to purchase the Debentures in accordance with the terms thereof
and this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase); or
(8) make any change to the provisions of the Indenture relating to
the purchase of the Debentures at the option of the Holder pursuant to
Sections 1110 and 1111 which change would result in a violation of
applicable federal or state securities laws (including positions of the
Commission under applicable no-action letters), whether as a result of the
exercise or performance of any rights or obligations under such provisions
or otherwise.
ARTICLE FIVE
REDEMPTION AND PURCHASES
SECTION 5.1 REDEMPTION.
(a) There shall be no sinking fund for the retirement of the
Debentures.
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(b) The Company, at its option, may redeem the Debentures in
accordance with the provisions of paragraphs 5 and 7 of the Debentures.
(c) The notice of redemption provided for in Section 1104 of the
Indenture shall also state (1) the Conversion Rate; (2) the name and address of
the Conversion Agent; (3) that Debentures called for redemption may be converted
at any time before the close of business on the Redemption Date; (4) that
Holders who want to convert Debentures must satisfy the requirements set forth
in paragraph 8 of the Debentures and (5) that, unless the Company defaults in
making payment of such Redemption Price, Original Issue Discount on Debentures
called for redemption and interest, if any, will cease to accrue on and after
the Redemption Date.
SECTION 5.2 SELECTION OF DEBENTURES TO BE REDEEMED.
Section 1103 of the Indenture is hereby amended, but only with
respect to the Debentures issued in accordance with the provisions hereof, to
add the following at the end of such Section:
If any Debenture selected for partial redemption is thereafter
surrendered for conversion in part before termination of the
conversion right with respect to the portion of the Debenture so
selected, the converted portion of such Debenture shall be deemed
(so far as may be), solely for purposes of determining the aggregate
Principal Amount at Maturity of Debentures to be redeemed by the
Company, to be the portion selected for redemption. Debentures that
have been converted during a selection of Debentures to be redeemed
may be treated by the Trustee as outstanding for the purpose of such
selection. Nothing in this Section 1103 shall affect the right of
any Holder to convert any Debenture pursuant to Article Fifteen
before the termination of the conversion right with respect thereto.
SECTION 5.3 DEPOSIT OF REDEMPTION PRICE.
Section 1105 of the Indenture is hereby amended, but only with
respect to the Debentures issued in accordance with the provisions hereof, to
add the following at the end of such Section:
The Trustee or the Paying Agent shall as promptly as practicable
return to the Company any money, with interest, if any, thereon (subject
to the provisions of Section 601(a)), not required for that purpose
because of the conversion of Debentures pursuant to Article Fifteen. If
such money is held by the Company in trust and is not required for such
purpose, it shall be discharged from such trust.
SECTION 5.4 PURCHASE.
New Sections 1109 through 1117 are hereby added to Article Eleven of
the Indenture, but only with respect to the Debentures issued in accordance with
the provisions hereof, as follows:
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SECTION 1109. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Debentures, the Company
may arrange, in lieu of redemption, for the purchase and conversion of any
Debentures called for redemption by an agreement with one or more
investment bankers or other purchasers to purchase all or a portion of
such Debentures by paying to the Trustee in trust for the Holders whose
Debentures are to be so purchased, on or before the close of business on
the Redemption Date, an amount that, together with any amounts deposited
with the Trustee by the Company for the redemption of such Debentures, is
not less than the Redemption Price, together with interest, if any,
accrued to the Redemption Date of such Debentures. Notwithstanding
anything to the contrary contained in this Article Eleven, the obligation
of the Company to pay the Redemption Price of such Debentures, including
all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no
such agreement shall relieve the Company of its obligation to pay such
Redemption Price and such accrued interest, if any, until such amount is
so paid by such purchasers. If such an agreement is entered into, any
Debentures not duly surrendered for conversion by the Holders thereof may,
at the option of the Company, be deemed, to the fullest extent permitted
by law, acquired by such purchasers from such Holders and (notwithstanding
anything to the contrary contained in Article Fifteen) surrendered by such
purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid. The Trustee shall hold and pay to the Holders whose Debentures
are selected for redemption any such amount paid to it for purchase and
conversion in the same manner as it would moneys deposited with it by the
Company for the redemption of Debentures. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Debentures shall increase or
otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in the Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any
loss, liability or expense arising out of or in connection with any such
arrangement for the purchase and conversion of any Debentures between the
Company and such purchasers, including the costs and expenses incurred by
the Trustee in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under the Indenture.
SECTION 1110. PURCHASE OF DEBENTURES AT OPTION OF THE HOLDER.
(a) GENERAL. Debentures shall be purchased by the Company pursuant
to paragraph 6 of the Debentures as of April 24, 2003, April 24, 2008 and
April 24, 2013 (each, a "Purchase Date"), at the purchase price specified
therein (each, a "Purchase Price"), at the option of the Holder thereof,
upon:
(1) delivery to the Paying Agent at the office of the Paying
Agent or to the office or agency referred to in Section 1002 by the
Holder of a written notice of purchase (a "Purchase Notice") at any
time from the opening of business on the date
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that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Debenture which the
Holder will deliver to be purchased,
(B) the portion of the Principal Amount at Maturity of
the Debenture which the Holder will deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof,
(C) that such Debenture shall be purchased on the
Purchase Date pursuant to the terms and conditions specified
in the Indenture and in paragraph 6 of the Debentures, and
(D) if the Company elects pursuant to Section 1110(b) to
pay the Purchase Price on such Purchase Date, in whole or in
part, in shares of Common Stock, but such portion of the
Purchase Price to be paid in Common Stock is ultimately to be
paid in cash because any condition in Section 1110(d) is not
satisfied, such Holder elects (i) to withdraw such Purchase
Notice as to some or all of the Debentures to which it relates
(stating the Principal Amount at Maturity and certificate
numbers of the Debentures as to which such withdrawal shall
relate), or (ii) to receive cash in respect of the Purchase
Price for all Debentures subject to such Purchase Notice; and
(2) delivery of such Debenture prior to, on or after the
Purchase Date (together with all necessary endorsements) to the
Paying Agent at the offices of the Paying Agent or to the office or
agency referred to in Section 1002, such delivery being a condition
to receipt by the Holder of the Purchase Price therefor; PROVIDED,
HOWEVER, that such Purchase Price shall be so paid pursuant to this
Section 1110 only if the Security so delivered conforms in all
respects to the description thereof in the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of
Section 1112, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 1110(a)(1) above, such Holder
shall be deemed to have elected to receive cash in respect of the Purchase
Price otherwise payable in Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1110, a portion of a Debenture if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
the Indenture that apply to the purchase of all of a Debenture also apply
to the purchase of such portion of such Debenture.
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Any purchase by the Company contemplated pursuant to the provisions
hereof shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date
and the time of delivery of the Debenture.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent or the office or agency referred to in
Section 1002 the Purchase Notice contemplated by this Section 1110(a)
shall have the right to withdraw at any time prior to the close of
business on the Purchase Date such Purchase Notice by delivery of a
written notice of withdrawal to the Paying Agent or such office or agency
in accordance with Section 1112.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE.
The Debentures to be purchased pursuant to Section 1110(a) may be paid
for, at the election of the Company, in cash or Common Stock, or in any
combination of cash and Common Stock, subject to the conditions set forth
in this Section 1110. The Company shall designate, in the notice from the
Company delivered pursuant to Section 1110(e), whether the Company will
purchase the Debentures for cash or Common Stock, and, if a combination
thereof, the percentages of the Purchase Price of Debentures in respect of
which it will pay in cash or Common Stock; PROVIDED that the Company will
pay cash for fractional shares of Common Stock. For purposes of
determining the existence of potential fractional interests, all
Debentures subject to purchase by the Company held by a Holder shall be
considered together (no matter how many separate certificates are to be
presented). Each Holder whose Debentures are purchased pursuant to this
Section 1110 shall receive the same percentage of cash or Common Stock in
payment of the Purchase Price for such Debentures, except (i) as provided
in Section 1110(d) with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase the Debentures of a Holder or Holders for Common
Stock because any necessary qualifications or registrations of the Common
Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Debentures of such Holder or Holders for cash.
The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the
Company has given notice thereof to Holders except pursuant to this
Section 1110(b) or Section 1110(d).
At least five Business Days before the Company Notice Date (as
defined below), the Company shall deliver an Officer's Certificate to the
Trustee specifying:
(i) the manner of payment selected by the Company;
(ii) the information required by Section 1110(e);
(iii) that the conditions to such manner of payment set forth
in Section 1110(d) have or will be complied with; and
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(iv) whether the Company desires the Trustee to give the
notice required by Section 1110(e).
(c) PURCHASE WITH CASH. On the Purchase Date, at the option of the
Company, the Principal Amount at Maturity of the Debentures in respect of
which a Purchase Notice pursuant to Section 1110(a) has been given, or a
specified percentage thereof, may be purchased by the Company with cash
equal to the aggregate Purchase Price of such Debentures.
(d) PAYMENT BY COMMON STOCK. On each Purchase Date, at the option of
the Company, the Principal Amount at Maturity of the Debentures in respect
of which a Purchase Notice pursuant to Section 1110(a) has been given, or
a specified percentage thereof, may be purchased by the Company by the
issuance of a number of shares of Common Stock equal to the quotient
obtained by dividing (i) the amount of cash to which the Holders would
have been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Purchase Price of such Debentures
in cash by (ii) the Market Price of a share of Common Stock, subject to
the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead, the Company will pay cash for the
current market value of the fractional share. The current market value of
a fraction of a share shall be determined by multiplying the Market Price
by such fraction and rounding the product to the nearest whole cent, with
one-half cent being rounded upward. It is understood that if a Holder
elects to have more than one Debenture purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Debentures to be
purchased.
Upon payment of Common Stock pursuant to the terms hereof, that
portion of accrued Original Issue Discount (or interest, if the Company
has exercised its option provided for in Section 1601) attributable to the
period from the Issue Date (or, if the Company has exercised the option
provided for in Section 1601, the later of (x) the date of such exercise
and (y) the date on which interest was last paid) to the Purchase Date
with respect to the purchased Debenture shall not be cancelled,
extinguished or forfeited, but rather shall be deemed paid in full to the
Holder through the delivery of the Common Stock (together with any cash
payment in lieu of fractional shares of Common Stock) in exchange for the
Debenture being purchased pursuant to the terms hereof, and the fair
market value of such Common Stock (together with any cash payments in lieu
of fractional shares of Common Stock) shall be treated as issued, to the
extent thereof, first in exchange for the Original Issue Discount accrued
through the Purchase Date, and the balance, if any, of the fair market
value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Debenture being
purchased pursuant to the provisions hereof.
The Company's right to exercise its election to purchase the
Debentures pursuant to this Section 1110 through the issuance of shares of
Common Stock shall be conditioned upon:
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(i) the Company's not having given notice of an election to
pay entirely in cash and its giving of timely notice of election to
purchase all or a specified percentage of the Debentures with Common
Stock as provided herein;
(ii) the registration of the shares of Common Stock to be
issued in respect of the payment of the Purchase Price under the
Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in
each case if required for the initial issuance thereof;
(iii) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption
from such qualification and registration; and
(iv) the receipt by the Trustee of an Officer's Certificate
and an Opinion of Counsel, each stating that (A) the terms of the
issuance of the Common Stock are in conformity with this Indenture
and (B) the shares of Common Stock to be issued by the Company in
payment of the Purchase Price in respect of Debentures have been
duly authorized and, when issued and delivered pursuant to the terms
of this Indenture in payment of the Purchase Price in respect of the
Debentures, will be validly issued, fully paid and nonassessable and
shall be free of any preemptive rights and any lien or adverse claim
(provided that such Opinion of Counsel may state that, insofar as it
relates to the absence of such preemptive rights, liens and adverse
claims, it is given upon the best knowledge of such counsel), and,
in the case of such Officer's Certificate, that conditions (i), (ii)
and (iii) above have been satisfied and, in the case of such Opinion
of Counsel, that conditions (ii) and (iii) above have been
satisfied.
Such Officer's Certificate shall also set forth the number of shares
of Common Stock to be issued for each $1,000 Principal Amount at Maturity
of Debentures and the Sale Price of a share of Common Stock on each of the
seven Business Days prior to the Purchase Date. The Company may elect to
pay in Common Stock only if the information necessary to calculate the
Market Price is reported in THE WALL STREET JOURNAL or another Authorized
Newspaper. If such conditions are not satisfied prior to or on the
Purchase Date and the Company has elected to purchase the Debentures
pursuant to this Section 1110 through the issuance of shares of Common
Stock, the Company shall pay, without further notice, the Purchase Price
in cash.
(e) NOTICE OF ELECTION. The Company shall send notices of its
election (the "Company Notice") to purchase with cash or Common Stock or
any combination thereof to the Holders (and to beneficial owners as
required by applicable law) in the manner provided in Section 107. The
Company Notice shall be sent to Holders (and to beneficial owners as
required by applicable law) on a date not less than 20 Business Days prior
to the Purchase Date (such date not less than 20 Business Days prior to
the Purchase Date being herein referred to as the "Company Notice Date").
Such notices shall state the manner of payment elected and shall contain
the following information:
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In the event the Company has elected to pay the Purchase Price (or
any specified percentage thereof) with Common Stock, the notice shall:
(1) state that each Holder will receive Common Stock with a
Market Price determined as of a specified date prior to the Purchase
Date equal to such specified percentage of the Purchase Price of the
Debentures held by such Holder (except for any cash amount to be
paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price; and
(3) state that because the Market Price will be determined
prior to the Purchase Date, Holders will bear the market risk with
respect to the value of the Common Stock to be received from the
date such Market Price is determined to the Purchase Date.
In any case, each notice shall include a form of Purchase Notice to
be completed by the Holder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the
Conversion Agent and of the office or agency referred to in Section
1002;
(iii) that Debentures as to which a Purchase Notice has been
given may be converted into Common Stock at any time prior to the
close of business on the applicable Purchase Date only if the
applicable Purchase Notice has been withdrawn in accordance with the
terms of this Indenture;
(iv) that Debentures must be surrendered to the Paying Agent
or to the office or agency referred to in Section 1002 to collect
payment;
(v) that the Purchase Price for any Debenture as to which a
Purchase Notice has been given and not withdrawn will be paid
promptly following the later of the Purchase Date and the time of
surrender of such Debenture as described in clause (iv) above;
(vi) the procedures the Holder must follow to exercise rights
under Section 1110 and a brief description of those rights;
(vii) briefly, the conversion rights of the Debentures and
that Holders who want to convert Debentures must satisfy the
requirements set forth in paragraph 8 of the Debentures; and
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(viii)the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional withdrawal
pursuant to the terms of Section 1110(a)(1)(D) or Section 1112).
At the Company's written request, the Trustee shall give such notice
in the Company's name and at the Company's expense; PROVIDED, HOWEVER,
that in all cases the text of such notice shall be prepared by the
Company.
Upon determination of the actual number of shares of Common Stock to
be issued for each $1,000 Principal Amount at Maturity of Debentures, the
Company will publish such determination in THE WALL STREET JOURNAL or
other Authorized Newspaper and furnish the Trustee with an affidavit of
publication.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered
upon purchase of the Debentures shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
The Company shall use reasonable efforts to list or cause to have
quoted any shares of Common Stock to be issued to purchase Debentures on
the principal national securities exchange or over-the-counter or other
domestic market on which any other shares of Common Stock are then listed
or quoted. The Company will promptly inform the Trustee in writing of any
such listing.
(g) PROCEDURE UPON PURCHASE. The Company shall deposit cash (in
respect of a cash purchase under Section 1110(c) or for fractional
interests, as applicable) or shares of Common Stock, or any combination
thereof, as applicable, at the time and in the manner as provided in
Section 1113, sufficient to pay the aggregate Purchase Price of all
Debentures to be purchased pursuant to this Section 1110. As soon as
practicable after the later of the Purchase Date and the date such
Debentures are surrendered to the Paying Agent or at the office or agency
referred to in Section 1002, the Company shall deliver to each Holder
entitled to receive Common Stock through the Paying Agent a certificate
for the number of full shares of Common Stock issuable in payment of the
Purchase Price and cash in lieu of any fractional interests. The Person in
whose name the certificate for Common Stock is registered shall be treated
as a holder of record of such Common Stock on the Business Day following
the related Purchase Date. Subject to Section 1110(d), no payment or
adjustment will be made for dividends on the Common Stock the record date
for which occurred prior to the Purchase Date.
(h) TAXES. If a Holder of a Debenture is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax
due on such issue of shares of Common Stock. However, the Holder shall pay
any such tax which is due because the Holder requests the shares of Common
Stock to be issued in a name other than the Holder's name. The Paying
Agent may refuse to deliver the certificates representing the Common Stock
being issued in a name other than the Holder's name until the Paying Agent
receives
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a sum sufficient to pay any tax which will be due, as set forth in an
Officer's Certificate, because the shares of Common Stock are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any
income tax withholding required by law or regulations.
SECTION 1111. PURCHASE OF DEBENTURES AT OPTION OF THE HOLDER UPON
CHANGE IN CONTROL.
(a) If on or prior to April 24, 2003 there shall have occurred a
Change in Control, Debentures shall be purchased, at the option of the
Holder thereof, by the Company at the purchase price specified in
paragraph 6 of the Debentures (the "Change in Control Purchase Price"), on
the date that is 35 Business Days after the occurrence of the Change in
Control (the "Change in Control Purchase Date"), subject to satisfaction
by or on behalf of the Holder of the requirements set forth in Section
1111(c).
(b) Within 15 Business Days after the Change in Control, the Company
shall (i) mail a written notice of such Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners if
required by applicable law) and (ii) cause a copy of such notice to be
published in THE WALL STREET JOURNAL or other Authorized Newspaper. The
notice shall include a form of Change in Control Purchase Notice to be
completed by the Holder and shall state:
(1) the events causing a Change in Control and the date such
Change in Control is deemed to have occurred for purposes of this
Section 1111;
(2) the date by which the Change in Control Purchase Notice
pursuant to this Section 1111 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the
Conversion Agent and the office or agency referred to in Section
1002;
(6) the Conversion Rate and any adjustments thereto;
(7) that Debentures with respect to which a Change in Control
Purchase Notice has been given by the Holder may be converted into
Common Stock (or, in lieu thereof, cash, if the Company shall so
elect) at any time prior to the close of business on the Change in
Control Purchase Date only if the Change in Control Purchase Notice
has been withdrawn by the Holder in accordance with the terms of
this Indenture;
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(8) that Debentures must be surrendered to the Paying Agent or
the office or agency referred to in Section 1002 to collect payment;
(9) that the Change in Control Purchase Price for any
Debenture as to which a Purchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Change in
Control Purchase Date and the time of surrender of such Debenture as
described in clause (8) above;
(10) the procedures the Holder must follow to exercise rights
under this Section 1111 and a brief description of those rights;
(11) briefly, the conversion rights of the Debentures; and
(12) the procedures for withdrawing a Change in Control
Purchase Notice.
(c) A Holder may exercise its rights specified in Section 1111(a)
upon delivery of a written notice of purchase (a "Change in Control
Purchase Notice") to the Paying Agent or to the office or agency referred
to in Section 1002 at any time prior to the close of business on the
Change in Control Purchase Date, stating:
(1) the certificate number of the Debenture which the Holder
will deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the
Debenture which the Holder will deliver to be purchased, which
portion must be $1,000 or an integral multiple thereof; and
(3) that such Debenture shall be purchased on the Change in
Control Purchase Date pursuant to the terms and conditions specified
in paragraph 6 of the Debentures.
Receipt of the Debenture by the Paying Agent prior to, on or after
the Change in Control Purchase Date (together with all necessary
endorsements), at the offices of the Paying Agent or to the office or
agency referred to in Section 1002 shall be a condition to the receipt by
the Holder of the Change in Control Purchase Price therefor; PROVIDED,
HOWEVER, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 1111 only if the Debenture so delivered to the
Paying Agent or such office or agency shall conform in all respects to the
description thereof set forth in the related Change in Control Purchase
Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1111, a portion of a Debenture if the Principal Amount at Maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to the purchase of all of a Debenture also apply
to the purchase of such portion of such Debenture.
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Any purchase by the Company contemplated pursuant to the provisions
of this Section 1111 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of
the Change in Control Purchase Date and the date such Debentures are
surrendered to the Paying Agent or at the office or agency referred to in
Section 1002.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent or to the office or agency referred to in
Section 1002 the Change in Control Purchase Notice contemplated by this
Section 1111(c) shall have the right to withdraw such Change in Control
Purchase Notice at any time prior to the close of business on the Change
in Control Purchase Date by delivery of a written notice of withdrawal to
the Paying Agent or to such office or agency in accordance with Section
1112.
The Paying Agent shall promptly notify the Company of the receipt by
it of any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 1112. EFFECT OF PURCHASE NOTICE OR CHANGE IN CONTROL
PURCHASE NOTICE.
Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 1110(a) or Section 1111(c),
as applicable, the Holder of the Debenture in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be,
was given shall (unless such Purchase Notice or Change in Control Purchase
Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such
Debenture. Such Purchase Price or Change in Control Purchase Price shall
be paid to such Holder promptly following the later of (x) the Business
Day following the Purchase Date or the Change in Control Purchase Date, as
the case may be, with respect to such Debenture (provided the conditions
in Section 1110(a) or Section 1111(c), as applicable, have been satisfied)
and (y) the time of delivery of such Debenture to the Paying Agent or to
the office or agency referred to in Section 1002 by the Holder thereof in
the manner required by Section 1110(a) and (g) or Section 1111(c), as
applicable. Debentures in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted into shares of Common Stock on or after the
date of the delivery of such Purchase Notice or Change in Control Purchase
Notice, as the case may be, unless such Purchase Notice or Change in
Control Purchase Notice, as the case may be, has first been validly
withdrawn as specified in the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent or to the office or agency
referred to in Section 1002 at any time prior to the close of business on
the Purchase Date or the Change in Control Purchase Date, as the case may
be, specifying:
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(1) the certificate number of the Debenture in respect of
which such notice of withdrawal is being submitted;
(2) the Principal Amount at Maturity of the Debenture with
respect to which such notice of withdrawal is being submitted; and
(3) the Principal Amount at Maturity, if any, of such
Debenture which remains subject to the original Purchase Notice or
Change in Control Purchase Notice, as the case may be, and which has
been or will be delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the
form set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the
terms of Section 1110(a)(1)(D) or (ii) a conditional withdrawal containing
the information set forth in Section 1110(a)(1)(D) and the preceding
paragraph and contained in a written notice of withdrawal delivered to the
Paying Agent as set forth in the preceding paragraph.
There shall be no purchase of any Debentures pursuant to Section
1110 (other than through the issuance of Common Stock in payment of the
Purchase Price, including cash in lieu of fractional shares of Common
Stock) or Section 1111 if there has occurred (prior to, on or after, as
the case may be, the giving, by the Holders of such Debentures, of the
required Purchase Notice or Change in Control Purchase Notice, as the case
may be) and is continuing an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control Purchase Price, as the
case may be, with respect to such Debentures). The Paying Agent will
promptly return to the respective Holders thereof any Debentures (x) with
respect to which a Purchase Notice or Change in Control Purchase Notice,
as the case may be, has been withdrawn in compliance with this Indenture,
or (y) held by it during the continuance of an Event of Default (other
than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, with respect to such Debentures) in
which case, upon such return, the Purchase Notice or Change in Control
Purchase Notice with respect thereto shall be deemed to have been
withdrawn.
SECTION 1113. DEPOSIT OF PURCHASE PRICE OR CHANGE IN CONTROL
PURCHASE PRICE.
Prior to 3:00 p.m. (local time in The City of New York) on the
Business Day following the Purchase Date or the Change in Control Purchase
Date, as the case may be, the Company shall deposit with the Trustee or
with the Paying Agent (or, if the Company is acting as Paying Agent, shall
segregate and hold in trust as provided in Section 1103) an amount of cash
in immediately available funds or securities, if expressly permitted
hereunder, sufficient to pay the aggregate Purchase Price or Change in
Control Purchase Price, as the case may be, of all the Debentures or
portions thereof which are to be purchased as of the Purchase Date or
Change in Control Purchase Date, as the case may be.
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SECTION 1114. DEBENTURES PURCHASED IN PART.
Any Debenture which is to be purchased only in part shall be
surrendered at the office of the Paying Agent or the office or agency
referred to in Section 1002 (with, if the Company or the Trustee so
requires, due endorsement, or a written instrument of transfer in form
satisfactory to the Company and the Trustee executed by the Holder or such
Holder's attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of
such Debenture, without service charge, a new Debenture or Debentures, of
any authorized denomination as requested by such Holder in aggregate
Principal Amount at Maturity equal to, and in exchange for, the portion of
the Principal Amount at Maturity of the Debenture so surrendered which is
not purchased.
SECTION 1115. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE
OF DEBENTURES.
In connection with any offer to purchase or purchase of Debentures
under Section 1110 or 1111, the Company shall (i) comply with Rule 13e-4
and Rule 14e-1 under the Exchange Act, if applicable, (ii) file the
related Schedule 13E-4 (or any successor schedule, form or report) under
the Exchange Act, if applicable, and (iii) otherwise comply with all
Federal and state securities laws regulating the offer and delivery of
shares of Common Stock upon purchase of the Debentures (including
positions of the Commission under applicable no-action letters) so as to
permit the rights and obligations under Sections 1110 and 1111 to be
exercised in the time and in the manner specified in Sections 1110 and
1111.
SECTION 1116. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company, upon
written request, any cash or shares of Common Stock, together with
interest on such cash as hereinafter provided and dividends on such shares
of Common Stock, if any (subject to the provisions of Section 601(a)),
held by them for the payment of a Purchase Price or Change in Control
Purchase Price, as the case may be, of the Debentures that remain
unclaimed as provided in paragraph 12 of the Debentures; PROVIDED,
HOWEVER, that to the extent that the aggregate amount of cash or shares of
Common Stock deposited by the Company pursuant to Section 1113 exceeds the
aggregate Purchase Price or Change in Control Purchase Price, as the case
may be, of the Debentures or portions thereof to be purchased, then
promptly after the Business Day following the Purchase Date or Change in
Control Purchase Date, as the case may be, the Trustee shall return any
such excess to the Company together with interest as hereinafter provided
or dividends, if any, thereon (subject to the provisions of Section
601(a)). Any cash deposited with the Trustee or with the Paying Agent
pursuant to Section 1113 hereof shall be invested by the Trustee or Paying
Agent, as applicable, in short-term obligations of, or fully guaranteed
by, the United States of America, or commercial paper rated A-1 or better
by Standard and Poor's or P-1 or better by Moody's Investors Service, Inc.
as specifically directed in writing by the Company. Interest earned on
such investments shall be repaid to the Company pursuant to this Section
1116. Except as provided for in this Section 1116, the Trustee shall be
under no liability for interest on any money received by it pursuant to
this Indenture.
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SECTION 1117. OUTSTANDING DEBENTURES.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Change in Control Purchase Date, or at Stated Maturity, money or, if
permitted by the terms hereof, including, without limitation, Section
1110, securities sufficient to pay the Debentures payable on that date,
then on and after that date such Debentures shall cease to be Outstanding
and Original Issue Discount and interest, if any (including, if such
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, interest on such notes), on such Debentures
shall cease to accrue and all other rights of the Holder shall terminate
(other than the right to receive the applicable Redemption Price, Purchase
Price or Change in Control Purchase Price, as the case may be, upon
delivery of the Debenture in accordance with the terms of this Indenture);
PROVIDED that if such Debentures 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.
If a Debenture is converted in accordance with Article Fifteen, then
from and after the Conversion Date such Debenture shall cease to be
Outstanding and Original Issue Discount and interest, if any (including,
if such Debentures have been converted to semiannual coupon notes
following the occurrence of a Tax Event, interest on such notes), shall
cease to accrue on such Debenture.
ARTICLE SIX
CONVERSION
SECTION 6.1 CONVERSION.
A new Article Fifteen is hereby added to the Indenture, but only
with respect to the Debentures issued in accordance with the provisions hereof,
as follows:
ARTICLE FIFTEEN
CONVERSION
SECTION 1501. CONVERSION PRIVILEGE.
A Holder of a Debenture may convert such Debenture into shares of
Common Stock at any time during the period stated in paragraph 8 of the
Debentures. The number of shares of Common Stock issuable upon conversion
of a Debenture per $1,000 of Principal Amount at Maturity thereof (the
"Conversion Rate") shall be that set forth in paragraph 8 in the
Debentures, subject to adjustment as herein set forth.
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A Holder may convert a portion of the Principal Amount at Maturity
of a Debenture if the portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to conversion of all of a
Debenture also apply to conversion of a portion of a Debenture.
"Average Sale Price" means the average of the Sale Prices of the
Common Stock for the shorter of:
(i) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination with respect to the
rights, options, warrants or distribution in respect of which the
Average Sale Price is being calculated, or
(ii) the period (x) commencing on the date next succeeding the
first public announcement of (a) the issuance of rights, options or
warrants or (b) the distribution, in each case, in respect of which
the Average Sale Price is being calculated and (y) proceeding
through the last full Trading Day prior to the Time of Determination
with respect to the rights, warrants or distribution in respect of
which the Average Sale Price is being calculated, or
(iii) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time with respect to the next preceding
(a) issuance of rights, warrants, or options or (b) distribution, in
each case, for which an adjustment is required by the provisions of
Section 1506(4), 1507 or 1508 and (y) proceeding through the last
full Trading Day prior to the Time of Determination with respect to
the rights, warrants, or options or distribution in respect of which
the Average Sale Price is being calculated.
If the Ex-Dividend Time (or in the case of a subdivision,
combination or reclassification, the effective date with respect thereto)
with respect to a dividend, subdivision, combination or reclassification
to which Section 1506(1), (2), (3) or (5) applies occurs during the period
applicable for calculating "Average Sale Price" pursuant to the definition
in the preceding sentence, "Average Sale Price" shall be calculated for
such period in a manner determined in good faith by the Board of Directors
to reflect the impact of such dividend, subdivision, combination or
reclassification on the Sale Price of the Common Stock during such period.
"Time of Determination" means the time and date of the earlier of
(i) the determination of stockholders entitled to receive rights,
warrants, or options or a distribution, in each case, to which Sections
1507 and 1508 apply and (ii) the time ("Ex-Dividend Time") immediately
prior to the commencement of "ex-dividend" trading for such rights,
options, warrants or distribution on the New York Stock Exchange or such
other national or regional exchange or market on which the shares of the
Common Stock are then listed or quoted.
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SECTION 1502. CONVERSION PROCEDURE.
To convert a Debenture into Common Stock, a Holder must satisfy the
requirements in paragraph 8 of the Debentures. The date on which the
Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). The Company shall deliver to the Holder no later than
the seventh Business Day following the Conversion Date, through the
Conversion Agent, a certificate for the number of full shares of Common
Stock issuable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 1503.
The Person in whose name the certificate is registered shall be
treated as a shareholder of record on and after the Conversion Date;
PROVIDED, HOWEVER, that no surrender of a Debenture on any date when the
stock transfer books of the Company shall be closed shall be effective to
constitute the Person or Persons entitled to receive the shares of Common
Stock upon such conversion as the record holder or holders of such shares
of Common Stock on such date, but such surrender shall be effective to
constitute the Person or Persons entitled to receive such shares of Common
Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer
books are open; PROVIDED FURTHER, that such conversion shall be at the
Conversion Rate in effect on the date that such Debenture shall have been
surrendered for conversion, as if the stock transfer books of the Company
had not been closed. Upon conversion of a Debenture, such Person shall no
longer be a Holder of such Debenture.
Holders may surrender a Debenture for conversion by means of
book-entry delivery in accordance with paragraph 8 of the Debentures and
the regulations of the applicable book-entry facility.
No payment or adjustment will be made for dividends on any Common
Stock except as provided in this Article Fifteen. On conversion of a
Debenture, that portion of accrued Original Issue Discount (or interest,
if the Company has exercised its option provided for in Section 1601)
attributable to the period from the Issue Date (or, if the Company has
exercised the option provided for in Section 1601, the later of (x) the
date of such exercise and (y) the date on which interest was last paid) to
the Conversion Date with respect to the converted Debenture shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the Holder thereof through delivery of the Common Stock
(together with any cash payment in lieu of fractional shares of Common
Stock) in exchange for the Debenture being converted pursuant to the terms
hereof, and the fair market value of such Common Stock (together with any
cash payment in lieu of fractional shares of Common Stock) shall be
treated as issued, to the extent thereof, first in exchange for the
Original Issue Discount accrued through the Conversion Date, and the
balance, if any, of such fair market value of such shares of Common Stock
(and any such cash payment) shall be treated as issued in exchange for the
Issue Price of the Debenture being converted pursuant to the provisions
hereof.
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If the Holder converts more than one Debenture at the same time, the
number of shares of Common Stock issuable upon the conversion shall be
computed based on the total Principal Amount at Maturity of the Debentures
converted.
Upon surrender of a Debenture that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Debenture in an authorized denomination equal in Principal
Amount at Maturity to the unconverted portion of the Debenture
surrendered.
If the last day on which a Debenture may be converted is a Legal
Holiday in a place where the Conversion Agent is located, the Debenture
may be surrendered to such Conversion Agent on the next succeeding day
that is not a Legal Holiday.
SECTION 1503. FRACTIONAL SHARES.
The Company will not issue a fractional share of Common Stock upon
conversion of a Debenture. Instead, the Company will deliver cash for the
current market value of the fractional share. The current market value of
a fractional share shall be determined to the nearest 1/1,000th of a share
by multiplying the Sale Price, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
SECTION 1504. TAXES ON CONVERSION.
If a Holder converts a Debenture, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of
shares of Common Stock upon such conversion. The Holder, however, shall
pay any such tax that is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may
refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder's name. Nothing
herein shall preclude any tax withholding required by law or regulations.
SECTION 1505. COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Debentures hereunder,
and from time to time as may be necessary, reserve out of its authorized
but unissued Common Stock a sufficient number of shares of Common Stock to
permit the conversion of the Debentures into shares of Common Stock.
All shares of Common Stock delivered upon conversion of the
Debentures shall be newly issued shares or treasury shares, shall be duly
and validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
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The Company will endeavor promptly to comply with all Federal and
state securities laws regulating the offer and delivery of shares of
Common Stock upon conversion of Debentures, if any, and will list or cause
to have quoted such shares of Common Stock on each national securities
exchange or in the over-the-counter market or such other market on which
the Common Stock is then listed or quoted.
SECTION 1506. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If, after the Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Common
Stock in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) pays a dividend or makes a distribution on its Common
Stock in shares of its Capital Stock (other than Common Stock or
rights, warrants or options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares
of its Capital Stock (other than rights, warrants or options for its
Capital Stock),
then the conversion privilege and the Conversion Rate in effect
immediately prior to such action shall be adjusted so that the Holder of a
Debenture thereafter converted may receive the number of shares or other
units of Capital Stock of the Company that such Holder would have owned
immediately following such action if such Holder had converted the
Debenture immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a Holder of a Debenture upon conversion of
such Debenture may receive shares or other units of two or more classes or
series of Capital Stock of the Company, the Conversion Rate shall
thereafter be subject to adjustment upon the occurrence of an action taken
with respect to any such class or series of Capital Stock as is
contemplated by this Article Fifteen with respect to the Common Stock, on
terms comparable to those applicable to Common Stock in this Article
Fifteen.
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SECTION 1507. ADJUSTMENT FOR RIGHTS ISSUE.
If, after the Issue Date, the Company distributes any rights,
warrants or options to all holders of its Common Stock entitling them, for
a period expiring within 60 days after the record date for such
distribution, to purchase shares of Common Stock or securities convertible
into Common Stock at a price per share less than the Sale Price as of the
Time of Determination, the Conversion Rate shall be adjusted in accordance
with the formula:
(O + N)
R1 = R x ---------------
(O + (N x P)/M)
where:
R1 = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record
date for the distribution to which this Section 1507 is being
applied.
N = the number of additional shares of Common Stock offered pursuant
to the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, minus, in the case of (i) a distribution
to which Section 1506(4) applies or (ii) a distribution to which
Section 1508 applies, for which, in each case, (x) the record
date shall occur on or before the record date for the
distribution to which this Section 1507 applies and (y) the Ex-
Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 1507
applies, the fair market value (on the record date for the
distribution to which this Section 1507 applies) of the
(1) Capital Stock of the Company distributed in respect of
each share of Common Stock in such Section 1506(4)
distribution, and
(2) assets of the Company or debt securities or any rights,
warrants or options to purchase securities of the
Company distributed in respect of each share of Common
Stock in such Section 1508 distribution.
The Board of Directors shall determine fair market values for the purposes
of this Section 1507.
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The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the rights,
warrants or options to which this Section 1507 applies.
No adjustment shall be made under this Section 1507 if the
application of the formula stated above in this Section 1507 would result
in a value of R1 that is equal to or less than the value of R.
SECTION 1508. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
If, after the Issue Date, the Company distributes to all holders of
its Common Stock any of its assets or debt securities or any rights,
warrants or options to purchase securities of the Company (including
securities or cash, but excluding (x) distributions of Capital Stock
referred to in Section 1506 and distributions of rights, warrants or
options referred to in Section 1507 and (y) cash dividends or other cash
distributions that are paid out of consolidated current net income or
earnings retained in the business as shown on the books of the Company,
unless such cash dividends or other cash distributions are Extraordinary
Cash Dividends), the Conversion Rate shall be adjusted, subject to the
provisions of the last paragraph of this Section 1508, in accordance with
the formula:
M
R1 = R x -----
M - F
where:
R1 = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution
to which Section 1506(4) applies for which (i) the record date
shall occur on or before the record date for the distribution
to which this Section 1508 applies and (ii) the Ex-Dividend
Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 1508
applies, the fair market value (on the record date for the
distribution to which this Section 1508 applies) of any
Capital Stock of the Company distributed in respect of each
share of Common Stock in such Section 1506(4) distribution.
F = the fair market value (on the record date for the distribution
to which this Section 1508 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of
each share of Common Stock in the distribution to which this
Section 1508 is being applied (including, in the case of cash
dividends or other cash distributions giving rise to an
adjustment, all such cash distributed concurrently).
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The Board of Directors shall determine fair market values for the purposes
of this Section 1508.
The adjustment shall become effective immediately after the record
date for the determination of shareholders entitled to receive the
distribution to which this Section 1508 applies.
For purposes of this Section 1508, the term "Extraordinary Cash
Dividend" shall mean any cash dividend with respect to the Common Stock
the amount of which, together with the aggregate amount of cash dividends
on the Common Stock to be aggregated with such cash dividend in accordance
with the provisions of this paragraph, equals or exceeds the threshold
percentages set forth in item (i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate amount
of such cash dividend together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Times occurring in
the 85 consecutive day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds 12.5% of the average of
the Sale Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the
period for calculating the average of the Sale Prices shall be the
period commencing 85 days prior to the date prior to the Ex-Dividend
Time with respect to the cash dividend to which this provision is
being applied), such cash dividend together with each other cash
dividend with an Ex-Dividend Time occurring in such 85-day period
shall be deemed to be an Extraordinary Cash Dividend and for
purposes of applying the formula set forth above in this Section
1508, the value of "F" shall be equal to (w) the aggregate amount of
such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (x)
the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 1508.
(ii) If upon the date prior to the Ex-Dividend Time with
respect to a cash dividend on the Common Stock, the aggregate amount
of such cash dividend, together with the amounts of all cash
dividends on the Common Stock with Ex-Dividend Times occurring in
the 365-consecutive-day period ending on the date prior to the
Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied equals or exceeds 25% of the average of
the Sale Prices during the period beginning on the date after the
first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the
period for calculating the average of the Sale Prices shall be the
period commencing 365 days prior to the date prior to
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the Ex-Dividend Time with respect to the cash dividend to which this
provision is being applied), such cash dividend together with each
other cash dividend with an Ex-Dividend Time occurring in such
365-day period shall be deemed to be an Extraordinary Cash Dividend
and for purposes of applying the formula set forth above in this
Section 1508, the value of "F" shall be equal to (y) the aggregate
amount of such cash dividend together with amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (z)
the aggregate amount of such other cash dividends with Ex-Dividend
Times occurring in such period for which a prior adjustment in the
Conversion Rate was previously made under this Section 1508.
In making the determinations required by items (i) and (ii) above,
the amount of cash dividends paid on a per share basis and the average of
the Sale Prices, in each case during the period specified in item (i) or
(ii) above, as applicable, shall be appropriately adjusted to reflect the
occurrence during such period of any event described in Section 1506.
In the event that, with respect to any distribution to which this
Section 1508 would otherwise apply, the difference "M-F" as defined in the
above formula is less than $1.00 or "F" is equal to or greater than "M,"
then the adjustment provided by this Section 1508 shall not be made and in
lieu thereof the provisions of Section 1514 shall apply to such
distribution.
SECTION 1509. WHEN ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Conversion Rate need be made unless the
adjustment would require an increase or decrease of at least 1% (E.G., if
the Conversion Rate is 4, an increase or decrease of .04 (1% of 4)) in the
Conversion Rate. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Article Fifteen shall be made to the
nearest cent or to the nearest 1/1,000th of a share, as the case may be,
with one-half of a cent and 5/10,000ths of a share being rounded upwards.
SECTION 1510. WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in Section
1506, 1507, 1508 or 1514 if Holders are to participate in the transaction
on a basis and with notice that the Board of Directors determines to be
fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
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To the extent the Debentures become convertible into cash pursuant
to the terms of Section 1508 or 1514, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to
the extent, such adjustment results in the following quotient being less
than the par value of the Common Stock: (i) the Issue Price plus accrued
Original Issue Discount as of the date such adjustment would otherwise be
effective divided by (ii) the Conversion Rate as so adjusted.
SECTION 1511. NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted, the Company shall file
with the Trustee and the Conversion Agent a notice of such adjustment and
a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it.
The Conversion Agent will promptly mail such notice to Holders at the
Company's expense. The certificate shall be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall
be under any duty or responsibility with respect to any such certificate
except to exhibit the same to any Holder desiring inspection thereof.
SECTION 1512. VOLUNTARY INCREASE.
The Company from time to time may increase the Conversion Rate by
any amount and for any period of time; PROVIDED that such period is not
less than 20 Business Days. Whenever the Conversion Rate is increased, the
Company shall mail to Holders and file with the Trustee and the Conversion
Agent a notice of the increase. The Company shall mail the notice at least
15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be
in effect.
A voluntary increase of the Conversion Rate does not change or
adjust the Conversion Rate otherwise in effect for purposes of Section
1506, 1507 or 1508.
SECTION 1513. NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company takes any action that would require an
adjustment in the Conversion Rate pursuant to Section 1506, 1507 or
1508 (unless no adjustment is to occur pursuant to Section 1510); or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 1514; or
(3) there is a liquidation or dissolution of the Company,
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then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend
or distribution of the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, binding share
exchange, transfer, liquidation or dissolution. The Company shall file and
mail the notice at least 15 days before such date. Failure to file or mail
the notice or any defect in it shall not affect the validity of the
transaction.
SECTION 1514. REORGANIZATION OF COMPANY; SPECIAL DISTRIBUTIONS.
If the Company is a party to a transaction subject to Section 801
(other than a sale of all or substantially all of the assets of the
Company in a transaction in which the holders of Common Stock immediately
prior to such transaction do not receive securities, cash or other assets
of the Company or any other person) or a merger or binding share exchange
that reclassifies or changes its outstanding Common Stock, the person
obligated to deliver securities, cash or other assets upon conversion of
Debentures shall enter into a supplemental indenture. If the issuer of
securities deliverable upon conversion of Debentures is an Affiliate of
the successor Company, that issuer shall join in the supplemental
indenture.
The supplemental indenture shall provide that the Holder of a
Debenture may convert it into the kind and amount of securities, cash or
other assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder
had converted the Debenture immediately before the effective date of the
transaction, assuming (to the extent applicable) that such Holder (i) was
not a constituent Person or an Affiliate of a constituent Person to such
transaction; (ii) made no election with respect thereto; and (iii) was
treated alike with the plurality of non-electing Holders. The supplemental
indenture shall provide for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this
Article Fifteen. The successor Company shall mail to Holders a notice
briefly describing the supplemental indenture.
If this Section 1514 applies, neither Section 1506 nor 1507 shall
apply.
If the Company makes a distribution to all holders of its Common
Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that, but for the provisions
of the last paragraph of Section 1508, would otherwise result in an
adjustment in the Conversion Rate pursuant to the provisions of Section
1508, then, from and after the record date for determining the holders of
Common Stock entitled to receive the distribution, a Holder of a Debenture
that converts such Debenture in accordance with the provisions of this
Indenture shall upon such conversion be entitled to receive, in addition
to the shares of Common Stock into which the Debenture is convertible, the
kind and amount of securities, cash or other assets comprising the
distribution that such Holder would have received if such Holder had
converted the Debenture immediately prior to the record date for
determining the holders of Common Stock entitled to receive the
distribution.
SECTION 1515. COMPANY DETERMINATION FINAL.
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Any determination that the Company or the Board of Directors must
make pursuant to this Article Fifteen is conclusive.
SECTION 1516. TRUSTEE'S ADJUSTMENT DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this
Article Fifteen should be made, how it should be made or what it should
be. The Trustee has no duty to determine whether a supplemental indenture
under Section 1514 need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable
for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Debentures. The Trustee
shall not be responsible for the Company's failure to comply with this
Article Fifteen. Each Conversion Agent (other than the Company or an
Affiliate of the Company) shall have the same protection under this
Section 1516 as the Trustee.
SECTION 1517. SIMULTANEOUS ADJUSTMENTS.
If this Article Fifteen requires adjustments to the Conversion Rate
under more than one of Sections 1506(4), 1507 or 1508, and the record
dates for the distributions giving rise to such adjustments shall occur on
the same date, then such adjustments shall be made by applying, first, the
provisions of Section 1506, second, the provisions of Section 1508 and,
third, the provisions of Section 1507.
SECTION 1518. SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this Article
Fifteen, any subsequent event requiring an adjustment under this Article
Fifteen shall cause an adjustment to the Conversion Rate as so adjusted.
ARTICLE SEVEN
SPECIAL TAX EVENT CONVERSION
SECTION 7.1 SPECIAL TAX EVENT CONVERSION.
A new Article Sixteen is hereby added to the Indenture, but only
with respect to the Debentures issued in accordance with the provisions hereof,
as follows:
ARTICLE SIXTEEN
SPECIAL TAX EVENT CONVERSION
SECTION 1601. OPTIONAL CONVERSION TO SEMIANNUAL COUPON NOTE UPON
TAX EVENT.
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<PAGE>
From and after the date (the "Tax Event Date") of the occurrence of
a Tax Event, at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at 4.75% per annum on a principal
amount per Debenture (the "Restated Principal Amount") equal to the Issue
Price plus Original Issue Discount accrued to the date immediately prior
to the Tax Event Date or the date on which the Company exercises the
option described herein, whichever is later (such date, the "Option
Exercise Date"). Such interest shall accrue from the Option Exercise Date
and shall be payable semiannually on April 24 and October 24 of each year
(each an "Interest Payment Date") to holders of record at the close of
business on March 31 or September 30 (each a "Regular Record Date")
immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year comprised of 12 30-day months and
will accrue from the most recent date on which interest has been paid or,
if no interest has been paid, from the Option Exercise Date. Within 15
days of the occurrence of a Tax Event, the Company shall mail a written
notice of such Tax Event by first-class mail to the Trustee.
ARTICLE EIGHT
MISCELLANEOUS
SECTION 8.1 GOVERNING LAW.
This First Supplemental Indenture and the Debentures shall be deemed
to be contracts made and to be performed entirely in the State of New York, and
for all purposes shall be governed and construed in accordance with the laws of
said State without regard to the conflicts of laws rules of said State. This
First Supplemental Indenture may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
SECTION 8.2 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this First Supplemental Indenture,
or for or in respect of the recitals contained herein, all of which recitals are
made by the Company solely. To the extent permitted by the provisions of Article
Six of the Indenture, the Trustee shall not be answerable or accountable for
anything whatsoever in connection with this First Supplemental Indenture except
for its own wilful misconduct or negligence.
SECTION 8.3 INTEREST LIMITATIONS.
Anything in this First Supplemental Indenture, the Original
Indenture or any Debenture to the contrary notwithstanding, the Company shall
never be required to pay unearned interest on any Debenture and shall never be
required to pay interest on such Debenture at a rate in excess of the Highest
Lawful Rate (as defined below), and if the effective rate of interest which
would otherwise be payable under this First Supplemental Indenture, the Original
Indenture and such Debenture would exceed the Highest Lawful Rate, or if the
Holder of such Debenture shall receive any unearned interest or shall receive
monies or other consideration that are deemed to constitute interest which would
increase the effective rate of interest payable by the Company under this First
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<PAGE>
Supplemental Indenture, the Original Indenture and such Debenture to a rate in
excess of the Highest Lawful Rate, then (i) the amount of interest which would
otherwise be payable by the Company under this First Supplemental Indenture, the
Original Indenture and such Debenture shall be reduced to the amount allowed
under applicable law, and (ii) any unearned interest paid by the Company or any
interest paid by the Company in excess of the Highest Lawful Rate shall, at the
option of the Holder of such Debenture, be either refunded to the Company or
credited on the principal of such Debenture. It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received by any Holder under the Debenture held by it, or under
this First Supplemental Indenture or the Original Indenture, shall be made, to
the extent permitted by applicable usury laws (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Debentures all interest (and other consideration deemed to
constitute interest) at any time contracted for, charged or received by such
Holder in connection therewith. If at any time and from time to time (i) the
amount of interest payable to any Holder on any date shall be computed at the
Highest Lawful Rate pursuant to this Section 8.3 and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to such Holder would be less than the amount of interest payable to such Holder
computed at the Highest Lawful Rate, then the amount of interest payable to such
Holder in respect of such subsequent interest computation period shall continue
to be computed at the Highest Lawful Rate until the total amount of interest
payable to such Holder shall equal the total amount of interest which would have
been payable to such Holder if the total amount of interest had been computed
without giving effect to this Section 8.3. For purposes of this Section 8.3,
"Highest Lawful Rate" means the maximum non-usurious rate of interest permitted
by applicable law, which the parties intend shall be the laws of the State of
New York; PROVIDED that, to the extent the Highest Lawful Rate is determined by
reference to the laws of the State of Texas, the Highest Lawful Rate shall be
the indicated (weekly) rate ceiling as defined in Texas Revised Civil Statutes,
Article 5069-1.04, as amended, at the applicable time in effect.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and attested as of the day and year
first above written.
PRIDE INTERNATIONAL, INC.
By:/S/EARL W. MCNIEL
Earl W. McNiel
Vice President and Chief Financial Officer
Attest:
/S/ ROBERT W. RANDALL
Robert W. Randall
Secretary
MARINE MIDLAND BANK,
as Trustee
By:/S/ FRANK J. GODINO
Name: Frank J. Godino
Title: Vice President
Attest:
/S/ CHARLES E. BAUER
Charles E. Bauer
Vice President
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<PAGE>
EXHIBIT A
[FORM OF FACE OF DEBENTURE]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF
PRINCIPAL AMOUNT OF THIS DEBENTURE IS $608.94, THE ISSUE DATE IS APRIL 24, 1998
AND THE YIELD TO MATURITY IS 4.75% (COMPUTED ON A SEMIANNUAL BOND EQUIVALENT
BASIS).
PRIDE INTERNATIONAL, INC.
Zero Coupon Convertible Subordinated
Debenture Due 2018
CUSIP No.
No.
Issue Date: April 24, 1998
Issue Price: $391.06
Original Issue Discount: $608.94
(for each $1,000 Principal
Amount at Maturity)
Pride International, Inc., a Louisiana corporation, promises to pay
to ______________ or registered assigns, the Principal Amount at Maturity of
________________ Dollars on April 24, 2018.
This Debenture shall not bear interest except as specified on the
other side of this Debenture. Original Issue Discount will accrue as specified
on the other side of this Debenture. This Debenture is convertible as specified
on the other side of this Debenture. All capitalized terms used herein without
definition shall have the respective meanings assigned thereto in the Indenture
referred to on the other side of this Debenture.
Additional provisions of this Debenture are set forth on the other
side of this Debenture.
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<PAGE>
Dated: PRIDE INTERNATIONAL, INC.
[SEAL] By:
Name:
Title:
ATTEST:
Name:
Title:
This is one of the Securities of the series
designated therein referred to in the
within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:____________________________
Authorized Signatory
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<PAGE>
[FORM OF REVERSE SIDE OF DEBENTURE]
Zero Coupon Convertible Subordinated
Debenture Due 2018
[Unless and until it is exchanged in whole or in part for Debentures
in definitive form, this Debenture may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company, a New York corporation ("DTC"), shall
act as the Depositary until a successor shall be appointed by the Company.
Unless this certificate is presented by an authorized representative of DTC to
the Company or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest therein.]*
1. INTEREST
This Debenture shall not bear interest except as specified in this
paragraph or in paragraph 9 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 502 of the Indenture, upon the
date set for payment of the Redemption Price pursuant to paragraph 5 hereof,
upon the date set for payment of a Purchase Price or Change in Control Purchase
Price pursuant to paragraph 6 hereof or upon the Stated Maturity of this
Debenture) or if shares of Common Stock (or cash in lieu of fractional shares)
in respect of a conversion of this Debenture in accordance with the terms of
Article Fifteen of the Indenture is not delivered when due, then in each such
case the overdue amount shall bear interest at the rate of 4.75% per annum,
compounded semiannually (to the extent that the payment of such interest shall
be legally enforceable), which interest shall accrue from the date such overdue
amount was due to the date payment of such amount, including interest thereon,
has been made or duly provided for. All such interest shall be payable on
demand.
Original Issue Discount (the difference between the Issue Price and
the Principal Amount at Maturity of the Debenture), in the period during which a
Debenture remains outstanding, shall accrue at 4.75% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of 12 30-day months,
commencing on the Issue Date of this Debenture, and shall cease to accrue on the
earlier of (a) the date on which the Principal Amount at Maturity hereof or any
portion of such Principal Amount at Maturity becomes due and payable and (b) any
Redemption Date, Conversion Date, Change in Control Purchase Date, Purchase Date
or other date on which
- --------
*This paragraph should be added only if the Debenture is issued in global
form.
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<PAGE>
such Original Issue Discount (or, if such Debentures have been converted to
semiannual coupon notes following the occurrence of a Tax Event, interest on
such notes) shall cease to accrue in accordance with Section 1117 of the
Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, Pride
International, Inc. (the "Company") will make payments in respect of any
Debenture to the Persons in whose name that Debenture is registered at the close
of business on the Business Day preceding the Redemption Date or Stated
Maturity, as the case may be, or at the close of business on a Purchase Date,
Change in Control Purchase Date or Conversion Date, as the case may be. Holders
must surrender Debentures to a Paying Agent to collect such payments in respect
of the Debentures. The Company will pay cash amounts in money of The United
States of America that at the time of payment is legal tender for payment of
public and private debts. The Company will make such cash payments (i) by wire
transfer of immediately available funds with respect to Debentures held in
book-entry form or (ii) by check payable in such money mailed to a Holder's
registered address with respect to any certificated Debentures.
3. PAYING AGENT, CONVERSION AGENT AND SECURITY REGISTRAR
Initially, Marine Midland Bank, as trustee (the "Trustee"), will act
as Paying Agent, Conversion Agent and Security Registrar. The Company may
appoint and change any Paying Agent, Conversion Agent, Security Registrar or
co-registrar without notice, other than notice to the Trustee, PROVIDED that the
Company shall maintain in the Borough of Manhattan, The City of New York, an
office or agency of the Security Registrar, Paying Agent or Conversion Agent.
The Company or any of its Subsidiaries or any of their Affiliates may act as
Paying Agent, Conversion Agent, Registrar or co-registrar.
4. INDENTURE
This Debenture is one of a duly authorized series of Securities of
the Company, designated as its Zero Coupon Convertible Subordinated Debentures
Due 2018, issued under an Indenture dated as of April 1, 1998, as amended and
supplemented by a First Supplemental Indenture dated as of April 24, 1998 (as so
amended and supplemented, the "Indenture"), between the Company and the Trustee.
The terms of the Debentures include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended and in effect on the date of the Indenture (the "Trust Indenture Act"),
except as provided in the Indenture. Capitalized terms used herein or on the
face hereof and not defined herein have the meanings ascribed thereto in the
Indenture. The Debentures are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of those
terms.
The Debentures are unsecured, subordinated, general obligations of
the Company limited to an aggregate Principal Amount at Maturity specified in
Section 2.2(b) of the Indenture. The Indenture does not limit other indebtedness
of the Company, secured or unsecured, including Senior Indebtedness.
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<PAGE>
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Debentures. The Debentures are
redeemable for cash as a whole at any time, or from time to time in part, at the
option of the Company at the Redemption Prices set forth below, PROVIDED that
the Debentures are not redeemable prior to April 24, 2003.
The table below shows the Redemption Prices of a Debenture per
$1,000 Principal Amount at Maturity on the dates shown below and at Stated
Maturity, which prices reflect the accrued Original Issue Discount calculated
through each such date. The Redemption Price of a Debenture redeemed between
such dates would include an additional amount reflecting the additional Original
Issue Discount accrued from and including the next preceding date in the table
to and including the actual Redemption Date.
ACCRUED ORIGINAL
DEBENTURE ISSUE DISCOUNT REDEMPTION
ISSUE PRICE AT 4.75% PRICE
REDEMPTION DATE (1) (2) (1) + (2)
--------------- ------- ------- ---------
April 24, 2003...................... $391.06 $103.46 $494.52
April 24, 2004...................... 391.06 127.23 518.29
April 24, 2005...................... 391.06 152.14 543.20
April 24, 2006...................... 391.06 178.25 569.31
April 24, 2007...................... 391.06 205.61 596.67
April 24, 2008...................... 391.06 234.29 625.35
April 24, 2009...................... 391.06 264.34 655.40
April 24, 2010...................... 391.06 295.85 686.91
April 24, 2011...................... 391.06 328.86 719.92
April 24, 2012...................... 391.06 363.46 754.52
April 24, 2013...................... 391.06 399.73 790.79
April 24, 2014...................... 391.06 437.74 828.80
April 24, 2015...................... 391.06 477.57 868.63
April 24, 2016...................... 391.06 519.32 910.38
April 24, 2017...................... 391.06 563.08 954.14
April 24, 2018...................... 391.06 608.94 1,000.00
If converted to a semiannual coupon note following the occurrence of
a Tax Event, this Debenture will be redeemable at the Restated Principal Amount
plus interest accrued and unpaid from and including the date of such conversion
to, but excluding, the Redemption Date; PROVIDED that in no event will this
Debenture be redeemable prior to April 24, 2003.
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<PAGE>
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER
Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Debentures
held by such Holder on the following Purchase Dates and at the following
Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to
the Purchase Date until the close of business on the Purchase Date and upon
delivery of the Debentures to the Paying Agent by the Holder as set forth in the
Indenture. Such Purchase Price may be paid, at the option of the Company, in
cash or by the issuance and delivery of shares of Common Stock of the Company,
or in any combination thereof.
PURCHASE DATE PURCHASE PRICE
April 24, 2003 $494.52
April 24, 2008 625.35
April 24, 2013 790.79
If prior to a Purchase Date this Debenture has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest from, and including, the date of conversion to, but excluding, the
Purchase Date.
Subject to the terms and conditions of the Indenture, if any Change
in Control occurs on or prior to April 24, 2003, the Company shall, at the
option of the Holder, purchase all Debentures for which a Change in Control
Purchase Notice shall have been delivered as provided in the Indenture and not
withdrawn, on the date that is 35 Business Days after the occurrence of such
Change in Control, for a Change in Control Purchase Price equal to the Issue
Price plus accrued Original Issue Discount through and including the Change in
Control Purchase Date, which Change in Control Purchase Price shall be paid in
cash. If prior to a Change in Control Purchase Date this Debenture has been
converted to a semiannual coupon note following the occurrence of a Tax Event,
the Change in Control Purchase Price shall be equal to the Restated Principal
Amount plus accrued and unpaid interest from, and including, the date of
conversion to, but excluding, the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture
prior to the close of business on the Purchase Date or Change in Control
Purchase Date, as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price of all Debentures or portions thereof to be purchased as of the
Purchase Date or the Change in Control Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Change in Control Purchase Date, as the case may be, Original
A-6
<PAGE>
Issue Discount (or interest upon conversion to semiannual coupon notes following
the occurrence of a Tax Event) ceases to accrue on such Debentures (or portions
thereof) on and after such date, and the Holders thereof shall have no other
rights as such (other than the right to receive the Purchase Price or Change in
Control Purchase Price, as the case may be, upon surrender of such Debenture).
7. NOTICE OF REDEMPTION
Notice of redemption will be given in the manner provided in the
Indenture not less than 30 days nor more than 60 days prior to the Redemption
Date. If money sufficient to pay the Redemption Price of all Debentures (or
portions thereof) to be redeemed on the Redemption Date is deposited with the
Paying Agent prior to or on the Redemption Date, from and after such Redemption
Date, Original Issue Discount and interest, if any (including, if such
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, interest on such notes), ceases to accrue on such
Debentures or portions thereof. Debentures in denominations larger than $1,000
of Principal Amount at Maturity may be redeemed in part but only in integral
multiples of $1,000 of Principal Amount at Maturity.
8. CONVERSION
Subject to the next two succeeding sentences, a Holder of a
Debenture may convert it into Common Stock of the Company at any time before the
close of business on April 24, 2018; PROVIDED, HOWEVER, that if a Debenture is
called for redemption, the Holder may convert it at any time before the close of
business on the Redemption Date. The number of shares of Common Stock to be
delivered upon conversion of a Debenture into Common Stock per $1,000 of
Principal Amount at Maturity shall be equal to the Conversion Rate. A Debenture
in respect of which a Holder has delivered a Purchase Notice or Change in
Control Purchase Notice exercising the option of such Holder to require the
Company to purchase such Debenture may be converted only if the notice of
exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 13.794 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section
1601 of the Indenture to have interest in lieu of Original Issue Discount accrue
on the Debenture following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option. If the Company
exercises such option, Debentures surrendered for conversion during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business of such Interest Payment Date
(except Debentures to be redeemed on a date within such period) must be
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Debentures surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Debentures will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
A-7
<PAGE>
To convert a Debenture a Holder must (i) complete and manually sign
the conversion notice on the back of the Debenture (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion Agent
(or the office or agency referred to in Section 1002 of the Indenture) or, if
applicable, complete and deliver to The Depository Trust Company ("DTC" or the
"Depositary," which term includes any successor thereto) the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program, (ii) surrender the Debenture to a Conversion Agent by
physical or book-entry delivery (which is not necessary in the case of
conversion pursuant to the Depositary's book-entry conversion program), (iii)
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Company or the Trustee and (iv) pay any transfer or
similar tax, if required. Book-entry delivery of a Debenture to the Conversion
Agent may be made by any financial institution that is a participant in the
Depositary; conversion through the Depositary's book-entry conversion program is
available for any security that is held in an account maintained at the
Depositary by any such participant.
A Holder may convert a portion of a Debenture if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000.
No payment or adjustment will be made for dividends on the Common Stock, except
as provided in the Indenture. On conversion of a Debenture, that portion of
accrued Original Issue Discount (or interest, if the Company has exercised its
option provided for in paragraph 9 hereof) attributable to the period from the
Issue Date (or, if the Company has exercised the option referred to in paragraph
9 hereof, the later of (x) the date of such exercise and (y) the date on which
interest was last paid) to the Conversion Date with respect to the converted
Debenture shall not be cancelled, extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder thereof through delivery of the Common
Stock (together with any cash payment in lieu of fractional shares of Common
Stock) in exchange for the Debenture being converted pursuant to the terms
hereof, and the fair market value of such Common Stock (together with any cash
payment in lieu of fractional shares of Common Stock) shall be treated as
issued, to the extent thereof, first in exchange for the Original Issue Discount
accrued through the Conversion Date, and the balance, if any, of such fair
market value of such shares of Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Issue Price of the Debenture being
converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for (i) dividends or
distributions on Common Stock payable in Common Stock or other Capital Stock of
the Company, (ii) subdivisions, combinations or certain reclassifications of
Common Stock, (iii) distributions to all holders of Common Stock of certain
rights, warrants or options to purchase Common Stock or securities convertible
into Common Stock for a period expiring within 60 days after the applicable
record date for such distribution at a price per share less than the Sale Price
at the Time of Determination and (iv) distributions to such holders of assets or
debt securities of the Company or certain rights, warrants or options to
purchase securities of the Company (excluding certain cash dividends or other
cash distributions). However, no adjustment need be made if Holders may
participate in the transaction or in certain other cases. The Company from time
to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding
share exchange of the type specified in the Indenture, or certain transfers of
all or substantially all of its assets to another Person, or in certain other
circumstances described in the Indenture, the right to convert a Debenture
A-8
<PAGE>
into Common Stock may be changed into a right to convert it into the kind and
amount of securities, cash or other assets that the Holder would have received
if the Holder had converted such Holder's Debentures immediately prior to such
transaction.
9. TAX EVENT
From and after the date (the "Tax Event Date") of the occurrence of
a Tax Event, at the option of the Company, interest in lieu of future Original
Issue Discount shall accrue at 4.75% per annum on a principal amount per
Debenture (the "Restated Principal Amount") equal to the Issue Price plus
Original Issue Discount accrued to the date immediately prior to the Tax Event
Date or the date on which the Company exercises the option described herein,
whichever is later (such date, the "Option Exercise Date"). Such interest shall
accrue from the Option Exercise Date and shall be payable semiannually on April
24 and October 24 of each year (each an "Interest Payment Date") to Holders of
record at the close of business on March 31 or September 30 (each a "Regular
Record Date") immediately preceding such Interest Payment Date. Interest will be
computed on the basis of a 360-day year composed of 12 30-day months and will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Option Exercise Date.
Interest on any Debenture that 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 Debenture is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. The Company will make such payments (i) by wire transfer of
immediately available funds with respect to Debentures held in book-entry form
or (ii) by check payable in such money mailed to a Holder's registered address
with respect to any certificated Debentures.
Except as otherwise specified with respect to the Debentures, any
interest on any Debenture that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company as provided for in Section 307 of
the Indenture.
10. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Debentures called for redemption, unless surrendered for
conversion before the Redemption Date, may be deemed to be purchased from the
Holders of such Debentures at an amount not less than the Redemption Price,
together with accrued interest, if any, to the Redemption Date, by one or more
investment bankers or other purchasers who may agree with the Company to
purchase such Debentures from the Holders and to make payment for such
Debentures to the Trustee in trust for such Holders.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Debentures are in fully registered form, without coupons, in
minimum denominations of $1,000 Principal Amount at Maturity or in integral
multiples thereof. A Holder may register a transfer or exchange of Debentures in
accordance with the Indenture. The Security
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<PAGE>
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Security Registrar need not register the
transfer or exchange of any Debentures selected for redemption (except, in the
case of a Debenture to be redeemed in part, the portion of the Debenture not to
be redeemed) or any Debentures in respect of which a Purchase Notice or Change
in Control Purchase Notice has been given and not withdrawn (except, in the case
of a Debenture to be purchased in part, the portion of the Debenture not to be
purchased) or any Debentures for a period of 15 days before a selection of
Debentures to be redeemed.
12. PERSONS DEEMED OWNERS
The registered Holder of this Debenture may be treated as the owner
of this Debenture for all purposes.
13. UNCLAIMED MONEY FOR SECURITIES
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of any amount with respect to the
Debentures and remaining unclaimed for three years after such amounts have
become due and payable shall be paid to the Company on Company Request (unless
otherwise required by mandatory provisions of the applicable escheat or
abandoned or unclaimed property law), or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Debenture 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 therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will
(unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law) be repaid to the Company.
14. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Debentures may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Debentures at the time Outstanding and (ii) certain defaults or noncompliance
with certain provisions may be waived with the written consent of the Holders of
a majority in aggregate Principal Amount at Maturity of the Debentures at the
time Outstanding. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Debentures in certain respects set forth in the
Indenture.
15. DEFAULTS AND REMEDIES
A-10
<PAGE>
Under the Indenture, Events of Default include (i) if the Debentures
have been converted to semiannual coupon notes following the occurrence of a Tax
Event, default in the payment of interest that continues for a period of 30
days; (ii) default in the payment of the Principal Amount at Maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to any
Debenture when the same becomes due and payable; (iii) default in the delivery
of shares of Common Stock (or cash in lieu of fractional interests in shares of
Common Stock) in accordance with the terms of the Indenture when such Common
Stock or cash is required to be delivered following conversion of a Debenture
and such default is not remedied for a period of 10 days; (iv) default in the
performance or breach of any covenant of the Company in the Indenture or the
Debentures, subject to notice and lapse of time; or (v) certain events of
bankruptcy, insolvency or reorganization of the Company. If an Event of Default
occurs and is continuing, either the Trustee or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Debentures at the time Outstanding
may declare all the Debentures to be due and payable immediately. The principal
amount of the Debentures that may be declared due and payable in such event
shall be the Issue Price plus accrued Original Issue Discount (or if the
Debentures have been converted to semiannual coupon notes following the
occurrence of a Tax Event, the Restated Principal Amount, plus accrued and
unpaid interest) on the Debentures to and including the date of default or the
date of declaration, as the case may be. Certain events of bankruptcy or
insolvency are Events of Default that will result in the Debentures becoming due
and payable immediately upon the occurrence of such Events of Default.
As set forth in, and subject to the provisions of, the Indenture, no
Holder of any Debenture shall have any right to institute any proceeding,
judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or trustee, or for any other remedy thereunder, unless certain
conditions set forth in the Indenture have been satisfied. The Trustee may
refuse to enforce the Indenture or the Debentures unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority in
aggregate Principal Amount at Maturity of the Outstanding Debentures shall have
the right to direct the time, method and place of conducting certain
proceedings, or exercising any trust or power conferred on the Trustee.
16. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Debentures and may otherwise deal with the
Company with the same rights it would have if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS
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
Debentures or the obligations of the Company or the Trustee under the Indenture
or any certificate or other writing delivered in connection therewith.
18. SUBORDINATION
A-11
<PAGE>
Indebtedness evidenced by the Debentures is subordinated, to the
extent and in the manner provided in the Indenture, to the prior payment in full
of all Senior Indebtedness of the Company, whether outstanding at the date of
the Indenture or thereafter created, incurred, assumed or guaranteed. There is
no restriction under the Indenture on the Company's incurring additional
indebtedness, including Senior Indebtedness. The Company, and each Holder by
accepting a Debenture, agrees to the subordination provided in the Indenture and
that the subordination provisions are for the benefit of the holders of Senior
Indebtedness.
Each Holder of a Debenture by his acceptance hereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
the Indenture and to protect the rights of the Holders of the Debentures
pursuant to the Indenture, and appoints the Trustee his attorney-in-fact for
such purpose, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
of the Company), the filing of a claim for the unpaid balance of his Debentures
in the form required in said proceedings and cause said claim to be approved.
19. AUTHENTICATION
This Debenture shall not be valid until an authorized signatory of
the Trustee manually signs the Certificate of Authentication on the other side
of this Debenture.
20. 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 UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
21. GOVERNING LAW
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
22. INTEREST LIMITATIONS
Anything in this Debenture or in the Indenture to the contrary
notwithstanding, the Company shall never be required to pay unearned interest on
this Debenture and shall never be required to pay interest on this Debenture at
a rate in excess of the Highest Lawful Rate.
A-12
<PAGE>
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture which has in it the text of this
Debenture in larger type. Requests may be made to:
Pride International, Inc.
5847 San Felipe, Suite 3300
Houston, Texas 77057
Attention: General Counsel
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
I or we assign and transfer this Debenture to
(Insert assignee's soc.
sec. or tax ID no.)
_____________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________ agent to transfer this Debenture on the
books of the Company. The agent may substitute another to act for him.
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Company, check the box:
To convert only part of this Debenture, state the Principal Amount at Maturity
to be converted (which must be $1,000 or an integral multiple of $1,000):
$
If you want the share certificate made out in another Person's name, fill in the
form below:
(Insert other Person's
soc. sec. or tax ID no.)
_________________________________________________________
(Print or type other Person's name, address and zip code)
A-13
<PAGE>
Date: Your Signature: _________________________________
(Sign exactly as your name appears
on the face of this Debenture)
Signature Guarantee:
(Participant in a Recognized Signature
Guaranty Medallion Program)
A-14
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE DEBENTURES*
The following exchanges of a part of this Global Debenture for
Definitive Debentures have been made:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
AMOUNT OF AMOUNT OF AT MATURITY OF THIS
DECREASE IN INCREASE IN GLOBAL DEBENTURE SIGNATURE OF
PRINCIPAL AMOUNT AT PRINCIPAL AMOUNT AT FOLLOWING AUTHORIZED OFFICER
MATURITY OF THIS MATURITY OF THIS SUCH DECREASE OF TRUSTEE OR
DATE OF EXCHANGE GLOBAL DEBENTURE GLOBAL DEBENTURE (OR INCREASE) SECURITY CUSTODIAN
---------------- ---------------- ---------------- --------------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
- ----------------
* To be included in a Global Debenture.
A-15
EXHIBIT 15
AWARENESS LETTER OF INDEPENDENT ACCOUNTANTS
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Pride International, Inc.
Quarterly Report on Form 10-Q
We are aware that our report dated May 14, 1998 on our review of interim
consolidated financial information of Pride International, Inc. for the periods
ended March 31, 1998 and 1997 and included in this Form 10-Q is incorporated by
reference in the Company's registration statements on Form S-8 and Form S-3
filed with the Securities and Exchange Commission: Form S-8 (file no. 33-26854)
filed on February 6, 1989; Form S-8 (file no. 33-44823) filed on December 30,
1991; Form S-8 (file no. 333-06823) and Form S-8 (file no. 333-06825) filed on
June 26, 1996; Form S-3 (file no. 333-21385) filed on April 4, 1997; Form S-8
(file no. 333-27661) filed on May 22, 1997; Form S-8 (file no. 333-35089) and
Form S-8 (file no. 333-35093) filed on September 8, 1997, and Form S-3 (file no.
333-44925) filed on March 23, 1998. 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, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE PRIDE INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEET AS OF MARCH 31,
1998 AND THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE-MONTH PERIOD
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 48,152
<SECURITIES> 2,296
<RECEIVABLES> 202,509
<ALLOWANCES> 0
<INVENTORY> 30,796
<CURRENT-ASSETS> 334,484
<PP&E> 1,381,794
<DEPRECIATION> (117,982)
<TOTAL-ASSETS> 1,629,007
<CURRENT-LIABILITIES> 248,042
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 707,000
<TOTAL-LIABILITY-AND-EQUITY> 1,629,007
<SALES> 213,686
<TOTAL-REVENUES> 213,686
<CGS> 136,493
<TOTAL-COSTS> 176,165
<OTHER-EXPENSES> 1,133
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (10,471)
<INCOME-PRETAX> 28,183
<INCOME-TAX> 6,749
<INCOME-CONTINUING> 21,434
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,434
<EPS-PRIMARY> .43
<EPS-DILUTED> .40
</TABLE>
