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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 31, 1998
--------------------------------
POOL ENERGY SERVICES CO.
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(Exact name of registrant as specified in its charter)
TEXAS 000-18437 76-0263755
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10375 Richmond Avenue, Houston, Texas 77042
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 954-3000
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Not Applicable
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(Former name or former address, if changed since last report.)
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Items 1 - 4
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Not applicable.
Item 5. Other Events
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The press releases dated March 31, 1998 and April 1, 1998, included as
Exhibit 99.1 and Exhibit 99.2 to this report, respectively, are
incorporated herein by reference.
Item 6
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Not applicable.
Item 7
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Not applicable except as follows:
(c) EXHIBITS
The following exhibits are filed herewith:
Exhibit No. Description
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4.1 Indenture dated as of March 31, 1998 by and among
Pool Energy Services Co., certain Subsidiary
Guarantors and Marine Midland Bank.
4.2 Registration Rights Agreement dated as of March 31,
1998 by and among Pool Energy Services Co. and SBC
Warburg Dillon Read Inc., Morgan Stanley & Co.
Incorporated and Johnson Rice & Company, L.L.C., and
the Subsidiary Guarantors named therein.
10.1 Purchase Agreement dated March 26, 1998 by and among
Pool Energy Services Co. and SBC Warburg Dillon Read
Inc., Morgan Stanley & Co. Incorporated and Johnson
Rice & Company, L.L.C., and the Subsidiary Guarantors
named therein.
2
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10.2 U.S. $180,000,000 Amended and Restated Credit
Agreement, dated as of March 26, 1998, among Pool
Energy Services Co., Pool Energy Holding, Inc., Pool
Company, various banks, SBC Warburg Dillon Read Inc.,
as Arranger, Credit Lyonnais New York Branch, as
Administrative Agent, and Swiss Bank Corporation,
Stamford Branch, as Documentation Agent.
99.1 Press Release dated March 31, 1998.
99.2 Press Release dated April 1, 1998.
Items 8-9
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Not applicable.
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 hereunto duly authorized.
POOL ENERGY SERVICES CO.
(Registrant)
Date April 6, 1998
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3
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Indenture dated as of March 31, 1998 by and among
Pool Energy Services Co., certain Subsidiary
Guarantors and Marine Midland Bank.
4.2 Registration Rights Agreement dated as of March 31,
1998 by and among Pool Energy Services Co. and SBC
Warburg Dillon Read Inc., Morgan Stanley & Co.
Incorporated and Johnson Rice & Company, L.L.C., and
the Subsidiary Guarantors named therein.
10.1 Purchase Agreement dated March 26, 1998 by and among
Pool Energy Services Co. and SBC Warburg Dillon Read
Inc., Morgan Stanley & Co. Incorporated and Johnson
Rice & Company, L.L.C., and the Subsidiary Guarantors
named therein.
10.2 U.S. $180,000,000 Amended and Restated Credit
Agreement, dated as of March 26, 1998, among Pool
Energy Services Co., Pool Energy Holding, Inc., Pool
Company, various banks, SBC Warburg Dillon Read Inc.,
as Arranger, Credit Lyonnais New York Branch, as
Administrative Agent, and Swiss Bank Corporation,
Stamford Branch, as Documentation Agent.
99.1 Press Release dated March 31, 1998.
99.2 Press Release dated April 1, 1998.
4
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===============================================================================
____________________________________
POOL ENERGY SERVICES CO.
AS ISSUER
THE GUARANTORS
NAMED HEREIN
AND
MARINE MIDLAND BANK,
AS TRUSTEE
$150,000,000
SERIES A and SERIES B
8 5/8% SENIOR SUBORDINATED NOTES DUE 2008
____________________________________
____________________
INDENTURE
Dated as of March 31, 1998
____________________
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TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 1.03. Incorporation by Reference of TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 2
The Notes
Section 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.02. Execution and Authentication; Authentication Agent . . . . . . . . . . . . . . . . . . . . 26
Section 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.07. Book-entry Provisions for Global Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.08. Special Transfer Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.09. Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.10. Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.11 Treasury Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.12. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.13. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.14. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.15. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.16. CUSIP and CINS Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 3
Redemptions and Offers to Purchase
Section 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.02. Selection of Notes to Be Redeemed or Purchased . . . . . . . . . . . . . . . . . . . . . . 35
Section 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.06 Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.07 Redemption Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 3.08. Mandatory Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 4
Covenants
Section 4.01 Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.02. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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Section 4.03. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.04. Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.05 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.06 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.07. Limitations on Additional Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.08. Limitation on the Issuance of Capital Stock of Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.09. Limitations on Layering Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.10. Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.11. Limitations on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.13. Limitations on Restrictions on Distributions from
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.14. [Intentionally Omitted.] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.15. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 4.16. Limitations on Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.17. Additional Note Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 5
Successors
Section 5.01. Limitations on Mergers and Certain Other Transactions . . . . . . . . . . . . . . . . . . 49
ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.05. Control by Majority of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.06. Limitations on Suits by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.07. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.12. Willful Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 7
Trustee
Section 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.05. Notice to Holders of Defaults and Events of Default . . . . . . . . . . . . . . . . . . . 56
Section 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
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Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 7.09. Successor Trustee by Merger, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 7.11. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 8
Discharge of Indenture
Section 8.01. Discharge of Liability on Notes; Defeasance . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.02. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.03. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.05. Indemnity for Government Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 9
Amendments
Section 9.01. Amendments and Supplements Permitted without Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.02. Amendments and Supplements Requiring Consent of Holders . . . . . . . . . . . . . . . . . 62
Section 9.03. Compliance with TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.04. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.05. Notation or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.06. Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 10
Subordination
Section 10.01. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.02. Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.03. No Payment on Notes in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.04. Acceleration of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 10.05. When Distributions Must Be Paid Over . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 10.06. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.07. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.08. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 10.09. The Company, Guarantors and Holders May Not Impair
Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 10.10. Distribution or Notice to Representative . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.11. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 10.12. Authorization to Effect Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 11
Guarantee
Section 11.01. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.02. Trustee to Include Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.03. Subordination of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.04. Senior Subordinated Debt of Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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Section 11.05. Limits of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 11.06. Subsidiary Guarantors May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . 71
Section 11.07. Releases of Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE 12
Miscellaneous
Section 12.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 12.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 12.03. Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . 74
Section 12.04. Certificate and Opinion As to Conditions Precedent . . . . . . . . . . . . . . . . . . . . 74
Section 12.05. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . 74
Section 12.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 12.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.08. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.09. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.10. Table of Contents, Headings, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.12. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.13. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.14. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 12.15. Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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INDENTURE, dated as of March 31, 1998, is by and among Pool Energy
Services Co. (as further defined below, the "Company"), the Guarantors and
Marine Midland Bank, a New York banking corporation and trust company, as
trustee (the "TRUSTEE").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 8_% Series A Senior Subordinated Notes due 2008 (the "OLD NOTES") and the
8_% Series B Senior Subordinated Notes due 2008 (the "NEW NOTES" and, together
with the Old Notes, the "NOTES"), without preference of one series of Notes
over the other:
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.01. Definitions
"ACQUIRED INDEBTEDNESS" means (a) with respect to any Person that becomes
a Restricted Subsidiary after the date of this Indenture, Indebtedness of such
Person and its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and (b) with
respect to the Company or any of its Restricted Subsidiaries, any Indebtedness
of a Person (other than the Company or a Restricted Subsidiary) existing at the
time such Person is merged with or into the Company or a Restricted Subsidiary,
or Indebtedness assumed by the Company or any of its Restricted Subsidiaries in
connection with the acquisition of an asset or assets from another Person,
which Indebtedness was not, in any case, incurred by such other Person in
connection with, or in contemplation of, such merger or acquisition.
"AFFILIATE" of any Person means any Person (i) which directly or
indirectly controls or is controlled by, or is under direct or indirect common
control with, the referent Person, (ii) which beneficially owns or holds,
directly or indirectly, 10% or more of any class of the Voting Stock, or more
than 20% of all classes of Capital Stock (other than Disqualified Capital
Stock) in the aggregate, of the referent Person, (iii) of which 10% or more of
the Voting Stock, or more than 20% of all classes of Capital Stock (other than
Disqualified Capital Stock) in the aggregate, is beneficially owned or held,
directly or indirectly, by the referent Person or (iv) with respect to an
individual, any immediate family member of such Person. For purposes of this
definition, control of a Person shall mean 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.
"AGENT" means any Registrar, Paying Agent, or co-registrar appointed
pursuant to Section 2.03.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition to any Person other than the Company or any of
its Restricted Subsidiaries (including, without limitation, by means of a Sale
and Leaseback Transaction or a merger or consolidation)
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(collectively, for purposes of this definition, a "transfer"), directly or
indirectly, in one transaction or a series of related transactions, of (a) any
Capital Stock of any Subsidiary or (b) any other properties or assets of the
Company or any of its Restricted Subsidiaries other than transfers of cash,
Cash Equivalents, accounts receivable, inventory or other properties or assets
in the ordinary course of business. For the purposes of this definition, the
term "Asset Sale" shall not include any of the following: (i) any transfer of
properties or assets (including Capital Stock) that is governed by, and made in
accordance with, the provisions of Article 5; (ii) any transfer of properties
or assets constituting a Restricted Investment, if permitted under Section
4.05; (iii) sales of damaged, worn-out or obsolete equipment or assets that, in
the Company's reasonable judgment, are either no longer used or useful in the
business of the Company or its Subsidiaries, provided that the proceeds thereof
are used to purchase replacement or similar assets for use in the business of
the Company and its Subsidiaries; (iv) any trade or exchange by the Company or
any Restricted Subsidiary of equipment or assets for other equipment or assets
owned or held by another Person, provided that (A) the Fair Market Value of the
equipment or assets traded or exchanged by the Company or such Restricted
Subsidiary (including any cash or Cash Equivalents, not to exceed 15% of such
Fair Market Value, to be delivered by the Company or such Restricted
Subsidiary) is reasonably equivalent to the Fair Market Value of the equipment
or assets (together with any cash or Cash Equivalents, not to exceed 15% of
such Fair Market Value) to be received by the Company or such Restricted
Subsidiary, (B) the Fair Market Value of the equipment or assets traded or
exchanged in such trade or exchange or any such series of related trades or
exchanges does not exceed $2.5 million and (C) such trade or exchange is
approved by a majority of the Independent Directors of the Company; and (v) any
transfers that, but for this clause (v), would be Asset Sales, if after giving
effect to such transfers, the aggregate Fair Market Value of the properties or
assets transferred in such transaction or any such series of related
transactions does not exceed $500,000.
"ATTRIBUTABLE INDEBTEDNESS," when used with respect to any Sale and
Leaseback Transaction, means, as at the time of determination, the present
value (discounted at a rate equivalent to the Company's then-current weighted
average cost of funds for borrowed money as at the time of determination,
compounded on a semi-annual basis) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in any such
Sale and Leaseback Transaction.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as amended.
"BANKRUPTCY LAW" means the Bankruptcy Code or any similar federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person, or any authorized committee of the Board of Directors
of such Person.
"BOARD RESOLUTION" means a copy of a resolution certified by the 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.
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<PAGE> 8
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions in the City of New York, the State of Texas or at a
place of payment are authorized by law, regulation or executive order to remain
closed.
"CAPITAL STOCK" of any Person means (i) any and all shares or other equity
interests (including without limitation common stock, preferred stock and
partnership interests) in such Person and (ii) all rights to purchase, warrants
or options (whether or not currently exercisable), participations or other
equivalents of or interests in (however designated) such shares or other
interests in such Person.
"CAPITALIZED LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"CASH EQUIVALENTS" means (i) marketable obligations with a maturity of 180
days or less issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof); (ii) U.S. dollar denominated time deposits and certificates of
deposit of any financial institution (a) that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than $100 million or (b) whose short-term commercial paper rating or that
of its parent company is at least A-1 or the equivalent thereof from S&P or P-1
or the equivalent thereof from Moody's (any such bank, an "APPROVED BANK"), in
each case with a maturity of 180 days or less from the date of acquisition;
(iii) commercial paper issued by any Approved Bank or by the parent company of
any Approved Bank and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short-term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or Baa1, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing no more than
180 days from the date of acquisition; (iv) repurchase obligations with a term
of not more than seven days for underlying securities of the types described
in clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii)(a) above; (v) investments in money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (iv) above; and (vi) time deposits and
certificates of deposit of any commercial bank of recognized standing having
capital and surplus in excess of the local currency equivalent of $100,000,000
incorporated in a country where the Company has one or more locally operating
Foreign Subsidiaries, and that is, as of the Issue Date, providing banking
services to the Company or any of its Foreign Subsidiaries.
"CHANGE OF CONTROL" means the occurrence of any of the following events
(whether or not approved by the Board of Directors of the Company): (i) any
other Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) is or becomes the beneficial owner (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of more than 50% of the Voting Stock of
the
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<PAGE> 9
Company, (ii) the Company sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of the assets of the Company and
its Subsidiaries, in either case taken as a whole, to any Person, (iii) the
Company or any of its Subsidiaries consolidates with, or merges with or into,
any Person, and as a result of such consolidation or merger the Voting Stock of
the Company outstanding prior to such consolidation or merger does not
represent (either by remaining outstanding or by being converted into Voting
Stock of the surviving Person or any parent thereof) at least a majority of the
Voting Stock of the Company or the surviving Person or any parent thereof
outstanding immediately after such consolidation or merger, or (iv) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
"CLOSING DATE" means the Issue Date.
"COMPANY" means Pool Energy Services Co., a Texas corporation, unless and
until a subsequent successor replaces it in accordance with Article 5 and
thereafter means such successor.
"CONSOLIDATED AMORTIZATION EXPENSE" for any period means the amortization
expense of the Company and its Restricted Subsidiaries for such period (to the
extent included in the computation of Consolidated Net Income), determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" for any period means the depreciation
expense of the Company and its Restricted Subsidiaries for such period (to the
extent included in the computation of Consolidated Net Income), determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" for any period means the provision for
taxes based on income and profits of the Company and its Restricted
Subsidiaries to the extent such income or profits were included in computing
Consolidated Net Income for such period.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, with respect to any
determination date, the ratio of (a) EBITDA for the four full fiscal quarters
immediately preceding the determination date (for any determination, the
"Reference Period"), to (b) Consolidated Interest Expense for such Reference
Period. In making such computations, (i) EBITDA and Consolidated Interest
Expense shall be calculated on a pro forma basis assuming that (A) the
Indebtedness to be incurred or the Disqualified Capital Stock to be issued (and
all other Indebtedness incurred or Disqualified Capital Stock issued after the
first day of such Reference Period referred to in Section 4.07, through and
including the date of determination), and (if applicable) the application of
the net proceeds therefrom (and from any other such Indebtedness or
Disqualified Capital Stock), including the refinancing of
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<PAGE> 10
other Indebtedness, had been incurred on the first day of such Reference Period
and, in the case of Acquired Indebtedness, on the assumption that the related
transaction (whether by means of purchase, merger or otherwise) also had
occurred on such date with the appropriate adjustments with respect to such
acquisition being included in such pro forma calculation and (B) any
acquisition or disposition by the Company or any Restricted Subsidiary of any
properties or assets outside the ordinary course of business or any repayment
of any principal amount of any Indebtedness of the Company or any Restricted
Subsidiary prior to the stated maturity thereof, in either case since the first
day of such Reference Period through and including the date of determination,
had been consummated on such first day of such Reference Period; (ii) the
Consolidated Interest Expense attributable to interest on any Indebtedness
required to be computed on a pro forma basis in accordance with Section 4.07
and (A) bearing a floating interest rate shall be computed as if the rate in
effect on the date of computation had been the applicable rate for the entire
period and (B) which was not outstanding during the period for which the
computation is being made but which bears, at the option of the Company, a
fixed or floating rate of interest, shall be computed by applying, at the
option of the Company, either the fixed or floating rate; (iii) the
Consolidated Interest Expense attributable to interest on any Indebtedness
under a revolving credit facility required to be computed on a pro forma basis
in accordance with Section 4.07 shall be computed based upon the average daily
balance of such Indebtedness during the applicable period, provided that such
average daily balance shall be reduced by the amount of any repayment of
Indebtedness under a revolving credit facility during the applicable period;
(iv) notwithstanding the foregoing clauses (ii) and (iii), interest on
Indebtedness determined on a floating rate basis, to the extent such interest
is covered by agreements relating to Hedging Obligations, shall be deemed to
have accrued at the rate per annum resulting after giving effect to the
operation of such agreements; and (v) if after the first day of the applicable
Reference Period and before the date of determination, the Company has
permanently retired any Indebtedness out of the net proceeds of the issuance
and sale of shares of Capital Stock (other than Disqualified Capital Stock) of
the Company within 60 days of such issuance and sale, Consolidated Interest
Expense shall be calculated on a pro forma basis as if such Indebtedness had
been retired on the first day of such period.
"CONSOLIDATED INTEREST EXPENSE" for any period means the sum, without
duplication, of the total interest expense of the Company and its Consolidated
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP and including, without limitation (i) imputed interest on
Capitalized Lease Obligations and Attributable Indebtedness, (ii) commissions,
discounts and other fees and charges owed with respect to letters of credit
securing financial obligations and bankers' acceptance financing, (iii) the net
costs associated with Hedging Obligations, (iv) amortization of other financing
fees and expenses, (v) the interest portion of any deferred payment
obligations, (vi) amortization of debt discount or premium, if any, (vii) all
other non-cash interest expense, (viii) capitalized interest, (ix) all cash
dividend payments (and non-cash dividend payments in the case of a Restricted
Subsidiary) on any series of preferred stock of the Company or any Restricted
Subsidiary, (x) all interest payable with respect to discontinued operations,
and (xi) all interest on any Indebtedness of any other Person guaranteed by the
Company or any Restricted Subsidiary.
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<PAGE> 11
"CONSOLIDATED NET INCOME" for any period means the net income (or loss) of
the Company and its consolidated Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary) in which any Person other than the Company and
its Restricted Subsidiaries has an ownership interest, except to the extent
that any such income has actually been received by the Company and its
Restricted Subsidiaries in the form of cash dividends during such period; (ii)
except to the extent includible in the consolidated net income of the Company
pursuant to the foregoing clause (i), the net income (or loss) of any Person
that accrued prior to the date that (a) such Person becomes a Restricted
Subsidiary or is merged into or consolidated with the Company or any Restricted
Subsidiary or (b) the assets of such Person are acquired by the Company or any
Restricted Subsidiary; (iii) the net income of any Restricted Subsidiary
during such period to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary of that income (a) is
not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary during such period or (b) would be subject to any
taxes payable on such dividend or distribution; (iv) any gain (or, only in the
case of a determination of Consolidated Net Income as used in EBITDA, any
loss), together with any related provisions for taxes on any such gain (or, if
applicable, the tax effects of such loss), realized during such period by the
Company or any Restricted Subsidiary upon (a) the acquisition of any
securities, or the extinguishment of any Indebtedness, of the Company or any
Restricted Subsidiary or (b) any Asset Sale by the Company or any of its
Restricted Subsidiaries; (v) any extraordinary gain (or, only in the case of a
determination of Consolidated Net Income as used in EBITDA, any extraordinary
loss), together with any related provision for taxes on any such extraordinary
gain (or, if applicable, the tax effects of such extraordinary loss), realized
by the Company or any Restricted Subsidiary during such period; and (vi) in the
case of a successor to the Company by consolidation, merger or transfer of its
assets, any earnings of the successor prior to such merger, consolidation or
transfer of assets; and provided, further, that any gain referred to in clauses
(iv) and (v) above that relates to a Restricted Investment and which is
received in cash by the Company or a Restricted Subsidiary during such period
shall be included in the consolidated net income of the Company.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any date,
the consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date, less all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of
tangible assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to the date of this Indenture in the
book value of any asset owned by such Person or a Subsidiary of such Person.
"CORPORATE TRUST OFFICE" shall be at the address of the Trustee specified
in Section 12.02 or such other address as the Trustee may give notice to the
Company.
"COVERAGE RATIO INCURRENCE CONDITION" would be met at any specified time
only if the Company (or its Successor, as the case may be) would be able to
incur $1.00 of additional
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<PAGE> 12
Indebtedness at such specified time pursuant to the Consolidated Interest
Coverage Ratio test set forth in Section 4.07.
"CREDIT AGREEMENT" means the Amended and Restated Credit Agreement dated
as of September 30, 1997, as amended on March 26, 1998 by and among SBC Warburg
Dillon Read Inc., as arranger, Credit Lyonnais New York Branch, as
administrative agent, Swiss Bank Corporation, as documentation agent, the banks
party thereto, the Company and the Guarantors, together with any additional
guarantees by the Guarantors and security agreements, as any of the foregoing
may be subsequently amended, restated, refinanced, or replaced from time to
time, and shall include agreements in respect of Hedging Obligations designed
to protect against fluctuations in interest rates and entered into with respect
to loans thereunder.
"CUSTODIAN" means any custodian, receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"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.
"DEPOSITARY" means, with respect to the Notes issuable or issued in whole
or in part in global form, The Depository Trust Company, until a successor
shall have been appointed and becomes such Depositary, and, thereafter,
"Depositary" shall mean or include such successor.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) Indebtedness under the Credit
Agreement (whether incurred pursuant to the definition of Permitted
Indebtedness or pursuant to the provisions of Section 4.07) and (ii) any other
Indebtedness constituting Senior Indebtedness that at the date of
determination, has an aggregate principal amount outstanding of at least $25.0
million and that is specifically designated by the Company, in the instrument
creating or evidencing such Senior Indebtedness or in an Officers' Certificate
delivered to the Trustee, as "Designated Senior Indebtedness."
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock of such Person or any
of its Subsidiaries that, by its terms, by the terms of any agreement related
thereto or by the terms of any security into which it is convertible, puttable
or exchangeable, is, or upon the happening of any event or the passage of time
would be, required to be redeemed or repurchased by such Person or any to its
Subsidiaries, whether or not at the option of the holder thereof, or matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
in whole or in part, on or prior to the final maturity date of the Notes;
provided, however, that any class of Capital Stock of such Person that, by its
terms, authorizes such Person to satisfy in full its obligations with respect
to the payment of dividends or upon maturity, redemption (pursuant to a sinking
fund or otherwise) or repurchase thereof or otherwise by the delivery of
Capital Stock that is not Disqualified Capital Stock, and that is not
convertible, puttable or exchangeable for Disqualified Capital Stock or other
Indebtedness, shall not be deemed to be Disqualified Capital Stock so long as
such Person satisfies its obligations with respect thereto solely by the
delivery of Capital Stock that is not Disqualified Capital Stock.
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"DOLLARS" and "$" means lawful money of the United States of America.
"EBITDA" for any period means without duplication, the sum of the amounts
for such period of (i) Consolidated Net Income plus (ii) in each case to the
extent deducted in determining Consolidated Net Income for such period (and
without duplication), (A) Consolidated Income Tax Expense, (B) Consolidated
Amortization Expense (but only to the extent not included in Consolidated
Interest Expense), (C) Consolidated Depreciation Expense, (D) Consolidated
Interest Expense and (E) all other non-cash items reducing the Consolidated Net
Income (excluding any such non-cash charge that results in an accrual of a
reserve for cash charges in any future period) for such period, in each case
determined on a consolidated basis in accordance with GAAP and minus (iii) the
aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such Period.
"EQUITY OFFERING" means an underwritten primary offering of Capital Stock
of the Company pursuant to a registration statement filed with the Commission
in accordance with the Securities Act, or pursuant to a private placement
pursuant to an available exemption from registration and, in the case of any
such private placement, a majority of such placement of which is sold to
Persons that are not then and were not at the Issue Date Affiliates of the
Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE OFFER" means the offer that may be made by the Company pursuant
to the Registration Rights Agreement and the Exchange Offer Registration
Statement to exchange New Notes for the Old Notes.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean a registration
statement relating to an Exchange Offer on an appropriate form and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"EXISTING INDEBTEDNESS" means all of the Indebtedness of the Company and
its Subsidiaries that is outstanding on the Issue Date.
"FAIR MARKET VALUE" of any asset or items means the fair market value of
such asset or items as determined in good faith by the Board of Directors and
evidenced by a Board Resolution.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Company that is not
incorporated or organized in the United States or in any State thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or
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<PAGE> 14
in such other statements by such other entity as may be approved by a
significant segment of the accounting profession of the United States, as in
effect on the Issue Date.
"GLOBAL NOTE" means a global note, without coupons, representing all or a
portion of the Notes deposited with, or on behalf of, the Depositary
substantially in the form of Exhibit A attached hereto.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
The term "GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"GUARANTOR" or any "SUBSIDIARY GUARANTOR" means each Restricted Subsidiary
of the Company other than Foreign Subsidiaries and each other Person who is
required to become (or whom the Company otherwise causes to become) a
Subsidiary Guarantor by the terms of the Indenture.
"HEDGING OBLIGATIONS" of any Person means the obligations of such Person
pursuant to (i) any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in interest rates, (ii) agreements or arrangements
designed to protect such Person against fluctuations in foreign currency
exchange rates in the conduct of its operations, or (iii) any forward contract,
commodity swap agreement, commodity option agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in
commodity prices, in each case, entered into in the ordinary course of business
for bona fide hedging purposes and not for the purpose of speculation.
"HOLDER" means a Person in whose name a Note is registered on the
Registrar's books.
The term "INCUR" means, with respect to any Indebtedness or Obligation,
incur, create, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to such Indebtedness
or Obligation; provided that (i) the Indebtedness of a Person existing at the
time such Person became a Restricted Subsidiary shall be deemed to have been
incurred by such Restricted Subsidiary and (ii) neither the accrual of interest
nor the accretion of accreted value shall be deemed to be an incurrence of
Indebtedness.
"INDEBTEDNESS" of any Person at any date means, without duplication: (i)
all liabilities, contingent or otherwise, of such Person for 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); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
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obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred by
such Person in the ordinary course of business in connection with obtaining
goods, materials or services, which payable is not overdue by more than 60 days
according to the original terms of sale unless such payable is being contested
in good faith; (v) the maximum fixed redemption or repurchase price of all
Disqualified Capital Stock of such Person; (vi) all Capitalized Lease
Obligations of such Person; (vii) all Indebtedness of others secured by a Lien
on any asset of such Person, whether or not such Indebtedness is assumed by
such Person; (viii) all Indebtedness of others guaranteed by such Person to the
extent of such guarantee; provided that Indebtedness of the Company or its
Subsidiaries that is guaranteed by the Company or the Company's Subsidiaries
shall only be counted once in the calculation of the amount of Indebtedness of
the Company and its Subsidiaries on a consolidated basis; (ix) all Attributable
Indebtedness of such Person; and (x) to the extent not otherwise included in
this definition, Hedging Obligations of such Person. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above, the maximum liability
of such Person for any such contingent obligations at such date and, in the
case of clause (vii), the lesser of (A) the Fair Market Value of any asset
subject to a Lien securing the Indebtedness of others on the date that the Lien
attaches and (B) the amount of the Indebtedness secured. For purposes of the
preceding sentence, the "maximum fixed redemption or repurchase price" of any
Disqualified Capital Stock that does not have a fixed redemption or repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased or redeemed
on any date on which Indebtedness shall be required to be determined pursuant
to this Indenture, and if such price is based upon, or measured by, the fair
market value of such Disqualified Capital Stock (or any equity security for
which it may be exchanged or converted), such fair market value shall be
determined in good faith by the Board of Directors of such Person, which
determination shall be evidenced by a Board Resolution.
"INDENTURE" means this Indenture as amended or supplemented from time to
time.
"INDEPENDENT DIRECTOR" means a director of the Company who has not and
whose Affiliates have not, at any time during the twelve months prior to the
taking of any action hereunder, directly or indirectly, received, or entered
into any understanding or agreement to receive, any compensation, payment or
other benefit, of any type or form, from the Company or any of its Affiliates,
other than customary directors fees for serving on the Board of Directors of
the Company or any Affiliate and reimbursement of out-of-pocket expenses for
attendance at the Company's or Affiliate's board and board committee meetings.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Company and its Affiliates.
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"INTEREST PAYMENT DATE" shall have the meaning set forth in the Notes.
"INVESTMENTS" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions
(excluding (A) commission, travel and similar advances to officers and
employees made in the ordinary course of business and (B) loans and advances to
officers and employees made in the ordinary course of business not to exceed
$1.0 million at any time outstanding) or similar credit extensions constituting
Indebtedness of such Person, and any guarantee of Indebtedness of any other
Person, (ii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iii) all other items that would be classified as investments (including
without limitation purchases of assets outside the ordinary course of business)
on a balance sheet of such Person prepared in accordance with GAAP.
"ISSUE DATE" means the date the Notes are initially issued.
"LIEN" means, with respect to any asset or property, any mortgage, deed of
trust, lien (statutory or other), pledge, lease, easement, restriction,
covenant, charge, security interest or other encumbrance of any kind or nature
in respect of such asset or property, whether or not filed, recorded or
otherwise perfected under applicable law, including without limitation any
conditional sale or other title retention agreement, and any lease in the
nature thereof, any option or other agreement to sell, and any filing of, or
agreement to give, any financing statement under the Uniform Commercial Code
(or equivalent statutes) of any jurisdiction (other than cautionary filings in
respect of operating leases).
"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"NET AVAILABLE PROCEEDS" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel, accountants and investment banks) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the
properties or assets subject to the Asset Sale or having a Lien therein and
(iv) appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pensions and other postemployment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee; provided,
however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Available Proceeds.
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"NON-RECOURSE PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the
Company or any of its Subsidiaries incurred (a) to finance the purchase of any
assets of the Company or any of its Subsidiaries within 90 days of such
purchase, (b) to the extent the amount of Indebtedness thereunder does not
exceed 100% of the purchase cost of such assets, (c) to the extent the purchase
cost of such assets is or should be included in "additions to property, plant
and equipment" in accordance with GAAP, and (d) to the extent that such
Indebtedness is non-recourse to the Company or any of its Subsidiaries or any
of their respective assets other than the assets so purchased.
"NON-U.S. PERSON" means a Person that is not a U.S. Person, as defined in
Regulation S.
"OBLIGATION" means any principal, interest (including, in the case of
Senior Indebtedness, interest accruing subsequent to the filing of a petition
in bankruptcy or insolvency at the rate specified in the document relating to
such Indebtedness, whether or not such interest is an allowed claim permitted
to be enforced against the obligor under applicable law), penalties, fees,
indemnification, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFER" means a Change of Control Offer or an Net Proceeds Offer, as the
context requires.
"OFFER PERIOD" means a Change of Control Offer Period as an Net Proceeds
Offer Period, as the context requires.
"OFFERING MEMORANDUM" means the Offering Memorandum dated March 26, 1998,
in the form used in connection with the original sale of the Notes.
"OFFICER" means any of the following of the Company: the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the President,
any Vice President, the Treasurer or the Secretary.
"OFFICERS' CERTIFICATE" means a certificate signed by any two Officers.
"OPINION OF COUNSEL" means a written opinion from legal counsel (such
counsel may be an employee of or counsel to the Company or the Trustee) that
complies with the requirements of this Indenture.
"PAYMENT RESTRICTION" with respect to a Subsidiary of any Person, means
any encumbrance, restriction of limitation, whether by operation of the terms
of its charter or by reason of any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation, on the ability of (i) such
Subsidiary to (a) pay dividends or make other distributions on its Capital
Stock or make payments on any obligation, liability or Indebtedness owed to
such Person or any other Subsidiary of such Person, (b) make loans or advances
to such Person or any other Subsidiary of such Person, (c) guarantee any
Indebtedness of the Company or any Restricted Subsidiary or (d)
-12-
<PAGE> 18
transfer any of its properties or assets to such Person or any other Subsidiary
of such Person (other than customary restrictions on transfers of property
subject to a Lien permitted under this Indenture) or (ii) such Person or any
other Subsidiary of such Person to receive or retain any such dividends,
distributions or payments, loans or advances, guarantee, or transfer of
properties or assets.
"PERMITTED INDEBTEDNESS" means any of the following:
(i) Indebtedness of the Company and any Subsidiary
Guarantor under the Credit Agreement in an aggregate principal amount at
any time outstanding not to exceed the greater of (a) $180 million, or (b)
the sum of 80% of the consolidated accounts receivable of the Company plus
30% of the consolidated net property, plant and equipment of the Company,
calculated as of the end of the most recent fiscal quarter for which
financial statements are available, as determined in accordance with GAAP;
(ii) Indebtedness under the Notes, the Note Guarantees
and this Indenture;
(iii) Existing Indebtedness;
(iv) Indebtedness under Hedging Obligations, provided
that (1) such Hedging Obligations are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by Section
4.07, and (2) the notional principal amount of such Hedging Obligations at
the time incurred does not exceed the principal amount of such
Indebtedness to which such Hedging Obligations relate;
(v) Indebtedness of the Company to a Subsidiary
Guarantor and Indebtedness of any Subsidiary Guarantor to the Company or
any other Subsidiary Guarantor; provided, however, that upon either (1)
the subsequent issuance (other than directors' qualifying shares), sale,
transfer or other disposition of any Capital Stock or any other event
which results in any such Subsidiary Guarantor ceasing to be a Subsidiary
Guarantor or (2) the transfer or other disposition of any such
Indebtedness (except to the Company or a Subsidiary Guarantor), the
provisions of this clause (v) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed, in each case, to be
incurred and shall be treated as an incurrence for purposes of Section
4.07 at the time the Subsidiary Guarantor in question ceased to be a
Subsidiary Guarantor or the time such transfer or other disposition
occurred;
(vi) Indebtedness in respect of bid, performance or
surety bonds issued for the account of the Company or any Restricted
Subsidiary in the ordinary course of business, including guarantees or
obligations of the Company or any Restricted Subsidiary with respect to
letters of credit supporting such bid, performance or surety obligations
(in each case other than for an obligation for money borrowed);
-13-
<PAGE> 19
(vii) Indebtedness in respect of Non-Recourse Purchase
Money Indebtedness incurred by the Company or any Restricted Subsidiary;
(viii)Refinancing Indebtedness;
(ix) Indebtedness, in addition to Indebtedness incurred
pursuant to the other clauses of this definition, with an aggregate
principal face or stated amount (as applicable) at any time outstanding
for all such Indebtedness incurred pursuant to this clause not in excess
of $20.0 million; provided, however, that the aggregate principal amount
at any time outstanding for all other Indebtedness incurred by all Foreign
Subsidiaries pursuant to this clause may not exceed $10.0 million in the
aggregate; and
(x) Acquired Indebtedness that is repaid by the
Company or any Restricted Subsidiary within 45 days after the time of the
merger or acquisition resulting in such Acquired Indebtedness if, but only
if, the Company could incur such amount of additional Indebtedness under
clause (i) above, at the time of such merger or acquisition and at the
time the Company or any Restricted Subsidiary repays such Indebtedness,
after giving effect to such repayment.
"PERMITTED JUNIOR SECURITIES" means any securities of the Company provided
for by a plan of reorganization or readjustment that are subordinated in right
of payment to all Senior Indebtedness that may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Notes are
subordinated to Senior Indebtedness of the Company.
"PERMITTED LIENS" means the following types of Liens:
(i) Liens existing as of the Issue Date;
(ii) Liens securing the Notes;
(iii)Liens in favor of the Company or, with respect to a
Restricted Subsidiary, Liens in favor of another Restricted Subsidiary;
(iv) Liens securing Permitted Indebtedness of the Company
and the Restricted Subsidiaries of the type described in clauses (i) and
(x) of the definition of Permitted Indebtedness;
(v) Liens securing Indebtedness that constitutes
Permitted Indebtedness of the type described in clause (viii) of the
definition of "Permitted Indebtedness" incurred as a refinancing of any
Indebtedness secured by Liens described in clauses (i), (iv), (xi), (xii)
and (xiii) of this definition;
-14-
<PAGE> 20
(vi) Liens for taxes, assessments or governmental charges
or claims either (a) not delinquent or (b) contested in good faith by
appropriate proceedings and as to which the Company or a Restricted
Subsidiary, as the case may be, has set aside on its books such reserves,
or has made such other appropriate provision, if any, as is required by
GAAP;
(vii)Liens of landlords, carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other similar Liens
incurred in the ordinary course of business for sums not delinquent or
being contested in good faith, and as to which the Company or a Restricted
Subsidiary, as the case may be, has set aside on its books such reserves,
or has made such other appropriate provision, if any, as is required by
GAAP;
(viii)Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the payment or
performance of tenders, statutory or regulatory obligations, surety and
appeal bonds, bids, government contracts and leases, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(ix) Liens securing any judgment not giving rise to a
Default or Event of Default and so long as any appropriate legal
proceedings that may have been duly initiated for the review of the
judgment has not been finally terminated or the period within which those
proceedings may be initiated has not expired;
(x) easements, rights-of-way, reservations, zoning and
other restrictions and other similar encumbrances not interfering in any
material respect with the ordinary conduct of business of the Company or
any Restricted Subsidiary;
(xi) any interest or title of a lessor under any
Capitalized Lease Obligation or operating lease; provided that (a) the
Attributable Indebtedness related thereto constitutes Indebtedness
permitted to be incurred under the terms of this Indenture and (b) with
respect to any Capitalized Lease Obligation, such Liens do not extend to
any property or assets that is not leased property subject to such
Capitalized Lease Obligation;
(xii) Liens securing Non-Recourse Purchase Money
Indebtedness; provided, however, that (a) the Non-Recourse Purchase Money
Indebtedness shall not be secured by any property or assets of the Company
or any Restricted Subsidiary other than the property or assets so acquired
and any proceeds therefrom and (b) the Lien securing such Non-Recourse
Purchase Money Indebtedness shall be created within 90 days of such
acquisition;
(xiii) Liens securing Acquired Indebtedness incurred in
accordance with the Consolidated Interest Coverage Ratio test described in
Section 4.07; provided that (a) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and were not
granted in
-15-
<PAGE> 21
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and (b) such Liens
do not extend to or cover any property or assets of the Company or of any
Restricted Subsidiary other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary and are no more
favorable to the lienholder than those securing the Acquired Indebtedness
prior to the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary;
(xiv) leases or subleases granted to others that do not
interfere with the ordinary conduct of business of the Company or any
Restricted Subsidiary;
(xv) rights of a common owner of any interest in
property held by the Company or any Restricted Subsidiary and that common
owner as tenants in common or through other common ownership; and
(xvi) Liens or equitable encumbrances deemed to exist by
reason of (a) fraudulent conveyance or transfer laws or (b) negative
pledge or other agreements to refrain from giving Liens.
"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.
"PLAN OF LIQUIDATION" with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and
all or substantially all of the remaining assets of such Person to holders of
Capital Stock of such Person.
"PURCHASE DATE" means the Change of Control Purchase Date or the Net
Proceeds Purchase Date, as the context requires.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"RECORD DATE" has the meaning set forth in the Notes.
"REFINANCING INDEBTEDNESS" means Indebtedness of the Company or a
Restricted Subsidiary issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used substantially concurrently to repay,
redeem, refund, refinance, discharge or otherwise retire for value, in whole or
in part (collectively, "repay"), or constituting an amendment, modification or
supplement
-16-
<PAGE> 22
to or a deferral or renewal of (collectively, an "amendment"), any Indebtedness
of the Company or any Restricted Subsidiary (the "Refinanced Indebtedness") in
a principal amount not in excess of the principal amount of the Refinanced
Indebtedness (or, if such Refinancing Indebtedness refinances Indebtedness
under a revolving credit facility or other agreement providing a commitment for
subsequent borrowings, with a maximum commitment not to exceed the maximum
commitment under such revolving credit facility or other agreement), plus the
amount of any premium required to be paid in connection with such refinancing
pursuant to the terms of the Refinanced Indebtedness or the amount of any
premium reasonably determined by the Company or such Restricted Subsidiary as
necessary to accomplish such refinancing, plus the amount of expenses of the
Company or such Restricted Subsidiary incurred in connection with such
refinancing; provided that: (i) the Refinancing Indebtedness is the obligation
of the same Person as that of the Refinanced Indebtedness, (ii) if the
Refinanced Indebtedness was subordinated to or pari passu with the Note
Indebtedness, then such Refinancing Indebtedness, by its terms, is expressly
pari passu with (in the case of Refinanced Indebtedness that was pari passu
with) the Note Indebtedness, or subordinate in right of payment to (in the case
of Refinanced Indebtedness that was subordinated to) the Note Indebtedness at
least to the same extent as the Refinanced Indebtedness; (iii) the portion, if
any, of the Refinancing Indebtedness that is scheduled to mature on or prior to
the maturity date of the Notes has a Weighted Average Life to Maturity at the
time such Refinancing Indebtedness is incurred that is equal to or greater than
the Weighted Average Life to Maturity of the portion of the Refinanced
Indebtedness being repaid that is scheduled to mature on or prior to the
maturity date of the Notes; and (iv) the Refinancing Indebtedness is secured
only to the extent, if at all, and by the assets (which may include
after-acquired assets), that the Refinanced Indebtedness is secured.
"REGISTRATION" means a registered exchange offer for the Notes by the
Company or other registration of the Notes under the Securities Act pursuant to
and in accordance with the terms of the Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated as of the Closing Date, by and among the Company, SBC Warburg Dillon Read
Inc., Morgan Stanley & Co. Incorporated and Johnson Rice & Company L.L.C., as
such agreement may be amended, modified or supplemented from time to time.
"REGISTRATION STATEMENT" means the Registration Statement pursuant to and
as defined in the Registration Rights Agreement.
"REGULATION S" means Regulation S under the Securities Act.
"RELATED BUSINESS" means any business in which the Company and its
Subsidiaries operate on the Issue Date, or that is closely related to or
complements the business of the Company and its Subsidiaries, as such business
exists on the Issue Date.
"RELATED BUSINESS INVESTMENT" means any Investment directly by the Company
or its Subsidiaries in any Related Business.
-17-
<PAGE> 23
"RELATED PARTY AGREEMENT" means any management or advisory agreement or
other arrangements with any Affiliate of the Company or with any other direct
or indirect holder of more than 10% of any class of the Company's Capital Stock
(except, in any such case, the Company or any Restricted Subsidiary).
"REPRESENTATIVE" means, with respect to any Senior Indebtedness, the
indenture trustee or other trustee, agent or other representative(s), if any,
of holders of such Senior Indebtedness.
"RESTRICTED DEBT PAYMENT" means any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or
a Restricted Subsidiary, prior to the scheduled maturity or prior to any
scheduled repayment of principal or sinking fund payment, as the case may be,
in respect of Subordinated Indebtedness.
"RESTRICTED INVESTMENT" means any Investment by the Company or any
Restricted Subsidiary (other than investments in Cash Equivalents) in any
Person that is not the Company or a Restricted Subsidiary, including in any
Unrestricted Subsidiary.
"RESTRICTED PAYMENT" means with respect to any Person: (i) the declaration
or payment of any dividend (other than a dividend declared and paid (x) by a
Wholly-Owned Restricted Subsidiary to holders of its Capital Stock, or (y) by a
Subsidiary (other than a Wholly-Owned Restricted Subsidiary) to its
shareholders on a pro rata basis, but only to the extent of the dividends
actually received by the Company or a Restricted Subsidiary) or the making of
any other payment or distribution of cash, securities or other property or
assets in respect of such Person's Capital Stock (except that a dividend
payable solely in Capital Stock (other than Disqualified Capital Stock) of such
Person shall not constitute a Restricted Payment); (ii) any payment on account
of the purchase, redemption, retirement or other acquisition for value of (A)
the Capital Stock of the Company or (B) the Capital Stock of any Restricted
Subsidiary, or any other payment or distribution made in respect thereof,
either directly or indirectly (other than a payment solely in Capital Stock
that is not Disqualified Capital Stock, and excluding any such payment to the
extent actually received by the Company or a Restricted Subsidiary); or (iii)
any Restricted Investment; or (iv) any Restricted Debt Payment.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and its successors.
"SALE AND LEASEBACK TRANSACTIONS" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a
-18-
<PAGE> 24
party, providing for the leasing by such Person of any property or asset of
such Person which has been or is being sold or transferred by such Person to
such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or asset.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means all Indebtedness and other Obligations
specified below payable directly or indirectly by the Company or any Guarantor,
as the case may be, whether outstanding on the Issue Date or thereafter
created, incurred or assumed by the Company or such Guarantor: (i) the
principal of and interest on and all other Indebtedness and Obligations related
to the Credit Agreement (including, without limitation, all loans, letters of
credit and unpaid drawings with respect thereto and other extensions of credit
under the Credit Agreement, and all expenses, fees, reimbursements, indemnities
and other amounts owing pursuant to the Credit Agreement), (ii) amounts payable
in respect of any Hedging Obligations, (iii) in addition to the amounts
described in (i) and (ii), all Indebtedness not prohibited by Section 4.07 that
is not expressly pari passu with, or subordinated to, the Notes or the Note
Guarantees, as the case may be, (iv) all Capitalized Lease Obligations, and (v)
all Refinancing Indebtedness permitted under this Indenture. Notwithstanding
anything to the contrary in the foregoing, Senior Indebtedness will not include
(a) any Indebtedness which by the express terms of the agreement or instrument
creating, evidencing or governing the same is junior or subordinate in right of
payment to any item of Senior Indebtedness, (b) any trade payable arising from
the purchase of goods or materials or for services obtained in the ordinary
course of business, (c) Indebtedness incurred (but only to the extent incurred)
in violation of this Indenture as in effect at the time of the respective
incurrence, (d) any Indebtedness of the Company or any of its Subsidiaries
that, when incurred, was without recourse to the Company or any of its
Subsidiaries, (e) any Indebtedness to any employee of the Company or any of its
Subsidiaries or (f) any liability for taxes owned or owing by the Company or
any of its Subsidiaries.
"SENIOR SUBORDINATED INDEBTEDNESS" of the Company means the Notes and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is
not subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness. "Senior
Subordinated Indebtedness" of any Guarantor has a correlative meaning.
"SHELF REGISTRATION STATEMENT" shall mean a Shelf Registration Statement
of the Company pursuant to the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Company that would be
a "Significant Subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the Issue Date, except all references to "10 percent" in such
definition shall be changed to "2 percent".
-19-
<PAGE> 25
"SPECIAL INTEREST" has the meaning set forth in the Notes.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or any
Restricted Subsidiary that is subordinated in right of payment to the Notes or
the Note Guarantee of such Restricted Subsidiary, respectively.
"SUBSIDIARY" of any Person means (i) any corporation of which at least a
majority of the aggregate voting power of all classes of the Voting Stock is
owned by such Person directly or through one or more other Subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Voting Stock of such
entity entitling the holder thereof to vote or otherwise participate in the
selection of the governing body, partners, managers or others that control the
management and policies of such entity; provided, however that Pool Arabia,
Ltd. shall not be deemed a Subsidiary as long as the Company uses the equity
method to account for its interest in Pool Arabia, Ltd. and the consolidated
financial statements of the Company do not include the financial statements of
Pool Arabia, Ltd. in accordance with GAAP. Unless otherwise specified,
"Subsidiary" means a Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Closing Date (except as otherwise provided in
Section 1.03 hereof); 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 amendments, the Trust Indenture Act of 1939 as so
amended.
"TRUSTEE" means Marine Midland Bank until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter
means such successor.
"TRUST OFFICER" when used with respect to the Trustee means any officer or
assistant officer of the Trustee assigned by the Trustee to administer this
Indenture; and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Company in the manner provided below and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors of the Company may
designate any Restricted Subsidiary to be an Unrestricted Subsidiary, and any
such designation shall be deemed to be a Restricted Investment at the time of
and immediately upon such designation by the Company and its Restricted
Subsidiaries in the amount of the Consolidated Net Worth of such designated
Subsidiary and its consolidated Subsidiaries at such time, provided that such
designation shall be permitted only if (A) the Company and its Restricted
Subsidiaries would be able to make the Restricted Investment deemed made
pursuant to such designation at such time, (B) no portion of the Indebtedness
or any other obligation (contingent or otherwise) of such Subsidiary (x) is
Guaranteed by the Company or any Restricted Subsidiary, (y) is recourse to the
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<PAGE> 26
Company or any Restricted Subsidiary or (z) subjects any property or asset of
the Company or any Restricted Subsidiary, directly or indirectly, contingently
or otherwise, to the satisfaction thereof and (C) no default or event of
default with respect to any Indebtedness of such Subsidiary would permit any
holder of any Indebtedness of the Company or any Restricted Subsidiary to
declare such Indebtedness of the Company or any restricted Subsidiary due and
payable prior to its maturity. The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary, and any
such designation shall be deemed to be an incurrence by the Company and its
Subsidiaries of the Indebtedness (if any) of such Subsidiary so designated for
purposes of Section 4.07 as of the date of such designation, provided that such
designation shall be permitted only if immediately after giving effect to such
designation and the incurrence of any such additional Indebtedness deemed to
have been incurred thereby (x) the Company would meet the Coverage Ratio
Incurrence Condition and (y) no Default or Event of Default shall be
continuing. Any such designation by the Board of Directors described in the
two preceding sentences shall be evidenced to the Trustee by the filing with
the Trustee of a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and setting forth the underlying
calculations of such certificate.
"U.S. PERSON" has the meaning ascribed to it in Regulation S.
"VOTING STOCK" with respect to any Person, means securities of any class
of Capital Stock of such Person entitling the holders thereof (whether at all
times or only so long as no senior class of stock or other relevant equity
interest has voting power by reason of any contingency) to vote in the election
of members of the board of directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY", when applied to any Indebtedness at
any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment by (ii) the then outstanding
principal amount of such Indebtedness.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means a Restricted Subsidiary of
which 100% of the Capital Stock (except for directors' qualifying shares or
certain minority interests owned by other Persons solely due to local law
requirements that there be more than one stockholder, but which interest is not
in excess of what is required for such purpose) is owned directly by the
Company or through one or more Wholly-Owned Restricted Subsidiaries.
Section 1.02. Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"AFFILIATE TRANSACTION"..................................................... 4.08
"AGENT MEMBERS"............................................................. 2.07
</TABLE>
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<PAGE> 27
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"ASSET SALE OFFER".......................................................... 4.14
"ASSET SALE OFFER AMOUNT"................................................... 4.14
"ASSET SALE OFFER PERIOD"................................................... 4.14
"ASSET SALE PAYMENT"........................................................ 4.14
"AFFILIATE TRANSACTION"..................................................... 4.10
"AGENT MEMBERS"......................................................... 2.07(a)(iii)
"ASSET SALE TRIGGER DATE"................................................. 4.16(c)
"CEDEL BANK".............................................................. 2.01(a)
"CERTIFICATED NOTE"....................................................... 2.01(a)
"CHANGE OF CONTROL OFFER"............................................... 4.15(b)(ii)
"CHANGE OF CONTROL OFFER PERIOD".......................................... 4.15(c)
"CHANGE OF CONTROL PURCHASE DATE"......................................... 4.15(c)
"CHANGE OF CONTROL PURCHASE PRICE"........................................ 4.15(a)
"CHANGE OF CONTROL TRIGGER DATE".......................................... 4.15(a)
"COMMISSION"................................................................ 4.02
"COVENANT DEFEASANCE"................................................... 8.01(b)(ii)
"EVENT OF DEFAULT"........................................................ 6.01(a)
"EUROCLEAR"............................................................... 2.01(a)
"EXCESS PROCEEDS"....................................................... 4.16(b)(ii)
"GLOBAL NOTE HOLDER"...................................................... 2.01(a)
"INSOLVENCY OR LIQUIDATION PROCEEDING".................................... 10.02(a)
"LEGAL DEFEASANCE"....................................................... 8.01(b)(i)
"NET PROCEEDS DEFICIENCY"............................................... 4.16(c)(ii)
"NET PROCEEDS OFFER"..................................................... 4.16(c)(i)
"NET PROCEEDS OFFER PERIOD ............................................. 4.16(c)(iii)
"NET PROCEEDS PURCHASE DATE"............................................ 4.16(c)(iii)
"NON-PAYMENT DEFAULT"..................................................... 10.03(b)
"NOTE GUARANTEE"........................................................ 11.01(a)(a)
"NOTE INDEBTEDNESS"........................................................ 10.01
"NOTICE OF DEFAULT"....................................................... 6.01(a)
"OFFERED PRICE"......................................................... 4.16(c)(ii)
"OFFSHORE CERTIFICATED NOTE".............................................. 2.01(a)
"PAYING AGENT".............................................................. 2.03
"PAYMENT AMOUNT"......................................................... 4.16(c)(i)
"PAYMENT BLOCKAGE NOTICE"................................................. 10.03(b)
"PAYMENT BLOCKAGE PERIOD"................................................. 10.03(b)
"PAYMENT DEFAULT"......................................................... 10.03(a)
"REGULATION S GLOBAL NOTE"................................................ 2.02(a)
"REGULATION S NOTES"...................................................... 2.01(a)
"REGULATION S PERMANENT GLOBAL NOTE"...................................... 2.01(a)
"REGULATION S TEMPORARY GLOBAL NOTE"...................................... 2.01(a)
</TABLE>
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<PAGE> 28
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"REPLACEMENT FACILITY".................................................... 4.13(b)
"RESTRICTED GLOBAL NOTE".................................................. 2.01(a)
"REGISTRAR"................................................................. 2.03
"RULE 144A NOTES"......................................................... 2.01(a)
"SECURITIES ACT LEGEND"................................................... 2.01(a)
"SUCCESSOR"............................................................. 5.01(a)(ii)
"TRUSTEE EXPENSES".......................................................... 6.08
</TABLE>
Section 1.03. Incorporation by Reference of TIA. Whenever this
Indenture refers to a provision of the TIA, the portion of the provision
required to be incorporated herein in order for this Indenture to be qualified
under the TIA is incorporated by reference in, and made a part of, this
Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by the TIA by reference to another statute or
defined by the SEC in a rule under the TIA have the meanings so assigned to
them therein.
Section 1.04. Rules of Construction. Unless the context otherwise
requires: (1) a term has the meaning assigned to it in this Indenture; (2) an
accounting term not otherwise defined herein has the meaning assigned to it
under GAAP; (3) "OR" is not exclusive; (4) words in the singular include the
plural, and in the plural include the singular; (5) provisions apply to
successive events and transactions; and (6) any reference to a Section or
Article refers to such Section or Article of this Indenture.
ARTICLE 2
The Notes
Section 2.01. Form and Dating. (a) The Notes and the certificate of
authentication of the Trustee or an authenticating agent appointed on its
behalf pursuant to Section 2.02 shall be substantially in the form of Exhibit A
hereto, bearing such legends as are required pursuant to this Section 2.01.
The Notes may have notations, legends or endorsements required by this
Indenture, law, stock exchange rule or usage. Each Note shall be dated the
date of its authentication. The Notes shall be in denominations of $1,000
principal amount and integral multiples thereof.
The Old Notes and the New Notes shall be considered collectively to be a
single class for all purposes of this Indenture, including, without limitation,
waivers, amendments, redemptions and offers to purchase. Any Old Notes that
remain outstanding after the Exchange Offer will be aggregated with the New
Notes, and the Holders of such Old Notes and the New Notes will vote together
as a single series for all such purposes. Accordingly, all references herein
shall be deemed to mean, at any time after the Exchange Offer is consummated,
such percentages in aggregate principal amount of the Old Notes and the New
Notes then outstanding.
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The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and to the extent applicable,
the Company, the Guarantors and the Trustee, by their execution and delivery of
this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Old Notes offered and sold to QIBs in reliance on Rule 144A ("RULE 144A
NOTES") shall be issued initially in the form of one or more Global Notes in
definitive, fully registered form, without interest coupons, substantially in
the form of Exhibit A hereto, bearing such legends as are required pursuant to
this Section 2.01 (the "RESTRICTED GLOBAL NOTES"), will be deposited on the
Issue Date with, or on behalf of, the Depositary and registered in the name of
Cede & Co., as nominee of the Depositary (such nominee being referred to herein
as the "GLOBAL NOTE HOLDER"), duly executed by the Company and authenticated by
the Trustee as herein provided. The aggregate principal amount of the
Restricted Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Old Notes sold in offshore transactions in reliance on Regulation S under
the Securities Act ("REGULATION S NOTES") will initially be represented by one
or more temporary Global Notes in definitive, fully registered form without
interest coupons (each a "REGULATION S TEMPORARY GLOBAL NOTE") and will be
deposited with the Trustee as custodian for, and registered in the name of Cede
& Co., as nominee of the Depositary for the accounts of Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euroclear System
("EUROCLEAR"), and Cedel Bank, societe anonyme ("CEDEL BANK"). Each Regulation
S Temporary Global Note will be exchangeable for one or more permanent global
Notes (each a "REGULATION S PERMANENT GLOBAL NOTE" and together with the
Regulation S Temporary Global Notes, the "REGULATION S GLOBAL NOTES") on or
after the 40th day following the latest of the commencement of the offering of
the Old Notes and the Issue Date upon delivery to the Company of certificates
of compliance with the transfer restrictions applicable to the Old Notes and
pursuant to Regulation S under the Securities Act. Prior to such 40th day,
beneficial interests in a Regulation S Temporary Global Note may be held only
through Euroclear or Cedel Bank. The aggregate principal amount of the
Regulation S Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the nominee of
the Depositary for the Regulation S Global Notes, for the accounts of Euroclear
and Cedel Bank, as hereinafter provided.
Any Person having a beneficial interest in the Global Notes may, upon
request to the Trustee, exchange such beneficial interest for Notes in
definitive form (each a "CERTIFICATED NOTE"). Certificated Notes issued in
exchange for interests in any Regulation S Global Note are sometimes referred
to as the "OFFSHORE CERTIFICATED NOTES." Upon any such issuance, the Trustee
is required to register such Notes in the name of, and cause the same to be
delivered to, such Persons or Persons (or the nominee of any thereof). Such
Notes will be issued in fully registered form and will be subject to transfer
restrictions. In addition, if (i) the Company notifies the Trustee in writing
that the Depositary is no longer willing or able to act as a depositary and the
Company is unable to locate a qualified successor within 90 days or (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of Certificated Notes, then, upon surrender by the relevant Global
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Note Holder of its Global Note in accordance with Section 2.07(e), Notes in
such form will be issued to each Person that such Global Note Holder and the
Depositary identify as being the beneficial owner of the related Notes.
Except as otherwise provided in Section 2.08(e), each Restricted Global
Note, each Regulation S Global Note and each Certificated Note shall bear the
legend (the "SECURITIES ACT LEGEND") set forth below on the face thereof:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY (1) BY ITS
ACQUISITION HEREOF REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (X) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (i) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A
U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
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SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (X) ABOVE."
(b) Each Global Note, whether or not a New Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 2.06, 2.07 AND 2.08 OF THE INDENTURE.
Section 2.02. Execution and Authentication; Authentication Agent. The
President or any Vice President and the Treasurer or any Assistant Treasurer of
the Company shall sign each Note for the Company by manual or facsimile
signature. If an Officer whose signature is on a Note no longer holds that
office at the time the Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee, and the Trustee's signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially
as set forth in Exhibit A. The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate the Notes. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or any of its Affiliates. If an appointment of an authenticating agent is made
pursuant to this Section 2.02, the Notes may have endorsed thereon, in lieu of
the Trustee's certificate of authentication, an alternative certificate of
authentication substantially in the form set forth in Exhibit A.
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The Trustee shall, upon receipt of a written order signed by an Officer of
the Company, authenticate (i) Old Notes for issuance on the Issue Date in the
aggregate principal amount of $150,000,000 and (ii) New Notes for issuance only
in exchange for a like principal amount of Old Notes. Notwithstanding anything
to the contrary contained in this Indenture, the Notes or otherwise, the
aggregate principal amount of outstanding Notes may not exceed $150,000,000 at
any time, except as provided in Section 2.10.
Section 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency (the "REGISTRAR") where Notes may be presented for
registration of transfer or for exchange (subject to Sections 2.06, 2.07 and
2.08) and an office or agency within the City and State of New York (the
"PAYING AGENT") where Notes may be presented for payment and an office or
agency where notices to or upon the Company in respect of the Notes or this
Indenture may be served. The Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Company may change the Paying
Agent, Registrar or co-registrar without prior notice to any Holder. The
Company shall notify the Trustee and the Trustee shall notify the Holders of
the name and address of any Agent not a party to this Indenture. The Company
shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, and such agreement shall incorporate the provisions of the TIA
and implement the provisions of this Indenture that relate to such Agent. The
Company initially appoints the Trustee as Registrar (subject to Section 2.06),
Paying Agent and agent for service of notices and demands in connection with
the Notes. The Company or any of its Affiliates may act as Paying Agent,
Registrar or co-registrar. If the Company fails to appoint or maintain a
Registrar and/or Paying Agent, subject to Section 2.06, the Trustee shall act
as such, and shall be entitled to appropriate compensation in accordance with
Section 7.07.
Section 2.04. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the Holders' benefit or the Trustee all
money the Paying Agent holds for the redemption or purchase of the Notes or for
the payment of principal of, or premium, if any, or interest (including Special
Interest, if any) on the Notes, and will notify the Trustee of any default by
the Company in providing the Paying Agent with sufficient funds to redeem or
purchase Notes or make any payment on the Notes as and to the extent required
to be redeemed, purchased or paid under the terms of this Indenture. While any
such default continues, the Trustee may require the Paying Agent to pay all
money it holds to the Trustee and account for any funds disbursed. The Company
at any time may require the Paying Agent to pay all money it holds to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or any of its Affiliates) shall have no further liability for the money
it delivered to the Trustee. If the Company or any of its Subsidiaries acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
Holders' benefit all money it holds as Paying Agent.
Section 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall
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otherwise comply with section 312(a) of the TIA. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, at least 7 Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require that sets forth the names and addresses of, and the
aggregate principal amount of Notes held by, each Holder, and the Company shall
otherwise comply with section 312(a) of the TIA.
Section 2.06 Transfer and Exchange. (a) The Company appoints the
Trustee as transfer and exchange agent for the purpose of any transfer or
exchange of the Notes.
(b) Without the prior consent of the Company, neither the
Trustee nor the Registrar shall be required (i) to register the transfer of or
exchange any Note selected for redemption, (ii) to register the transfer of or
exchange any Note for a period of 15 days before the mailing of a notice of
redemption ending on the date of such mailing, (iii) to register the transfer
or exchange of a Note between a record date and the next succeeding interest
payment date.
(c) No service charge shall be made for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but the
Registrar may require a Holder to furnish appropriate endorsements and
transfer documents and payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer tax or similar governmental charge payable upon exchanges
pursuant to Section 2.12, 3.06 or 9.05, which the Company shall pay).
(d) Prior to due presentment for registration of transfer of
any Note to the Trustee, the Trustee, any Agent and the Company shall deem and
treat the Person in whose name any Note is registered as the absolute owner of
such Note (whether or not such Note shall be overdue and notwithstanding any
notation of ownership or other writing on such Note made by anyone other than
the Company, the Registrar, or any co-registrar) for the purpose of receiving
payment of principal of, premium, if any, interest (including Special Interest,
if any) on such Note and for all other purposes, and notice to the contrary
shall not affect the Trustee, any Agent or the Company.
(e) A Holder may transfer a Note only by written application
to the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer by the Registrar.
Furthermore, any Holder of a Global Note shall, by acceptance of such Global
Note, be deemed to agree that transfers of beneficial interests in such Global
Note may be effected through a book entry system maintained by the Holder of
such Global Note (or its agent) and that ownership of a beneficial interest in
the Note shall be required to be reflected in a book entry. When Notes are
presented to the Registrar or a co-registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations (including an exchange of Old Notes for New Notes),
the Registrar or co-registrar, as relevant, shall register the transfer or make
the exchange as requested if the requirements for such transactions set forth
herein are met; provided, however, that no exchanges
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of Old Notes for New Notes shall occur except pursuant to the Exchange Offer or
otherwise pursuant to a Registration of Notes and provided further that any Old
Notes that are so exchanged for New Notes shall be cancelled by the Trustee.
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Notes at the Registrar's request.
All Notes issued upon any registration of transfer or exchange of Notes
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Section 2.07. Book-entry Provisions for Global Notes. (a) The
Restricted Global Notes and Regulation S Global Notes initially shall (i) be
registered in the name of the Depositary for such Global Notes or the nominee
of such Depositary, (ii) be delivered to the Trustee as custodian for such
Depositary and (iii) bear legends as set forth in Section 2.01.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Restricted Global Note
or Regulation S Global Note held on their behalf by the Depositary, or the
Trustee as its custodian, or under such Restricted Global Note or Regulation S
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the 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 Holder of any Note.
(b) Transfers of a Restricted Global Note or Regulation S
Global Note shall be limited to transfers of such Global Note in whole, but not
in part, to the Depositary, its successors or their respective nominees.
Interests of beneficial owners in a Restricted Global Note or Regulation S
Global Note may be transferred in accordance with the rules and procedures of
the Depositary and the provisions of Section 2.08.
(c) Any beneficial interest in one of the Global Notes that
is transferred to a Person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Note for as
long as it remains such an interest.
(d) In connection with any exchange of a portion of the
beneficial interests in the Global Notes for Certificated Notes by the
beneficial owners pursuant to Section 2.01(a), the Registrar shall reflect on
its books and records the date and a decrease in the principal amount of the
Global Notes in an amount equal to the principal amount of the beneficial
interest in the Global Notes to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Certificated Notes
of like tenor and amount.
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(e) In connection with the transfer of all of the Restricted
Global Notes or Regulation S Global Notes to beneficial owners pursuant to
Section 2.01(a), the Restricted Global Notes or Regulation S Global Notes, as
the case may be, 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 relevant Global Note
Holder and the Depositary in exchange for its beneficial interest in the
Restricted Global Notes or Regulation S Global Notes, as the case may be, an
equal aggregate principal amount of Certificated Notes or Offshore Certificated
Notes, as the case may be, of authorized denominations.
(f) Any Certificated Notes delivered in exchange for an
interest in a Restricted Global Note pursuant to Section 2.01(a) or paragraph
(d) of this Section shall, except as otherwise provided by paragraph (e) of
Section 2.08, bear the legend regarding transfer restrictions applicable to the
Certificated Notes set forth in Section 2.01(a).
(g) Any Offshore Certificated Note delivered in exchange for
an interest in a Regulation S Global Note pursuant to Section 2.01(a) or
paragraph (d) of this Section shall, except as otherwise provided by paragraph
(e) of Section 2.08, bear the legend regarding transfer restrictions applicable
to the Offshore Certificated Note set forth in Section 2.01(a).
(h) The registered holder of a Global Note may grant proxies
and otherwise authorize any Person, including Agent Members and Persons that
may hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
Section 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for a New Note in connection with an effective Registration pursuant
to the Registration Rights Agreement or the Note is no longer required by
Section 2.08(e) to bear a Securities Act Legend, the following provisions shall
apply:
(a) TRANSFERS TO QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Certificated
Note or an interest in a Restricted Global Note to a QIB (excluding Non-U.S.
Persons):
(i) If the Note to be transferred consists of (x)
Certificated Notes, the Registrar shall register the transfer, if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar, that it is purchasing the
Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that
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it is aware that the transferor is relying upon its foregoing
representation in order to claim the exemption from registration provided
for by Rule 144A or (y) an interest in the Restricted Global Note, the
transfer of such interest may be effected only through the book entry
system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and
the Note to be transferred consists of Certificated Notes, upon receipt by
the Registrar of the documents referred to in clause (i) and instructions
given in accordance with the Depositary's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Restricted Global Notes in an
amount equal to the principal amount of the Certificated Notes to be
transferred and the Trustee shall cancel the Certificated Notes so
transferred.
(b) TRANSFERS OF INTERESTS IN THE REGULATION S TEMPORARY
GLOBAL NOTES. The following provisions shall apply with respect to
registration of any proposed transfer of interests in any Regulation S
Temporary Global Note:
(i) The Registrar shall register the transfer of any
Note (x) if the proposed transferee is a Non-U.S. Person and the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit B hereto or (y) if the proposed transferee is a QIB
and the proposed transferor has checked the box provided for on the form
of Note stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with provisions of Rule
144A to a transferee who has signed the certification provided for on the
form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Note for its own account
or an account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the meaning of
Rule 144A, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor
is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member,
upon receipt by the Registrar of the documents referred to in clause
(i)(y) above and instructions given in accordance with the Depositary's
and the Registrar's procedures, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of the
Restricted Global Notes, in an amount equal to the principal amount of the
Regulation S Temporary Global Notes to be transferred, and the Trustee
shall decrease the amount of the Regulation S Temporary Global Note.
(c) TRANSFERS OF INTERESTS IN THE REGULATION S PERMANENT
GLOBAL NOTES OR OFFSHORE CERTIFICATED NOTES TO U.S. PERSONS. The following
provisions shall apply with respect to any transfer of interests in any
Regulation S Global Note or Offshore Certificated Notes to U.S. Persons:
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(i) prior to the removal of the Securities Act Legend
from any Regulation S Global Note or Offshore Certificated Notes in
accordance with Section 2.01(e), the Registrar shall refuse to register
such transfer; and
(ii) after such removal, the Registrar shall register
the transfer of any such Note without requiring any additional
certification.
(d) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) Prior to 40 days after the Issue Date, the
Registrar shall register any proposed transfer of a Note to a Non-U.S.
Person upon receipt of a certificate substantially in the form of Exhibit
B hereto from the proposed transferor.
(ii) On and after 40 days after the Issue Date, the
Registrar shall register any proposed transfer to any Non-U.S. Person if
the Note to be transferred is a Certificated Note or an interest in the
Global Note, upon receipt of a certificate substantially in the form of
Exhibit B from the proposed transferor.
(iii) (A) If the proposed transferor is an Agent Member
holding a beneficial interest in a Restricted Global Note, upon receipt by
the Registrar of (x) the documents, if any, required by paragraph (ii) and
(y) instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the Restricted Global Notes in
an amount equal to the principal amount of the beneficial interest in the
Restricted Global Notes to be transferred, and (B) if the proposed
transferee is an Agent Member, upon receipt by the Registrar of
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Regulation S Global Notes
in an amount equal to the principal amount of the Certificated Notes or
the Restricted Global Notes, as the case may be, to be transferred, and
the Trustee shall cancel the Certificated Notes, if any, so transferred or
decrease the amount of the Restricted Global Notes, as the case may be.
(e) SECURITIES ACT LEGEND. Upon the registration of
transfer, exchange or replacement of Notes not bearing the Securities Act
Legend, the Registrar shall deliver Notes that do not bear the Securities Act
Legend. Upon the registration of transfer, exchange or replacement of Notes
bearing the Securities Act Legend, the Registrar shall deliver only Notes that
bear the Securities Act Legend unless (i) the Note being delivered is a New
Note issued in the Exchange Offer pursuant to the Exchange Offer Registration
Statement or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
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(f) GENERAL. By its acceptance of any Note bearing the
Securities Act Legend, each Holder of such a Note acknowledges the restrictions
on transfer of such Note set forth in this Indenture and in the Securities Act
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees
by its acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other
information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
Section 2.09. Replacement Notes. Holders shall surrender mutilated
Notes to the Trustee. If any mutilated Note is surrendered to the Trustee, or
if the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee
shall authenticate, a replacement Note if the Trustee's requirements are met,
and each such replacement Note shall be an additional obligation of the
Company. If the Trustee or the Company requires, the Holder must supply an
indemnity bond that is sufficient, in the reasonable judgment of the Trustee
and the Company, to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company and the Trustee may charge for its reasonable expenses
in replacing a Note.
Section 2.10. Outstanding Notes. The Notes outstanding at any time are
all the Notes the Trustee has authenticated except for those it has cancelled,
those delivered to it for cancellation, and those described in this Section
2.10 as not outstanding. If a Note is replaced pursuant to Section 2.09, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that a protected purchaser holds the replaced Note. If the entire principal
of, premium, if any, and accrued interest (including Special Interest, if any)
on any Note is considered paid under Section 2.04, it ceases to be outstanding
and interest on it ceases to accrue. Subject to Section 2.11, a Note does not
cease to be outstanding because the Company or any Affiliate of the Company
holds such Note.
Section 2.11 Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company or any Affiliate of the Company shall be
considered as though they are not outstanding; provided, however, that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded. Notwithstanding the foregoing, Notes that the
Company or any Affiliate of the Company offers to purchase or acquires pursuant
to an exchange offer, tender offer or otherwise shall
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not be deemed to be owned by the Company or any Affiliate of the Company until
legal title to such Notes passes to the Company or such Affiliate, as the case
may be.
Section 2.12. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee on its behalf shall
authenticate temporary Notes. Temporary Notes shall be substantially in the
form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee on its behalf, upon receipt of a written order signed
by two Officers of the Company, shall authenticate definitive Notes in exchange
for temporary Notes. Until such exchange, temporary Notes shall be entitled to
the same rights, benefits and privileges as definitive Notes.
Section 2.13. Cancellation. Holders shall surrender Notes for
cancellation to the Trustee. The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar, any co-registrar, the Paying Agent,
the Company and its Subsidiaries shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange, replacement,
payment (including all Notes called for redemption and all Notes accepted for
payment pursuant to an Offer) or cancellation, and the Trustee shall cancel all
such Notes and shall return all cancelled Notes to the Company. The Company
may not issue new Notes to replace any Notes that have been cancelled by the
Trustee or that have been delivered to the Trustee for cancellation. If the
Company or any Affiliate of the Company acquires any Notes (other than by
redemption pursuant to Section 3.07 or an Offer pursuant to Section 4.15 or
4.16), such acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes unless and until such Notes are
delivered to the Trustee for cancellation.
Section 2.14. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to Holders on a subsequent special record date, in each case at the rate
provided in the Notes and Section 4.01. The Company shall, with the Trustee's
consent, fix or cause to be fixed each such special record date and payment
date. At least 15 days before the special record date, the Company (or, at the
request of the Company, the Trustee in the name of, and at the expense of, the
Company) shall mail a notice that states the special record date, the related
payment date and the amount of interest to be paid.
Section 2.15. Record Date. The record date for purposes of determining
the identity of Holders of Notes entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture shall be
determined as provided for in section 316(c) of the TIA.
Section 2.16. CUSIP and CINS Numbers. A "CUSIP" or "CINS" number will
be printed on the Notes and the Trustee shall use CUSIP or CINS numbers, as the
case may be, in notices of redemption, purchase or exchange as a convenience to
Holders, provided that any such notice may state that no representation is made
as to the correctness or accuracy of such numbers printed in the notice or on
the Notes and that reliance may be placed only on the other identification
numbers
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printed on the Notes. The Company will promptly notify the Trustee of any
change in the CUSIP or CINS number, as the case may be.
ARTICLE 3
Redemptions and Offers to Purchase
Section 3.01. Notices to Trustee. If the Company elects to redeem
Notes pursuant to Section 3.07, it shall furnish to the Trustee, at least 45
but not more than 60 days before notice of any redemption is to be mailed to
Holders (or such shorter time as may be satisfactory to the Trustee), (x) an
Officers' Certificate stating (i) that the Company has elected to redeem Notes
pursuant to Section 3.07(a) or (b), as the case may be, (ii) the date notice of
redemption is to be mailed to Holders, (iii) the redemption date, (iv) the
aggregate principal amount of Notes to be redeemed, (v) the redemption price
for such Notes and, (vi) the amount, if any, of accrued and unpaid interest
(including Special Interest, if any) on such Notes as of the redemption date
and (y) in the case of any redemption pursuant to Section 3.07(b), an Opinion
of Counsel that the Company is entitled to redeem the Notes. If the Trustee is
not the Registrar, the Company shall, concurrently with delivery of its notice
to the Trustee of a redemption, cause the Registrar to deliver to the Trustee
a certificate (upon which the Trustee may rely) setting forth the name of, and
the aggregate principal amount of the Notes held by, each Holder.
If the Company is required to offer to purchase Notes pursuant to Section
4.15 or 4.16, it shall furnish to the Trustee, at least two Business Days
before notice of the Offer is to be mailed to Holders, an Officers' Certificate
setting forth (i) that the Offer is being made pursuant to Section 4.15 or
4.16, as the case may be, (ii) the Purchase Date, (iii) the maximum principal
amount of Notes the Company is offering to purchase pursuant to the Offer, (iv)
the purchase price for such Notes and (v) the amount, if any, of accrued and
unpaid interest (including Special Interest, if any) on such Notes as of the
Purchase Date.
The Company will also provide the Trustee with any additional information
that the Trustee reasonably requests in connection with any redemption or
Offer.
Section 3.02. Selection of Notes to Be Redeemed or Purchased. If less
than all outstanding Notes are to be redeemed or if less than all Notes
tendered pursuant to an Offer are to be accepted for payment, the Trustee shall
select the outstanding Notes to be redeemed or accepted for payment on a pro
rata basis, by lot or by any other method that the Trustee deems fair and
appropriate. If the Company elects to mail notice of a redemption to Holders,
the Trustee shall at least 15 days prior to the date notice of redemption is to
be mailed (i) select the Notes to be redeemed from Notes outstanding not
previously called for redemption in the manner specified by the Trustee and
(ii) notify the Company of the names of each Holder of Notes selected for
redemption, the principal amount of Notes held by each such Holder and the
principal amount of such Holder's Notes that are to be redeemed. If less than
all Notes tendered pursuant to an Offer are to be accepted for payment, the
Trustee shall select on or prior to the Purchase Date for such Offer the Notes
to be accepted for payment. The Trustee shall select for redemption or
purchase Notes or portions of Notes in principal
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<PAGE> 41
amounts at maturity of $1,000 or integral multiples thereof; except that if all
of the Notes of a Holder are selected for redemption or purchase, the aggregate
principal amount of the Notes held by such Holder, even if not an integral
multiple of $1,000, may be redeemed or purchased. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption or tendered pursuant to an Offer also apply to portions of Notes
called for redemption or tendered pursuant to an Offer. The Trustee shall
notify the Company promptly of the Notes or portions of Notes to be called for
redemption or selected for purchase.
Section 3.03. Notice of Redemption. (a) At least 30 days but not more
than 60 days before any redemption date the Company shall mail by first class
mail a notice of redemption to the Holders and the Trustee. With respect to
any redemption of Notes, the notice shall identify the Notes or portions
thereof to be redeemed, including CUSIP or CINS numbers, and shall state: (1)
the redemption date; (2) the redemption price for the Notes and the amount, if
any, of unpaid and accrued interest on such Notes as of the date of redemption
and the premium, if any, and Special Interest, if any, on the Notes as of the
date of redemption; (3) the section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; (4) if any Note is being
redeemed in part, the portion of the principal amount of such Note to be
redeemed and that, after the redemption date, upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion will be
issued; (5) the name and address of the Paying Agent; (6) that Notes called for
redemption must be surrendered to the Paying Agent to collect the redemption
price for, and any accrued and unpaid interest (including Special Interest, if
any) on such Notes as of the date of redemption; (7) that, unless the Company
defaults in making such redemption payment, interest on Notes called for
redemption ceases to accrete or accrue, as the case may be, on, and after the
redemption date; and (8) that no representation is made as to the correctness
or accuracy of the CUSIP or CINS number (as applicable) listed in such notice
and printed on the Notes. If any of the Notes to be redeemed is in the form of
a Global Note, then the Company shall modify such notice to the extent
necessary to accord with the procedures of the Depositary applicable to
redemptions.
(b) At the request of the Company, the Trustee shall (at the
Company's expense and in the Company's name) give the notice of any redemption
to Holders; provided, however, that the Company shall deliver to the Trustee,
at least 45 days prior to the date of redemption and at least 15 days prior to
the date that notice of the redemption is to be mailed to Holders, an Officers'
Certificate that (i) requests the Trustee to give notice of the redemption to
Holders, (ii) sets forth the information to be provided to Holders in the
notice of redemption, as set forth in the preceding paragraph, and (iii) sets
forth the aggregate principal amount of Notes to be redeemed and the amount, if
any, of accrued and unpaid interest (including Special Interest, if any)
thereon as of the date of redemption. If the Trustee is not the Registrar, the
Company shall, concurrently with any such request, cause the Registrar to
deliver to the Trustee a certificate (upon which the Trustee may rely) setting
forth the name of, the address of, and the aggregate principal amount of Notes
held by, each Holder; provided further that any such Officers' Certificate may
be delivered to the Trustee on a date later than permitted under this Section
3.03(b) if such later date is acceptable to the Trustee.
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Section 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date at the price set forth in the Note.
Section 3.05. Deposit of Redemption Price. (a) Prior to 10:00 a.m.,
New York City time, on any redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of, and the amount,
if any, of accrued interest and unpaid interest (including Special Interest, if
any) on all Notes to be redeemed in immediately available funds as of the date
of redemption. After any redemption date, the Paying Agent shall promptly
return to the Company any money that the Company deposited with the Paying
Agent in excess of the amounts necessary to pay the redemption price of, and
any accrued interest (including Special Interest, if any) on all Notes to be
redeemed.
(b) If the Company complies with the preceding paragraph,
interest on the Notes to be redeemed will cease to accrue on such Notes on the
applicable redemption date, whether or not such Notes are presented for
payment. If a Note is redeemed on an interest payment date, then any accrued
and unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on the related interest record date, but,
in all other circumstances, such interest shall be paid to the Holder of such
Note. If any Note called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Company to comply with the
preceding paragraph, interest will be paid on the unpaid principal, premium, if
any, and unpaid interest (including Special Interest, if any) which has accrued
to the redemption date, from the redemption date until such amounts are paid,
at the rate of interest provided in the Notes and Section 4.01.
Section 3.06 Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall issue and the Trustee shall authenticate
for the Holder at the Company's expense a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
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Section 3.07 Redemption Provisions. (a) The Notes will not be
redeemable at the Company's option prior to April 1, 2003 except as described
below, with the proceeds of an Equity Offering. Thereafter, the Notes will be
subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest (including Special Interest, if any) thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on April 1 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
------------------------------------------- ----------
<S> <C>
2003....................................... 104.313%
2004....................................... 102.875%
2005....................................... 101.438%
2006 and thereafter........................ 100.000%
</TABLE>
(b) In addition to the Company's right to redeem the Notes as
set forth in subsection (a), above, from time to time prior to April 1, 2001,
the Company may (but will not have the obligation to) redeem up to 35% of the
aggregate principal amount of the Notes outstanding on the Issue Date at a
redemption price of 108.625% of the principal amount thereof, in each case plus
accrued and unpaid interest (including Special Interest, if any) thereon, if
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings; provided that at least $97.5 million of the aggregate principal
amount of the Notes remain outstanding immediately after the occurrence of any
such redemption; and provided, further that each such redemption will occur
within 60 days of the date of the closing of any such Equity Offering.
Section 3.08. Mandatory Offers. (a) Within 30 days after any Change of
Control Trigger Date or Asset Sale Trigger Date, the Company shall mail to the
Trustee (who shall mail to each Holder at the Company's expense) a notice
stating: (1) that an Offer is being made pursuant to Section 4.15 or 4.16, as
the case may be, and describing the transaction or transactions that constitute
the change of control or Asset Sale, as the case may be, and the length of time
the Offer shall remain open and the maximum aggregate principal amount of Notes
that the Company is offering to purchase pursuant to such Offer; (2) the
purchase price for the Notes (as set forth in Section 4.15 or 4.16, as the case
may be), the amount (if any) of accrued and unpaid interest on such Notes as of
the Purchase Date, and the Purchase Date; (3) that any Note not accepted for
payment will continue to accrue interest; (4) that, unless the Company defaults
in making such payment, any Note accepted for payment pursuant to the Offer
will cease to accrue interest after the relevant Purchase Date; (5) that
Holders may tender all or any portion of the Notes registered in the name of
such Holder and that any portion of a Note tendered must be tendered in a
principal amount of $1,000 or an integral multiple thereof; (6) that Holders
electing to tender any Note or portion thereof will be required to surrender
their Note, with the form therein entitled "Option of Holder to Elect Purchase"
completed, or transfer by book-entry transfer, to the Company, a Depositary, if
appointed by the Company, or a Paying Agent at the address specified in the
notice at least three days prior to the Purchase Date; (7) that Holders will be
entitled to withdraw their election to tender Notes if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than
the close of business on
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the last day of the relevant Offer Period, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have such Note purchased; and (8) that Holders whose Notes are accepted for
payment in part will be issued new Notes equal in principal amount to the
unpurchased portion of Notes surrendered, provided that only Notes in a
principal amount of $1,000 or integral multiples thereof will be accepted for
payment in part.
(b) On the Purchase Date for any Offer, the Company will (i)
to the extent lawful, (x) in the case of an Offer resulting from a Change of
Control, accept for payment all Notes or portions thereof properly tendered
pursuant to such Offer and (y) in the case of an Offer resulting from one or
more Asset Sales, accept for payment, on a pro rata basis to the extent
necessary, the Payment Amount of Notes or portions thereof pursuant to the Net
Proceeds Offer, or if less than the Payment Amount has been tendered, all Notes
tendered, and will deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of Sections 3.08 and 4.16, (ii) deposit with the
Paying Agent in immediately available funds the aggregate purchase price of all
Notes or portions thereof accepted for payment any accrued and unpaid interest
(including Special Interest, if any) on such Notes as of the Purchase Date, and
(iii) deliver, or cause to be delivered, to the Trustee all Notes or portions
thereof so accepted together with an Officers' Certificate setting forth the
name of each Holder that tendered Notes and the principal amount of the Notes,
as the case may be, or portions thereof tendered by each such Holder.
(c) With respect to any Offer, (i) if less than all of the
Notes tendered pursuant to an Offer are to be accepted for payment by the
Company for any reason, the Trustee shall select on or prior to the Purchase
Date the Notes or portions thereof to be accepted for payment pursuant to
Section 3.02, and (ii) if the Company deposits with the Paying Agent on the
Purchase Date an amount sufficient to purchase all Notes accepted for payment,
interest shall cease to accrue on such Notes on the Purchase Date; provided,
however, that if the Company fails to deposit an amount sufficient to purchase
all Notes accepted for payment, the deposited funds shall be used to purchase
on a pro rata basis all Notes accepted for payment and interest shall continue
to accrue, as the case may be, on all Notes not purchased.
(d) Promptly after consummation of an Offer, (i) the Paying
Agent shall mail to each Holder of Notes or portions thereof accepted for
payment an amount equal to the Change of Control Purchase Price or Offered
Price, as the case may be, (ii) with respect to any tendered Note not accepted
for payment in whole or in part, the Trustee shall return such Note to the
Holder thereof, and (iii) with respect to any Note accepted for payment in
part, the Company shall issue and the Trustee shall authenticate and mail to
each such Holder a new Note equal in principal amount to the unpurchased
portion of the tendered Note.
(e) The Company will (i) publicly announce the results of the
Offer to Holders on or as soon as practicable after the Purchase Date, and (ii)
comply with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations to the extent such laws and regulations are applicable to any
Offer.
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<PAGE> 45
(f) If any of this Section 3.08, Section 4.15 or Section 4.16
conflict with duties imposed upon the Company or the Guarantors by virtue of
any applicable United States securities laws or regulations, the Company or
such Guarantor, as the case may be, shall comply with such securities laws or
regulations and will not be deemed to have breached its obligations under this
Indenture.
ARTICLE 4
Covenants
Section 4.01 Payment of Notes. Subject to the provisions of Article
10, the Company shall pay the principal of, and premium, if any, and interest
(including Special Interest, if any) on the Notes on the dates and in the
manner provided in the Notes. Holders must surrender their Notes to the Paying
Agent to collect principal payments. The Notes will be payable as to
principal, premium, if any, and interest (including Special Interest, if any)
at the office or agency of the Company maintained for such purpose within the
City and State of New York or, at the option of the Company, by wire transfer
of immediately available funds or, in the case of Certificated Notes or
Offshore Certificated Notes only, by mailing a check to the registered address
of the Holder.
Principal, premium or interest (including Special Interest, if any) shall
be considered paid on the date due if, by 10:00 a.m., New York City time, on
such date, the Company has deposited with the Paying Agent money in immediately
available funds designated for and sufficient to pay such principal, premium or
interest (including Special Interest, if any); provided, however, that
principal, premium or interest (including Special Interest, if any) shall not
be considered paid within the meaning of this Section 4.01 if money intended to
pay such principal, premium or interest (including Special Interest, if any) is
held by the Paying Agent for the benefit of holders of Senior Indebtedness of
the Company pursuant to the provisions of Article 10. The Paying Agent shall
return to the Company, no later than five days following the date of payment,
any money that exceeds the amount then due and payable on the Notes.
Section 4.02. Reports. Whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "COMMISSION"), so
long as any Notes are outstanding, the Company and the Subsidiary Guarantors
will file with the Commission, to the extent such filings are accepted by the
Commission, and will furnish (within 15 days after such filing) to the Trustee
and the Holders of Notes all quarterly and annual reports and other
information, documents and reports that would be required to be filed with the
Commission pursuant to Section 13 of the Exchange Act if the Company and the
Subsidiary Guarantors were required to file under such section. In addition,
the Company and the Subsidiary Guarantors will make such information available
to prospective purchasers of the Notes, securities analysts and broker-dealers
who request it in writing. The Company and the Guarantors have agreed that,
for so long as any Notes remain outstanding, they will furnish to the Holders
and beneficial Holders of Notes and to prospective purchasers of Notes
designated by the Holders and to broker dealers, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
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<PAGE> 46
Section 4.03. Compliance Certificate. The Company and each Subsidiary
Guarantor shall deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company, beginning with the fiscal year ending December 31,
1998, an Officers' Certificate stating that (i) a review of the activities of
the Company and its Subsidiaries during the preceding fiscal year without
regard to any Grace Period has been made to determine whether the Company and
each Subsidiary Guarantor has kept, observed, performed and fulfilled all of
its obligations under this Indenture and the Notes, (ii) such review was
supervised by the Officers of the Company and each Subsidiary Guarantor signing
such certificate, and (iii) that to the best knowledge of each Officer signing
such certificate, (a) the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default occurred, describing all
such Defaults or Events of Default of which each such Officer may have
knowledge and what action the Company and each Subsidiary Guarantor has taken
or proposes to take with respect thereto), and (b) no event has occurred and
remains in existence by reason of which payments on account of the principal
of, or premium, if any, or interest (including Special Interest, if any) on the
Notes are prohibited or if such event has occurred, a description of the event
and what action the Company and each Subsidiary Guarantor is taking or proposes
to take with respect thereto.
The Company will, so long as any of the Notes are outstanding, deliver to
the Trustee, promptly after any Officer of the Company becomes aware of any
Default or Event of Default, an Officers' Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto.
Section 4.04. Stay, Extension and Usury Laws. Each of the Company and
the Subsidiary Guarantors covenant (to the extent that they may lawfully do so)
that they will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that might affect the
covenants or the performance of their obligations under this Indenture and
Notes; and each of the Company and the Guarantors (to the extent they may
lawfully do so) hereby expressly waive all benefit or advantage of any such
law, and covenant that they will not, by resort to any such law, hinder, delay
or impede the execution of any power granted to the Trustee pursuant to this
Indenture, but will suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.05 Limitation on Restricted Payments. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any Restricted Payment (except as permitted below) if at the
time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred
and be continuing or shall occur as a consequence thereof;
(ii) the Company would be unable to meet the Coverage
Ratio Incurrence Condition; or
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<PAGE> 47
(iii) the amount of such Restricted Payment, when added
to the aggregate amount of all other Restricted Payments (except as
expressly provided in the second following paragraph) made after the Issue
Date, exceeds the sum of (A) 50% of the Company's Consolidated Net Income
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the Issue Date to the end of the Company's most
recently ended fiscal quarter for which financial statements are available
at the time of such Restricted Payment (or, if such aggregate Consolidated
Net Income shall be a deficit, minus 100% of such aggregate deficit) plus
(B) the net cash proceeds from the issuance and sale (other than to a
Subsidiary of the Company) after the Issue Date of (1) the Company's
Capital Stock that is not Disqualified Capital Stock or (2) debt
securities of the Company that have been converted into the Company's
Capital Stock that is not Disqualified Capital Stock (and is not then held
by a Subsidiary of the Company), plus (C) to the extent that any
Restricted Investment that was made after the Issue Date is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (x) the cash
return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (y) the initial amount of such Restricted
Investment plus (D) the amount of Restricted Investment outstanding in an
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary of the Company in accordance with the
definition of "Unrestricted Subsidiary" plus (E) $5.0 million.
The foregoing provisions will not prohibit (1) the payment of any dividend
by the Company or any Restricted Subsidiary within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture; (2) the redemption, repurchase,
retirement or other acquisition of any Capital Stock of the Company in exchange
for, or out of the proceeds of, the substantially concurrent sale (other than
to a Subsidiary of the Company) of other Capital Stock of the Company (other
than any Disqualified Capital Stock); (3) the defeasance, redemption,
repurchase or other retirement of Subordinated Indebtedness in exchange for, or
out of the proceeds of, the substantially concurrent issue and sale of Capital
Stock of the Company (other than (x) Disqualified Capital Stock, (y) Capital
Stock sold to a Subsidiary of the Company and (z) Capital Stock purchased with
the proceeds of loans from the Company or any of its Subsidiaries); (4) the
making of a Related Business Investment in joint ventures or Unrestricted
Subsidiaries out of the proceeds of the substantially concurrent issue and sale
of Capital Stock of the Company (other than (x) Disqualified Capital Stock,
(y) Capital Stock sold to a Subsidiary of the Company and (z) Capital Stock
purchased with the proceeds of loans from the Company or any of its
Subsidiaries); (5) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock held by any member of the Company's
management pursuant to any management equity subscription agreement, employment
agreement, stock option agreement or other compensation agreement in an amount
not to exceed $500,000 in the aggregate in any fiscal year of the Company; or
(6) Restricted Investments the amount of which, together with the amount of all
other Restricted Investments made pursuant to this clause (6) after the Issue
Date, does not exceed $20.0 million, provided that, in the case of clause (6),
no Default or Event of Default shall have occurred and be continuing or occur
as a consequence of the actions or payments set forth therein.
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Each Restricted Payment permitted pursuant to clause (1) of the preceding
paragraph shall be included once in calculating whether the conditions of
clause (iii) of the second preceding paragraph have been met with respect to
any subsequent Restricted Payments. For purposes of determining compliance
with this Section 4.05, in the event that a transaction meets the criteria of
more than one of the types of Restricted Payments described in the clauses of
the immediately preceding paragraph or of the clauses of the definition of
"Restricted Payment," the Company, in its sole discretion, shall classify such
transaction and only be required to include the amount and type of such
transaction in one of such clauses. If an issuance of Capital Stock of the
Company is applied to make a Restricted Payment pursuant to clause (2), (3) or
(4) above, then, in calculating whether the conditions of clause (iii) of the
second preceding paragraph have been met with respect to any subsequent
Restricted Payments, the proceeds of any such issuance shall be included under
such clause (iii) only to the extent such proceeds are not applied as so
described in this sentence. In addition, Restricted Investments made pursuant
to clause (6) of the preceding paragraph shall not be treated as a Restricted
Payment or Restricted Investment for purposes of calculating whether the
conditions of clause (iii) of the second preceding paragraph have been met with
respect to any subsequent Restricted Payments.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.05 were computed, which calculations
shall be based upon the Company's latest available financial statements,
provided that the Company shall not be required to deliver individually such an
Officers' Certificate with respect to Restricted Payments that are otherwise
permitted under this Section 4.05 by Kuukpik/Pool Arctic Alaska, an Alaskan
partnership ("KPAA"), and are made in the ordinary course of business; and
thereafter, shall deliver the basis upon which the calculations required by
this Section 4.05 were computed with respect to KPAA permitted Restricted
Payments in the next required Officers' Certificate pursuant to this
paragraph.
Section 4.06 Corporate Existence. Subject to Article 5, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or
other existence of each of its Subsidiaries in accordance with the respective
organizational documents of each of its Subsidiaries and the rights (charter
and statutory), licenses and franchises of the Company and each of its
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any Subsidiary, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries taken as a whole,
and that the loss thereof is not adverse in any material respect to the
Holders.
Section 4.07. Limitations on Additional Indebtedness. The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, incur any Indebtedness (including without limitation Acquired
Indebtedness), provided that the Company and its Restricted Subsidiaries may
incur Permitted Indebtedness and may incur additional Indebtedness if, after
giving
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effect thereto, the Company's Consolidated Interest Coverage Ratio on the date
thereof would be at least 2.5 to 1, determined on a pro forma basis as if the
incurrence of such additional Indebtedness, and the application of the net
proceeds therefrom, had occurred at the beginning of the four-quarter period
used to calculate the Company's Consolidated Interest Coverage Ratio.
Section 4.08. Limitation on the Issuance of Capital Stock of Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell any shares of its Capital Stock (including
options, warrants or other rights to purchase shares of such Capital Stock)
except (i) to the Company or a Wholly-Owned Restricted Subsidiary, (ii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary or (iii) to the
extent such shares represent directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Wholly-Owned
Restricted Subsidiary. The proceeds of any sale of Capital Stock permitted
hereunder and referred to in clauses (ii) and (iii) above will be treated as
Net Available Proceeds and must be applied in a manner consistent with the
provisions of Section 4.16.
Section 4.09. Limitations on Layering Debt. The Company will not, and
will not permit any Subsidiary Guarantor to, incur any Indebtedness that is
subordinate or junior in right of payment to any Senior Indebtedness of the
Company or such Subsidiary Guarantor unless such Indebtedness by its terms is
pari passu with, or subordinated to, the Notes or the Note Guarantee of such
Subsidiary Guarantor, as the case may be.
Section 4.10. Limitation on Transactions with Affiliates. The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, in one transaction or a series of related transactions, sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in
a comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with respect
to any Affiliate Transaction (or series of related transactions) involving
aggregate payments in excess of $5.0 million, an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and a
Board Resolution that has been adopted by a vote of a majority of the
Independent Directors approving such Affiliate Transaction or, if at the time
fewer than three Independent Directors are then in office, a Board Resolution
that has been adopted unanimously by the Company's Board of Directors and (b)
with respect to any Affiliate Transaction (or series of related transactions)
involving aggregate payments of $15.0 million or more, the certificates
described in the preceding clause (a) and an opinion as to the fairness to the
Company or such Subsidiary from a financial point of view issued by an
Independent Financial Advisor; provided, however, that the following shall not
be deemed to be Affiliate Transactions: (i) transactions exclusively between
or among (1) the Company and one or more Restricted Subsidiaries or (2)
Restricted Subsidiaries, provided, in each case, that no Affiliate of the
Company (other than another Restricted Subsidiary) owns Capital Stock of any
such
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Restricted Subsidiary; (ii) transactions between the Company or any Restricted
Subsidiary and any qualified employee stock ownership plan established for the
benefit of the Company's employees, or the establishment or maintenance of any
such plan; (iii) reasonable director, officer and employee compensation and
other benefits, and indemnification arrangements approved by a majority of the
Independent Directors on the Board of Directors; (iv) transactions permitted
under Section 4.05; (v) the pledge of Capital Stock of Unrestricted
Subsidiaries to support the Indebtedness thereof; (vi) transactions between the
Company and any Restricted Subsidiary and KPAA, so long as no direct or
indirect holder of an equity interest in KPAA (other than the Company or a
Restricted Subsidiary) is an Affiliate of the Company or a Restricted
Subsidiary and provided that at the time of such transaction the Company and
its Restricted Subsidiary have no less economic benefit in KPAA than the
Company and its Restricted Subsidiaries had as of the Issue Date; (vii)
transactions between the Company or any Restricted Subsidiary and any Affiliate
of the Company or such Restricted Subsidiary that is a joint venture, provided
that no direct or indirect holder of an equity interest in such joint venture
(other than the Company or a Restricted Subsidiary) is an Affiliate of the
Company or such Restricted Subsidiary; and (viii) sale of inventory in the
ordinary course of business from the Company or any Restricted Subsidiary to
any Affiliate of the Company.
Section 4.11. Limitations on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, incur or
permit to exist any Lien of any nature whatsoever on any property of the
Company or any Restricted Subsidiary (including Capital Stock of a Restricted
Subsidiary), whether owned at the Issue Date or thereafter acquired, which
secures Indebtedness that is not Senior Indebtedness, except Permitted Liens,
unless contemporaneously therewith effective provision is made to secure the
Notes or its Note Guarantee, as the case may be, equally and ratably with (or
if such Lien secures Subordinated Indebtedness, prior to) such Indebtedness.
Section 4.12. Taxes. The Company shall, and shall cause each of its
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies the failure of which to pay could reasonably be expected to
result in a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and its Subsidiaries taken as
a whole, except for those taxes contested in good faith by appropriate
proceedings.
Section 4.13. Limitations on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for (a) any such Payment Restriction in effect
on the Issue Date under the Credit Agreement or any similar Payment Restriction
under any similar credit facility, or any amendment, restatement, renewal,
replacement or refinancing of any of the foregoing, provided that such similar
Payment Restrictions are not, taken as a whole, materially more restrictive
than the Payment Restrictions in effect on the Issue Date under the Credit
Agreement, (b) any such Payment Restriction in effect on the Issue Date
consisting of customary net worth or leverage tests in effect on the Issue Date
under any credit facility of any Foreign Subsidiary, or any amendment,
restatement, renewal, replacement or refinancing of any of the foregoing
(including for purposes of this clause
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(b), any increase in the principal amount available thereunder) (a "REPLACEMENT
FACILITY"), provided that any such Payment Restrictions in any such Replacement
Facility are not, taken as a whole, materially more restrictive than the
Payment Restrictions in effect on the Issue Date under the facility amended,
restated, renewed, replaced or refinanced, (c) any such Payment Restriction
under any agreement evidencing any Acquired Indebtedness that was permitted to
be incurred pursuant to this Indenture in effect at the time of such incurrence
and not created in contemplation of such event, provided that such Payment
Restriction is not extended to apply to any of the assets of the entities not
previously subject thereto, (d) any such Payment Restriction arising in
connection with Refinancing Indebtedness, provided that any such Payment
Restrictions that arise under such Refinancing Indebtedness are not, taken as a
whole, materially more restrictive than those under the agreement creating or
evidencing the Indebtedness being refunded or refinanced and (e) any such
restriction by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business.
Section 4.14. [Intentionally Omitted.]
Section 4.15. Change of Control. (a) Upon the occurrence of a Change
of Control (the "CHANGE OF CONTROL TRIGGER DATE"), each Holder of Notes may
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Notes pursuant to the offer
described below at an offer price in cash equal to 101% of the aggregate
principal amount of the Notes thereof plus accrued and unpaid interest
(including Special Interest, if any), if any, to the date of repurchase (the
"CHANGE OF CONTROL PURCHASE PRICE").
(b) Within 30 days following any Change of Control, the
Company will mail to the Trustee (who shall mail to each Holder at the
Company's expense) a notice (i) describing the transaction or transactions that
constitute the Change of Control, (ii) offering to repurchase, pursuant to the
procedures required by Section 3.08 of this Indenture and described in such
notice (a "CHANGE OF CONTROL OFFER"), on a date specified in such notice (which
shall be a Business Day not earlier than 30 days or later than 60 days from the
date such notice is mailed) and for the Change of Control Purchase Price, all
Notes properly tendered by such Holder pursuant to such offer to purchase for
the Change of Control Purchase Price and (iii) describing the procedures that
Holders must follow to accept the Change of Control Offer.
(c) The Change of Control Offer will remain open for a period
of at least 20 Business Days following its commencement (the "CHANGE OF CONTROL
OFFER PERIOD"). No later than five Business Days after the termination of the
Change of Control Offer Period (the "CHANGE OF CONTROL PURCHASE DATE"), the
Company will purchase all Notes tendered in response to the Change of Control
Offer. Payment for any Notes so purchased will be made in the same manner as
interest payments are made.
(d) Prior to complying with the provisions of this Section
4.15, but in any event within 30 days following a Change of Control, the
Company will either repay all outstanding Senior Indebtedness or obtain the
requisite consents, if any, under all agreements governing outstanding
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Senior Indebtedness to permit the repurchase of Notes required by this
covenant. The Company's obligation to make a Change of Control Offer will be
satisfied if a third party makes the Change of Control Offer in the manner and
at the times and otherwise in compliance with the requirements applicable to a
Change of Control Offer made by the Company and purchases all Notes properly
tendered and not withdrawn under such Change of Control Offer.
(e) The Company will comply with the applicable tender offer
rules, including the requirements of Rule 14e-1 under the Exchange Act and any
other applicable laws and regulations in connection with the purchase of Notes
pursuant to a Change of Control Offer.
Section 4.16. Limitations on Asset Sales. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, consummate any Asset
Sale unless (i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets included in such Asset Sale (evidenced by the delivery by
the Company to the Trustee of an Officers' Certificate certifying that such
Asset Sale complies with this clause (i)), (ii) immediately before and
immediately giving effect to such Asset Sale, no Default or Event of Default
shall have occurred and be continuing, and (iii) at least 75% of the
consideration received by the Company or such Restricted Subsidiary therefor is
in the form of cash paid at the closing thereof. The amount (without
duplication) of any (x) Indebtedness (other than Subordinated Indebtedness) of
the Company or such Restricted Subsidiary that is expressly assumed by the
transferee in such Asset Sale and with respect to which the Company or such
Restricted Subsidiary, as the case may be, is unconditionally released by the
holder of such Indebtedness, and (y) any Cash Equivalents, or other notes,
securities or items of property received from such transferee that are promptly
(but in any event within 30 days) converted by the Company or such Restricted
Subsidiary to cash (to the extent of the cash actually so received), shall be
deemed to be cash for purposes of clause (ii) and, in the case of clause (x)
above, shall also be deemed to constitute a repayment of, and a permanent
reduction in, the amount of such Indebtedness for purposes of the following
paragraph (b). If at any time any non-cash consideration received by the
Company or any Restricted Subsidiary of the Company, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise disposed
of for cash (other than interest received with respect to any such non-cash
consideration), then the date of such conversion or disposition shall be deemed
to constitute the date of an Asset Sale hereunder and the Net Available
Proceeds thereof shall be applied in accordance with this Section 4.16. A
transfer of assets by the Company to a Restricted Subsidiary or by a Restricted
Subsidiary to the Company or to a Restricted Subsidiary will not be deemed to
be an Asset Sale and a transfer of assets that constitutes a Restricted
Investment and that is permitted under Section 4.05 will not be deemed to be an
Asset Sale.
(b) If the Company or any Restricted Subsidiary engages in an
Asset Sale, the Company or any Restricted Subsidiary shall, no later than 270
days after such Asset Sale, either (i) apply all or any of the Net Available
Proceeds therefrom to repay amounts outstanding under the Credit Agreement or
any other Senior Indebtedness; provided, in each case, that the related loan
commitment (if any) is thereby permanently reduced by the amount of such
Indebtedness so repaid and/or (ii) invest all or any part of the Net Available
Proceeds thereof in the purchase of fixed assets
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to be used by the Company and its Restricted Subsidiaries in a Related Business
(together with any short-term assets incidental thereto), or the making of a
Related Business Investment. The amount of such Net Available Proceeds not
applied or invested as provided in this paragraph will constitute "EXCESS
PROCEEDS."
(c) When the aggregate amount of Excess Proceeds equals or
exceed $10.0 million (such date, the "ASSET SALE TRIGGER DATE"), the Company
will be required to make an offer to purchase, from all Holders of the Notes,
an aggregate principal amount of Notes equal to the amount of such Excess
Proceeds as follows:
(i) The Company will make an offer to purchase (a "NET
PROCEEDS OFFER") from all Holders of the Notes, in accordance with the
procedures set forth in Section 3.08, the maximum principal amount
(expressed as a multiple of $1,000) of Notes that may be purchased out of
the amount (the "PAYMENT AMOUNT") of such Excess Proceeds.
(ii) The offer price for the Notes will be payable in
cash in an amount equal to 100% of the principal amount of the Notes
tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid
interest and Special Interest, if any, to the date such Net Proceeds Offer
is consummated (the "OFFERED PRICE"), in accordance with the procedures
set forth in this Indenture. To the extent that the aggregate Offered
Price of Notes tendered pursuant to a Net Proceeds Offer is less than the
Payment Amount relating thereto (such shortfall constituting a "NET
PROCEEDS DEFICIENCY"), the Company may use such Net Proceeds Deficiency,
or a portion thereof, for general corporate purposes, subject to the
limitations in Section 4.05.
(iii) If the aggregate Offered Price of Notes validly
tendered and not withdrawn by Holders thereof exceeds the Payment Amount,
Notes to be purchased will be selected on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Notes
in denominations of $1,000, or integral multiples thereof, will be
purchased). The Net Proceeds Offer shall remain open for a period of at
least 20 Business Days following its commencement (the "NET PROCEEDS OFFER
PERIOD"). No later than five Business Days after the termination of the
Offer Period (the "NET PROCEEDS PURCHASE DATE"), the Company will purchase
the principal amount of Notes required to be purchased pursuant to this
covenant. Payment for any Notes so purchased will be made in the same
manner as interest payments are made.
(iv) Upon completion of such Net Proceeds Offer in
accordance with the foregoing provisions, the amount of Excess Proceeds
with respect to which such Net Proceeds Offer was made shall be deemed to
be zero.
The Company will not permit any Subsidiary to enter into or suffer to
exist any agreement that would place any restriction of any kind (other than
pursuant to law or regulation) on the ability of the Company to make a Net
Proceeds Offer following any Asset Sale. The Company will comply with Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder,
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if applicable, in the event that an Asset Sale occurs and the Company is
required to purchase Notes as described above.
Section 4.17. Additional Note Guarantees. If the Company or any of its
Subsidiaries shall acquire or create another Subsidiary (other than (x) any
Foreign Subsidiary or (y) a Subsidiary that has been designated as an
Unrestricted Subsidiary), then within 10 days after acquiring or creating such
Subsidiary, the Company will cause each such Subsidiary to execute and deliver
to the Trustee a supplement to this Indenture, substantially in the form of
Exhibit C hereto, as a Subsidiary Guarantor.
ARTICLE 5
Successors
Section 5.01. Limitations on Mergers and Certain Other Transactions.
The Company will not, in a single transaction or a series of related
transactions, (i) consolidate or merge with or into (other than a merger with a
Wholly-Owned Restricted Subsidiary solely for the purpose of changing the
Company's jurisdiction of incorporation to another State of the United States),
or sell, lease, transfer, convey or otherwise dispose of or assign all or
substantially all of the assets of the Company or the Company and its
Subsidiaries (taken as a whole), or assign any of its obligations under the
Notes and this Indenture, to any Person or (ii) adopt a Plan of Liquidation
unless, in either case: (v) the Person formed by or surviving such
consolidation or merger (if other than the Company) or to which such sale,
lease, conveyance or other disposition or assignment shall be made (or, in the
case of a Plan of Liquidation, any Person to which assets are transferred)
(collectively, the "SUCCESSOR"), is a corporation organized and existing under
the laws of any State of the United States of America or the District of
Columbia, and the Successor assumes by supplemental indenture in a form
satisfactory to the Trustee all of the obligations of the Company under the
Notes and this Indenture; (w) immediately prior to and immediately after giving
effect to such transaction and the assumption of the obligations as set forth
in clause (v) above and the incurrence of any Indebtedness to be incurred in
connection therewith, no Default or Event of Default shall have occurred and be
continuing; (x) immediately after and giving effect to such transaction and the
assumption of the obligations set forth in clause (v) above and the incurrence
of any Indebtedness to be incurred in connection therewith, and the use of any
net proceeds therefrom on a pro forma basis, (1) the Consolidated Net Worth of
the Company or the Successor, as the case may be, would be at least equal to
the Consolidated Net Worth of the Company immediately prior to such transaction
and (2) the Company or the Successor, as the case may be, could meet the
Coverage Ratio Incurrence Condition; (y) each Subsidiary Guarantor, unless it
is the other party to the transactions described above, shall have confirmed,
by a supplemental indenture in form and substance reasonably satisfactory to
the Trustee, that its Note Guarantee shall apply to the obligations of the
Company or the Successor under the Notes and this Indenture; and (z) the
Company will have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture (if any) comply with the provisions of this
Section 5.01. For purposes of this covenant, any Indebtedness of the Successor
which was not
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Indebtedness of the Company immediately prior to the transaction shall be
deemed to have been incurred in connection with such transaction.
ARTICLE 6
Defaults and Remedies
Section 6.01. Events of Default. (a) Each of the following constitutes
an event of default (an "EVENT OF DEFAULT"):
(i) failure by the Company to pay interest on any of
the Notes when it becomes due and payable and the continuance of any such
failure for 30 days;
(ii) failure by the Company to pay the principal or
premium, if any, on any of the Notes when it becomes due and payable,
whether at stated maturity, upon redemption, upon acceleration or
otherwise;
(iii) failure by the Company to comply with any of its
agreements or covenants described above under Article 5, or in respect of
its obligations to make a Change of Control Offer or a Net Proceeds Offer
described in Sections 4.15 and 4.16, respectively;
(iv) failure by the Company to comply with any other
covenant in this Indenture and continuance of such failure for 60 days
after notice of such failure has been given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% of the
aggregate principal amount of the Notes then outstanding;
(v) failure by either the Company or any of its
Restricted Subsidiaries to make any payment when due after the expiration
of any applicable grace period, in respect of any Indebtedness of the
Company or any of such Restricted Subsidiaries, or the acceleration of the
maturity of such Indebtedness by the holders thereof because of a default,
with an aggregate outstanding principal amount for all such Indebtedness
under this clause (v) of $10.0 million or more;
(vi) one or more final, non-appealable judgments or
orders that exceed $10.0 million in the aggregate for the payment of money
have been entered by a court or courts of competent jurisdiction against
the Company or any Subsidiary of the Company and such judgment or
judgments have not been satisfied, stayed, annulled or rescinded within 60
days of being entered;
(vii) except as permitted by this Indenture, any Note
Guarantee ceases to be in full force and effect or any Guarantor
repudiates its obligations under any Note Guarantee; and
(viii) if under any Bankruptcy Law, (A) the Company, or
any Significant Subsidiary commences a voluntary case, consents to the
entry of an order for relief against it in an
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involuntary case, consents to the appointment of a Custodian of it or for
all or substantially all of its property, or makes a general assignment
for the benefit of its creditors, or (B) a court of competent jurisdiction
enters an order or decree, and such order or decree remains unstated and
in effect for 60 days, that is for relief against the Company or any
Significant Subsidiary in an involuntary case, appoints a Custodian of the
Company or any Significant Subsidiary or for all or substantially all of
the property of the Company or any Significant Subsidiary, or orders the
liquidation of the Company or any Significant Subsidiary.
(b) Any notice of default delivered to the Company by the
Trustee or by Holders of Notes with a copy to the Trustee must specify the
Default, demand that it be remedied and state that the notice is a "NOTICE OF
DEFAULT".
Section 6.02. Acceleration. (a) If an Event of Default (other than an
Event of Default under Section 6.01(a)(viii) involving the Company) occurs and
is continuing under this Indenture, the Trustee, by written notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding by written notice to the Company and the Trustee may
declare all amounts owing under the Notes to be due and payable immediately.
Upon such declaration of acceleration, the aggregate principal of, premium, if
any, and interest on the outstanding Notes shall immediately become due and
payable.
(b) Notwithstanding anything to the contrary in this
Indenture, if an Event of Default arises under Section 6.01(a)(viii) involving
the Company, the principal amount of and premium on, if any, and any accrued
and unpaid interest (including Special Interest, if any) on all outstanding
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders.
(c) The Holders of a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may rescind any
declaration of acceleration of such Notes and its consequences if (i) the
rescission would not conflict with any judgment or decree, (ii) all existing
Defaults and Events of Default (other than the nonpayment of principal of, or
premium, if any, or interest on, the Notes which shall have become due by such
declaration) shall have been cured or waived and (iii) the Trustee has been
paid all amounts due to it pursuant to Section 7.07.
Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of, or premium, if any, or interest (including Special Interest,
if any) on, the Notes or to enforce the performance of any provision of the
Notes or this Indenture. The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
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Section 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of all Holders waive any existing Default or Event of
Default and its consequences under this Indenture, except a continuing Default
or Event of Default in the payment of the principal of, premium, if any, or
interest (including Special Interest, if any) on, any Note (which may only be
waived with the consent of each Holder 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; provided that
no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon.
Section 6.05. Control by Majority of Holders. Subject to Section
7.01(e), the Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it by this Indenture. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of other Holders, or
would involve the Trustee in personal liability. The Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Notwithstanding any provision to the contrary in this Indenture,
the Trustee shall not be obligated to take any action with respect to the
provisions of Section 6.12 hereof unless directed to do so pursuant to this
Section 6.05.
Section 6.06. Limitations on Suits by Holders. A Holder may pursue a
remedy with respect to this Indenture or the Notes only if: (1) the Holder
gives to the Trustee written notice of a continuing Event of Default; (2) the
Holders of at least 25% in principal amount of the then outstanding Notes make
a written request to the Trustee to pursue the remedy; (3) such Holder or
Holders offer to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense; (4) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of indemnity; and (5)
during such 60-day period the Holders of a majority in aggregate principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request. A Holder may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder. Holders of the Notes may not enforce this Indenture or
the Notes, except as provided herein.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, but subject to Article 10, the right of
any Holder to receive payment of principal of, and premium, if any, and
interest (including Special Interest, if any) on, a Note, on or after a
respective due date expressed in the Note, or to bring suit for the enforcement
of any such payment on or after such respective date, shall not be impaired or
affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a)(i) or (a)(ii) occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company (or any Guarantor or other obligor under the
Notes) for (i) principal, premium, if any, interest, if any, and Special
Interest, if any, remaining
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unpaid on the Notes, (ii) interest on overdue principal and premium, if any,
and, to the extent lawful, interest, and (iii) 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 ("TRUSTEE EXPENSES").
Section 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable to have the claims of the Trustee (including any claim for Trustee
Expenses and for amounts due under Section 7.07) and the Holders allowed in any
Insolvency or Liquidation Proceeding or other judicial proceeding relative to
the Company (or any Subsidiary Guarantor or other obligor upon the Notes), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute to Holders any money or other property payable or
deliverable on any such claims and each Holder authorizes any Custodian in any
such Insolvency or Liquidation Proceeding or other judicial proceeding to make
such payments to the Trustee, and if the Trustee shall consent to the making of
such payments directly to the Holders any such Custodian is hereby authorized
to make such payments directly to the Holders, and to pay to the Trustee any
amount due to it hereunder for Trustee Expenses, and any other amounts due the
Trustee or any predecessor Trustee under Section 7.07; provided, however, that
the Trustee shall not be authorized to (i) consent to, accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder or (ii) vote in
respect of the claim of any Holder in any such Insolvency or Liquidation
Proceeding or other judicial proceeding. To the extent that the payment of any
such Trustee Expenses, and any other amounts due the Trustee under Section 7.07
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, Notes and other properties which
the Holders may be entitled to receive in such proceeding, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Section 6.10. Priorities. If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
First: to the Trustee for all Trustee Expenses and for all
amounts due under Section 7.07;
Second: to the holders of Senior Indebtedness to the extent
required by Article 10;
Third: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, interest, Special Interest,
if any, ratably, without preference or priority of any
kind, according to the amounts due and payable on the
Notes for principal, premium, if any, interest and
Special Interest, if any, respectively; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders.
Section 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.06, or
a suit by Holders of more than 10% in principal amount of the then outstanding
Notes.
Section 6.12. Willful Default. In the case of an Event of Default
occurring by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding payment of the
premium that the Company would have had to pay if the Company then had elected
to redeem the Notes under the provisions of Article 3 and under the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, upon the acceleration of the Notes. If an Event of
Default occurs prior to April 1, 2003 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Notes prior to April
1, 2003, then, upon acceleration of the Notes, an additional premium shall also
become and be immediately due and payable, to the extent permitted by law, in
an amount equal to 10.0%.
ARTICLE 7
Trustee
Section 7.01. Duties of Trustee. (a) If an Event of Default occurs
(and has not been cured) the Trustee shall (i) exercise the rights and powers
vested in it by this Indenture, and (ii) use the same degree of care and skill
in exercising such rights and powers as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely by the express provisions
of this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and (ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether they conform to this
Indenture's requirements.
(c) The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own wilful
misconduct, except that: (i) this Section 7.01(c) does not limit the effect of
Section 7.01(b); (ii) the Trustee shall not be liable for any error of
judgment made
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in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not
be liable with respect to any action it takes or omits to take in good faith in
accordance with a direction it receives pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee shall be subject to paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers or to perform any
duty under this Indenture at the request of any Holders, including, without
limitation, the provisions of Section 6.05 hereof, unless such Holders shall
have offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense that might be incurred by it in complying with
such request.
(f) The Trustee shall not be liable for interest on any money
received by it except as it may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee. (a) The Trustee may rely on any
document it believes to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or matter stated in
any such document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and 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 under this Indenture in good faith
and in reliance on such advice or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
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(g) The Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Notes unless either (1) a Trust
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 the Notes or by any Holder of
the Notes.
Section 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any of its Affiliates with the same
rights it would have if it were not Trustee. The Trustee shall at all times
comply with Section 310(b) of the TIA as in effect from time to time. Each
Agent shall have the same rights as the Trustee under this Section 7.03.
Section 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Notes or any Note Guarantee; it shall not be accountable
for the Company's use of the proceeds from the Notes, and it shall not be
responsible for any statement or recital in this Indenture or any statement in
the Notes or any other document executed in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. Notice to Holders of Defaults and Events of Default. If
a Default or Event of Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to the Holders a notice of the Default or
Event of Default within 30 days after the occurrence thereof. Except in the
case of a Default or Event of Default in payment of principal or interest or
Special Interest, if any, on any Note (including any failure to redeem Notes
called for redemption or any failure to purchase Notes that are tendered
pursuant to an Offer and that are required to be purchased by the terms of this
Indenture), the Trustee may withhold the notice if and so long as a committee
of its Trust Officers determines in good faith that withholding such notice is
in the Holders' interests.
Section 7.06. Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with May 15, 1998, the Trustee shall mail to the Holders a
brief report dated as of such reporting date that complies with section 313(a)
of the TIA (but if no event described in section 313(a) of the TIA has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with section 313(b)(2) of the TIA.
The Trustee shall also transmit by mail all reports as required by section
313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a copy
of each report at the time of its mailing to Holders shall be filed with the
SEC and each stock exchange on which the Notes are listed. The Company shall
notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation for its services hereunder as the
parties shall agree to from time to time. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of
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an express trust. The Company shall reimburse the Trustee upon request for all
reasonable disbursements, advances and expenses it incurs or makes in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify the Trustee for, from and against any and all
losses, liabilities or expenses the Trustee Incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture (including any expenses Incurred in connection with the performance
of its duties under Section 6.08), except as set forth below. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity;
provided, however, that failure by the Trustee to provide the Company with any
such notice shall not relieve the Company of any of its obligations under this
Section 7.07 except to the extent that the Company has been prejudiced by such
failure. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The Company's obligations under this Section 7.07 shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture. The Company need not reimburse any expense or indemnify
against any loss or liability the Trustee Incurs through the Trustee's
negligence or bad faith.
To secure payment of the Company's obligations under this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property the
Trustee holds or collects, except that held in trust to pay principal of, and
premium, if any, interest and Special Interest, if any, on, particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee Incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(viii) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute administrative expenses under any
Bankruptcy Law without any need to demonstrate substantial contribution under
Bankruptcy Law.
Section 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company in writing. The Holders of a majority in aggregate
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if: (i) the Trustee fails to comply with Section 7.10; (ii) the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law; (iii) a Custodian
or public officer takes charge of the Trustee or its property or (iv) the
Trustee becomes incapable of performing the services of the Trustee hereunder.
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If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee, provided that within one year after such appointment the Holders of a
majority in aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace any successor Trustee appointed by the
Company. If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its appointment to
Holders. The retiring Trustee shall promptly transfer all property it holds as
Trustee to the successor Trustee, subject to its rights under Section 7.07 and
provided that all sums owing to the retiring Trustee hereunder have been paid.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 shall continue for the retiring
Trustee's benefit with respect to expenses and liabilities relating to the
retiring Trustee's activities prior to being replaced.
Section 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all
of its corporate trust business to, another corporation, subject to Section
7.10, the successor corporation without any further act shall be the successor
Trustee. As soon as practicable, the successor Trustee shall give notice of
its succession to the Company and the Holders of the Notes.
Section 7.10. Eligibility; Disqualification. The Trustee shall at all
times (i) be a corporation organized and doing business under the laws of the
United States of America, of any state thereof, or the District of Columbia
authorized under such laws to exercise corporate trustee power, (ii) be subject
to supervision or examination by federal or state authority, (iii) have a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition, and (iv) satisfy the requirements
of sections 310(a)(1), (2) and (5) and 310(b) of the TIA.
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee is subject to section 311(a) of the TIA, excluding any creditor
relationship listed in section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to section 311(a) of the TIA to the extent
indicated therein.
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ARTICLE 8
Discharge of Indenture
Section 8.01. Discharge of Liability on Notes; Defeasance. (a) Subject
to Sections 8.01(c) and 8.06, this Indenture shall cease to be of any further
effect after (i) either the Company has delivered to the Trustee all
outstanding Notes (other than Notes replaced pursuant to Section 2.09) for
cancellation or all outstanding Notes have become due and payable and the
Company has irrevocably deposited with the Trustee or a Paying Agent money
and/or Government Securities in an amount sufficient (without reinvestment
thereof) to pay when due all principal of, premium, if any, and interest and
Special Interest, if any, on, all outstanding Notes (other than Notes replaced
pursuant to Section 2.09), and (ii) the Company pays all other sums payable
under this Indenture.
(b) Subject to Sections 8.01(c), 8.02, and 8.06, the Company
at any time may terminate all its obligations under this Indenture and the
Notes ("LEGAL DEFEASANCE"), or its obligations under Sections 4.02, 4.03, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 5.01
("COVENANT DEFEASANCE"). The Company may exercise Legal defeasance
notwithstanding its prior exercise of Covenant Defeasance.
If the Company exercises Legal Defeasance, payment of the Notes may not be
accelerated because of an Event of Default. If the Company exercises Covenant
Defeasance, payment of the Notes may not be accelerated because of an Event of
Default specified in 6.01 (a)(iii), (iv), (v), (vi), (vii) or (viii).
Upon satisfaction of the conditions set forth in Section 8.02 and upon the
Company's request (and at the Company's expense), the Trustee shall acknowledge
in writing the discharge of those obligations that the Company has terminated.
Upon discharge of the Company's obligations as a result of the exercise by the
Company of its Covenant Defeasance the obligations of the Guarantors under the
Note Guarantees and under this Indenture shall terminate.
(c) Notwithstanding Sections 8.01(a) and (b), the Company's
obligations under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01,
4.04, 7.07, 7.08, 8.04, 8.05, and 8.06, and the obligations of the Trustee and
the Paying Agent under Section 8.04 shall survive until the Notes have been
paid in full. Thereafter, the Company's obligations under Sections 7.07 and
8.05 and the obligations of the Company, Trustee and Paying Agent under Section
8.04 shall survive.
Section 8.02. Conditions to Defeasance. The Company may exercise
either Legal Defeasance or Covenant Defeasance only if:
(i) the Company irrevocably deposits with the Trustee,
in trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in
such amounts as will be sufficient, (x) in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium, if any, and interest and Special Interest, if any, on the
outstanding Notes on the stated maturity or
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the date such payments are due in accordance with the terms of the Notes
or on the applicable, redemption date, as the case may be, and (y) in the
opinion of the Company as stated in an Officers' Certificate, to pay the
Trustee Expenses. In addition, the Company specifies whether the Notes
are being defeased to maturity or to a particular redemption date,
(ii) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee (1) an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (x) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (y) since the date of this Indenture, there has been a change in
the applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel will confirm that, the Holders
of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will
be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
had not occurred, (2) an Opinion of Counsel to the effect that (x) the
deposit of the trust funds does not violate the Investment Company Act of
1940 and (y) the trust funds will not be subject to the effect of Section
547 of the United States Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law in a case commenced by or against the Company
under either such statute,
(iii) in the case of Covenant Defeasance, the Company
shall have delivered to the (1) Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner at the same times as would have been the case if such Covenant
Defeasance had not occurred, (2) an Opinion of Counsel to the effect that
(x) the deposit of the trust funds does not violate the Investment Company
Act of 1940 and (y) the trust funds will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the New
York Debtor and Creditor Law in a case commenced by or against the Company
under either such statute,
(iv) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
123rd day after the date of deposit,
(v) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a Default under any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound,
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(vi) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of Notes over the other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others and
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.03. Application of Trust Money. The Trustee or Paying Agent
shall hold in trust money and/or Government Securities deposited with it
pursuant to this Article 8. The Trustee or Paying Agent shall apply the
deposited money and the money from Government Securities in accordance with
this Indenture to the payment of principal of, and premium, if any, interest or
Special Interest, if any, on, the Notes. Money deposited with the Trustee or
a Paying Agent pursuant to this Article 8 shall not be subject to the
provisions of Article 10.
Section 8.04. Repayment to Company. After the Notes have been paid in
full, the Trustee and the Paying Agent shall promptly turn over to the Company
any excess money or Notes held by them.
Any money deposited with the Trustee or a Paying Agent pursuant to this
Article 8 for the payment of the principal of, premium, if any, interest or
Special Interest, if any, on, any Note that remains unclaimed for two years
after becoming due and payable shall be paid to the Company on its request; and
the Holder of such Note 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 money shall cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in The
New York Times and The Wall Street Journal (National Edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.05. Indemnity for Government Securities. The Company shall
pay and shall indemnify the Trustee and any Paying Agent against any tax, fee
or other charge imposed on or assessed against cash and/or Government
Securities deposited with it pursuant to this Article 8 or the principal and
interest received on such cash and/or Government Securities.
Section 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or Government Securities in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's Obligations under this Indenture and the Notes
and the Guarantors' Obligations under the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying
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Agent is permitted to apply all such money or Government Securities in
accordance with this Article 8; provided, however, that if the Company or any
Guarantor has made any payment of principal of, or premium, if any, interest,
or Special Interest, if any, on, any Notes because of the reinstatement of its
Obligations under this Indenture and the Notes or the Note Guarantees, the
Company or such Guarantor, as the case may be, shall be subrogated to the
Holders' rights to receive such payment from the money or Government Securities
held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
Section 9.01. Amendments and Supplements Permitted without Consent of
Holders. Notwithstanding Section 9.02, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder to: (i) cure any ambiguity, defect or inconsistency; (ii)
provide for uncertificated Notes in addition to or in place of Certificated
Notes; (iii) provide for the assumption of the obligations to the Holders of
the Company or a Guarantor, as the case may be, in the event of a merger or
consolidation; (iv) make any change that (1) would provide any additional
rights or benefits to Holders or (2) does not adversely affect the legal rights
under this Indenture of any Holder; (v) comply with Section 4.17 or Article 11;
(vi) secure the Notes pursuant to the requirements of Section 4.11; or (vii)
comply with the requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA.
Section 9.02. Amendments and Supplements Requiring Consent of Holders.
(a) Except as otherwise provided in Sections 9.01, this Indenture and the Notes
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for the Notes), and any existing Default or Event of Default or
compliance with any provision of this Indenture or the Notes may be waived
(other than any continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes) with the consent of
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for the Notes); provided that:
(i) no such modification or amendment may, without the
consent of the Holders of at least 75% in aggregate principal amount of
Notes then outstanding, amend or modify the obligations of the Company
under Section 4.15 (or the definitions related thereto) that could
adversely affect the rights of any holder of the Notes; and
(ii) without the consent of each Holder affected, the
Company and the Trustee may not: (w) extend the maturity of any Note; (x)
affect the terms of any scheduled payment of interest on or principal of
the Notes (including without limitation any redemption provisions); (y)
take any action that would subordinate the Notes or the Note Guarantees to
any other Indebtedness of the Company or any of Guarantors, respectively
(except as provided in Article 10), or otherwise affect the ranking of the
Notes or the Note Guarantees;
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or (z) reduce the percentage of Holders necessary to consent to an
amendment, supplement or waiver to this Indenture.
(b) It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof. After an amendment, supplement or waiver under
this Section becomes effective, the Company shall mail to each Holder affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.
Section 9.03. Compliance with TIA. Every amendment or supplement to
this Indenture or the Notes shall be set forth in an amended supplemental
indenture that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents. (a) Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same Indebtedness as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as
to his or her Note or portion of a Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Notes have consented to the amendment, supplement or waiver.
(b) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders of Notes entitled to
consent to any amendment or waiver. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders of Notes at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
amendment or waiver or to revoke any consent previously given, whether or not
such Persons continue to be Holders of Notes after such record date. No consent
shall be valid or effective for more than 90 days after such record date unless
consents from Holders of the principal amount of Notes required hereunder for
such amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.
(c) After an amendment, supplement or waiver becomes
effective, it shall bind every Holder, unless it is of the type described in
clause (ii) of Section 9.02(a), in which case the amendment, supplement or
waiver shall only bind each Holder that consented to it and every subsequent
holder of a Note that evidences the same debt as the consenting Holder's Note.
Section 9.05. Notation or Exchange of Notes. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall authenticate New Notes that
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reflect the amendment, supplement or waiver. Failure to make the appropriate
notation or issue a New Note shall not affect the validity and effect of such
amendment, supplement or waiver.
Section 9.06. Trustee Protected. Upon the Company's request, after
receipt by the Trustee of a resolution of the Board of Directors of the Company
authorizing the execution of any amended or supplemental indenture described in
Section 9.02, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture, but the Trustee shall not be obligated to enter
into an amended or supplemental indenture that adversely affects its own
rights, duties or immunities under this Indenture or otherwise. In signing
such amended or supplemental indenture, the Trustee shall be entitled to
receive and, subject to Section 7.01, shall be fully protected in relying upon,
an Officers' Certificate and Opinion of Counsel pursuant to Sections 12.04 and
12.05 as conclusive evidence that such amended or supplemental indenture is
authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company and the
Guarantors in accordance with its terms.
ARTICLE 10
Subordination
Section 10.01. Agreement to Subordinate. The Company and each Guarantor
agrees, and each Holder by accepting a Note agrees, that the payment by the
Company of principal of, and premium, if any, and interest (including Special
Interest, if any) on the Notes, and by each Guarantor of such amounts under its
Note Guarantee (collectively, the "NOTE INDEBTEDNESS"), are subordinated to the
prior payment in full in cash when due of the principal of, and premium, if
any, and accrued and unpaid interest on and all other amounts owing in respect
of, all existing and future Senior Indebtedness of the Company and of each
Guarantor, as the case may be.
Section 10.02. Liquidation; Dissolution; Bankruptcy. (a) Upon any
payment or distribution to creditors of the Company or any Guarantor of the
assets of the Company or such Guarantor of any kind or character in a total or
partial liquidation or dissolution of the Company or such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or any Guarantor, whether voluntary or involuntary
(including any assignment for the benefit of creditors and proceedings for
marshaling of assets and liabilities of the Company or such Guarantor) (a
"INSOLVENCY OR LIQUIDATION PROCEEDING"), the holders of all Senior Indebtedness
of the Company or any Guarantor then outstanding will be entitled to payment in
full in cash (including interest accruing subsequent to the filing of petition
of bankruptcy or insolvency at the rate specified in the document relating to
the applicable Senior Indebtedness, whether or not such interest is an allowed
claim enforceable against the Company or such Guarantor under applicable law)
before the Holders of Notes are entitled to receive any payment (other than
payments made from a trust previously established pursuant to provisions
described in Section 8.02) on or with respect to the Note Indebtedness and
until all such Senior Indebtedness receives payment in full in cash, any
distribution to which the Holders of Notes would be entitled will be made to
holders of such Senior Indebtedness.
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(b) Notwithstanding anything to the contrary in Section
10.02, Holders of Notes may continue to receive payments from the trust
established pursuant to Article 8.
Section 10.03. No Payment on Notes in Certain Circumstances. (a) Upon
the occurrence of any default in the payment of any principal of or interest on
or other amounts due on any Designated Senior Indebtedness of the Company or
any Guarantor (a "PAYMENT DEFAULT"), no payment of any kind or character shall
be made by the Company or such Guarantor (or by any other Person on its or
their behalf) with respect to the Note Indebtedness unless and until (i) such
Payment Default shall have been cured or waived in accordance with the
instruments governing such Indebtedness or shall have ceased to exist, (ii)
such Designated Senior Indebtedness has been discharged or paid in full in cash
in accordance with the instruments governing such Indebtedness or (iii) the
benefits of this sentence have been waived by the holders of such Designated
Senior Indebtedness or their representative, including, if applicable, the
Agents, immediately after which the Company or any Guarantor, as the case may
be, must resume making any and all required payments, including missed
payments, in respect of its obligations under the Notes.
(b) Upon (i) the occurrence and continuance of an event of
default (other than a Payment Default) relating to Designated Senior
Indebtedness, as such event of default is defined therein or in the instrument
or agreement under which it is outstanding, which event of default, pursuant to
the instruments governing such Designated Senior Indebtedness, entitles the
holders (or a specified portion of the holders) of such Designated Senior
Indebtedness or their designated representative to immediately accelerate
without further notice (except such notice as may be required to effect such
acceleration) the maturity of such Designated Senior Indebtedness (whether or
not such acceleration has actually occurred) (a "NON-PAYMENT DEFAULT") and (ii)
the receipt by the Trustee and the Company or any Guarantor from the trustee or
other representative of holders of such Designated Senior Indebtedness of
written notice (a "PAYMENT BLOCKAGE NOTICE") of such occurrence, no payment is
permitted to be made by the Company or any Guarantor (or by any other Person on
its or their behalf) in respect of the Note Indebtedness for a period (a
"PAYMENT BLOCKAGE PERIOD") commencing on the date of receipt by the Trustee of
such notice and ending on the earliest to occur of the following events
(subject to any blockage of payments that may then be in effect due to a
Payment Default on Designated Senior Indebtedness): (w) such Non-payment
Default has been cured or waived or has ceased to exist; (x) a
179-consecutive-day period commencing on the date such written notice is
received by the Trustee has elapsed; (y) such Payment Blockage Period has been
terminated by written notice to the Trustee from the trustee or other
representative of holders of such Designated Senior Indebtedness, whether or
not such Non-payment Default has been cured or waived or has ceased to exist;
and (z) such Designated Senior Indebtedness has been discharged or paid in full
in cash, immediately after which, in the case of clause (w), (x), (y) or (z),
the Company or any Guarantor, as the case may be, must resume making any and
all required payments, including missed payments, in respect of its obligations
under the Notes. Notwithstanding the foregoing, (A) not more than one Payment
Blockage Period may be commenced in any period of 360 consecutive days and (B)
no default or event of default with respect to the Designated Senior
Indebtedness of the Company or any Guarantor that was the subject of a Payment
Blockage Notice which existed or was continuing on the date of the giving of
any Payment Blockage Notice shall be
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or serve as the basis for the giving of a subsequent Payment Blockage Notice
whether or not within a period of 360 consecutive days unless such default or
event of default shall have been cured or waived for a period of at least 90
consecutive days after such date. Notwithstanding anything in this Indenture
to the contrary, there must be 180 consecutive days in any 360-day period in
which no Payment Blockage Period is in effect.
(c) Notwithstanding the foregoing, Holders of Notes may
receive and retain Permitted Junior Securities and payment from the money or
the proceeds held in any defeasance trust described under Article 8, and no
such receipt or retention will be contractually subordinated in right of
payment to any Senior Indebtedness or subject to the restrictions described in
this Article 10.
Section 10.04. Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
the Credit Facility Agent and each holder of the Senior Indebtedness of the
Company or any Guarantor of the acceleration.
Section 10.05. When Distributions Must Be Paid Over. In the event that
any payment or distribution of assets of the Company or any Guarantor, whether
in cash, property or securities, shall be received by the Trustee or the
Holders of Notes at a time when such payment or distribution is prohibited by
this Article 10, such payment or distribution shall be segregated from other
funds or assets and held in trust for the benefit of the holders of Senior
Indebtedness of the Company or such Guarantor, as the case may be, and shall be
paid or delivered by the Trustee or such Holders, as the case may be, to the
holders of the Senior Indebtedness of the Company or such Guarantor, as the
case may be, 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 any of such Senior Indebtedness of the Company
or such Guarantor, as the case may be, may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of the Senior Indebtedness
of the Company or such Guarantor, as the case may be, held or represented by
each, for application to the payment of all Senior Indebtedness of the Company
or such Guarantor, as the case may be, remaining unpaid, to the extent
necessary to pay or to provide for the payment in full in cash of all such
Senior Indebtedness after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
With respect to the holders of Senior Indebtedness of the Company or any
Guarantor, the Trustee undertakes to perform only such obligations on its part
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to any holders of the Senior Indebtedness of the
Company or any Guarantor shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of the
Senior Indebtedness of the Company or any Guarantor and shall not be liable to
any holders of such Senior Indebtedness if the Trustee shall pay over or
distribute to, or on behalf of, Holders or the Company or any other Person,
money or assets to which any holders of such Senior Indebtedness are entitled
pursuant to this Article 10, except if such payment is made at a time when a
Trust Officer has knowledge that the terms of this Article 10 prohibit such
payment.
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Section 10.06. Notice. Neither the Trustee nor the Paying Agent shall
at any time be charged with the knowledge of the existence of any facts that
would prohibit the making of any payment to or by the Trustee or Paying Agent
under this Article 10, unless and until the Trustee or Paying Agent shall have
received written notice thereof from the Company or such Guarantor or one or
more holders of the Senior Indebtedness of the Company or such Guarantor, as
the case may be, or a Representative of any holders of such Senior
Indebtedness; and, prior to the receipt of any such written notice, the Trustee
or Paying Agent shall be entitled to assume conclusively that no such facts
exist. The Trustee shall be entitled to rely on the delivery to it of written
notice by a Person representing itself to be a holder of the Senior
Indebtedness of the Company or such Guarantor (or a Representative thereof) to
establish that such notice has been given.
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts it knows that would cause a payment of principal of, or
premium, if any, or interest (including Special Interest, if any) on, the Notes
or any other Obligation in respect of the Notes to violate this Article 10, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Indebtedness of the Company or any Guarantor provided in this
Article 10 or the rights of holders of such Senior Indebtedness under this
Article 10.
Section 10.07. Subrogation. After all Senior Indebtedness of the
Company or any Guarantor has been paid in full in cash and until the Notes are
paid in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari-passu with the Notes) to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness to
the extent that distributions otherwise payable to the Holders have been
applied to the payment of such Senior Indebtedness. A distribution made under
this Article 1 to holders of the Senior Indebtedness of the Company or any
Guarantor that otherwise would have been made to Holders is not, as between the
Company or such Guarantor, as the case may be, and Holders, a payment by the
Company or such Guarantor, as the case may be, on its Senior Indebtedness.
Section 10.08. Relative Rights. This Article 10 defines the relative
rights of Holders and holders of the Senior Indebtedness of the Company or any
Guarantor. Nothing in this Indenture shall: (1) impair, as between the
Company or a Guarantor, as the case may be, and Holders, the Obligations of the
Company or any Guarantor, which are absolute and unconditional, to pay
principal of, and premium, if any, and interest (including Special Interest, if
any) on the Notes in accordance with their terms; (2) affect the relative
rights of Holders and the creditors of the Company or any Guarantor other than
their rights in relation to holders of the Senior Indebtedness of the Company
or any Guarantor; or (3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of the Senior Indebtedness of the Company or any Guarantor to receive
distributions and payments otherwise payable to Holders.
Nothing contained in this Article 10 or elsewhere in this Indenture or in
any Note is intended to or shall impair, as between the Company, any Guarantor
and the Holders, the Obligations of the Company and the Guarantors, which are
absolute and unconditional, to pay to the Holders the principal of, and
premium, if any, and interest (including Special Interest, if any) on the Notes
as and
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when the same shall become due and payable in accordance with their terms, or
is intended to or shall affect the relative rights of the Holders and creditors
of the Company and the Guarantors other than the holders of the Senior
Indebtedness of the Company or any Guarantor, 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 10 of the holders of such
Senior Indebtedness.
The failure to make a payment on account of principal of, or interest on
the Notes by reason of any provision of this Article 10 shall not be construed
as preventing the occurrence of an Event of Default under Section 6.01.
Section 10.09. The Company, Guarantors and Holders May Not Impair
Subordination. (a) No right of any holder of the Senior Indebtedness of the
Company or any Guarantor to enforce the subordination as provided in this
Article 10 shall at any time or in any way be prejudiced or impaired by any act
or failure to act by the Company or any Guarantor or by any noncompliance by
the Company or any Guarantor with the terms, provisions and covenants of this
Indenture or the Notes or any other agreement regardless of any knowledge
thereof with which any such holder may have or be otherwise charged.
(b) Without in any way limiting Section 10.09(a), the holders
of any Senior Indebtedness of the Company or any Guarantor may, at any time and
from time to time to the extent not otherwise prohibited by this Indenture,
without the consent of or notice to any Holders, without incurring any
liabilities to any Holder and without impairing or releasing the subordination
and other benefits provided in this Indenture or the Holders' obligations to
the holders of such Senior Indebtedness, even if any Holder's right of
reimbursement or subrogation or other right or remedy is affected, impaired or
extinguished thereby, do any one or more of the following: (i) amend, renew,
exchange, extend, modify, increase or supplement in any manner such Senior
Indebtedness or any instrument evidencing or guaranteeing or securing such
Senior Indebtedness or any agreement under which such Senior Indebtedness is
outstanding (including, but not limited to, changing the manner, place or terms
of payment or changing or extending the time of payment of, or renewing,
exchanging, amending, increasing or altering, (x) the terms of such Senior
Indebtedness, (y) any security for, or any Guarantee of, such Senior
Indebtedness, (z) any liability of any obligor on such Senior Indebtedness
(including any guarantor) or any liability Incurred in respect of such Senior
Indebtedness); (ii) sell, exchange, release, surrender, realize upon, enforce
or otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing such Senior Indebtedness or any liability of
any obligor thereon, to such holder, or any liability Incurred in respect
thereof; (iii) settle or compromise any such Senior Indebtedness or any other
liability of any obligor of such Senior Indebtedness to such holder or any
security therefor or any liability Incurred in respect thereof and apply any
sums by whomsoever paid and however realized to any liability (including,
without limitation, payment of any of the Senior Indebtedness) in any manner or
order; and (iv) fail to take or to record or otherwise perfect, for any reason
or for no reason, any lien or security interest securing such Senior
Indebtedness by whomsoever granted, exercise or delay in or refrain from
exercising any right or remedy against any obligor or any guarantor or any
other Person,
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elect any remedy and otherwise deal freely with any obligor and any security
for such Senior Indebtedness or any liability of any obligor to the holders of
such Senior Indebtedness or any liability Incurred in respect of such Senior
Indebtedness.
Section 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made, or a notice given, to holders of Senior
Indebtedness of the Company or any Guarantor, the distribution may be made and
the notice given to their Representative, if any. If any payment or
distribution of the Company's assets is required to be made to holders of any
of the Senior Indebtedness of the Company or any Guarantor pursuant to this
Article 10, the Trustee and the Holders shall be entitled to rely upon any
order or decree of any court of competent jurisdiction, or upon any certificate
of a Representative of such Senior Indebtedness or a Custodian, in ascertaining
the holders of such Senior Indebtedness entitled to participate in any such
payment or distribution, the amount to be paid or distributed to holders of
such Senior Indebtedness and all other facts pertinent to such payment or
distribution or to this Article 10.
Section 10.11. Rights of Trustee and Paying Agent. The Trustee or
Paying Agent may continue to make payments on the Notes unless at least two
Business Days prior to any payment date it has received written notice of facts
that would cause a payment of principal of, or premium, if any, or interest
(including Special Interest, if any) on the Notes to violate this Article 10.
Only the Company, a Guarantor, a Representative of Senior Indebtedness, or a
holder of Senior Indebtedness that has no Representative may give such notice.
To the extent permitted by the TIA, the Trustee in its individual or any
other capacity may hold Indebtedness of the Company or any Guarantor (including
Senior Indebtedness) with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
Section 10.12. Authorization to Effect Subordination. Each Holder of a
Note by its acceptance thereof authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 10, and appoints the Trustee as such
Holder's attorney-in-fact for any and all such purposes (including, without
limitation, the timely filing of a claim for the unpaid balance of the Note
that such Holder holds in the form required in any Insolvency or Liquidation
Proceeding and causing such claim to be approved).
If a proper claim or proof of debt in the form required in such proceeding
is not filed by or on behalf of all Holders prior to 30 days before the
expiration of the time to file such claims or proofs, then the holders or a
Representative of any Senior Indebtedness of the Company or any Guarantor are
hereby authorized, and shall have the right (without any duty), to file an
appropriate claim for and on behalf of the Holders.
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ARTICLE 11
Guarantee
Section 11.01. Guarantee. Each Guarantor hereby unconditionally,
jointly and severally, guarantees (each a "NOTE GUARANTEE") to each Holder of a
Note authenticated and delivered by the Trustee that: (i) the principal of,
premium, interest (including Special Interest, if any) on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest
(including Special Interest, if any), and premium, if any, on the Notes, if
any, to the extent lawful, and all other Obligations of the Company to the
Holders or the Trustee under this Indenture and the Notes will be promptly paid
in full, all in accordance with the terms of this Indenture and the Notes; and
(ii) in case of any extension of time of payment or renewal of any Notes or
any of such other Obligations, that the Notes will be promptly paid in full
when due in accordance with the terms of such extension or renewal, whether at
stated maturity, by acceleration or otherwise.
Each Guarantor hereby further agrees that its Obligations under this
Indenture and the Notes shall, subject to Section 11.05, be unconditional,
regardless of the validity, legality or enforceability of this Indenture or the
Notes, the absence of any action to enforce this Indenture or the Notes, any
waiver or consent by any Holder with respect to any provisions this Indenture
or the Notes, any modification or amendment of, or supplement of, this
Indenture or the Notes, the recovery of any judgment against the Company or any
action to enforce any such judgment, or any other circumstance that might
otherwise constitute a legal or equitable discharge or defense of such
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that its Note
Guarantee will not be discharged except by complete performance by the Company
of such Obligations. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, such Guarantor or a Custodian of the
Company or such Guarantor any amount paid by the Company or such Guarantor to
the Trustee or such Holder, its Note Guarantee shall, to the extent previously
discharged as a result of any such payment, be immediately reinstated and be in
full force and effect. Each Guarantor hereby acknowledges and agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Company's Obligations under this Indenture and
the Notes may be accelerated as provided in Article 6 for purposes of its Note
Guarantee notwithstanding any stay, injunction or other prohibition preventing
such acceleration, and (y) in the event of any declaration of acceleration of
the Company's Obligations under this Indenture and the Notes as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Guarantor for the purpose of its Note Guarantee.
(b) Upon making any payment with respect to the Company
hereunder, a Guarantor shall be subrogated to the rights of the payee against
the Company with respect to such payment; provided that no Guarantor shall
enforce any payment by way of subrogation or contribution until all
Obligations of the Company under this Indenture have been paid in full.
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Section 11.02. Trustee to Include Paying Agent. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company,
the term "Trustee" as used in this Article 11 shall (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 11 in place of the Trustee.
Section 11.03. Subordination of Guarantee. Each Guarantor's Obligations
under its Note Guarantee shall be junior and subordinated in right of payment
to any Senior Indebtedness of such Guarantor in the same manner and to the same
extent as the Notes are subordinated to Senior Indebtedness of the Company
pursuant to Article 10. Any Payment Blockage Notice given to the Trustee in
respect of the Company's Designated Senior Indebtedness pursuant to Section
10.03 shall be deemed to be a Payment Blockage Notice given to the Trustee in
respect of such Guarantor's Designated Senior Indebtedness and any Payment
Blockage Notice given to the Trustee in respect of such Guarantor's Designated
Senior Indebtedness pursuant to this Section 11.03 shall be deemed to be a
Payment Blockage Notice given to the Trustee in respect of the Company's
Designated Senior Indebtedness.
In the event of a conflict between the provisions of Section 10.03 and the
provisions of Section 10.03 as read to apply to such Guarantor's Note Guarantee
pursuant to this Section 11.03, the provisions of Section 10.03 shall apply and
govern this Indenture.
Section 11.04. Senior Subordinated Debt of Guarantor. Each Guarantor
hereby agrees that it will not incur, guarantee or otherwise become liable for
any Indebtedness that is subordinated or junior in right of payment to any
Senior Indebtedness of such Guarantor unless such Indebtedness is pari passu
with or is expressly subordinated in right of payment to the Notes.
Section 11.05. Limits of Guarantee. (a) Notwithstanding anything to the
contrary in this Article 11, the aggregate amount of the Obligations guaranteed
under this Indenture by each Subsidiary Guarantor shall be limited in amount to
the lesser of (a) the maximum amount that would not render such Subsidiary
Guarantor's obligations subject to avoidance under applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of any applicable state law and (b) the maximum amount that would not
render the Note Guarantee an improper corporate distribution by such Subsidiary
Guarantor under applicable state law.
Section 11.06. Subsidiary Guarantors May Consolidate, etc., on Certain
Terms. No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
Person, whether or not affiliated with such Subsidiary Guarantor, unless:
(a) subject to the provisions of Section 11.07 hereof, the
Person formed by or surviving any such consolidation or merger (if other than
such Subsidiary Guarantor) assumes all the obligations of such Subsidiary
Guarantor) assumes all the obligations of such Subsidiary Guarantor
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pursuant to a supplemental indenture in form reasonably satisfactory to the
Trustee in respect of the Notes, this Indenture and such Subsidiary Guarantor's
Note Guarantee;
(b) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(c) immediately after giving effect to such transaction, the
Coverage Ratio Incurrence Condition would be met.
Notwithstanding the foregoing, none of the Subsidiary Guarantors shall be
permitted to consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the surviving Person), another corporation, Person or
entity pursuant to the preceding sentence if such consolidation or merger would
not be permitted by Section 5.01 hereof.
In case of any such consolidation or merger and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, such successor corporation shall
succeed to and be substituted for such Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor.
Except as set forth in Articles 4 and 5 hereof, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of
any Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor, or shall prevent any sale or conveyance of the property of any
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or any Subsidiary Guarantor.
Section 11.07. Releases of Guarantees. In the event of a sale or other
disposition of all or substantially all of the assets of any Subsidiary
Guarantor or a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor, to any corporation or other Person (including an
Unrestricted Subsidiary) by way of merger, consolidation, or otherwise, in a
transaction that does not violate any of the covenants of this Indenture, then
such Subsidiary Guarantor (in the event of a sale or other disposition, by way
of such merger, consolidation or otherwise, of all the Capital Stock of such
Subsidiary Guarantor) shall be released and relieved of any obligations under
its Note Guarantee and such acquiring corporation or other Person (in the
event of a sale or other disposition of all or substantially all of the assets
of such Subsidiary Guarantor), if other than a Subsidiary Guarantor, shall have
no obligation to assume or otherwise become liable under such Note Guarantee;
provided, that the Net Available Proceeds of such sale or other disposition are
applied in accordance with Section 4.16 hereof. Upon delivery by the Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.16, the Trustee shall execute any documents reasonably required in
order to evidence the release of any Subsidiary Guarantor from its obligations
under its Note Guarantee.
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Any Subsidiary Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of such Subsidiary Guarantor under
this Indenture as provided in Article 11.
Any Subsidiary Guarantor that is designated an Unrestricted Subsidiary in
accordance with the terms of this Indenture shall be released from and relieved
of its obligations under its Note Guarantee and any Unrestricted Subsidiary
that becomes a Restricted Subsidiary and any newly created or newly acquired
Subsidiary that is or becomes a Subsidiary shall be required to execute a
supplemental indenture in accordance with the terms of this Indenture.
ARTICLE 12
Miscellaneous
Section 12.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with the duties imposed by operation
of Section 318(c) of the TIA, the imposed duties shall control.
Section 12.02. Notices. Any notice or communication by the Company, the
Guarantors or the Trustee to the others is duly given if in writing in the
English language and delivered in person, mailed by registered or certified
mail, postage prepaid, return receipt requested or delivered by telecopier or
overnight air courier guaranteeing next day delivery to the following address:
If to the Company or the Guarantors:
Pool Energy Services Co.
10375 Richmond Avenue
Houston, Texas 77042
Telecopier: (713) 954-3037
Attention: Senior Vice President, Finance
Copy to: Treasurer
Telecopier: (713) 954-3244
If to the Trustee:
Marine Midland Bank
140 Broadway-12th Floor
New York, New York 10005-1180
Telecopier: (212) 658-6425
Attention: Corporate Trust Administration
The Company, the Guarantors or the Trustee by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: (i) at the time delivered by hand, if
personally delivered; (ii) the date receipt is
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acknowledged, if mailed by registered or certified mail; (iii) when answered
back, if telecopied and (iv) the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to his or her address shown on the register maintained by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it. If the
Company or any Guarantor mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to section 312(b) of the TIA with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of
section 312(c) of the TIA.
Section 12.04. Certificate and Opinion As to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee: (a) an
Officers' Certificate (which shall include the statements set forth in Section
12.05) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and (b) an Opinion of Counsel (which shall
include the statements set forth in Section 12.05) stating that, in the opinion
of such counsel, all such conditions precedent provided for in this Indenture
relating to the proposed action have been complied with.
Section 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
section 314(a)(4) of the TIA) shall include: (1) a statement that the Person
making such certificate or opinion has read such covenant or condition; (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 such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with, and (4) a statement as to whether, in such Person's opinion,
such condition or covenant has been complied with.
Section 12.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
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Section 12.07. Legal Holidays. If a payment date is a not a Business
Day at a place of payment, payment may be made at that place on the next
succeeding day that is a Business Day, and no interest shall accrue for the
intervening period.
Section 12.08. No Recourse Against Others. No director, officer,
employee, incorporator or direct or indirect stockholder or Affiliate of the
Company or any Guarantor (other than the Company and any Guarantor), as such,
shall have any liability for any obligation of the Company or any Guarantor
under this Indenture, the Notes Guarantees or the Notes or for any claim based
on, in respect of, or by reason of, any such obligation or the creation of any
such obligation. Each Holder by accepting a Note waives and releases such
Persons from all such liability and such waiver and release is part of the
consideration for the issuance of the Notes.
Section 12.09. Counterparts. This Indenture may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Section 12.10. Table of Contents, Headings, Etc. The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part of this
Indenture, and shall in no way modify or restrict any of the terms or
provisions of this Indenture.
Section 12.11. Governing Law. The laws of the State of New York shall
govern this Indenture, the Note Guarantees and the Notes.
Section 12.12. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries, and no other indenture,
loan or debt agreement may be used to interpret this Indenture.
Section 12.13. Successors. All agreements of the Company and the
Guarantors in this Indenture and the Notes shall bind any successors of the
Company and such Guarantors, respectively. All agreements of the Trustee in
this Indenture shall bind its successor.
Section 12.14. Severability. If any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 12.15. Third Party Beneficiaries. Holders of Senior
Indebtedness are third party beneficiaries of this Indenture, and any of them
(or their Representative) shall have the right to enforce the provisions of
this Indenture that benefit such holders.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date and year first written above.
POOL ENERGY SERVICES CO.
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
MARINE MIDLAND BANK
as Trustee
By:
----------------------------------------
Name:
Title:
GUARANTORS:
ASSOCIATED PETROLEUM SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
INTERNATIONAL AIR DRILLING COMPANY
KUUKPIK - POOL ARCTIC ALASKA
By: Pool Alaska, Inc., d/b/a Pool Arctic Alaska
PCNV, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL-AUSTRALIA, INC.
POOL CALIFORNIA ENERGY SERVICES, INC.
POOL COMPANY
POOL COMPANY HOUSTON LTD.
By: Pool Company, General Partner
POOL COMPANY TEXAS, LTD.
By: Pool Company, General Partner
POOL INTERNATIONAL, INC.
POOL PRODUCTION SERVICES, INC.
PTX, INC.
By:
--------------------------------------------------
Name:
Title:
<PAGE> 82
EXHIBIT A
(FORM OF FACE OF NOTE)
[Securities Act Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY (1) BY ITS
ACQUISITION HEREOF REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (X) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (i) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A
U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
IF THE COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
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<PAGE> 83
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (X)
ABOVE.
[Additional Legend if Note is a Global Note]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 2.06, 2.07 AND 2.08 OF THE INDENTURE.
A-2
<PAGE> 84
POOL ENERGY SERVICES CO.
8 5/8% [SERIES A] [SERIES B] SENIOR SUBORDINATED NOTE DUE 2008
No. ___________ $__________
CUSIP NO.
Pool Energy Services Co., a corporation duly organized and existing under
the laws of the State of Texas (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., or registered assigns,
the principal sum of One Hundred and Fifty Million Dollars on April 1, 2008.
Interest Payment Dates: April 1 and October 1, commencing
October 1, 1998
Record Dates: March 15 and September 15
Pursuant to the Indenture, the payment of principal of and premium, if
any, and interest and, if applicable, Special Interest on this Note is
unconditionally guaranteed by the Guarantors referred to on the reverse hereof.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof and as more fully specified in the Indenture, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
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<PAGE> 85
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
POOL ENERGY SERVICES CO.
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
GUARANTORS:
ASSOCIATED PETROLEUM SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
INTERNATIONAL AIR DRILLING COMPANY
KUUKPIK - POOL ARCTIC ALASKA
By: Pool Alaska, Inc., d/b/a Pool Artic Alaska
PCNV, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL-AUSTRALIA, INC.
POOL CALIFORNIA ENERGY SERVICES, INC.
POOL COMPANY
POOL COMPANY HOUSTON LTD.
By: Pool Company, General Partner
POOL COMPANY TEXAS, LTD.
By: Pool Company, General Partner
POOL INTERNATIONAL, INC.
POOL PRODUCTION SERVICES, INC.
PTX, INC.
By:
---------------------------------------------
Name:
Title:
Dated: _____________________
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<PAGE> 86
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:
-------------------------------------------------
Authorized Signatory
FORM OF ALTERNATIVE CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By:
---------------------------------------------------
as Authenticating Agent
By:
---------------------------------------------------
Authorized Signatory
A-5
<PAGE> 87
FORM OF REVERSE OF NOTE
1. INTEREST. Pool Energy Services Co. (the "Company")
promises to pay interest on the principal amount of this Note at the rate and
in the manner specified below. Cash interest will accrue at 8_% per annum
until maturity and will be payable semi-annually in arrears in cash on April 1
and October 1 of each year commencing October 1, 1998, or if any such day is
not a Business Day on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on this Note will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from the
original date of issue. To the extent lawful, the Company shall pay interest
on overdue principal, premium, if any, interest and Special Interest, if any,
from time to time on demand at the rate of 8_% per annum, compounded
semi-annually. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
[In the event that a Registration Default occurs under the Registration
Rights Agreement, then Special Interest (as defined therein) (in addition to
the interest otherwise due hereon) will accrue on the principal amount of the
Notes and the New Notes (in addition to the stated interest on the Notes and
the New Notes) from and including the date on which any such Registration
Default shall occur to but excluding the date on which any such Registration
defaults have been cured. Special Interest will accrue at a rate of 0.25% per
annum during the 90-day period immediately following the occurrence of any
Registration Default and shall increase by 0.25% per annum at the end of each
subsequent 90-day period, but in no event shall such rate exceed 1.5% per
annum. All accrued Special Interest, if any, will be paid by the Company or
the Guarantors, in arrears, on each Interest Payment Date, commencing October
1, 1998. Upon the cure of all Registration Defaults, the accrual of Special
Interest will cease.](1)
[There shall also be payable in respect of this Note all Special Interest
that may have accrued on the Note for which this Note was exchanged (as defined
in such Note) pursuant to the Exchange Offer or otherwise pursuant to a
Registration of such Note, such Special Interest to be payable in accordance
with the terms of such Note.](2)
2. METHOD OF PAYMENT. The Company will pay interest on this
Note to the Person who is the registered Holder of this Note at the close of
business on the record date for the next Interest Payment Date, which record
date shall be March 15 and September 15 of each year (each a "Record Date")
even if such Note is cancelled after such Record Date and on or before such
Interest Payment Date. Holders must surrender Notes to a Paying Agent, as
defined below, to collect principal payments on such Notes. Principal of,
premium, if any, interest and Special Interest, if any, on, the Notes will be
payable at the office or agency of the Company maintained for such purpose
within the City and State of New York or, at the option of the Company by wire
transfer of immediately available funds or, in the case of certificated
securities only, by mailing a check to the registered
- --------------------
(1) To be included in Notes but not New Notes.
(2) To be included in New Notes.
A-6
<PAGE> 88
address of the Holder. Until otherwise designated by the Company, the
Company's office or agency will be the office of the Trustee maintained for
such purpose.
3. PAYING AGENT AND REGISTRAR. (a) Marine Midland Bank (the
"Trustee") will initially act as the Paying Agent and Registrar. The Company
may appoint additional paying agents or co-registrars, and change the Paying
Agent, any additional paying agent, the Registrar or any co-registrar without
prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
(b) Pursuant to the Indenture, the Company has
appointed the Trustee as transfer and exchange agent for the purpose of
any transfer or exchange of the Notes.
(c) Holders shall present Notes to the Trustee, as
transfer and exchange agent.
4. INDENTURE. The Company has issued the Notes under an
Indenture, dated as of March 31, 1998 (the "Indenture"), among the Company, as
issuer of the Notes, the Guarantors party thereto and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of the original issuance of the
Notes (the "Trust Indenture Act"). The Notes are subject to, and qualified by,
all such terms, certain of which are summarized herein, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of such
terms (all capitalized terms not defined herein shall have the meanings
assigned to them in the Indenture). The Notes are unsecured general
obligations of the Company limited to $150,000,000 in aggregate principal
amount.
5. REDEMPTION PROVISIONS. (a) The Notes are not subject to
any mandatory sinking fund redemption prior to maturity.
(b) Except as set forth below in this Section 5, the
Notes may not be redeemed at the option of the Company prior to April 1,
2003. On April 1, 2003 and thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of the principal amount of the Notes) set forth
below, together with accrued and unpaid interest (including Special
Interest, if any) thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on April 1 of the years
indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
--------------------------------------------- ----------
<S> <C>
2003 104.313%
2004 102.875%
2005 101.438%
2006 and thereafter 100.000%
</TABLE>
(c) In addition to the Company's right to redeem the Notes as
set forth in Section 5(b), from time to time prior to April 1, 2001, the
Company may redeem up to 35% of the
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<PAGE> 89
aggregate principal amount of the Notes outstanding on the Issue Date at
a redemption price equal to 108.625% of the principal amount thereof, in
each case plus accrued and unpaid interest (including Special Interest, if
any) thereon, if any, to the redemption date, with the net cash proceeds
of one or more Equity Offerings; provided that at least $97.5 million of
the aggregate principal amount of the Notes remains outstanding
immediately after the occurrence of such redemption; and provided, further
that each such redemption occurs within 60 days of the date of the closing
of any such Equity Offering.
(d) If less than all of the Notes are to be redeemed
at any time, selection of the Notes to be redeemed will be made by the
Trustee from among the outstanding Notes on a pro rata basis, by lot or by
any other method permitted in the Indenture. Notice of redemption will be
mailed at least 30 days but not more than 60 days before any redemption
date to each holder whose Notes are to be redeemed at the registered
address of such holder. On and after the redemption date, interest will
cease to accrue on the Notes or portions thereof called for redemption.
6. MANDATORY OFFERS. (a) Within 30 days after any Change of
Control Trigger Date or Asset Sale Trigger Date, the Company shall mail to the
Trustee (who shall mail to each Holder) a notice stating certain details as set
forth in Section 3.08 of the Indenture in connection with the Offer that the
Company is obligated under the Indenture to make to Holders in such
circumstances.
(b) Holders may tender all or, subject to Section 8
below, any portion of their Notes by completing the attachment hereto
entitled "OPTION OF HOLDER TO ELECT PURCHASE" in an Offer.
(c) Upon a Change of Control, any Holder of Notes will
have the right to cause the Company to purchase the Notes of such Holder,
in whole or in part in integral multiples of aggregate principal amount of
$1,000, at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest (including Special Interest, if
any), if any, to the date of repurchase, as provided in, and subject to
the terms of the Indenture.
(d) Upon there being at least $10,000,000 in Excess
Proceeds relating to one or more Asset Sales, any Holder of Notes will
have the right to cause the Company to purchase the Notes, equal to the
amount of such Excess Proceeds, of such Holder, in whole or in part in
integral multiples of aggregate principal amount of $1,000, at a purchase
price in cash equal to 100% of the principal amount thereof plus accrued
and unpaid interest, if any, and Special Interest, if any, to the date
such Net Proceeds Offer is consummated, as provided in, and subject to the
terms of the Indenture.
(e) Promptly after consummation of an Offer, (i) the
Paying Agent shall mail or wire transfer, if permitted under the
Indenture, to each Holder of Notes or portions thereof accepted for
payment an amount equal to the Change of Control Purchase Price or Offered
Price, as the case may be, (ii) with respect to any tendered Note not
accepted for payment in whole or in part, the Trustee shall return such
Note to the Holder thereof, and (iii) with respect to any Note accepted
for payment in part, the Company shall issue and the Trustee
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<PAGE> 90
shall authenticate and mail to each such Holder a new Note equal in
principal amount to the unpurchased portion of the tendered Note.
(f) The Company will (i) announce the results of the
Offer to Holders on or as soon as practicable after the Purchase Date, and
(ii) comply with Rule 14e-1 under the Securities Exchange Act of 1934, as
amended, and any other securities laws and regulations to the extent such
laws and regulations are applicable to any Offer.
7. NOTES TO BE REDEEMED OR PURCHASED. The Notes may be
redeemed or purchased in part, but only in multiples of $1,000 principal amount
unless all Notes held by a Holder are to be redeemed or purchased. On or after
any date on which Notes are redeemed or purchased, interest ceases to accrete
or accrue, as the case may be, on the Notes or portions thereof called for
redemption or accepted for purchase on such date.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form, without coupons, in denominations of $1,000 principal amount
and integral multiples thereof. The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture. Holders seeking to
transfer or exchange their Notes may be required, 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 Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption or tendered pursuant to an Offer. Neither the Trustee or the
Registrar shall be required to issue, register the transfer of or exchange any
Note to register the transfer of or exchange any Note selected for redemption,
to register the transfer of or exchange any Note for a period of 15 days before
the mailing of a notice of redemption ending on the date of such mailing, to
register the transfer or exchange of a Note between a record date and the next
succeeding interest payment date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note
shall be treated as the owner of the Note for all purposes.
10. AMENDMENTS AND WAIVERS. (a) Subject to certain
exceptions, the Indenture and the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes), and any existing Default
or Event of Default or compliance with any provision of the Indenture or the
Notes may be waived with the consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes);
provided that: (i) no such modification or amendment may, without the consent
of the Holders of at least 75% in aggregate principal amount of such series of
Notes then outstanding, amend or modify the obligations of the Company under
Section 4.15 of the Indenture (or the definitions related thereto) that could
adversely affect the rights of any holder of the Notes; and (ii) without the
consent of each holder affected, the Company and the Trustee may not: (w)
extend the maturity of any Note; (x) affect the terms of any scheduled payment
of interest on or principal of the Notes (including without limitation any
redemption provisions); (y) take any action that would subordinate the Notes or
the Note Guarantees to any other Indebtedness of the Company or any of
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<PAGE> 91
Guarantors, respectively (except as provided in Article 10), or otherwise
affect the ranking of the Notes or the Note Guarantees; or (z) reduce the
percentage of Holders necessary to consent to an amendment, supplement or
waiver to this Indenture.
(b) Notwithstanding section 10(a) above, the Company,
the Guarantors and the Trustee may amend or supplement the Indenture or
the Notes, without the consent of any Holder, to: cure any ambiguity,
defect or inconsistency; provide for uncertificated Notes in addition to
or in place of Certificated Notes; provide for the assumption of the
obligations to the Holders of the Company or a Guarantor, as the case may
be, in the event of a merger or consolidation; make any change that would
provide any additional rights or benefits to Holders or does not adversely
affect the legal rights under the Indenture of any Holder; comply with
Section 4.17 or Article 11 of the Indenture; secure the Notes pursuant to
the requirements of Section 4.11 of the Indenture; comply with the
requirements of the SEC in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act.
(c) Certain provisions of the Indenture cannot be
amended, supplemented or waived without the consent of each Holder of
Notes affected.
11. DEFAULTS AND REMEDIES. Events of Default include: (i)
failure by the Company to pay interest on any of the Notes when it becomes due
and payable and the continuance of any such failure for 30 days; (ii) failure
by the Company to pay the principal or premium, if any, on any of the Notes
when it becomes due and payable, whether at stated maturity, upon redemption,
upon acceleration or otherwise; (iii) failure by the Company to comply with any
of its agreements or covenants described under Article 5 of the Indenture, or
in respect of its obligations to make a Change of Control Offer or a Net
Proceeds Offer described in Section 4.15 and 4.16 of the Indenture,
respectively; (iv) failure by the Company to comply with any other covenant in
the Indenture and continuance of such failure for 60 days after notice of such
failure has been given to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% of the aggregate principal amount of the
Notes then outstanding; (v) failure by either the Company or any of its
Restricted Subsidiaries to make any payment when due after the expiration of
any applicable grace period, in respect of any Indebtedness of the Company or
any of such Restricted Subsidiaries, or the acceleration of the maturity of
such Indebtedness by the holders thereof because of a default, with an
aggregate outstanding principal amount for all such Indebtedness under this
clause (v) of $10.0 million or more; (vi) one or more final, non-appealable
judgments or orders that exceed $10.0 million in the aggregate for the payment
of money have been entered by a court or courts of competent jurisdiction
against the Company or any Subsidiary of the Company and such judgment or
judgments have not been satisfied, stayed, annulled or rescinded within 60 days
of being entered; (vii) certain events of bankruptcy, insolvency or
reorganization involving the Parent, the Company or any Significant Subsidiary;
and (viii) except as permitted by the Indenture, any Note Guarantee ceases to
be in full force and effect or any Guarantor repudiates its obligations under
any Note Guarantee.
If an Event of Default (other than an Event of Default specified in clause
(vii) above involving the Company), occurs and is continuing under the
Indenture, the Trustee, by written notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Notes then
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<PAGE> 92
outstanding by written notice to the Company and the Trustee may declare all
amounts owing under the Notes to be due and payable immediately. Upon such
declaration of acceleration, the aggregate principal of, premium, if any, and
interest on the outstanding Notes shall immediately become due and payable. If
an Event of Default results from bankruptcy, insolvency or reorganization
involving the Company, all outstanding Notes shall become due and payable
without any further action or notice. In certain cases, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
an existing Default or Event of Default and its consequences, except a default
in the payment of principal of, premium, if any, and interest on the Notes.
The Holders may not enforce the provisions of the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power; provided however, that such
direction does not conflict with the terms of the Indenture. The Trustee may
withhold from the Holders notice of any continuing Default or Event of Default
(except any Default or Event of Default in payment of principal of, premium, if
any, or interest on the Notes) if the Trustee determines that withholding such
notice is in the holders' interest.
12. GUARANTEE. Each Guarantor unconditionally, jointly and
severally, guarantees (each a "NOTE GUARANTEE") to each Holder of a Note
authenticated and delivered by the Trustee that: (i) the principal of, premium,
interest (including Special Interest, if any) on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest and
(including, Special Interest, if any), and premium, if any, on the Notes, if
any, to the extent lawful, and all other Obligations of the Company to the
Holders or the Trustee under this Indenture and the Notes will be promptly paid
in full, all in accordance with the terms of this Indenture and the Notes; and;
(ii) in case of any extension of time of payment or renewal of any Notes or any
of such other Obligations, that the Notes will be promptly paid in full when
due in accordance with the terms of such extension or renewal, whether at
stated maturity, by acceleration or otherwise; provided that notwithstanding
anything to the contrary herein or in Article 11 of the Indenture, the
aggregate amount of the Obligations guaranteed under the Indenture by any
Subsidiary Guarantor shall be limited in amount to the lesser of (x) the
maximum amount that would not render such Subsidiary Guarantor's obligations
subject to avoidance under applicable fraudulent conveyance provisions of the
United States Bankruptcy Code or any comparable provision of any applicable
state law and (y) the maximum amount that would not render the Note Guarantee
of such Subsidiary Guarantor an improper corporate distribution by such
Subsidiary Guarantor under applicable state law. The Note Guarantees are
subject to release as and to the extent provided in the Indenture.
13. ADDITIONAL NOTE GUARANTEES. If the Company or any of its
Subsidiaries shall acquire or create another Subsidiary (other than (x) any
Foreign Subsidiary or (y) a Subsidiary that has been designated as an
Unrestricted Subsidiary), then within 10 days after acquiring or creating such
Subsidiary, the Company will cause each such Subsidiary to execute and deliver
to the Trustee a supplement to of this Indenture as a Subsidiary Guarantor.
14. SUBORDINATION. (a) All Obligations owed under and in
respect of the Notes are subordinated in right of payment, to the extent and in
the manner provided in Article 10 of the
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<PAGE> 93
Indenture, to the prior payment in full in cash of all Obligations owed under
and in respect of all Senior Indebtedness of the Company, and the subordination
of the Notes is for the benefit of all Holders of all Senior Indebtedness,
whether outstanding on the Closing Date or incurred thereafter. The Company
agrees, and the Holder of this Note by accepting the Note agrees, to the
subordination.
(b) Each Guarantor's Obligations under its Notes
Guarantee shall be junior and subordinated in right of payment to any
Senior Indebtedness of the Guarantor in the manner set forth in more
detail in Section 11.03 of the Indenture.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any of its Affiliates with the same
rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or direct or indirect stockholder of the Company or any
Guarantor (other than the Company and any Subsidiary Guarantor), as such, shall
have any liability for any obligation of the Company or such Subsidiary
Guarantor under the Indenture or the Notes or for any claim based on, in
respect of, or by reason of, any such obligation or the creation of any such
obligation. Each Holder by accepting a Note waives and releases such Persons
from all such liability, and such waiver and release is part of the
consideration for the issuance of the Notes.
17. MERGERS AND CERTAIN OTHER TRANSACTIONS. The Company will
not, in a single transaction or a series of related transactions, (i)
consolidate or merge with or into (other than a merger with a Wholly-Owned
Restricted Subsidiary solely for the purpose of changing the Company's
jurisdiction of incorporation to another State of the United States), or sell,
lease, transfer, convey or otherwise dispose of or assign all or substantially
all of the assets of the Company or the Company and its Subsidiaries (taken as
a whole), or assign any of its obligations under the Notes and the Indenture,
to any Person or (ii) adopt a Plan of Liquidation unless, in either case: (a)
the Person formed by or surviving such consolidation or merger (if other than
the Company) or to which such sale, lease, conveyance or other disposition or
assignment shall be made (or, in the case of a Plan of Liquidation, any Person
to which assets are transferred) (collectively, the "SUCCESSOR"), is a
corporation organized and existing under the laws of any State of the United
States of America or the District of Columbia, and the Successor assumes by
supplemental indenture in a form satisfactory to the Trustee all of the
obligations of the Company under the Notes and the Indenture; (b) immediately
prior to and immediately after giving effect to such transaction and the
assumption of the obligations as set forth in clause (a) above and the
incurrence of any Indebtedness to be incurred in connection therewith, no
Default or Event of Default shall have occurred and be continuing; and (c)
immediately after and giving effect to such transaction and the assumption of
the obligations set forth in clause (a) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net
proceeds therefrom on a pro forma basis, (1) the Consolidated Net Worth of the
Company or the Successor, as the case may be, would be at least equal to the
Consolidated Net Worth of the Company immediately prior to such transaction and
(2) the Company or the Successor, as the case may be, could meet the Coverage
Ratio Incurrence Condition; and (d) each Subsidiary Guarantor, unless it is the
other party to the transactions described above, shall have confirmed, by a
supplemental indenture, that its Note Guarantee shall
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<PAGE> 94
apply to the obligations of the Company or the Successor under the Notes and
the Indenture; and (e) the Company will have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with the provisions of Section 5.01 of the Indenture. For purposes of
this paragraph, any Indebtedness of the Successor which was not Indebtedness of
the Company immediately prior to the transaction shall be deemed to have been
incurred in connection with such transaction.
18. GOVERNING LAW. This Note shall be governed by and
construed in accordance with the internal laws of the State of New York,
without regard to the conflict of laws provisions thereof.
19. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent
20. CUSIP/CINS NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Note Identification Procedures, the
Company has caused CUSIP and CINS numbers, as applicable, to be printed on the
Notes and has directed the Trustee to use CUSIP and CINS numbers, as
applicable, in notices of redemption, purchases or exchanges as a convenience
to Holders. No representation is made as to the accuracy of such numbers
either as printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers printed on the
Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to: Pool Energy Services
Co., 10375 Richmond Avenue, Houston, Texas 77042, Attention: Corporate
Secretary.
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<PAGE> 95
SCHEDULE OF EXCHANGES OF CERTIFICATED NOTES(3)
The following exchanges of a part of this Global Note for Certificated Notes
have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Note authorized officer of
Date of Principal Amount Principal Amount of following such Trustee or Notes
Exchange of this Global Note this Global Note decrease (or increase) Custodian
- ------------- ------------------------- ------------------------- --------------------------- -----------------------
<S> <C> <C> <C> <C>
</TABLE>
- --------------------
(3) This schedule should only be added if the Note is issued in global form.
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<PAGE> 96
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s)
and transfer(s) unto
Insert Taxpayer Identification No.:
----------------------------------
Please print or typewrite name and address including zip code of assignee:
- ------------------------------------------------------------
- ------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
____________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES,
RESTRICTED GLOBAL NOTES AND OFFSHORE CERTIFICATED NOTES:]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of an effective Registration or (ii) two
years after the later of the original issuance of this Note or the last date on
which this Note was held by the Company or an Affiliate of the Company, the
undersigned confirms, without utilizing any general solicitation or general
advertising, that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the
exemption from registration under the Securities Act of
1933, as amended, provided by Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance
with (a) above and documents are being furnished which
comply with the conditions of transfer set forth in this
Note and the Indenture.
If neither of the foregoing boxes is checked, the Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer or registration set
forth herein and in Section 2.08 of the Indenture shall have been satisfied.
Date: Signature:
---------------- ----------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within-mentioned instrument in every
particular, without alteration or any change whatsoever.
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<PAGE> 97
TO BE COMPLETED BY PURCHASER IF (a), ABOVE, IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in reliance
on Rule 144A and acknowledges that it has received such information regarding
the Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: Signature:
------------ ---------------------------
NOTICE: To be executed by an executive
officer of the transferee
Signature Guarantee:
-------------------------------
(Signature must be guaranteed by a financial institution that is a member
of the Securities Transfer Agent Medallion Program ("STAMP"), in accordance
with the Securities Exchange Act of 1934, as amended.)
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<PAGE> 98
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Note purchased by the Company pursuant to
Section 4.15 of the Indenture, check the box: [ ]
If you elect to have this Note purchased by the Company pursuant to
Section 4.16 of the Indenture, check the box: [ ]
If you elect to have only part of the principal amount of this Note
purchased by the Company pursuant to Section 4.15 or 4.16 of the Indenture,
state the portion of such amount (multiples of $1,000 principal amount only):
$_________________________.
Dated: Your signature:
- ------------------- ---------------------------------
(Sign exactly as name appears on
the other side of this Note)
Signature Guarantee:
----------------------------------------------
(Signature must be guaranteed by a financial institution that is a member
of the Securities Transfer Agent Medallion Program ("STAMP"), in accordance
with the Securities Exchange Act of 1934, as amended.)
A-17
<PAGE> 99
EXHIBIT B
Form of Certificate to be Delivered
in Connection with Transfers
Pursuant to Regulation S
_________, ____
- ----------------------
- ----------------------
- ----------------------
Attention: Corporate Trust Administration
Re: Pool Energy Services Co. (the "Company")
8 5/8% Senior Subordinated Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of $150,000,000 aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to
and in accordance with Regulation S under the Securities Act of 1933, as
amended, and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------------------
Authorized Signatory
<PAGE> 100
EXHIBIT C
==============================================================================
POOL ENERGY SERVICES CO.
AND
THE GUARANTORS NAMED HEREIN
SERIES A AND SERIES B
8 5/8% SENIOR SUBORDINATED NOTES DUE 2008
--------------------
FORM OF SUPPLEMENTAL INDENTURE
DATED AS OF __________, ____
--------------------
--------------------
MARINE MIDLAND BANK,
TRUSTEE
--------------------
=============================================================================
C-1
<PAGE> 101
This SUPPLEMENTAL INDENTURE, dated as of __________ ___, ____, is among
Pool Energy Services Co., a Texas corporation (the "Company"), each of the
parties identified under the caption "Guarantors" on the signature page hereto
(the "Guarantors") and Marine Midland Bank, as Trustee.
RECITALS
WHEREAS, the Company, the initial Guarantors and the Trustee entered into
an Indenture, dated as of March 31, 1998 (the "Indenture"), pursuant to which
the Company has originally issued $150,000,000 in principal amount of 8 5/8%
Senior Subordinated Notes due 2008 (the "Notes"); and
WHEREAS, Section 9.01 of the Indenture provides that the Company and the
Trustee may amend or supplement the Indenture in order to execute and deliver a
guarantee (a "Note Guarantee") to comply with Section 4.17 thereof without the
consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by
the charter and the bylaws (or comparable constituent documents) of the
Company, of the Guarantors and of the Trustee necessary to make this
Supplemental Indenture a valid instrument legally binding on the Company, the
Guarantors and the Trustee, in accordance with its terms, have been duly done
and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Guarantors and the
Trustee covenant and agree for the equal and proportionate benefit of the
respective Holders of the Notes as follows:
ARTICLE 1
SECTION 1.01. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes.
SECTION 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 4.17 and by executing this
Supplemental Indenture, the Guarantors whose signatures appear below are
subject to the provisions of the Indenture to the extent provided for in
Article 11 thereunder.
ARTICLE 3
SECTION 3.01. Except as specifically modified herein, the Indenture and
the Notes are in all respects ratified and confirmed (mutatis mutandis) and
shall remain in full force and effect in accordance with their terms with all
capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.
C-2
<PAGE> 102
SECTION 3.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
SECTION 3.03. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.
SECTION 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
[NEXT PAGE IS SIGNATURE PAGE]
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<PAGE> 103
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
POOL ENERGY SERVICES CO.
By:
-----------------------------------
Name:
Title:
GUARANTORS:
ASSOCIATED PETROLEUM SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
INTERNATIONAL AIR DRILLING COMPANY
KUUKPIK - POOL ARCTIC ALASKA
By: Pool Alaska, Inc., d/b/a Pool Artic Alaska
PCNV, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL-AUSTRALIA, INC.
POOL CALIFORNIA ENERGY SERVICES, INC.
POOL COMPANY
POOL COMPANY HOUSTON LTD.
By: Pool Company, General Partner
POOL COMPANY TEXAS, LTD.
By: Pool Company, General Partner
POOL INTERNATIONAL, INC.
POOL PRODUCTION SERVICES, INC.
PTX, INC.
By:
-----------------------------------
Name:
Title:
MARINE MIDLAND BANK,
as Trustee
By:
-----------------------------------
Name:
Title:
C-4
<PAGE> 1
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of March 31, 1998
by and among
POOL ENERGY SERVICES CO.
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
SBC WARBURG DILLON READ INC.,
MORGAN STANLEY & CO. INCORPORATED, and
JOHNSON RICE & COMPANY L.L.C.
- --------------------------------------------------------------------------------
<PAGE> 2
This Registration Rights Agreement (the "Agreement") is made and
entered into as of March 31, 1998 by and among POOL ENERGY SERVICES CO. (the
"Issuer"), the SUBSIDIARY GUARANTORS (as defined herein) and SBC WARBURG DILLON
READ INC., MORGAN STANLEY & CO. INCORPORATED and JOHNSON RICE & COMPANY L.L.C.
(the "Initial Purchasers"). The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers to purchase $150,000,000
of the 8 5/8% Senior Subordinated Notes due 2008 of the Issuer under the
Purchase Agreement, dated as of March 26, 1998 (the "Purchase Agreement"), by
and among the Issuer, the Subsidiary Guarantors and the Initial Purchasers.
The Issuer, the Subsidiary Guarantors and the Initial Purchasers hereby
agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.
Action: As defined in Section 8(c) of this Agreement.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: As that term is defined in the Indenture.
Closing Date: The date that the Notes are purchased by the Initial
Purchasers pursuant to the Purchase Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Notes to be issued in the Exchange Offer, (ii) the maintenance
of such Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) of this Agreement and (iii) the delivery by the Issuer
to the Registrar under the Indenture of New Notes in the same aggregate
principal amount as the aggregate principal amount of Old Notes that were so
tendered.
Damages Payment Date: With respect to the Notes, each Interest Payment
Date.
Effectiveness Target Date: As defined in Section 5 of this Agreement.
<PAGE> 3
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission pursuant thereto.
Exchange Offer: The registration under the Act by the Issuer and the
Subsidiary Guarantors of the New Notes pursuant to a Registration Statement
pursuant to which the Issuer and the Subsidiary Guarantors offer the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange all
such outstanding Old Notes that are Transfer Restricted Securities held by such
Holders for New Notes in an aggregate principal amount equal to the aggregate
principal amount of the Old Notes that are Transfer Restricted Securities
tendered in such exchange offer by such Holders.
Exchange Offer Effective Date: The date on which the Exchange Offer
Registration Statement is declared effective by the Commission.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Notes to (i) certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Act, and (ii) other eligible
purchasers pursuant to Regulation S under the Act.
Holders: As defined in Section 2(b) of this Agreement.
Indenture: The Indenture, dated as of March 31, 1998, by and among the
Issuer, the Subsidiary Guarantors and Marine Midland Bank, as trustee (the
"Trustee"), pursuant to which the Notes are to be issued, as such Indenture is
amended or supplemented from time to time in accordance with its terms.
Initial Purchaser: SBC Warburg Dillon Read Inc., Morgan Stanley & Co.
Incorporated and Johnson Rice & Company L.L.C.
Interest Payment Date: As defined in the Notes.
Issue Date: The date the Old Notes are originally issued (March 31,
1998).
NASD: National Association of Securities Dealers, Inc.
New Notes: The Series B 85/8% Senior Subordinated Notes due 2008 of the
Issuer to be issued pursuant to the Indenture in connection with the Exchange
Offer and evidencing the same debt as the Old Notes, including the guarantees by
the Subsidiary Guarantors.
Notes: Old Notes and New Notes.
-2-
<PAGE> 4
Old Notes: The Series A 85/8% Senior Subordinated Notes due 2008 of the
Issuer to be issued pursuant to the Indenture on the Closing Date, including the
guarantees by the Subsidiary Guarantors.
Participating Broker Dealer: As defined in Section 6(a)(iii) of this
Agreement.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
and supplements thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such Prospectus.
Registration Default: As defined in Section 5 of this Agreement.
Registration Statement: Any registration statement of the Issuer and
the Subsidiary Guarantors relating to (a) an offering of New Notes pursuant to
an Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement that is filed pursuant
to the provisions of this Agreement, in each case, including the Prospectus
included therein, all amendments and supplements thereto (including pre- and
post-effective amendments) and all exhibits and material incorporated by
reference or deemed to be incorporated by reference, if any, therein.
Shelf Filing Deadline: As defined in Section 4(a) of this Agreement.
Shelf Registration Statement: As defined in Section 4(a) of this
Agreement.
Subsidiary: With respect to any Person, any other Person of which a
majority of the equity ownership or the voting securities is at the time owned,
directly or indirectly, by such Person or by one or more other subsidiaries of
such Person or a combination thereof.
Subsidiary Guarantors: Each Subsidiary of the Issuer that, pursuant to
the Indenture, is, or is required to become, a guarantor of the obligations of
the Issuer under the Notes and the Indenture.
TIA: The Trust Indenture Act of 1939, as amended (15 U.S.C. Section
77aaa-77bbbb), as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note until the earliest to occur
of (i) the date on which each such Old Note has been exchanged by a person other
than a Broker-Dealer for a New Note in the Exchange Offer, (ii) following the
exchange by a Broker-Dealer in the Exchange Offer of an Old Note for a New Note,
the date on which such New Note is sold to a purchaser who receives from
-3-
<PAGE> 5
such Broker-Dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Issuer are sold to an underwriter for reoffering to the
public pursuant to an effective Registration Statement.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
to be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person beneficially owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless, due to a change in law or Commission policy after the
date hereof, the Exchange Offer shall not be permissible under applicable
federal law or Commission policy, the Issuer and the Subsidiary Guarantors shall
(i) cause to be filed with the Commission as soon as practicable on or prior to
60 days after the Closing Date, a Registration Statement under the Act relating
to the New Notes and the Exchange Offer and (ii) use their best efforts to cause
such Registration Statement to be declared effective by the Commission as soon
as practicable on or prior to 120 days after the Closing Date. In connection
with the foregoing, the Issuer and the Subsidiary Guarantors shall (A) file all
pre-effective amendments to such Registration Statement as may be necessary to
cause such Registration Statement to become effective, (B) if applicable, file a
post-effective amendment to such Registration Statement pursuant to Rule 430A
under the Act, (C) cause all necessary filings in connection with the
registration and qualification of the New Notes to be made under the Blue Sky
laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer (provided, however, that the Issuer and the Subsidiary Guarantors
shall not be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to take any action that would subject them to
general service of process or taxation in any jurisdiction where they are not so
subject, except service of process with respect to the offering and sale of the
Notes and Exchange Notes) and (D) upon the effectiveness of such Registration
Statement, commence the Exchange Offer and use their best efforts to issue on or
prior to 45 days after the Exchange Offer Effective Date, New Notes in exchange
for all Old Notes tendered in the Exchange Offer. The Exchange Offer shall be on
the appropriate form permitting registration of the New Notes to be offered in
exchange for the Transfer Restricted Securities and to permit resales of New
Notes held by Broker-Dealers as contemplated by Section 3(c) below. If, after
such Exchange
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Offer Registration Statement initially is declared effective by the Commission,
the Exchange Offer or the issuance of New Notes under the Exchange Offer or the
resale of New Notes received by Broker-Dealers in the Exchange Offer as
contemplated by Section 3(c) below is interfered with by any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court, such Registration Statement shall be deemed not to
have become effective for purposes of this Agreement during the period that such
stop order, injunction or other similar order or requirement shall remain in
effect.
(b) The Issuer and the Subsidiary Guarantors shall cause the
Exchange Offer Registration Statement to be effective continuously and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 business days. The Issuer and the Subsidiary Guarantors shall cause the
Exchange Offer to comply with all applicable federal and state securities laws.
The Issuer and the Subsidiary Guarantors shall only offer to exchange New Notes
for Old Notes in the Exchange Offer, and only the New Notes shall be registered
under the Exchange Offer Registration Statement.
(c) The Issuer shall indicate in a "Plan of Distribution" section
contained in the Prospectus included in the Exchange Offer Registration
Statement that any Broker-Dealer that holds Old Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Issuer), may exchange such Old
Notes pursuant to the Exchange Offer; provided, however, that such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the Act and must,
therefore, deliver a prospectus meeting the requirements of the Act in
connection with any resales of the New Notes received by such Broker-Dealer in
the Exchange Offer. Such "Plan of Distribution" section shall allow the use of
the Prospectus by all Persons subject to the prospectus delivery requirements of
the Act, including Participating Broker-Dealers, and shall also contain all
other information with respect to such resales by Broker-Dealers that the
Commission may require to permit such resales pursuant thereto, but such "Plan
of Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission.
The Issuer and the Subsidiary Guarantors shall use their best efforts
to keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) below to
the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time for such period of time as such
Broker-Dealers must comply with prospectus delivery requirements of the Exchange
Act in order to resell the Notes. The Issuer shall provide sufficient copies of
the latest version of such Prospectus to Broker-Dealers promptly upon request at
any time during such period in order to facilitate such resales.
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SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Issuer and the Subsidiary
Guarantors are not required to file an Exchange Offer Registration Statement or
to consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Transfer Restricted
Securities shall notify the Issuer within 20 business days of the commencement
of the Exchange Offer that such Holder (A) is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) may not
resell the New Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder or (C) is a Broker-Dealer and holds Old Notes (including the Initial
Purchaser who holds Old Notes as part of an unsold allotment from the original
offering of the Notes) acquired directly from the Issuer or one of its
affiliates or (iii) the Issuer and the Subsidiary Guarantors do not consummate
the Exchange Offer within 45 days following the effectiveness date of the
Exchange Offer Registration Statement, then the Issuer and the Subsidiary
Guarantors shall (x) cause to be filed a shelf registration statement pursuant
to Rule 415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration Statement"), on
or prior to the earliest to occur of (1) the 60th day after the date on which
the Issuer determines that it is not required to file the Exchange Offer
Registration Statement or (2) the 60th day after the date on which the Issuer
receives notice from a Holder of Transfer Restricted Securities as contemplated
by clause (ii) above (such earliest date being the "Shelf Filing Deadline"),
which Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) of this Agreement, and (y) use its best
efforts to cause such Shelf Registration Statement to be declared effective by
the Commission on or before the 120th day after the Shelf Filing Deadline. The
Issuer and the Subsidiary Guarantors shall use their best efforts to keep such
Shelf Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) of this Agreement to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a) and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a continuous period of two years following the
date on which such Shelf Registration Statement becomes effective under the Act
or such shorter period that will terminate when all the Notes covered by the
Shelf Registration Statement have been sold pursuant to such Shelf Registration
Statement.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuer in writing, within 15 business days after receipt of a request
therefor, such information regarding such Holder as the Issuer may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included in such Shelf Registration
Statement. Each Holder as to which any Shelf Registration Statement is
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<PAGE> 8
being effected agrees to furnish promptly to the Issuer all information required
to be disclosed to make the information previously furnished to the Issuer by
such Holder not materially misleading.
SECTION 5. SPECIAL INTEREST
If (i) any of the Registration Statements required by this Agreement is
not filed with the Commission on or prior to the date specified for such filing
in this Agreement (or, if such date is not a Business Day, the next succeeding
Business Day), (ii) any of such Registration Statements has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 165 days after the Issue Date
(or, if such date is not a Business Day, the next succeeding Business Day) or
(iv) any Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or usable in connection
with resales of Transfer Restricted Securities during the periods required by
this Agreement (each such event referred to in clauses (i) through (iv), a
"Registration Default"), the Issuer and the Subsidiary Guarantors hereby agree,
jointly and severally, to pay special interest to each Holder of Transfer
Restricted Securities with respect to the first 90-day period immediately
following the occurrence of such Registration Default, at a rate equal to 0.25%
per annum on the principal amount of Notes constituting Transfer Restricted
Securities held by such Holder for the period of the Registration Default. The
amount of the special interest shall increase by an additional 0.25% per annum
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of special interest of 1.5% per annum in
the aggregate. Notwithstanding the foregoing, the Issuer and the Subsidiary
Guarantors shall not be required to pay special interest to each Holder of
Transfer Restricted Securities if the Registration Default arises from the
failure of the Issuer and the Subsidiary Guarantors to file, or cause to become
effective, a Shelf Registration Statement within the time period required by
Section 4 of this Agreement and such Registration Default is by reason of the
failure of the Holders to provide the information regarding the Holder
reasonably requested by the Issuer, the NASD or any other regulatory agency
having jurisdiction over any of the Holders at least 10 business days prior to
such Registration Default. All accrued special interest shall be paid by the
Issuer and the Subsidiary Guarantors on each Damages Payment Date to the Holders
by wire transfer of immediately available funds or by federal funds check and to
the Holders of certificated securities by mailing a check to such Holders'
registered addresses. Following the cure of all Registration Defaults relating
to any particular Transfer Restricted Securities, the accrual of liquidated
damages with respect to such Transfer Restricted Securities will cease.
All obligations of the Issuer and the Subsidiary Guarantors set forth
in the preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to
such Transfer Restricted Security shall have been satisfied in full.
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<PAGE> 9
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Issuer and the Subsidiary Guarantors shall comply with all
of the provisions of Section 6(c) below, shall use their best efforts to effect
such exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If, due to a change in law or Commission policy after
the date hereof, in the reasonable opinion of counsel to the Issuer
there is a question as to whether the Exchange Offer is permitted by
applicable federal law or Commission policy, the Issuer hereby agrees
to seek a no-action letter or other favorable decision from the
Commission allowing the Issuer and the Subsidiary Guarantors to
Consummate an Exchange Offer for such Old Notes. The Issuer hereby
agrees to pursue the issuance of such a no-action letter or favorable
decision to the Commission staff level but shall not be required to
take commercially unreasonable action to effect a change of Commission
policy. The Issuer hereby agrees, however, to (A) participate in
telephonic conferences with the Commission, (B) deliver to the
Commission an analysis prepared by special counsel to the Issuer
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursue a resolution (which need not be favorable) by the
Commission of such submission. The Initial Purchasers shall be given
prior notice of any action taken by the Issuer under this clause (i).
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Issuer,
prior to the Consummation of the Exchange Offer, a written
representation to the Issuer (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an affiliate of the Issuer or any of
the Subsidiary Guarantors, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the New Notes to be issued
in the Exchange Offer and (C) it is acquiring the New Notes in its
ordinary course of business. In addition, all such Holders of Transfer
Restricted Securities shall otherwise cooperate in the Issuer's
preparations for the Exchange Offer.
(iii) The Issuer, the Subsidiary Guarantors and the Initial
Purchasers acknowledge that the staff of the Commission has taken the
position that any broker-dealer that owns New Notes that were received
by such broker-dealer for its own account in the Exchange Offer (a
"Participating Broker-Dealer") may be deemed to be an "underwriter"
within the meaning of the Act and must deliver a prospectus meeting the
requirements of the Act in connection with any resale of such New Notes
(other than a resale of an unsold allotment resulting from the original
offering of the Notes).
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<PAGE> 10
The Issuer, the Subsidiary Guarantors and the Initial Purchasers also
acknowledge that it is the Commission staff's position that if the Prospectus
contained in the Exchange Offer Registration Statement includes a plan of
distribution containing a statement to the above effect and the means by which
Participating Broker-Dealers may resell the New Notes, without naming the
Participating Broker-Dealers or specifying the amount of New Notes owned by
them, such Prospectus may be delivered by Participating Broker-Dealers to
satisfy their prospectus delivery obligations under the Act in connection with
resales of New Notes for their own accounts, so long as the Prospectus otherwise
meets the requirements of the Act.
(b) Shelf Registration Statement. In the event that a Shelf
Registration Statement is required by this Agreement, the Issuer and the
Subsidiary Guarantors shall comply with all the provisions of Section 6(c) of
this Agreement and shall use their best efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in accordance
with the intended method or methods of distribution of such Transfer Restricted
Securities and, in connection therewith, the Issuer and the Subsidiary
Guarantors will as expeditiously as possible prepare and file with the
Commission a Shelf Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution of such Transfer Restricted Securities.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of Transfer Restricted Securities (including, without limitation, any
Registration Statement and the related Prospectus, to the extent that the same
are required to be available to permit resales of Notes by Broker-Dealers), the
Issuer and the Subsidiary Guarantors shall:
(i) use their best efforts to keep such Registration
Statement continuously effective for the applicable time period
required hereunder and provide all requisite financial statements
(including, if required by the Act or any regulation thereunder,
financial statements of the Subsidiary Guarantors) for the period
specified in Section 3 or 4 of this Agreement, as applicable; upon the
occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by
this Agreement, the Issuer shall promptly notify the Holders to suspend
use of the Prospectus, and the Holders shall suspend use of the
Prospectus, and such Holders shall not communicate non-public
information to any third party, in violation of the securities laws,
until the Issuer and the Subsidiary Guarantors have made an appropriate
amendment to such Registration Statement, in the case of clause (A),
correcting any such material misstatement or omission, and, in the case
of either clause (A) or (B), the Issuer and the Subsidiary Guarantors
shall use their best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable
thereafter;
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<PAGE> 11
(ii) prepare and file with the Commission such amendments
and post-effective amendments to such Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 of this Agreement, as
applicable, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been
sold; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Act during the applicable time period required
hereunder and to comply fully with the applicable provisions of Rules
424 and 430A under the Act in a timely manner; and comply with the
provisions of the Act and the Exchange Act with respect to the
disposition of all Transfer Restricted Securities covered by such
Registration Statement during such period in accordance with the
intended method or methods of distribution by the sellers of such
securities set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented;
(iii) advise the underwriter(s), if any, the Initial
Purchasers, and, in the case of a Shelf Registration Statement, each of
the selling Holders promptly and, if requested by such Persons, to
confirm such advice in writing, (A) when the Prospectus or any
prospectus supplement or post-effective amendment has been filed and,
with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional
information relating to such Registration Statement or Prospectus, (C)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any condition, the
happening of any event or any information becoming known that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement to such Registration Statement
or Prospectus, as the case may be, or any document incorporated by
reference in such Registration Statement or Prospectus untrue in any
material respect, or that requires the making of any additions to or
changes in the Registration Statement or the Prospectus so that, in the
case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and that in the case of the Prospectus, it will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Issuer and the Subsidiary
Guarantors shall use their best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
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<PAGE> 12
(iv) furnish to each of the underwriter(s), if any, the
Initial Purchasers and, in the case of a Shelf Registration Statement,
each of the selling Holders before filing with the Commission, copies
of any Registration Statement or any Prospectus included in such
Registration Statement or Prospectus or any amendments or supplements
to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the
reasonable review of such underwriter(s), if any, the Initial
Purchasers, and such Holders for a period of at least five business
days, and the Issuer and the Subsidiary Guarantors will not file any
such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus, as the
case may be, (including all such documents incorporated by reference)
to which any underwriter, Initial Purchasers or selling Holder shall
reasonably object within five business days after the receipt of such
Registration Statement or Prospectus. A selling Holder or underwriter,
if any, shall be deemed to have reasonably objected to such filing if
such Registration Statement, Prospectus, amendment or supplement, as
applicable, as proposed to be filed, contains a material misstatement
or omission;
(v) make available at reasonable times for inspection by
the selling Holders, any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such selling Holders or any of the underwriter(s), if any,
at the offices where normally kept, during reasonable business hours,
all relevant financial and other records, pertinent corporate documents
and properties of the Issuer and the Subsidiary Guarantors and cause
the Issuer's and the Subsidiary Guarantors' officers, directors and
employees to supply all information reasonably requested by any such
Holder, underwriter, attorney or accountant in connection with such
Registration Statement subsequent to the filing thereof and prior to
its effectiveness; provided, however, that such persons shall first
agree in writing with the Issuer that any information that is
reasonably and in good faith designated by the Issuer in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless and to the extent that (i)
disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to federal securities
laws in connection with the filing of the Shelf Registration Statement
or the use of any Prospectus), (iii) such information becomes generally
available to the public other than as a result of a disclosure or
failure to safeguard such information by such person or (iv) such
information becomes available to such person from a source other than
the Issuer and its Subsidiaries and such source is not bound by a
confidentiality agreement;
(vi) if requested by a majority in aggregate principal
amount of Transfer Restricted Securities being sold in connection with
an underwritten offering or the underwriter(s), if any, promptly
incorporate in any Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information
relating to such
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<PAGE> 13
selling Holders or such underwriters as such selling Holders and
underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being
paid for Transfer Restricted Securities and any other terms of the
offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Issuer is
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment; provided, however, that the
Issuer shall not be required to take any action pursuant to this
Section 6(c)(vii) that would, in the opinion of counsel for the Issuer,
violate applicable law;
(vii) furnish to each underwriter, if any, the Initial
Purchasers and upon request to the Issuer to a selling Holder without
charge, at least one conformed copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto,
including, upon the request of such Person, all documents incorporated
by reference therein and all exhibits to the extent requested
(including exhibits incorporated therein by reference);
(viii) deliver to each selling Holder, each of the
underwriter(s), if any, and the Initial Purchasers, without charge, as
many copies of the Prospectus (including each preliminary prospectus)
and any amendment or supplement thereto as such Persons may reasonably
request; the Issuer and the Subsidiary Guarantors hereby consent to the
use of the Prospectus and any amendment or supplement to the Prospectus
by each of the selling Holders and each of the underwriter(s), if any,
in connection with the offering and the sale of the Transfer Restricted
Securities in accordance with the terms thereof and with U.S. Federal
securities laws and Blue Sky laws covered by the Prospectus or any
amendment or supplement thereto;
(ix) enter into such agreements (including an underwriting
agreement in form, scope and substance as is customary in underwritten
offerings of securities of this type) and take all such other
reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement,
all as may be reasonably requested by any Holder of Transfer Restricted
Securities or the underwriter(s), if any, in connection with any sale
or resale of Transfer Restricted Securities pursuant to any
Registration Statement contemplated by this Agreement; and whether or
not an underwriting agreement is entered into and whether or not the
registration is an Underwritten Registration, the Issuer and the
Subsidiary Guarantors shall (i) make such representations and
warranties to the Holders of such Transfer Restricted Securities and
the underwriters, if any, with respect to the business of the Issuer
and its Subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Shelf Registration
Statement, Prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each
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<PAGE> 14
case, in form, substance and scope as are customarily made by Issuer to
underwriters in underwritten offerings, and confirm the same if and
when customarily requested; (ii) obtain opinions of counsel to the
Issuer and the Subsidiary Guarantors and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably
satisfactory to the underwriters, if any, and special counsel to the
Holders of the Transfer Restricted Securities being sold), addressed to
each selling Holder of Transfer Restricted Securities and each of the
underwriters, if any, covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters, if any, and special
counsel to Holders of Transfer Restricted Securities; (iii) use their
best efforts to obtain customary "cold comfort" letters and updates
thereof from the independent certified public accountants of the Issuer
(and, if necessary, any other independent certified public accountants
of any subsidiary of the Issuer or of any business acquired by the
Issuer or any such subsidiary for which financial statements and
financial data is, or is required to be, included in the Registration
Statement), addressed (where reasonably possible) to each selling
Holder of Transfer Restricted Securities and each of the underwriters,
if any, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection
with underwritten offerings; (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and
procedures no less favorable to the selling Holders and the
underwriters, if any, than those set forth in Section 8 hereof (or such
other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Transfer Restricted Securities covered by
such Shelf Registration Statement and the underwriters, if any); and
(v) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities being sold and the underwriters, if
any, to evidence the continued validity of the representations and
warranties made pursuant to clause (i) above and to evidence compliance
with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Issuer;
If at any time the representations and warranties of the
Issuer and the Subsidiary Guarantors contemplated in clause (x)(i)
above cease to be true and correct, the Issuer shall so advise the
Initial Purchasers and the underwriter(s), if any, and each selling
Holder promptly and, if requested by any of them, shall confirm such
advice in writing;
(x) prior to any public offering of Transfer Restricted
Securities, cooperate with and cause the Subsidiary Guarantors to
cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration and
qualification (or exemption from such registration or qualification) of
the Transfer Restricted Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders and underwriter(s), if any, may reasonably request in writing
and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions
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<PAGE> 15
of the Transfer Restricted Securities covered by the Registration
Statement; provided, however, that neither the Issuer nor the
Subsidiary Guarantors shall be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xi) if a Shelf Registration is filed pursuant to Section
2(b), cooperate with the selling Holders of Registrable Securities and
the managing Underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted
Securities to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with
The Depository Trust Company; and enable such Transfer Restricted
Securities to be in such denominations and registered in such names as
the managing Underwriters, if any, or Holders may reasonably request;
(xii) in connection with any sale or transfer of Transfer
Restricted Securities that will result in such securities no longer
being Transfer Restricted Securities, cooperate with and cause the
Subsidiary Guarantors to cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xiii) use their best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers of such
Transfer Restricted Securities or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xi) above;
(xiv) if any fact or event contemplated by Section
6(c)(iii)(D) of this Agreement shall exist or have occurred, prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated in such Registration
Statement or Prospectus by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Registration Statement will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading and the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading;
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<PAGE> 16
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities that are in a form
eligible for deposit with The Depository Trust Company;
(xvi) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter" that is required to be retained in accordance with the
rules and regulations of the NASD);
(xvii) otherwise use their best efforts to comply with all
applicable rules and regulations of the Commission in regards to any
Registration Statement, and make generally available to its
securityholders, as soon as practicable, a consolidated earning
statement of the Issuer meeting the requirements of Rule 158 (which
need not be audited) for the twelve-month period (A) commencing at the
end of any fiscal quarter in which Transfer Restricted Securities are
sold to underwriters in a firm commitment or reasonable best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Issuer's first fiscal
quarter commencing after the effective date of the Registration
Statement;
(xviii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate
with the Trustee and the Holders to effect such changes to the
Indenture, if any, as may be required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use
its best efforts to cause the Trustee to execute, all customary
documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable
such Indenture to be so qualified in a timely manner.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Issuer of the existence of any fact of
the kind described in Section 6(c)(iii)(D) of this Agreement, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the applicable Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 6(c)(xv) of
this Agreement, or until it is advised in writing (the "Advice") by the Issuer
that the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Issuer, each Holder will deliver to the Issuer
(at the Issuer's expense) all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
that the Issuer shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 of this
Agreement, as applicable, shall be extended by the number of days during the
period from and including the date
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<PAGE> 17
of the giving of such notice pursuant to Section 6(c)(iii)(D) of this Agreement
to and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xv) of this Agreement or shall have
received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All fees and expenses incident to the Issuer and the
Subsidiary Guarantors' performance of or compliance with this Agreement will be
borne by the Issuer regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees
and expenses (including filings made with the NASD (and, if applicable, the fees
and expenses of any "qualified independent underwriter" and its counsel that may
be required by the rules and regulations of the NASD)); (ii) all fees and
expenses of compliance with federal securities and state Blue Sky or securities
laws; (iii) all expenses of printing (including printing certificates for the
New Notes to be issued in the Exchange Offer and printing of Prospectuses); (iv)
all fees and disbursements of counsel for the Issuer, the Subsidiary Guarantors
and, subject to Section 7(b) below, the Holders of Transfer Restricted
Securities; and (v) all fees and disbursements of independent certified public
accountants of the Issuer and the Subsidiary Guarantors (including the expenses
of any special audit and comfort letters required by or incident to such
performance).
The Issuer and the Subsidiary Guarantors will, in any event, bear their
internal expenses (including, without limitation, all salaries and expenses of
their officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by them.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of Transfer Restricted Notes shall pay all underwriting
discounts and commissions of any underwriters with respect to any Notes sold by
or on behalf of it.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuer will reimburse the
Initial Purchaser and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Vinson & Elkins L.L.P. or such other counsel as may be chosen by the Holders of
a majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
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<PAGE> 18
SECTION 8. INDEMNIFICATION
(a) Each of the Issuer and the Subsidiary Guarantors, on a joint
and several basis, agrees to indemnify and hold harmless (i) the Initial
Purchasers, each Holder of Transfer Restricted Securities and each Participating
Broker Dealer, (ii) each person, if any, who controls any of the foregoing
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(any of the persons referred to in this clause (ii) being hereinafter referred
to as a "controlling person") and (iii) its agents, employees, officers and
directors and the agents, employees, officers and directors of any such
controlling person (collectively, the "Indemnified Persons") from and against
any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all reasonable amounts paid in settlement of any claim or litigation) to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Issuer and the Subsidiary
Guarantors will not be liable in any such case to the extent, but only to the
extent, that any such loss, liability, claim, damage or expense arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Issuer by or on behalf of any Indemnified Person
relating to such Indemnified Person expressly for use therein. This indemnity
agreement will be in addition to any liability that the Issuer and the
Subsidiary Guarantors may otherwise have, including, but not limited to,
liability under this Agreement.
If any action is brought against any Indemnified Persons or any such
person in respect of which indemnity may be sought against the Issuer and the
Subsidiary Guarantors pursuant to the foregoing paragraph, such Indemnified
Persons or such person shall promptly notify the indemnifying party in writing
of the institution of such action and the indemnifying party shall assume the
defense of such action, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses,
provided, however, except to the extent that the indemnifying party shall be
materially prejudiced thereby (through the forfeiture of substantive rights or
defenses), that the omission to so notify the indemnifying party shall not
relieve the indemnifying party from any liability which they may have to the
Indemnified Persons or any such person or otherwise. Such Indemnified Persons
shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Persons
unless the employment of such counsel shall have been authorized in writing by
the indemnifying party in connection with the defense of such action or the
indemnifying party shall not have employed counsel to have charge of the defense
of such action or such indemnified
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<PAGE> 19
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the indemnifying party and paid as incurred (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with appropriate local
counsel) in any one action or series of related actions in the same jurisdiction
representing the indemnified parties who are parties to such action). The
indemnifying party shall not be liable for any settlement of any such claim or
action effected without its written consent but if settled with the written
consent of the indemnifying party, the indemnifying party agrees to indemnify
and hold harmless any Indemnified Persons and any such person from and against
any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(b) In connection with any Registration Statement pursuant to
which a Holder of Transfer Restricted Securities offers or sells Transfer
Restricted Securities, such Holder agrees, severally and not jointly, to
indemnify and hold harmless the Issuer and the Subsidiary Guarantors, their
respective directors and officers and any person controlling the Issuer or a
Subsidiary Guarantor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each of their agents, employees, officers
and directors and the agents, employees, officers and directors of such
controlling person from and against any losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever and any and all reasonable amounts paid in settlement of any claim or
litigation) to which they or either of them may become subject under the Act,
the Exchange Act or otherwise insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case to the extent, but only
to
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<PAGE> 20
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information relating to such Holder furnished to the Issuer by such Holder
expressly for use in such Registration Statement.
If any action is brought against the Issuer or the Subsidiary
Guarantors or any such person in respect of which indemnity may be sought
against any Holder of Transfer Restricted Securities pursuant to foregoing
paragraph, the Issuer, the Subsidiary Guarantors or such person shall promptly
notify such Holder in writing of the institution of such action and such Holder
shall assume the defense of such action, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses, provided, however, except to the extent that the indemnifying party
shall be materially prejudiced thereby (through the forfeiture of substantive
rights or defenses), that the omission to so notify such Holder shall not
relieve such Holder from any liability which they may have to the Issuer the
Subsidiary Guarantors or any such person or otherwise. The Issuer, the
Subsidiary Guarantors or such person shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Issuer or such person unless the employment of such counsel
shall have been authorized in writing by such Holder of Transfer Restricted
Securities in connection with the defense of such action or such Holder shall
not have employed counsel to have charge of the defense of such action or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to such Holder (in which case such Holder shall not have the right to
direct the defense of such action on behalf of the indemnified party or parties,
but such Holder may employ counsel and participate in the defense thereof but
the fees and expenses of such counsel shall be at the expense of such Holder),
in any of which events such fees and expenses shall be borne by such Holder and
paid as incurred (it being understood, however, that such Holder shall not be
liable for the expenses of more than one separate counsel in any one action or
series of related actions in the same jurisdiction representing the indemnified
parties who are parties to such action). Anything in this paragraph to the
contrary notwithstanding, any Holder of Transfer Restricted Securities shall not
be liable for any settlement of any such claim or action effected without the
written consent of such Holder but if settled with the written consent of such
Holder, such Holder agrees to indemnify and hold harmless the Issuer, the
Subsidiary Guarantors and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnifying party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any
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<PAGE> 21
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) In order to provide for contribution in circumstances in which
the indemnification provided for in paragraphs (a) and (b) of this Section 8 is
for any reason held to be unavailable from the indemnifying party, or is
insufficient to hold harmless a party indemnified under this Section 8, the
Issuer, the Subsidiary Guarantors and the Indemnified Parties shall contribute
to the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action or any claims asserted) to which the Issuer and/or the
Subsidiary Guarantors and the Indemnified Parties may be subject, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuer and the Subsidiary Guarantors, on the one hand, and the Indemnified
Parties, on the other hand, from the offering of the Old Notes or, (ii) if such
allocation is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuer and the Subsidiary Guarantors,
on the one hand, and the Indemnified Parties, on the other hand, in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Issuer and the Subsidiary Guarantors, on
the one hand, and the Indemnified Parties, on the other hand, shall be deemed to
be in the same proportion as the total proceeds from the offering of Old Notes
(net of discounts but before deducting expenses) received by the Issuer as set
forth in the table on the cover page of the Offering Memorandum bear to the
total proceeds received by such Holder with respect to its sale of Transfer
Restricted Securities or New Notes. The relative fault of the Issuer and the
Subsidiary Guarantors, on the one hand, and the Indemnified Parties, on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuer,
the Subsidiary Guarantors or the Indemnified Parties and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Issuer, the Subsidiary Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this
paragraph (c) of this Section 8 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of paragraph
(c) of this Section 8, (i) in no case shall an Indemnified Party be required to
contribute any amount in excess of the amount by which the total received by
such Indemnified Party with respect to its sale of its Transfer Restricted
Securities or New Notes, as the case may be, exceeds the amount of any damages
that such Indemnified Party has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (c)
of this
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<PAGE> 22
Section 8, each person, if any, who controls an Indemnified Party within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Indemnified Party, and each person, if
any, who controls the Issuer or the Subsidiary Guarantors within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Issuer or the Subsidiary Guarantors, subject in
each case to clauses (i) and (ii) of this paragraph. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
Action against such party in respect of which a claim for contribution may be
made against another party or parties under this paragraph 8(c), notify such
party or parties from whom contribution may be sought, but, except to the extent
that the indemnifying party shall be materially prejudiced thereby (through the
forfeiture of substantive rights and defenses), the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this paragraph (c)
or otherwise. No party shall be liable for contribution with respect to any
action or claim settled without its written consent; provided, however, that
such written consent was not unreasonably withheld.
SECTION 9. RULE 144A
The Issuer and the Subsidiary Guarantors shall use their best efforts,
for so long as any Transfer Restricted Securities remain outstanding, to make
available to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale of such securities and any prospective purchaser of
such Transfer Restricted Securities from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration under this
Agreement unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled under this Agreement to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorneys, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Issuer.
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<PAGE> 23
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights provided in this Agreement, in the Indenture, the Purchase
Agreement or granted by law, including recovery of liquidated or other damages,
will be entitled to specific performance of its rights under this Agreement. The
Issuer and the Subsidiary Guarantors agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agree to waive the defense in any Action
for specific performance that a remedy at law would be adequate. The obligations
of the Issuer and the Subsidiary Guarantors under this Agreement are joint and
several and, in any proceedings against any of such Persons arising out of this
Agreement, it shall not be necessary to join any other such Person.
(b) No Inconsistent Agreements. Each of the Issuer and the
Subsidiary Guarantors will not on or after the date of this Agreement enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions of this Agreement. The rights granted to the Holders under this
Agreement do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the securities of the Issuer under any
agreement in effect on the date of this Agreement.
(c) Adjustments Affecting the Notes. Without the written consent
of the Holders of a majority in aggregate principal amount of outstanding
Transfer Restricted Notes, the Issuer and the Subsidiary Guarantors will not
take any action, or permit any change to occur, with respect to the Notes that
would materially and adversely affect the ability of the Holders to Consummate
any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions of this Agreement may not be given unless the
Issuer has obtained the written consent of Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities. Notwithstanding
the foregoing, a waiver or consent to departure from the provisions of this
Agreement that relates exclusively to the rights of Holders whose securities are
being sold or tendered pursuant to a Registration Statement and that does not
affect directly or indirectly the rights of other Holders whose securities are
not being sold or tendered pursuant to such Registration Statement may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities being so sold or tendered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivering, first-class
mail (registered or certified, return receipt requested), telex, telecopier or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
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<PAGE> 24
(ii) if to the Issuer or the Subsidiary Guarantors, at:
Pool Energy Services Co.
10375 Richmond Avenue
Houston, Texas 77042
Facsimile: (713) 954-3037
Attention: E. J. Spillard, Senior Vice President --
Finance
with a copy to:
Covington & Burling LLP
1201 Pennsylvania Avenue N.W.
Washington, D.C. 20044
Facsimile: (202) 778-5446
Attention: David N. Brown
(iii) if to the Initial Purchasers, at:
SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, New York 10022
Facsimile: (212) 593-0164
Attention: Corporate Finance Department
with a copy to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin
Houston, Texas 77002
Facsimile: (713) 758-2346
Attention: Scott N. Wulfe
All such notices and communications shall be deemed to have been duly
given: (i) at the time delivered by hand, if personally delivered; (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) when answered back, if telexed; (iv) when receipt acknowledged, if
telecopied; and (v) on the next business day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
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<PAGE> 25
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties to this Agreement in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Submission to Jurisdiction. The Issuer and the Subsidiary
Guarantors irrevocably submit to the nonexclusive jurisdiction of any State or
Federal court sitting in New York over any suit, action or proceeding arising
out of or relating to this agreement. The Issuer and the Subsidiary Guarantors
irrevocably waive, to the fullest extent permitted by law, any objection it may
now or thereafter have to the laying of venue of any such court and any claim
that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. The Issuer and the Subsidiary Guarantors agree
that a final judgment in any such suit, action or proceeding brought in any such
court shall be conclusive and binding upon the Issuer and the Subsidiary
Guarantors and may be enforced in any other courts to the jurisdiction of which
the Issuer and the Subsidiary Guarantors are or may be subject, by suit upon
such judgment. The Issuer and the Subsidiary Guarantors hereby appoint, without
power of revocation, CT Corporation System as its agent to accept and
acknowledge on its behalf service of any and all process which may be served in
any suit, action or proceeding arising out of or relating to this letter.
(k) Severability. In the event that any one or more of the
provisions contained in this Agreement, or the application of any such provision
in any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained in this Agreement shall not be affected or
impaired thereby.
(l) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties to
this Agreement in respect of the subject matter contained in this Agreement.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to in this Agreement with respect to the
registration rights granted by the Issuer with respect to the Transfer
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<PAGE> 26
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
-25-
<PAGE> 27
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
POOL ENERGY SERVICES CO.
By:
---------------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
ASSOCIATED PETROLEUM SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
INTERNATIONAL AIR DRILLING COMPANY
KUUKPIK - POOL ARCTIC ALASKA
By: Pool Alaska, Inc. d/b/a Pool Artic Alaska
PCNV, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL-AUSTRALIA, INC.
POOL CALIFORNIA ENERGY SERVICES, INC.
POOL COMPANY
POOL COMPANY HOUSTON LTD.
By: Pool Company, General Partner
POOL COMPANY TEXAS, LTD.
By: Pool Company, General Partner
POOL INTERNATIONAL, INC.
POOL PRODUCTION SERVICES, INC.
PTX, INC.
By:
---------------------------------------------
Name:
Title:
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<PAGE> 28
SBC WARBURG DILLON READ INC.,
MORGAN STANLEY & CO. INCORPORATED,
and
JOHNSON RICE & COMPANY L.L.C.
By: SBC Warburg Dillon Read Inc.
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
-27-
<PAGE> 1
POOL ENERGY SERVICES CO.
$150,000,000 8-5/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
March 26, 1998
SBC WARBURG DILLON READ INC.
MORGAN STANLEY & CO. INCORPORATED
JOHNSON RICE & COMPANY L.L.C.
as Initial Purchasers
c/o SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, New York 10022
Dear Sirs:
Pool Energy Services Co. (the "Issuer"), proposes to issue and sell to
SBC Warburg Dillon Read Inc., Morgan Stanley & Co. Incorporated and Johnson Rice
& Company L.L.C. (the "Initial Purchasers") $150,000,000 aggregate principal
amount of its 8-5/8% Senior Subordinated Notes due 2008 (the "Notes"). The Notes
will be issued pursuant to an indenture (the "Indenture"), to be dated the
Closing Date (as defined below), by and among the Issuer and the guarantors
listed on the signature pages hereto (collectively, the "Subsidiary Guarantors")
and Marine Midland Bank as trustee (the "Trustee"). The Issuer's obligations
under the Notes and the New Notes (as defined below) will be unconditionally
guaranteed on a senior subordinated basis by each of the Subsidiary Guarantors
pursuant to each of their guarantees (the "Subsidiary Guarantees"). All
references herein to the Notes or the New Notes include the related Subsidiary
Guarantees, unless the context otherwise requires. Capitalized terms used but
not otherwise defined herein shall have the meanings given to such terms in the
Indenture or the Offering Memorandum (as defined below).
The Notes will be offered and sold to the Initial Purchasers pursuant
to an exemption from the registration requirements under the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the
"Act"), including the documents incorporated by reference therein. The Issuer
has prepared a preliminary offering memorandum, dated March , 1998, including
the documents incorporated by reference therein (the "Preliminary Offering
Memorandum"), and a final offering memorandum, dated and available for
distribution on the date hereof, including the documents incorporated by
reference therein (the "Offering Memorandum"), relating to the Issuer, the
Subsidiary Guarantors and the Notes.
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The Initial Purchasers have advised the Issuer that the Initial
Purchasers intend, as soon as they deem it advisable after this Purchase
Agreement (the "Agreement") has been executed and delivered, to resell (the
"Exempt Resales") the Notes purchased by the Initial Purchasers under this
Purchase Agreement (this "Agreement") in private sales exempt from registration
under the Act on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers," as defined in Rule 144A under
the Act ("QIBs"), in compliance with Rule 144A and (ii) other eligible
purchasers pursuant to offers and sales that occur outside the U.S. within the
meaning of Regulation S under the Act. The persons specified in clauses (i) and
(ii) of the preceding sentence are sometimes collectively referred to herein as
the "Eligible Purchasers", and the offering and sale of the Notes to the Initial
Purchasers and Eligible Purchasers are sometimes referred to herein as the
"Offering".
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement, to be dated
the Closing Date (the "Registration Rights Agreement"), among the Issuer, the
Subsidiary Guarantors and the Initial Purchasers, for so long as such Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuer and
the Subsidiary Guarantors will agree to (a) file with the Securities and
Exchange Commission (the "Commission"), under the circumstances set forth in the
Registration Rights Agreement, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Issuer's 8-5/8% Senior
Subordinated Notes due 2008 to be offered in exchange (the "New Notes") for the
Notes (the "Exchange Offer") and/or (ii) a shelf registration statement pursuant
to Rule 415 under the Act (the "Shelf Registration Statement" and, together with
the Exchange Offer Registration Statement, the "Registration Statements")
relating to the resale by certain holders of the Notes, and (b) use their best
efforts to cause such Registration Statements to be declared effective as soon
as practicable on or prior to 120 days after the Closing Date. This Agreement,
the Notes, the New Notes, the Indenture and the Registration Rights Agreement
are hereinafter sometimes referred to collectively as the "Operative Documents."
Upon original issuance of the Notes and until such time as the same is
no longer required under the applicable requirements of the Act, the Notes shall
bear a legend substantially in the form provided in the Offering Memorandum.
The net proceeds of the sale of the Notes will be used in the manner
described in the Offering Memorandum.
The Issuer, each of the Subsidiary Guarantors, and the Initial
Purchasers agree as follows:
1. SALE AND PURCHASE. Upon the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the other
terms and conditions herein set forth, the Issuer agrees to issue and sell to
the Initial Purchasers, and the Initial Purchasers agree to purchase from the
Issuer, the aggregate principal amount of the Notes. The purchase price for the
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Notes shall be 97.25% of their principal amount. The Issuer shall cause each
Subsidiary Guarantor to unconditionally guarantee on a senior subordinated basis
the Issuer's obligations under the Notes and the New Notes.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the
Notes shall be made to the Issuer by wire transfer of immediately available
funds, to an account of the Issuer designated by the Issuer at least two
business days prior to the payment date, against delivery of the certificates
for the Notes for the account of the Initial Purchasers. Delivery of, and
payment of the purchase price for, the Notes shall be made at 10:00 a.m., New
York City time, on the third business day following the date of this Agreement
(the "Closing Date") at the offices of Vinson & Elkins L.L.P., 2300 First City
Tower, 1001 Fannin, Houston, Texas 77002. The Closing Date, and the location of
delivery of, and the form of payment for, the Notes may be varied by mutual
agreement between the Initial Purchaser and the Issuer.
One or more of the Notes in global form or certificated form, as the
case may be, registered in such names as the Initial Purchasers may request upon
at least one business day's notice prior to the Closing Date, having an
aggregate principal amount corresponding to the aggregate principal amount of
the Notes sold pursuant to Exempt Resales to QIBs, in the case of the Notes in
global form, and to other Eligible Purchasers, in the case of Notes in
certificated form sold pursuant to Regulation S, shall be delivered by the
Issuer to the Initial Purchasers (or as the Initial Purchasers direct), against
payment by the Initial Purchasers of the purchase price therefor by means of
transfer of immediately available funds (including book transfer) reasonably
acceptable to the Initial Purchasers and the Issuer to the order of the Issuer.
The Notes shall be made available to the Initial Purchasers for inspection not
later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.
3. CERTAIN AGREEMENTS OF THE ISSUER AND SUBSIDIARY GUARANTORS.
The Issuer and the Subsidiary Guarantors, jointly and severally, covenant and
agree with the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers, without charge, with as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for
purposes contemplated by the Act. The Issuer and Subsidiary Guarantors consent
to the use of the Preliminary Offering Memorandum and the Offering Memorandum,
and any amendments and supplements thereto required pursuant to this Agreement,
by the Initial Purchasers in connection with Exempt Resales that are in
compliance with Section 4(B) of this Agreement.
(b) Not to amend or supplement the Offering Memorandum prior to
the Closing Date unless the Initial Purchasers shall previously have been
advised of, and shall not have objected to in writing (any such objection not to
be unreasonable), such amendment or supplement within a reasonable time, but in
any event not longer than five days after being furnished with a copy of such
amendment or supplement. The Issuer shall promptly prepare, upon the Initial
Purchasers'
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reasonable request, any amendment or supplement to the Offering Memorandum that
may be necessary or advisable in connection with Exempt Resales.
(c) If, during the time that an Offering Memorandum is required to
be delivered in connection with any Exempt Resales or market-making transactions
after the date of this Agreement and prior to the consummation of the Exchange
Offer, any event shall occur that, in the judgment of the Issuer or any of the
Subsidiary Guarantors or in the judgment of counsel to the Initial Purchasers,
makes any statement of a material fact in the Offering Memorandum untrue or that
requires the making of any additions to or changes in the Offering Memorandum in
order to make such statements in the Offering Memorandum, in the light of the
circumstances under which they are made, not misleading, or if it is necessary
to amend or supplement the Offering Memorandum to comply with all applicable
laws, the Issuer and the Subsidiary Guarantors shall promptly notify the Initial
Purchasers of such event and prepare an appropriate amendment or supplement to
the Offering Memorandum so that (i) such statements in the Offering Memorandum
as amended or supplemented will, in the light of the circumstances at the time
that the Offering Memorandum is delivered to prospective Eligible Purchasers,
not be misleading and (ii) the Offering Memorandum will comply with applicable
law.
(d) To furnish such information as may be required and otherwise
to cooperate with the Initial Purchasers and counsel to the Initial Purchasers
in qualifying the Notes and New Notes for offering and sale under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may request and
to maintain such qualification in effect so long as required for the Exempt
Resales; provided that neither the Issuer nor any Subsidiary Guarantor shall be
required to qualify as a foreign partnership, limited liability company or
corporation in any jurisdiction in which it is not so qualified or to file a
general consent to service of process in any such jurisdiction or subject itself
to taxation in excess of a nominal dollar amount in any such jurisdiction where
it is not then so subject (except service of process with respect to the
offering and sale of the Notes and New Notes).
(e) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, to confirm such advice in writing, of the issuance by
any securities commission of any stop order or notification suspending the
qualification or exemption from qualification of any of the Notes for offering
or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority. The
Issuer shall use its reasonable best efforts (unless otherwise agreed by the
Initial Purchasers) to prevent the issuance of any stop order or order
suspending the qualification or exemption of any of the Notes under any state
securities or Blue Sky laws, and if at any time any state securities commission
or other regulatory authority shall issue an order suspending the qualification
or exemption of any of the Notes under any state securities or Blue Sky laws,
the Issuer shall use its reasonable best efforts (unless otherwise agreed by the
Initial Purchasers) to obtain the withdrawal or lifting of such order at the
earliest possible time.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees, disbursements (including fees, expenses and disbursements
of counsel) and stamp, documentary or similar taxes
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incident to and in connection with: (i) the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all amendments and
supplements thereto, (ii) the preparation and delivery of the Operative
Documents and all other agreements, memoranda, correspondence and documents
prepared and delivered in connection with this Agreement and with the Exempt
Resales, (iii) the issuance, transfer and delivery by the Issuer and the
Subsidiary Guarantors of the Notes and the Subsidiary Guarantees, respectively,
to the Initial Purchasers, (iv) the qualification or registration of the Notes
for offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the cost of printing and mailing a preliminary
and final Blue Sky memorandum and the fees and disbursements of counsel to the
Initial Purchasers relating thereto), (v) the furnishing of such copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and all amendments
and supplements thereto, as may be reasonably requested for use in connection
with Exempt Resales, (vi) the preparation of certificates for the Notes and New
Notes (including, without limitation, printing and engraving thereof), (vii) the
application for eligibility of the Notes for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") market of the National
Association of Securities Dealers, Inc. ("NASD"), including, but not limited to,
all application fees and expenses, (viii) the approval of the Notes and New
Notes by The Depository Trust Company ("DTC") for "book-entry" transfer, (ix)
the rating of the Notes and New Notes by rating agencies, (x) the fees and
expenses of the Trustee and its counsel and (xi) the performance by the Issuer
and the Subsidiary Guarantors of their other obligations under the Operative
Documents, including, but not limited to, the fees, disbursements and expenses
of the Issuer's counsel and accountants. It is understood, however, that, except
as provided in clause (iv) above in this Section, and Sections 5, 7 and 10(d)
hereof, the Initial Purchasers will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Notes or New Notes by them, and any advertising expenses connected with any
offers they may make.
(g) To use the net proceeds from the sale of the Notes in the
manner described in the Offering Memorandum under the caption "Use of Proceeds."
(h) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to satisfy all
conditions precedent on its part to the delivery of the Notes.
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Notes in a manner that would require
the registration under the Act of the sale of the Notes to the Initial
Purchasers or any Eligible Purchasers.
(j) During the period of two years after the Closing Date or, if
earlier, until such time as the Notes are no longer restricted securities (as
defined in Rule 144 under the Act), not to, and not to permit any of its
affiliates (as defined in Rule 144 under the Act) to, resell any of the Notes
that have been reacquired by any of them.
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(k) Not to engage, or allow any of its affiliates, or any person
acting on its behalf (other than in any case any Initial Purchasers, as to whom
the Issuer and the Subsidiary Guarantors make no covenant) to engage, in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Act) in connection with any offer or sale of the Notes.
(l) Not to engage, or allow any of its affiliates, or any person
acting on its behalf (other than in any case any Initial Purchasers, as to whom
the Issuer and the Subsidiary Guarantors make no covenant), to engage in any
directed selling effort with respect to the Notes, and agree to comply with the
offering restrictions requirement of Regulation S under the Act. Terms used in
this paragraph have the meanings given to them by Regulation S.
(m) In connection with the Offering, until the Initial Purchasers
shall have notified the Issuer of the completion of the resale of the Notes, not
to, and not to permit any of its affiliates to, either alone or with one or more
other persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest in any Notes; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating actual, or
apparent, active trading in, or of raising the price of, the Notes.
(n) During the period of two years after the Closing Date or, if
earlier, until such time as the Notes are no longer restricted securities (as
defined in Rule 144 under the Act), not to be or become an investment company
required to be registered, but not registered, under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
(o) From and after the Closing Date, for so long as any of the
Notes remain outstanding and are "restricted securities" within the meaning of
Rule 144(a)(3) under the Act and during any period in which the Issuer is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to make available the information required by Rule
144A(d)(4) under the Act to (i) any holder or beneficial owner of Notes in
connection with any sale of such Notes and (ii) any prospective purchaser of
such Notes from any such holder or beneficial owner designated by the holder or
beneficial owner.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representations letter of the Issuer to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(q) To use its best efforts to effect the eligibility of the Notes
for trading in the PORTAL market and to obtain approval of the Notes by DTC for
"book-entry" transfer.
(r) From and after the Closing Date, for so long as any of the
Notes remain outstanding, to deliver without charge to the Initial Purchasers,
promptly upon their becoming available, copies of (i) all reports and other
communications (financial or otherwise) that the Issuer shall mail or otherwise
make available to its security holders, (ii) all reports or financial statements
furnished to or filed by the Issuer and each of the Subsidiary Guarantors with
the Commission or any national
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securities exchange and (iii) such other information as the Initial Purchasers
may reasonably request regarding the Issuer and its subsidiaries.
(s) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared by the Issuer and the Subsidiary
Guarantors, a copy of any regularly prepared internal financial statements of
the Issuer and each of the Subsidiary Guarantors for any period subsequent to
the period covered by the financial statements appearing in the Offering
Memorandum and prior to the Closing Date.
(t) Not to distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Notes other than the
Preliminary Offering Memorandum and the Offering Memorandum.
4. REPRESENTATIONS AND WARRANTIES.
(A) The Issuer and each of the Subsidiary Guarantors, jointly and
severally, represent and warrant to the Initial Purchasers that:
(1) Each of the Preliminary Offering Memorandum and the Offering
Memorandum has been prepared in connection with the Exempt Resales. Neither the
Preliminary Offering Memorandum nor the Offering Memorandum, or any supplement
or amendment thereto, contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Issuer and the Subsidiary Guarantors make no
representation or warranty with respect to information contained in or omitted
from the Preliminary Offering Memorandum or the Offering Memorandum, as
supplemented or amended, in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Issuer by or on behalf of
the Initial Purchasers expressly for use in the Preliminary Offering Memorandum
or the Offering Memorandum or any supplement or amendment thereto. No order
prohibiting the use of either the Preliminary Offering Memorandum or the
Offering Memorandum or asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act has been
issued or threatened. Except as disclosed in the Offering Memorandum, on the
date of this Agreement, the Issuer's Annual Report on Form 10-K most recently
filed with the Securities and Exchange Commission (the "Commission") and all
subsequent reports (collectively, the "Exchange Act Reports") which have been
filed by the Issuer with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") do not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder.
(2) As of the date of this Agreement, the Issuer has the
authorized, issued and outstanding capitalization as set forth under the heading
entitled "Actual" in the section of the Offering
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Memorandum entitled "Capitalization" and, as of the Closing Date, the Issuer
shall have an authorized capitalization as set forth under the heading entitled
"Pro Forma As Adjusted" in the section of the Offering Memorandum entitled
"Capitalization."
(3) The Issuer, either directly or indirectly through a Subsidiary
Guarantor, owns, all of the outstanding capital stock, partnership interests,
membership interests and other securities evidencing equity ownership of each of
the Subsidiary Guarantors, free and clear of any pledge, fiduciary transfer,
security interest, claim, lien, limitation on voting rights or encumbrance, and
all such securities will have been duly authorized and validly issued, fully
paid and nonassessable and have not been issued in violation of, or subject to,
any preemptive, first refusal or similar rights. There are not any outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock, partnership interests, membership
interests or other equity interest of any Subsidiary Guarantor.
(4) The Issuer and each of its subsidiaries have been duly
organized, are validly existing as corporations in good standing under the laws
of their respective jurisdictions of organization and have all requisite power
and authority under their constituent documents and applicable laws to (a) carry
on its business as it is currently being conducted and as proposed to be
conducted, in each case as described in the Offering Memorandum and (b) own,
lease and operate its respective properties in accordance with its business as
currently and as proposed to be conducted. The Issuer and each of its
subsidiaries is duly qualified and in good standing as a foreign entity
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not, either individually or in
the aggregate, result in a Material Adverse Effect. A "Material Adverse Effect"
means any material adverse effect on the business, condition (financial or
other), properties, assets, liabilities, results of operations or prospects of
the Issuer and its subsidiaries taken as a whole.
(5) The Issuer and each of the Subsidiary Guarantors has all
requisite power and authority to execute, deliver and perform all of its
obligations under the Operative Documents and to consummate the transactions
contemplated by the Operative Documents and, without limitation, the Issuer has
all requisite power and authority to issue, sell and deliver the Notes and New
Notes and each of the Subsidiary Guarantors has all requisite power and
authority to execute, deliver and perform all of its obligations under the
Subsidiary Guarantees.
(6) This Agreement has been duly and validly authorized, executed
and delivered by the Issuer and each of the Subsidiary Guarantors.
(7) The Indenture has been duly and validly authorized by the
Issuer and each of the Subsidiary Guarantors and, when duly executed and
delivered by the Issuer and each of the Subsidiary Guarantors, will be a legal,
valid and binding agreement of each of the Issuer and the Subsidiary Guarantors,
enforceable against each of them in accordance with its terms, except that
enforceability of the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general
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principles of equity. The Indenture, when executed and delivered, will conform
in all material respects to the description thereof in the Offering Memorandum.
(8) The Notes have been duly and validly authorized for issuance
and sale to the Initial Purchasers by the Issuer and, when issued, authenticated
and delivered by the Issuer against payment by the Initial Purchasers in
accordance with the terms of this Agreement and the Indenture, the Notes will be
legal, valid and binding obligations of the Issuer, entitled to the benefits of
the Indenture and enforceable against the Issuer in accordance with their terms,
except that enforceability of the Notes may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity. The Notes,
when executed, authenticated and delivered, will conform in all material
respects to the description thereof in the Offering Memorandum.
(9) The New Notes have been duly and validly authorized for
issuance by the Issuer and, when issued, authenticated and delivered by the
Issuer in accordance with the terms of the Exchange Offer and the Indenture, the
New Notes will be legal, valid and binding joint and several obligations of each
of the Issuer, entitled to the benefits of the Indenture and enforceable against
the Issuer in accordance with their terms, except that enforceability of the New
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity. The New Notes, when executed, authenticated and
delivered, will conform in all material respects to the description thereof in
the Offering Memorandum.
(10) The Subsidiary Guarantees have been duly and validly
authorized by the Subsidiary Guarantors and, when the Notes are executed and
delivered in accordance with the terms of the Indenture and, in the case of the
Subsidiary Guarantees on the New Notes, when the New Notes are executed and
delivered in accordance with the Registration Rights Agreement, will be legal,
valid and binding joint and several obligations of the Subsidiary Guarantors,
enforceable against each of them in accordance with their terms, except that
enforceability of the Subsidiary Guarantees may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity. The Subsidiary Guarantees, when executed and delivered,
will conform in all material respects to the description thereof in the Offering
Memorandum.
(11) The Registration Rights Agreement has been duly and validly
authorized by the Issuer and each of the Subsidiary Guarantors and, when duly
executed and delivered by the Issuer and each of the Subsidiary Guarantors, will
be a legal, valid and binding agreement of the Issuer and each of the Subsidiary
Guarantors, enforceable against each of them in accordance with its terms,
except that (a) enforceability of the Registration Rights Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity and (b) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws and
public policy
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considerations. The Registration Rights Agreement, when executed and delivered,
will conform in all material respects to the description thereof in the Offering
Memorandum.
(12) None of the Issuer or its subsidiaries is (a) in violation of
its articles of incorporation, charter, bylaws or other organizational document
or (b) in default (or, with notice or lapse of time or both, would be in
default) in the performance or observance of any obligation, agreement, covenant
or condition contained in any bond, debenture, note, indenture, mortgage, deed
of trust, loan agreement, lease, license, storage or service agreement,
authorization, permit, certificate or other agreement or instrument to which any
of them is a party or by which any of them is bound or to which any of their
assets or properties is subject (collectively, "Agreements and Instruments"), or
(c) in violation of any law, statute, rule, regulation, judgment, order or
decree of any domestic or foreign court with jurisdiction over any of them or
any of their assets or properties or other governmental or regulatory authority,
agency or other body, that, in the case of clauses (b) and (c) above, would,
either individually or in the aggregate, result in a Material Adverse Effect.
There exists no condition that, with notice or lapse of time or both, would
constitute a default by the Issuer or any of its subsidiaries under any such
Agreements and Instruments or the items referred to in clause (c) of the
preceding paragraph or result in the imposition of any penalty or the
acceleration of any indebtedness, other than penalties, defaults or conditions
that would not, either individually or in the aggregate, result in a Material
Adverse Effect.
(13) The execution, delivery or performance by the Issuer and the
Subsidiary Guarantors of this Agreement and each of the other Operative
Documents to which they are a party, and the use of the proceeds of the sale of
the Notes in the manner contemplated by the Offering Memorandum, does not or
will not violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the lapse of
time, or both, would constitute a default), or require consent not already
obtained under (as of the Closing Date), or result in the creation or
imposition of a lien, charge or encumbrance on any property or assets of the
Issuer or any of the Subsidiary Guarantors pursuant to (a) the articles of
incorporation, charter, bylaws or other organizational documents of the Issuer
or any of the Subsidiary Guarantors, (b) any bond, debenture, note, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Issuer or any of the Subsidiary Guarantors is a party or by which the
Issuer or any of the Subsidiary Guarantors is bound or to which any of the
property or assets of the Issuer or any of the Subsidiary Guarantors is
subject, (c) any law, statute, rule or regulation applicable to the Issuer or
any of the Subsidiary Guarantors or their assets or properties or (d) any
judgment, order or decree of any domestic or foreign court or governmental
agency or authority having jurisdiction over the Issuer or any of the
Subsidiary Guarantors or their assets or properties, except as would not,
either individually or in the aggregate, affect the validity of, or any of the
rights under, the Notes or result in a Material Adverse Effect. Assuming the
accuracy of the representations and warranties of the Initial Purchasers in
Section 4(B) of this Agreement, no consent, approval, authorization or order
of, or filing, registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency, domestic or
foreign, is required to be obtained or made for the execution, delivery and
performance of this Agreement or any of the other Operative Documents, or any
of the transactions contemplated thereby or the planned expansion of the
Issuer's facilities as
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described in the Offering Memorandum, except (a) such that have been obtained or
made and are in full force and effect, (b) registration of the offer and sale of
the New Notes under the Act pursuant to the Registration Rights Agreement and
(c) such as may be required by the NASD or pursuant to the Blue Sky law of any
state. No consents or waivers from any other person or entity are required for
the execution, delivery and performance of this Agreement or any of the other
Operative Documents, or any of the transactions contemplated thereby, except
such as have been obtained or made and are in full force and effect.
(14) There is (a) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or foreign,
now pending or, to the knowledge of the Issuer or its subsidiaries, threatened
or contemplated, to which the Issuer or any of its subsidiaries is or may be a
party or to which the business, assets or property of such person is or may be
subject, (b) except as set forth in the Offering Memorandum, no statute, rule,
regulation or order that has been enacted, adopted or issued or, to the
knowledge of the Issuer or its subsidiaries, that has been proposed by any
governmental body or agency, domestic or foreign, (c) no injunction, restraining
order or order of any nature by a federal or state court or foreign court of
competent jurisdiction to which the Issuer or any of its subsidiaries is or may
be subject that would be reasonably likely to in the case of the preceding
clauses, either individually or in the aggregate, (1) result in a Material
Adverse Effect, or (2) interfere with or adversely affect the issuance of the
Notes or the New Notes or the Subsidiary Guarantees in any jurisdiction or
adversely affect the consummation of the transactions contemplated by any of the
Operative Documents or the planned acquisition of Sea Mar, Inc. ("Sea Mar") as
described in the Offering Memorandum. Every request of any securities authority
or agency of any jurisdiction for additional information with respect to Notes
or the New Notes that has been received by the Issuer, the Subsidiary Guarantors
or their counsel prior to the date hereof has been, or will prior to the Closing
Date be, complied with.
(15) No labor disturbance by the employees of the Issuer or any of
its subsidiaries exists or, to the knowledge of the Issuer or the Subsidiary
Guarantors, is imminent that might reasonably be expected to result in a
Material Adverse Effect; the Issuer and its subsidiaries are in compliance in
all respects with, as applicable and except where a failure to so comply would
not, individually or in the aggregate, have a Material Adverse Effect, all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA").
(16) The Issuer and each of its subsidiaries (a) is in compliance
with, and not subject to costs or liabilities under, any and all local, state,
provincial, federal and foreign laws, regulations, rules of common law, orders
and decrees, as in effect as of the date hereof, and any presently effective
judgments, decrees, orders and injunctions issued or promulgated thereunder,
including those relating to pollution or protection of public and employee
health and safety and the environment applicable to it or its business or
operations or ownership or use of its property ("Environmental Laws"), other
than such noncompliance or costs or liabilities that would not, either
individually or in the aggregate, result in a Material Adverse Effect, and (b)
possesses all permits, certificates of public convenience and necessity,
licenses, authorizations, or other approvals required
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under applicable Environmental Laws, other than such permits, certificates,
licenses, authorizations or approvals the lack of which would not, either
individually or in the aggregate, result in a Material Adverse Effect. All
currently pending and, to its knowledge, threatened proceedings, notices of
violation, demands, notices of potential responsibility or liability, suits and
existing environmental or other conditions with respect to which the Issuer or
its subsidiaries could reasonably be expected to have any liability are fully
and accurately described in all material respects in the Offering Memorandum
except as would not, either individually or in the aggregate, result in a
Material Adverse Effect. The Issuer maintains a system of internal management
controls sufficient to provide reasonable assurance that all material sampling,
analytical, recordkeeping and reporting requirements under applicable
Environmental Laws are implemented, executed and maintained in accordance with
the requirements of such Environmental Laws.
(17) The Issuer and each of its subsidiaries has (a) good and
marketable title to all of the properties and assets described in the Offering
Memorandum as owned by it and good and marketable title to the leasehold estates
in the real and personal property described in the Offering Memorandum as leased
by it, free and clear of all Liens (as defined in the Indenture), except for
Liens described in the Offering Memorandum, Liens permitted under the Indenture
and such Liens as would not, either individually or in the aggregate, result in
a Material Adverse Effect, (b) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made all
declarations and filings with, all federal, state, local and foreign
authorities, all self-regulatory authorities and all courts and other tribunals
(each, an "Authorization") to (i) carry on its business as it is currently being
conducted and as described in the Offering Memorandum, (ii) own, lease, license
and operate its respective properties in accordance with its business as
currently conducted, and (iii) proceed with the acquisition of Sea Mar, and (c)
no reason to believe that any governmental body or agency, domestic or foreign,
is considering limiting, suspending or revoking any such Authorization, except
where such limiting, suspending or revoking would not, either individually or in
the aggregate, result in a Material Adverse Effect. All such Authorizations are
valid and in full force and effect and the Issuer and each of its subsidiaries
is in compliance with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities having jurisdiction
with respect to such Authorizations except where the failure to be in compliance
would not, either individually or in the aggregate, result in a Material Adverse
Effect. Except as would not, either individually or in the aggregate, result in
a Material Adverse Effect, all leases and storage contracts to which the Issuer
or any of its subsidiaries is a party are valid, binding and enforceable, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity and no default has occurred and is
continuing thereunder.
(18) The Issuer and each of its subsidiaries owns, possesses or has
the right to employ all patents, patent rights, licenses, inventions,
copyrights, technology, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively, the
"Intellectual Property"), if any, necessary to conduct the businesses operated
by the Issuer or any of its subsidiaries as
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<PAGE> 13
described in the Offering Memorandum. None of the Issuer or the Subsidiary
Guarantors has received any notice of infringement of or conflict with (and
neither knows of any such infringement or a conflict with) asserted rights of
others with respect to any of the foregoing that, if such assertion of
infringement or conflict were sustained, would result in a Material Adverse
Effect. To the knowledge of the Issuer and each of the Subsidiary Guarantors,
the use of the Intellectual Property in connection with the business and
operations of the Issuer and its subsidiaries does not infringe on the rights of
any person.
(19) The Issuer and each of its subsidiaries has timely and
properly prepared and filed all tax returns and necessary federal, state, local
and foreign tax returns which are required to be filed by the Issuer and each of
its subsidiaries, and all taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from such
entities or that are due and payable have been paid, other than those being
contested in good faith and for which reserves have been provided in accordance
with generally accepted accounting principles or those currently payable without
penalty or interest. To the knowledge of the Issuer and each of the Subsidiary
Guarantors, there are no material tax deficiencies or proposed additional tax
assessments which have been or might be asserted against any of them or their
subsidiaries or their assets or property.
(20) None of the Issuer or its subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), or analogous foreign laws and regulations.
(21) Except with respect to the Notes or the New Notes as
contemplated by the Registration Rights Agreement and with respect to securities
issuable pursuant to the acquisition of Sea Mar, there are no holders of
securities of the Issuer or any of its subsidiaries who have the right to
request or demand that the Issuer or any of its subsidiaries register under the
Act or analogous foreign laws and regulations any of such securities held by any
such holders.
(22) The Issuer and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that:
(a) transactions are executed in accordance with management's general or
specific authorizations; (b) transactions are recorded as necessary to permit
preparation of its financial statements in conformity with United States
generally accepted accounting principles and to maintain accountability for
assets; (c) access to assets is permitted only in accordance with management's
general or specific authorization; and (d) the recorded accountability for its
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(23) The Issuer and each of its subsidiaries maintain insurance
covering their properties, assets, operations, personnel and businesses, and
such insurance is of such type and in such amounts in accordance with customary
industry practice to protect the Issuer and its subsidiaries and their
businesses. None of the Issuer or the Subsidiary Guarantors has received notice
from any insurer or agent of such insurer that any material capital improvements
or other material expenditures will
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<PAGE> 14
have to be made in order to continue any insurance maintained by any of them
other than capital improvements and other expenditures that have been budgeted
by the Issuer or its subsidiaries, as the case may be.
(24) None of the Issuer, the Subsidiary Guarantors or their
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has (a)
taken, directly or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipulation of the price of
any security of the Issuer or any of the Subsidiary Guarantors to facilitate the
sale or resale of the Notes or (b) since the date of the Preliminary Offering
Memorandum (i) sold, bid for, purchased or paid any person any compensation for
soliciting purchases of the Notes in a manner that would require registration of
the Notes under the Act or (ii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Issuer or any of the Subsidiary Guarantors in a manner that would require
registration of the Notes under the Act.
(25) No registration under the Act of the Notes is required for the
sale of the Notes to the Initial Purchasers as contemplated by this Agreement or
for the Exempt Resales, assuming in each case (a) the purchasers who buy the
Notes in the Exempt Resales are Eligible Purchasers and (b) the accuracy of and
compliance with the Initial Purchasers' representations, warranties and
covenants contained in Section 4(B) of this Agreement. No form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) was used by the Issuer, any of the Subsidiary Guarantors or any
of their representatives in connection with the offer and sale of any of the
Notes or in connection with Exempt Resales, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. Neither the Issuer nor the Subsidiary Guarantors nor any of their
affiliates has entered into, and none of the Issuer or the Subsidiary Guarantors
or their affiliates will enter into, any contractual arrangement with respect to
the distribution of the Notes except for this Agreement.
(26) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes, the New Notes, and Subsidiary
Guarantees to be purchased by the Eligible Purchasers will not involve any
prohibited transaction within the meaning of Section 406(a) of ERISA or Section
4975(c)(1)(A)-(D) of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder ("Code"). The
representation made by the Issuer and each of the Subsidiary Guarantors in the
preceding sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum under the caption
"Transfer Restrictions."
(27) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of its
date, contains the information specified in, and meets the requirements of, Rule
144A(d)(4) under the Act.
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<PAGE> 15
(28) As of December 31, 1997, none of the Issuer, or any of the
Issuer's subsidiaries had any material liabilities or obligations, direct or
contingent, that were not set forth in the financial statements (including the
pro forma financial statements) and the notes thereto set forth in the Offering
Memorandum. Since December 31, 1997, neither the Issuer nor any of its
subsidiaries had any material liabilities or obligations, direct or contingent,
that were not set forth in the Issuer's consolidated balance sheet as of
December 31, 1997, or in the notes thereto. Since the date as of which
information is given in the Offering Memorandum and up to the Closing Date,
except as otherwise expressly set forth in the Offering Memorandum, (a) none of
the Issuer or its subsidiaries has (i) incurred any liabilities or obligations,
direct or contingent, that are not in the ordinary course of business that
would, either individually or in the aggregate, result in a Material Adverse
Effect or (ii) entered into any material transaction not in the ordinary course
of business, (b) there has not been any event or development in respect of the
business, development or financial condition of the Issuer or any of its
subsidiaries that would, either individually or in the aggregate, result in a
Material Adverse Effect, (c) there has been no dividend or distribution of any
kind declared, paid, or made by either the Issuer or any of the Issuer's
subsidiaries on any class of its equity securities, and (d) there has not been
any change in the long-term debt of the Issuer and its subsidiaries.
(29) Neither the Issuer nor any of the Subsidiary Guarantors (nor
any agent acting on behalf of the Issuer or any of the Subsidiary Guarantors)
has taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Notes or New Notes to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation
U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations, in each case as in effect, or as the same may hereafter be in
effect, on the Closing Date.
(30) The accountants who have certified the financial statements
included as part of the Offering Memorandum are independent accountants within
the meaning of the Act. The historical financial statements of the Issuer and
Sea Mar comply as to form in all material respects with the requirements
applicable to registration statements on Form S-1 under the Act and present
fairly in all material respects the consolidated financial position and results
of operations of the Issuer and Sea Mar at the respective dates and for the
respective periods indicated. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods presented and comply as to form
with the rules and regulations promulgated under the Act. The pro forma
financial statements included in the Offering Memorandum (a) have been prepared
on a basis consistent with such historical statements, except for the pro forma
adjustments specified therein, (b) include all material adjustments to the
historical financial statements required by Rule 11-02 of Regulation S-X under
the Exchange Act to reflect the transactions described in the Offering
Memorandum and (c) give effect to assumptions made on a reasonable basis and
present fairly in all material respects the historical and proposed transactions
contemplated by the Offering Memorandum, this Agreement, the Operative Documents
and the acquisition of Sea Mar. All other financial and statistical information
and data included in the Offering Memorandum (including, but not limited to,
financial and statistical information contained in the Offering Memorandum under
the headings "Summary -- Selected Historical and
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<PAGE> 16
Pro Forma Condensed Consolidated Financial Data," "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations"), historical and pro forma, are accurately presented in all material
respects and prepared on a basis consistent with the financial statements and
the books and records of the Issuer and its subsidiaries.
(31) None of the Issuer or the Subsidiary Guarantors is or, upon
consummation of the transactions contemplated by the Operative Documents, will
be (a) "insolvent" as that term is defined in Section 101(32) of the United
States Bankruptcy Code (the "Bankruptcy Code") (11 U.S.C. Section 101(32)),
Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or Section 2 of the
Uniform Fraudulent Conveyance Act ("UFCA"), (b) an entity with "unreasonably
small capital" as that term is used in Section 548(a)(2)(ii) of the Bankruptcy
Code or Section 5 of the UFCA, (c) engaged or about to engage in a business or
transaction for which its remaining property is "unreasonably small" in relation
to the business or transaction as that term is used in Section 4 of the UFTA or
(d) unable to pay its debts as they mature or become due, within the meaning of
Section 548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4 of the UFTA and
Section 6 of the UFCA. The Issuer and each of the Subsidiary Guarantors now owns
and upon consummation of the Transactions will own assets having a value both at
"fair valuation" and at "present fair saleable value" greater than the amount
required to pay its "debts" as such terms are used in Section 2 of the UFTA and
Section 2 of the UFCA.
(32) There are no contracts, agreements or understandings between
the Issuer or any of the Subsidiary Guarantors and any other person other than
the Initial Purchasers that would give rise to a valid claim against the Issuer,
the Subsidiary Guarantors or the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase and sale
of the Notes or New Notes.
(33) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the Issuer and the
Subsidiary Guarantors believe to be reliable and accurate and represent the
Issuer's and the Subsidiary Guarantors' good faith estimates that are made on
the basis of data derived from such sources.
(34) No forward-looking statement (within the meaning of Section
27A of the Act and Section 21E of the Exchange Act) contained in the Offering
Memorandum has been made without a reasonable basis or has been disclosed other
than in good faith.
(35) Sea Mar and any of its subsidiaries that owns the marine
vessels described in the Offering Memorandum, which operate in United States
coastwise trade (the "Vessels"), are and at all times have been citizens of the
United States within the meaning of Section 2 of the Shipping Act of 1916, as
amended, 46 U.S.C. Section 802 (the "Shipping Act"), and qualified to engage in
coastwise trade. At no time during Sea Mar's or any subsidiary's ownership of
the Vessels have any of the Vessels been sold, chartered or otherwise
transferred to any person or entity in violation of any applicable laws, rules
or regulations. Each Vessel so required has a certificate of inspection from the
United States Coast Guard and an American Bureau of Shipping load line
certificate where
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<PAGE> 17
applicable, in each case free of reported or reportable exceptions or notations
of record, except where failure to be so certified would not, either
individually or in the aggregate, result in a Material Adverse Effect.
(36) Each certificate signed by any officer of the Issuer or any of
the Subsidiary Guarantors and delivered to the Initial Purchasers or counsel for
the Initial Purchasers pursuant to, or in connection with, this Agreement shall
be deemed to be a representation and warranty by the Issuer or such Subsidiary
Guarantor to the Initial Purchasers as to the matters covered by such
certificate.
(37) The Issuer and each of the lenders have executed the amendment
to the Credit Agreement that increases the aggregate limit under the Credit
Agreement to $180 million as further described in the Offering Memorandum (the
"Amended Credit Agreement").
The Issuer and each of the Subsidiary Guarantors acknowledge that the
Initial Purchasers and, for purposes of the opinions to be delivered to the
Initial Purchasers pursuant to Section 7 of this Agreement, the various law
firms acting as counsel to the Issuer and each of the Subsidiary Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and the Issuer and each Subsidiary Guarantor hereby
consent to such reliance.
(B) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Issuer that it is a QIB with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the securities. Each
of the Initial Purchasers, severally and not jointly, represents, warrants and
agrees with the Issuer that (i) it has not and will not solicit offers for, or
offer or sell, the Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the Act
and (ii) it has and will solicit offers for the Notes only from, and will offer
the Notes only to, (x) persons whom such Initial Purchaser reasonably believes
to be QIBs or, if any such person is buying for one or more institutional
accounts for which such person is acting as fiduciary or agent, only when such
person has represented to such Initial Purchaser that each such account is a QIB
to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in transactions under Rule 144A, or
(y) persons other than U.S. persons outside the U.S. in reliance on Regulation
S.
Each of the Initial Purchasers, severally and not jointly, represents
and warrants that the source of funds being used by it to acquire the Notes does
not include the assets of any "employee benefit plan" (within the meaning of
Section 3 of ERISA) or any "plan" (within the meaning of Section 4975 of the
Code).
The Initial Purchasers understand that the Issuer and, for purposes of
the opinion to be delivered to them pursuant to Section 7(f) hereof, counsel to
the Issuer will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchasers hereby consent to such reliance.
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5. INDEMNIFICATION. (a) Each of the Issuer and the Subsidiary
Guarantors, on a joint and several basis, agrees to indemnify and hold harmless
each of the Initial Purchasers, each person, if any, who controls the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, the agents, employees, officers and directors of the Initial
Purchasers and the agents, employees, officers and directors of any such
controlling person from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or any of them may become
subject under the Act, the Securities Exchange Act of 1934, as amended or
otherwise insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Issuer
and the Subsidiary Guarantors will not be liable in any such case to the extent,
but only to the extent, that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Initial Purchasers furnished
to the Issuer by or on behalf of the Initial Purchasers expressly for use
therein. This indemnity agreement will be in addition to any liability that each
of the Issuer and the Subsidiary Guarantors may otherwise have, including, but
not limited to, liability under this Agreement.
If any action is brought against any of the Initial Purchasers or any
such person with respect to which indemnity may be sought against the Issuer and
the Subsidiary Guarantors pursuant to the foregoing paragraph, the Initial
Purchasers or such person shall promptly notify the indemnifying party in
writing of the institution of such action and the indemnifying party shall
assume the defense of such action, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses, provided, however, that the omission to so notify the indemnifying
party shall not relieve the indemnifying party from any liability which they may
have to the Initial Purchasers or any such person or otherwise. The Initial
Purchasers shall have the right to employ their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Initial
Purchasers unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or the indemnifying party shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying party and
paid as incurred (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (together
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with appropriate local counsel) in any one action or series of related actions
in the same jurisdiction representing the indemnified parties who are parties to
such action). The indemnifying party shall not be liable for any settlement of
any such claim or action effected without its written consent but if settled
with the written consent of the indemnifying party, the indemnifying party
agrees to indemnify and hold harmless the Initial Purchasers and any such person
from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(b) The Initial Purchasers, severally and not jointly, agree to
indemnify and hold harmless the Issuer and the Subsidiary Guarantors, each
person, if any, who controls the Issuer within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and each of its agents, employees,
officers and directors and the agents, employees, officers and directors of such
controlling person from and against any losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever and any and all reasonable amounts paid in settlement of any claim or
litigation) to which they or either of them may become subject under the Act,
the Exchange Act or otherwise insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum or the Offering Memorandum, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Initial Purchasers furnished
to the Issuer by or on behalf of the Initial Purchasers in writing expressly for
use therein. The Issuer, the Subsidiary Guarantors and the Initial Purchasers
acknowledge that the information set forth in Section 8 is the only information
furnished in writing by the Initial Purchasers to the Issuer expressly for use
in the Offering Memorandum.
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<PAGE> 20
If any action is brought against the Issuer or the Subsidiary
Guarantors or any such person with respect to which indemnity may be sought
against the Initial Purchasers pursuant to the foregoing paragraph, the Issuer,
the Subsidiary Guarantors or such person shall promptly notify the Initial
Purchasers in writing of the institution of such action and the Initial
Purchasers shall assume the defense of such action, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses, provided, however, that the omission to so notify the Initial
Purchasers shall not relieve the Initial Purchasers from any liability which
they may have to the Issuer, the Subsidiary Guarantors or any such person or
otherwise. The Issuer, the Subsidiary Guarantors or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Issuer or such person unless the
employment of such counsel shall have been authorized in writing by the Initial
Purchasers in connection with the defense of such action or the Initial
Purchasers shall not have employed counsel to have charge of the defense of such
action or such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to the Initial Purchasers (in which case the
Initial Purchasers shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties, but the Initial Purchasers may
employ counsel and participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of the Initial Purchasers), in any of
which events such fees and expenses shall be borne by the Initial Purchasers and
paid as incurred (it being understood, however, that the Initial Purchasers
shall not be liable for the expenses of more than one separate counsel in any
one action or series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Initial Purchasers shall not be
liable for any settlement of any such claim or action effected without the
written consent of the Initial Purchasers but if settled with the written
consent of the Initial Purchasers, the Initial Purchasers agrees to indemnify
and hold harmless the Issuer, the Subsidiary Guarantors and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (a) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (b) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (c) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
6. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 5 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified
-20-
<PAGE> 21
under Section 5 of this Agreement, the Issuer, the Subsidiary Guarantors and the
Initial Purchasers shall contribute to the amount paid or payable by such
indemnified party as a result of such aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action or any claims
asserted) to which the Issuer and/or the Subsidiary Guarantors and the Initial
Purchasers may be subject (a) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer and the Subsidiary Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, from the Offering
or, (b) if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (a) above but also the relative fault of the Issuer and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuer and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, shall be deemed to be in the same proportion as (i) the total proceeds
from the Offering (net of discounts and commissions but before deducting
expenses) received by the Issuer and the Subsidiary Guarantors and (ii) the
total discounts and commissions received by the Initial Purchasers as set forth
in the table on the cover page of the Offering Memorandum. The relative fault of
the Issuer and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer (and the Subsidiary Guarantors) or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission.
The Issuer, the Subsidiary Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
6 were determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 6, (a) in no case shall the
Initial Purchasers be required to contribute any amount in excess of the amount
by which the total discount and commissions applicable to the Notes pursuant to
this Agreement exceeds the amount of any damages that the Initial Purchasers
have otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (b) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each person, if any, who controls the Issuer or the
Subsidiary Guarantors within the meaning of Section 15 of the Act or Section 20
of the Exchange Act shall have the same rights to contribution as the Issuer or
the Subsidiary Guarantors, respectively, where applicable, subject in each case
to clauses (a) and (b) of this paragraph. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be made against
another party or parties under this Section 6, notify such party
-21-
<PAGE> 22
or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 6 or otherwise; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 5 for purposes of indemnification. No party shall be liable for
contribution with respect to any action or claim settled without its written
consent, provided, however, that such written consent was not unreasonably
withheld.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers to purchase and pay for the Notes, as provided for in
this Agreement, shall be subject to satisfaction of the following conditions
prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuer and
the Subsidiary Guarantors contained in this Agreement shall be true and correct
on the date of this Agreement and on the Closing Date. The Issuer and the
Subsidiary Guarantors shall have performed or complied with all of the
agreements contained in this Agreement and required to be performed or complied
with by them at or prior to the Closing Date.
(b) No stop order suspending the qualification or exemption from
qualification of the Notes in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the issuance of
the Notes or the Exchange Offer; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge of the
Issuer and the Subsidiary Guarantors, threatened against the Issuer and/or the
Subsidiary Guarantors before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, would result in a Material
Adverse Effect.
(d) Since the date as of which information is given in the
Offering Memorandum, except as expressly set forth therein, neither the Issuer
nor any of its subsidiaries had any material liabilities or obligations, direct
or contingent, that were not set forth in the Issuer's consolidated balance
sheet as of December 31, 1997 or in the notes thereto. Since the date as of
which information is given in the Offering Memorandum and up to the Closing
Date, except as otherwise expressly set forth in the Offering Memorandum, (i)
none of the Issuer or its subsidiaries has (A) incurred any liabilities or
obligations, direct or contingent, that would, either individually or in the
aggregate, result in a Material Adverse Effect or (B) entered into any material
transaction not in the ordinary course of business, and (ii) there has not been
any event or development in respect of the business, development or financial
condition of the Issuer or any of its subsidiaries that would, either
individually or in the aggregate, result in a Material Adverse Effect.
-22-
<PAGE> 23
(e) The Initial Purchasers shall have received certificates, dated
the Closing Date, signed by (i) the Chief Executive Officer and (ii) the chief
financial or accounting officer of the Issuer confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (b), (c) and (d) of this Section
7.
(f) The Initial Purchasers shall have received on the Closing Date
opinions dated the Closing Date, addressed to the Initial Purchasers, of
Covington & Burling, of Conyer, Dill & Pearman (with respect to foreign
subsidiaries), of Skrine & Co. (with respect to foreign subsidiaries) and of the
General Counsel to the Company (with respect to subparagraph 12 of Exhibit A),
in each case counsel to the Issuer, collectively in substance substantially
similar to Exhibit A hereto.
(g) The Initial Purchasers shall have received on the Closing Date
an opinion dated the Closing Date of Vinson & Elkins L.L.P., special counsel to
the Initial Purchasers, covering substantially such matters as are customarily
covered in such opinions.
(h) The Initial Purchasers shall have received a "comfort letter"
from each of Deloitte & Touche L.L.P. and Arthur Andersen LLP, independent
public accountants for the Issuer and the Subsidiary Guarantors and Sea Mar,
respectively, dated as of the date of this Agreement, addressed to the Initial
Purchasers and in form and substance satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers. In addition, as of the Closing Date, the
Initial Purchasers shall have received "bring-down comfort letters" from
Deloitte & Touche L.L.P. and Arthur Andersen LLP in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial Purchasers
covering the same items and matters as covered in the "comfort letters" but as
of a date that is not more than three days prior to the date thereof and any
changes and additions to the Preliminary Offering Memorandum that were made
producing the Offering Memorandum.
(i) The Issuer, the Subsidiary Guarantors and the Trustee shall
have entered into the Indenture, in a form satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(j) The Issuer and the Subsidiary Guarantors shall have entered
into the Registration Rights Agreement, in a form satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(k) The Notes shall have been approved as eligible for trading in
the PORTAL market.
(l) There shall not have occurred any downgrading, nor shall any
notice have been given of (i) any intended or potential downgrading of the Notes
or (ii) any review or possible change that does not indicate an improvement in
the rating accorded the Notes.
(m) The Initial Purchasers shall have been furnished with true and
correct copies of such other documents as they may reasonably request in
writing.
-23-
<PAGE> 24
(n) Each of the acquisition of Sea Mar and the Amended Credit
Agreement shall have been closed.
(o) Vinson & Elkins L.L.P., counsel to the Initial Purchasers,
shall have been furnished with such documents as they may reasonably request in
writing to enable them to review or pass upon the matters referred to in this
Section 7 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
contained in this Agreement.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Initial Purchasers on notice to the Issuer at
any time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except that the Issuer and the
Subsidiary Guarantors, jointly and severally, shall reimburse the Initial
Purchasers for all of the reasonable out-of-pocket expenses, including the
reasonable expense of Initial Purchasers' counsel, incurred by the Initial
Purchasers in connection with this Agreement. Notwithstanding any such
termination, the provisions of Sections 3(f), 5, 6, 9, 10(d), 13, 14 and 15
shall remain in effect.
The Issuer's obligation under this Agreement to sell the Notes to the
Initial Purchasers on the Closing Date is subject to the Initial Purchasers
purchasing and paying for all of the Notes.
8. INITIAL PURCHASERS' INFORMATION. The Issuer and the Initial
Purchasers severally acknowledge that the statements set forth in (a) the last
paragraph on the front cover page concerning the forms of the offering by the
Initial Purchasers; (b) the first paragraph on page 3 concerning stabilization
activities by the Initial Purchasers; and (c) the statements concerning the
Initial Purchasers contained in the fifth paragraph under the caption "Plan of
Distribution" in the Offering Memorandum constitute the only information
furnished in writing by or on behalf of the Initial Purchasers expressly for use
in the Offering Memorandum.
9. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements contained in this
Agreement, including the agreements contained in Sections 3(f) and 10(d), the
indemnity agreements contained in Section 5 and the contribution agreements
contained in Section 6 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Initial Purchasers
or any controlling person thereof or by or on behalf of the Issuer, any of the
Subsidiary Guarantors or any controlling person of any thereof, and shall
survive delivery of and payment for the Notes to and by the Initial Purchasers.
The representations contained in Section 4 and the agreements contained in
Sections 3(f), 5, 6, 9, 10(d), 13, 14 and 15 shall survive the termination of
this Agreement, including pursuant to Sections 7 and 10.
10. EFFECTIVE DATE OF AGREEMENT.
-24-
<PAGE> 25
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Issuer from the
Initial Purchasers, without liability (other than with respect to Sections 5 and
6) on the Initial Purchasers if, on or prior to such date, (i) the Issuer or any
of the Subsidiary Guarantors shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed under
this Agreement, (ii) any other condition of the obligations of the Initial
Purchasers under this Agreement as provided in Section 7 is not fulfilled when
and as required in any material respect, (iii) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or NASDAQ shall have
been suspended or materially limited, or minimum prices shall have been
established on such exchange by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
banking moratorium shall have been declared by U.S. federal, New York, or if a
moratorium in foreign exchange trading by major international banks or persons,
shall have been declared, or (v) there is an outbreak or escalation of military
action, hostilities or other national or international calamity or crisis on or
after the date of this Agreement, or if there has been a declaration by the
United States of a national emergency or war, the effect of which shall be, in
the Initial Purchasers' judgment, to make it inadvisable or impracticable to
proceed with the offering or delivery of the Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 10 shall be
given at the address specified in Section 11 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any clause
of Section 10(b), or if the sale of the Notes provided for in this Agreement is
not consummated because any condition to the obligations of the Initial
Purchasers set forth in this Agreement is not satisfied or because of any
refusal, inability or failure on the part of either of the Issuer or any
Subsidiary Guarantor to perform any agreement in this Agreement or comply with
any provision of this Agreement, the Issuer and the Subsidiary Guarantors,
jointly and severally, will, subject to demand by the Initial Purchasers,
reimburse the Initial Purchasers for all of their reasonable out-of-pocket
expenses (including the reasonable fees and expenses of the Initial Purchasers'
counsel) incurred in connection with this Agreement.
11. NOTICES. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered, or telexed, telegraphed or telecopied and confirmed in writing to SBC
Warburg Dillon Read Inc., 535 Madison Avenue, New York, New York 10022
(telephone: (212) 906-7000), Attention: Corporate Finance Department, telecopy
number: (212) 593-0164; and if sent to the Issuer or the Subsidiary Guarantors,
shall be mailed, delivered or telexed, telegraphed or telecopied and confirmed
in writing to Pool Energy Services Co., 10375
-25-
<PAGE> 26
Richmond Avenue, Houston, Texas 77042 (telephone: (713) 954-3000, Attention:
Senior Vice President -- Finance, telecopy number: (713) 954-3037.
All such notices and communications shall be deemed to have been duly
given: (a) at the time delivered by hand, if personally delivered; (b) five
business days after being deposited in the mail, postage prepaid, if mailed; (c)
when answered back, if telexed; (d) when receipt acknowledged if telecopied; and
(e) on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
12. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Issuer and the
Subsidiary Guarantors and the controlling persons and agents referred to in
Sections 5 and 6, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Notes from the Initial Purchasers.
13. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York (without giving effect to any
provisions thereof relating to conflicts of law that would result in the
application of the laws of another jurisdiction).
14. SUBMISSION TO JURISDICTION. The Issuer and each Subsidiary
Guarantor irrevocably submit to the nonexclusive jurisdiction of any State or
Federal court sitting in New York over any suit, action or proceeding arising
out of or relating to this Agreement. The Issuer and each Subsidiary Guarantor
irrevocably waive, to the fullest extent permitted by law, any objection they
may now or thereafter have to the laying of venue of any such court and any
claim that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. The Issuer, and each Subsidiary Guarantor
agree that a final judgment in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon the Issuer and each
Subsidiary Guarantor and may be enforced in any other court to the jurisdiction
of which the Issuer and such Subsidiary Guarantor are or may be subject, by suit
upon such judgment. The Issuer and each Subsidiary Guarantor hereby appoint,
without power of revocation, CT Corporation System as their agent to accept and
acknowledge on its behalf service of any and all process which may be served in
any suit, action or proceeding arising out of or relating to this letter.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of the Initial Purchasers to bring
proceedings against the Issuer and/or the Subsidiary Guarantor in the courts of
any other jurisdiction. The obligations of the Issuer and the Subsidiary
Guarantors under this Agreement are joint and several and, in any proceeding
against the Issuer or a Subsidiary Guarantors, it shall not be necessary to join
any other such person.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
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<PAGE> 27
16. COUNTERPARTS. This Agreement may be executed in various
counterparts and by the parties to this Agreement in separate counterparty, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
17. MISCELLANEOUS. SBC Warburg Dillon Read Inc., an indirect,
wholly owned subsidiary of Swiss Bank Corporation, is not a bank and is separate
from any affiliated bank, including any U.S. branch or agency of Swiss Bank
Corporation. Because SBC Warburg Dillon Read Inc. is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales purchases of
securities. Securities sold, offered or recommended by SBC Warburg Dillon Read
Inc. are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
-27-
<PAGE> 28
If the foregoing correctly sets forth the understanding among the
Issuer, the Subsidiary Guarantors and the Initial Purchasers, please so indicate
in the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Issuer, each of the
Subsidiary Guarantors and the Initial Purchasers.
POOL ENERGY SERVICES CO.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ASSOCIATED PETROLEUM SERVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BIG 10 FISHING TOOL COMPANY, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
INTERNATIONAL AIR DRILLING COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
KUUKPIK - POOL ARCTIC ALASKA
By: Pool Alaska, Inc.
d/b/a Pool Artic Alaska
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-28-
<PAGE> 29
PCNV, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL ALASKA, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL AMERICAS, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL-AUSTRALIA, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL CALIFORNIA ENERGY SERVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-29-
<PAGE> 30
POOL COMPANY HOUSTON LTD.
By: Pool Company,
General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
POOL COMPANY TEXAS, LTD.
By: Pool Company,
General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
POOL ENERGY HOLDING, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL INTERNATIONAL, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL PRODUCTION SERVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-30-
<PAGE> 31
PTX, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Confirmed and accepted as of
the date first above written:
SBC WARBURG DILLON READ INC.,
MORGAN STANLEY & CO. INCORPORATED, AND
JOHNSON RICE & COMPANY L.L.C.
By: SBC Warburg Dillon Read Inc.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
-31-
<PAGE> 32
EXHIBIT A
OPINIONS OF COUNSEL
The opinions of counsel for the Issuer, to be delivered pursuant to
Section 7(f) of the Purchase Agreement shall be to the effect that:
1. The Issuer, each of the Subsidiary Guarantors and each of the
Issuer's significant foreign subsidiaries have been duly incorporated and are
validly existing corporations in good standing under the laws of their
respective jurisdictions of organization and have all requisite power and
authority under their constituent documents and applicable laws to (a) carry on
their business as currently conducted and as proposed to be conducted, in each
case as described in the Offering Memorandum and (b) own, lease and operate
their respective properties in accordance with their business as currently and
as proposed to be conducted.
2. The Issuer, each of the Subsidiary Guarantors and each of the
Issuer's significant foreign subsidiaries is duly qualified and in good standing
as a foreign entity authorized to do business in each jurisdiction listed in
Schedule A hereto.
3. The Issuer, either directly or indirectly through a Subsidiary
Guarantor, owns of record all of the outstanding capital stock, partnership
interests, membership interests and other securities evidencing equity ownership
of each of the Subsidiary Guarantors, free and clear of any adverse claim within
the meaning of the Uniform Commercial Code, and all such securities have been
duly authorized and validly issued, fully paid and nonassessable and have not
been issued in violation of, or subject to, any preemptive, first refusal or
similar rights.
4. The Issuer and each of the Subsidiary Guarantors have all
requisite power and authority to execute, deliver and perform all of their
obligations under the Operative Documents and to consummate the transactions
contemplated by the Operative Documents and, without limitation, the Issuer has
all requisite power and authority to issue, sell and deliver the Notes and New
Notes and each of the Subsidiary Guarantors has all requisite power and
authority to execute, deliver and perform all of its obligations under the
Subsidiary Guarantees.
5. The Agreement has been duly authorized, executed and delivered
by the Issuer and each Subsidiary Guarantor.
6. The Notes and the New Notes have been duly authorized by the
Issuer. The Notes have been duly executed and, when authenticated and delivered
to and paid for in accordance with the terms of the Agreement, and the New
Notes, when executed, authenticated and delivered in exchange for the Notes in
accordance with the Indenture, will be (a) valid and binding joint and several
obligations of the Issuer enforceable in accordance with their terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent
A-1
<PAGE> 33
conveyance, moratorium or similar laws affecting the enforcement of creditors'
rights generally and general equitable principles (regardless of whether in a
proceeding in law or equity) and (b) entitled to the benefits of the Indenture.
7. Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, each of the Issuer and each Subsidiary Guarantor, enforceable in
accordance with its terms except as the enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforceability of creditors' rights generally and
(ii)general equitable principles (regardless of whether in a proceeding in law
or equity) and except that such counsel does not express an opinion as to the
indemnification provisions contained in Section 8 of the Registration Rights
Agreement or Sections 5 and 6 of the Agreement.
8. The Subsidiary Guarantees have been duly authorized, executed
and delivered by each Subsidiary Guarantor, and the Subsidiary Guarantees are
valid and binding joint and several obligations of each Subsidiary Guarantor,
enforceable against each Subsidiary Guarantor in accordance with its terms,
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (ii) general
equitable principles (regardless of whether in a proceeding in law or equity).
9. The execution, delivery or performance by the Issuer and the
Subsidiary Guarantors (as applicable) of the Agreement and each of the other
Operative Documents to which they are a party, and the use of the proceeds of
the sale of the Notes in the manner contemplated by the Offering Memorandum,
does not or will not violate, conflict with or constitute a breach of any of the
terms or provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or require a consent or
waiver (other than registration of the Notes or the New Notes under Act pursuant
to the Registration Rights Agreement and any necessary qualifications under the
state securities or blue sky laws of the various jurisdictions in which the
Notes are being offered by the Initial Purchasers, as to which counsel expresses
no opinion) not previously obtained and in full force and in effect under, or
result in the creation or imposition of a lien, charge or encumbrance on any
property or assets of the Issuer or any of the Subsidiary Guarantors pursuant
to, (a) the articles of incorporation, charter, bylaws or other organizational
documents of the Issuer or any of the Subsidiary Guarantors or (b) any bond,
debenture, note, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Issuer or any of the
Subsidiary Guarantors is a party or by which the Issuer or any of the Subsidiary
Guarantors is bound or to which any of the property or assets of the Issuer or
any of its subsidiaries is subject and which is filed or incorporated by
reference by the Company with the commission as an Exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 or any
subsequent current report of the Company (except where such conflict, breach, or
default could not reasonably be expected to have a Material Adverse Effect).
A-2
<PAGE> 34
10. Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 4(B) of the Agreement and the accuracy and
performance of the representations and agreements of the Issuer and the
Subsidiary Guarantors in Sections 3(b), 3(l) and the second and third sentence
of Section 4(A)(25) of the Agreement, no consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of or with,
any court or governmental agency is required to be obtained or made for the
execution, delivery and performance by the Issuer and the Subsidiary Guarantors
of the Agreement or any of the other Operative Documents, or any of the
transactions contemplated thereby, except (a) registration of the offer and sale
of the New Notes under the Act pursuant to the Registration Rights Agreement,
(b) such as may be required by the NASD or pursuant to the blue sky law of any
state or such as may be required under any Energy Law, as to which counsel need
not express any opinion.
11. None of the Issuer or the Subsidiary Guarantors is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act.
12. After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Issuer or any
Subsidiary Guarantor is a party or to which any of the properties of the Issuer
or any Subsidiary Guarantors is subject other than proceedings which such
counsel believes are not likely to have a Material Adverse Effect or any effect
on the power or ability of the Issuer or any Subsidiary Guarantor to perform its
obligations under the Operative Documents or to consummate the transactions
contemplated thereby.
13. Each of the Operative Documents conform in all material
respects to the descriptions thereof contained in the Offering Memorandum; the
statements in the Offering Memorandum under the captions "Description of Notes,"
"Description of Other Indebtedness," "Certain U.S. Federal Income Tax
Considerations" and "Transfer Restrictions" in the Offering Memorandum, insofar
as such statements constitute a summary of the laws, regulations, legal matters,
documents or proceedings referred to therein, fairly summarize the matters
referred to therein.
14. Assuming the accuracy of the representations and warranties of
the Issuer and the Subsidiary Guarantors in Sections 3(k) and 3(l) and the
second and third sentences of Sections 4(A)(25) of the Agreement and of the
Initial Purchasers in Section 4(B) of the Agreement, the offer and sale of the
Notes to the Initial Purchasers in the manner contemplated by the Agreement or
in connection with the initial resale of such Notes by the Initial Purchasers
will be exempt from the registration requirements of the Act; and it is not
necessary to qualify an indenture in respect of the Notes or Subsidiary
Guarantees under the Trust Indenture Act in connection with such offer and sale
of the Notes.
15. The Offering Memorandum (except as to the financial statements
and other financial data contained therein) complies as to form in all material
respects with the requirements of the Act and the Trust Indenture Act as if it
were a prospectus filed under the Act, and to such counsel's
A-3
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knowledge, there are no contracts, licenses, agreements, leases or documents of
a character that would be required to be summarized or described in the Offering
Memorandum if it were a prospectus filed under the Act that are not described in
the Offering Memorandum.
In addition, such opinion shall include a statement that such counsel
has participated in conferences with officers and other representatives of the
Issuer and the Subsidiary Guarantors and representatives of the independent
public accountants of the Issuer and representatives of the Initial Purchasers
at which the contents of the Offering Memorandum were discussed, and although
such counsel has not independently verified and does not assume responsibility
for the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except as and to the extent stated in subparagraph 13
above), on the basis of the foregoing (relying as to materiality to upon the
opinions of officers and other representatives of the Company), no facts have
come to the attention of such counsel that causes them to believe that the
Offering Memorandum, after giving effect to any amendment or supplement thereof
made prior to the Closing Date, as of its date or at the Closing Date contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no comment with respect to the financial statements and
schedules and statistical and market-related data included in the Offering
Memorandum).
Such opinion shall state that it is rendered to the Initial Purchasers
at the request of the Issuer.
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<PAGE> 1
================================================================================
U.S. $180,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
POOL ENERGY SERVICES CO.,
POOL ENERGY HOLDING, INC.,
POOL COMPANY,
VARIOUS BANKS,
SBC WARBURG DILLON READ INC., as ARRANGER
CREDIT LYONNAIS NEW YORK BRANCH, as ADMINISTRATIVE AGENT
and
SWISS BANK CORPORATION, STAMFORD BRANCH, as
DOCUMENTATION AGENT
Dated as of March 26, 1998
----------------------------------
================================================================================
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.01 The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Minimum Amount of Each Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.12 Replacement of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.13 Extension of Final Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Maximum Letter of Credit Outstandings; Final Maturities . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.03 Letter of Credit Requests; Minimum Stated Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.04 Letter of Credit Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.05 Agreement to Repay Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.06 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3. Commitment Commission; Fees; Reductions of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.02 Voluntary Termination of Unutilized Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.03 Mandatory Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4. Prepayments; Payments; Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.02 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5. Conditions Precedent to the Restatement Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.01 Execution of Agreement; Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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5.02 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.03 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.04 Corporate Documents; Proceedings; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.05 Sea Mar Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.06 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.07 Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.08 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.09 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.10 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.11 Subsidiaries Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.12 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.13 Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6. Conditions Precedent to All Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.01 Restatement Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.02 No Default; Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.03 Notice of Borrowing; Letter of Credit Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.04 Absence of Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7. Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.02 Corporate and Other Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.04 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . 29
7.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.07 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.09 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.10 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.11 The Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.12 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.13 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.15 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.16 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.17 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.19 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.20 Patents, Licenses, Franchises and Formulas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.21 Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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7.22 Inactive Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.23 No Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
8.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(a) Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(b) Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
(c) Budgets and Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(d) Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(e) Notice of Default or Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(f) Other Reports and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(g) Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(h) Annual Meetings with Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(i) Acquisition Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(j) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.03 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.04 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.05 Compliance with Statutes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.06 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.07 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.08 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.09 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.10 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.11 Foreign Subsidiaries Guaranty, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.12 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.01 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.03 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.04 Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.05 Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.06 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.07 Consolidated Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.08 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.09 Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.10 Maximum Debt-to-Total Capital Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.11 Minimum Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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9.12 Limitation on Modifications of Certificate of Incorporation and By-Laws; Limitation on Voluntary Payments and
Modifications of Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.13 Limitation on Certain Restrictions on Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.14 Limitation on Issuance of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.15 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.16 Limitation on Creation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.17 Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
10.04 Default Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
10.07 Pledge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.08 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
10.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.10 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 11. Definitions and Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
11.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 12. The Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.02 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.03 Lack of Reliance on the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
12.04 Certain Rights of the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.05 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.06 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
12.07 The Administrative Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.08 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12.09 Resignation by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 13. The Arranger; The Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.01 The Arranger; Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.02 Liability of the Arranger and the Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.03 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
13.04 Arranger and Documentation Agent in their Individual Capacities . . . . . . . . . . . . . . . . . . . . . . . 90
13.05 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
</TABLE>
(iv)
<PAGE> 6
<TABLE>
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<S> <C>
SECTION 14. Parents Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.01 The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.02 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
14.03 Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
14.04 Independent Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
14.05 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
14.06 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
14.07 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
14.08 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
14.09 Nature of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 15. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
15.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
15.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
15.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
15.04 Benefit of Agreement; Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
15.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
15.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
15.07 Calculations; Computations; Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
15.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 101
15.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
15.12 Amendment or Waiver; etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
15.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.14 Domicile of Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.15 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.16 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
15.17 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
15.18 Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
15.19 Inactive Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
</TABLE>
(v)
<PAGE> 7
SCHEDULE I Revolving Loan Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Subsidiaries
SCHEDULE IV Existing Funded Debt
SCHEDULE V Existing Liens
SCHEDULE VI Existing Investments; Existing Intercompany Loans
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Conversion
EXHIBIT B Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of Gardere Wynne Sewell & Riggs, L.L.P.
Special Counsel to the Credit Parties
EXHIBIT E-2 Opinion of Geoffrey Arms, Esq, General Counsel to the
Borrower
EXHIBIT E-3 Opinion of Louisiana Counsel to Sea Mar
EXHIBIT F Officers' Certificate
EXHIBIT G Pledge Agreement
EXHIBIT H Reserved
EXHIBIT I Assignment and Assumption Agreement
EXHIBIT J Intercompany Note
EXHIBIT K Compliance Certificate
EXHIBIT L Permitted Acquisition Certificate
(vi)
<PAGE> 8
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 26,
1998, among POOL ENERGY SERVICES CO., a Texas corporation ("PESCO"), POOL
ENERGY HOLDING, INC., a Delaware corporation ("Holding"), POOL COMPANY, a Texas
corporation (the "Borrower"), the Banks party hereto from time to time, SBC
WARBURG DILLON READ INC., as Arranger (the "Arranger"), CREDIT LYONNAIS NEW
YORK BRANCH, as Administrative Agent, SWISS BANK CORPORATION, STAMFORD BRANCH,
as Documentation Agent (the "Documentation Agent") and BANK ONE, TEXAS, N.A.,
and THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED, as Co-Agents (all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, the parties hereto entered into a Credit Agreement
dated as of September 30, 1997 (the "Original Credit Agreement"); and
WHEREAS, the parties hereto desire to amend the Original
Credit Agreement and restate it in its entirety so as, inter alia, (i) to
increase the Total Revolving Loan Commitment to $180,000,000, (ii) to permit
PESCO and the Borrower to consummate the transactions contemplated by the Stock
Purchase Agreement, dated as of February 10, 1998 (as in effect on the date
hereof, the "Sea Mar Acquisition Agreement"), among PESCO, the Borrower, Sea
Mar, Inc. ("Sea Mar") and the stockholders of Sea Mar and (iii) to make certain
other changes to the Original Credit Agreement; and
WHEREAS, upon the occurrence of the Restatement Effective
Date, this Agreement shall replace and supersede in all respects, and
constitute a restatement of, the Original Credit Agreement; and
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
<PAGE> 9
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees to make, at any time
and from time to time on and after the Original Effective Date and prior to the
Final Maturity Date, a revolving loan or revolving loans (each a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Borrower, which
Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Bank's
RL Percentage and (y) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time, equals the Revolving Loan Commitment of such Bank at such
time and (iv) shall not exceed for all Banks at any time outstanding that
aggregate principal amount which, when added to the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals the Total Revolving Loan
Commitment at such time.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Base Rate Loans or Eurodollar Loans shall
not be less than the Minimum Borrowing Amount applicable thereto. More than
one Borrowing may occur on the same date, but at no time shall there be
outstanding more than thirteen Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to incur (x) Eurodollar Loans hereunder, the Borrower shall give the
Administrative Agent at the Notice Office at least three Business Days' prior
notice of each Eurodollar Loan to be incurred hereunder and (y) Base Rate Loans
hereunder, the Borrower shall give the Administrative Agent at the Notice
Office at least one Business Day's prior notice of each Base Rate Loan to be
incurred hereunder, provided that (in each case) any such notice shall be
deemed to have been given on a certain day only if given before 11:30 A.M. (New
York time) on such day. Each such notice (each a "Notice of Borrowing"),
except as otherwise expressly provided in Section 1.10, shall be irrevocable
and shall be given by the Borrower in writing, or by telephone promptly
confirmed in writing, in the form of Exhibit A-1, appropriately completed to
specify the aggregate principal amount of the Revolving Loans to be incurred
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), whether the Revolving Loans being incurred pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or, to the extent
permitted hereunder,
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<PAGE> 10
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Bank
notice of such proposed Borrowing, of such Bank's proportionate share thereof
and of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing or
prepayment of Revolving Loans, the Administrative Agent may act without
liability upon the basis of telephonic notice of such Borrowing or prepayment,
as the case may be, believed by the Administrative Agent in good faith to be
from the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Financial Officer, the Treasurer or any Assistant Treasurer of the
Borrower, or from any other person designated in writing by any of the
foregoing officers of the Borrower to the Administrative Agent as being
authorized to give such notices, prior to receipt of written confirmation. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice of such
Borrowing or prepayment of Revolving Loans, as the case may be, absent manifest
error.
1.04 Disbursement of Funds. No later than 12:00 Noon (New
York time) on the date specified in any relevant Notice of Borrowing, each
Bank will make available its pro rata portion (determined in accordance with
Section 1.07) of each such Borrowing requested to be made on such date. All
such amounts will be made available in Dollars and in immediately available
funds at the Payment Office of the Administrative Agent, and the Administrative
Agent will make available to the Borrower at the Payment Office the aggregate
of the amounts so made available by the Banks. Unless the Administrative Agent
shall have been notified by any Bank prior to the date of Borrowing that such
Bank does not intend to make available to the Administrative Agent such Bank's
portion of any Borrowing to be made on such date, the Administrative Agent may
assume that such Bank has made such amount available to the Administrative
Agent on such date of Borrowing and the Administrative Agent may (but shall not
be obligated to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from
such Bank. If such Bank does not pay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
also shall be entitled to recover on demand from such Bank or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower until the date such corresponding amount
is recovered by the Administrative Agent, at a rate per annum equal to (i) if
recovered from such Bank, at the overnight Federal Funds Rate and (ii) if
recovered from the Borrower, the rate of interest applicable to the respective
Borrowing, as determined pursuant to Sec-
-3-
<PAGE> 11
tion 1.08. Nothing in this Section 1.04 shall be deemed to relieve any Bank
from its obligation to make Revolving Loans hereunder or to prejudice any
rights which the Borrower may have against any Bank as a result of any failure
by such Bank to make Revolving Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Revolving Loans made by each Bank shall be
evidenced by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B, with blanks appropriately completed in
conformity herewith (each a "Note" and, collectively, the "Notes").
(b) The Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to such Bank or its registered assigns and be dated
the date of the issuance thereof, (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such Bank (or, if issued after the
termination thereof, be in a stated principal amount equal to the outstanding
Revolving Loans of such Bank at such time) and be payable in the outstanding
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Final Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01, and mandatory repayment as provided in Section 4.02,
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) Each Bank will note on its internal records the amount of
each Revolving Loan made by it and each payment in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Revolving Loans evidenced thereby. Failure
to make any such notation or any error in such notation shall not affect the
Borrower's obligations in respect of such Revolving Loans.
1.06 Conversions. The Borrower shall have the option to
convert all or a portion equal to at least the Minimum Borrowing Amount of the
outstanding principal amount of Revolving Loans made pursuant to one or more
Borrowings of one or more Types of Revolving Loans into a Borrowing of another
Type of Revolving Loan, provided that, (i) except as otherwise provided in
Section 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable to the Revolving Loans being
converted and no such partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no Default or
Event of Default is in existence on the date of such conversion, and (iii) no
conversion pursuant to this Section 1.06 shall result in a greater number of
Borrowings of Eurodollar Loans than is permitted
-4-
<PAGE> 12
under Section 1.02. Each such conversion shall be effected by the Borrower by
giving the Administrative Agent at its Notice Office prior to 11:30 A.M. (New
York time) at least three Business Days' prior notice (each a "Notice of
Conversion") in the form of Exhibit A-2, appropriately completed to specify the
Revolving Loans to be so converted, the Borrowing or Borrowings pursuant to
which such Revolving Loans were made and, if to be converted into Eurodollar
Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Revolving Loans. Upon any such conversion the
proceeds thereof will be deemed to be applied directly on the day of such
conversion to prepay the outstanding principal amount of the Revolving Loans
being converted.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis of
their Revolving Loan Commitments. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make
Revolving Loans hereunder and that each Bank shall be obligated to make the
Revolving Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Revolving Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date of
Borrowing thereof until the maturity thereof (whether by acceleration or
otherwise) at a rate per annum which shall be equal to the sum of the Base Rate
plus the Applicable Base Rate Margin, each as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of Borrowing
thereof until the maturity thereof (whether by acceleration or otherwise) at a
rate per annum which shall, during each Interest Period applicable thereto, be
equal to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Eurodollar Rate Margin as in effect on the first day of such
Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Revolving Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum equal
to the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be
payable (i) in respect of each Base Rate Loan, in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Revolving
-5-
<PAGE> 13
Loan, on any repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) Upon each Interest Determination Date, the Administrative
Agent shall determine the Eurodollar Rate for each Interest Period applicable
to Eurodollar Loans and shall promptly notify the Borrower and the Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any
Notice of Borrowing or Notice of Conversion in respect of the making of, or
conversion into, any Eurodollar Loan (in the case of the initial Interest
Period applicable thereto) or on the third Business Day prior to the expiration
of an Interest Period applicable to such Eurodollar Loan (in the case of any
subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be a one, two, three or six-month period,
provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at
all times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan
shall commence on the date of Borrowing of such Eurodollar Loan
(including the date of any conversion thereto from a Base Rate) and
each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day; provided,
however, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a
Default or an Event of Default is then in existence; and
-6-
<PAGE> 14
(vi) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall be selected which extends beyond the Final
Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event
that any Bank shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto but, with
respect to clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loan because of (x) any change since
the date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any
Bank of the principal of or interest on the Notes or any other amounts
payable hereunder (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located
or any subdivision thereof or therein) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting the position of such Bank in the interbank
Eurodollar market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having force
of law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely
affects the position of such Bank in the interbank Eurodollar market;
-7-
<PAGE> 15
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have
not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Bank, upon such Bank's written request therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing in reasonable
detail the basis for the calculation thereof, submitted to the Borrower by such
Bank shall, absent manifest error, be final and conclusive and binding on all
the parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) the Borrower shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel such
Borrowing by giving the Administrative Agent telephonic notice (confirmed in
writing) prior to the time of funding of such Eurodollar Loan or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business
Days' written notice to the Administrative Agent, require the affected Bank to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Bank is affected at any time, then all affected Banks must be treated the
same pursuant to this Section 1.10(b).
(c) If any Bank determines that after the date of this
Agreement the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by the NAIC or any governmental
authority, central bank or comparable agency, will have the effect of
increasing the amount of capital required or expected to be maintained by such
Bank or any corporation controlling such Bank based on the existence of such
Bank's Revolving Loan Commitment hereunder or its obligations hereunder, then
the Borrower shall pay to such Bank, upon its written demand therefor, such
additional amounts as shall be required to compensate such Bank or such other
corporation for the increased cost to such Bank or such
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<PAGE> 16
other corporation or the reduction in the rate of return to such Bank or such
other corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall show in reasonable detail the basis
for calculation of such additional amounts.
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth in reasonable detail
the basis for requesting such compensation (including the calculation
thereof)), for all losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding loss of anticipated profits) which such
Bank may actually incur: (i) if for any reason (other than a default by such
Bank or the Administrative Agent) a Borrowing of, or conversion from or into,
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made pursuant to Section 4.01, Section 4.02 or as a result of an
acceleration of the Revolving Loans pursuant to Section 10) or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or any Note held by such Bank or (y) any election made pursuant to
Section 1.10(b).
1.12 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Revolving
Loans, or (y) upon the occurrence of an event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04
with respect to any Bank which results in such Bank charging, or giving notice
that it is entitled to charge, to the Borrower increased costs in excess of
those being generally charged by the other Banks, the Borrower shall have the
right, if no Default or Event of Default then exists to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferees, none of whom
shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") and each of whom shall be required to be
reasonably acceptable to the Administrative Agent, provided that (i) at the
time of any replacement pursuant to this Section 1.12, the Replacement Bank
shall enter into one or more Assignment and Assumption Agreements pursuant to
Section 15.04(b) (and with all fees payable pursuant to said Section 15.04(b)
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(other than fees incurred by or for the account of the Defaulting Bank in any
capacity hereunder) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire the entire Revolving Loan Commitment and
outstanding Revolving Loans of, and participations in Letters of Credit by, the
Replaced Bank and, in connection therewith, shall pay to (x) the Replaced Bank
in respect thereof an amount equal to the sum of (I) an amount equal to the
principal of, and all accrued interest on, all outstanding Revolving Loans of
the Replaced Bank, (II) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (III) an amount equal to
all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01, and (y) each Issuing Bank an amount equal to such Replaced
Bank's RL Percentage of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) to the extent such amount was not theretofore funded by such
Replaced Bank to such Issuing Bank and (ii) all obligations of the Borrower due
and owing to the Replaced Bank at such time (other than those specifically
described in clause (i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in full to such
Replaced Bank concurrently with such replacement. Upon the execution of the
respective Assignment and Assumption Agreement, the payment of amounts referred
to in clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.06, 4.04, 12.06, 13.03 and 15.01), which shall survive
as to such Replaced Bank.
1.13 Extension of Final Maturity Date. At any time prior to
the 90th day preceding any anniversary of the Original Effective Date, the
Borrower may make a written request to the Administrative Agent, who shall
forward a copy of such request to each of the Banks, that the Final Maturity
Date be extended by one year. The Banks may, but shall not be obligated to,
agree to extend the Final Maturity Date. In any event, the Administrative
Agent shall be obligated to respond in writing, affirmatively or negatively, to
such request within sixty (60) days after the date of such request of extension
of the Final Maturity Date made by the Borrower.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms
and conditions set forth herein, the Borrower may request that an Issuing Bank
issue, at any time and from time to time on and after the Original Effective
Date and prior to the 30th day prior to the Final Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C Support-
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<PAGE> 18
able Obligations of PESCO or any of its Subsidiaries, an irrevocable standby
letter of credit, in a form customarily used by such Issuing Bank or in such
other form as has been approved by such Issuing Bank and (y) for the account of
the Borrower and for the benefit of sellers of goods to PESCO or any of its
Subsidiaries, an irrevocable trade letter of credit, in a form customarily used
by such Issuing Bank or in such other form as has been approved by such Issuing
Bank (each such letter of credit issued pursuant to this Section 2.01, a
"Letter of Credit"). All Letters of Credit shall be denominated in Dollars.
(b) Subject to and upon the terms and conditions set forth
herein, each Issuing Bank agrees that it will, at any time and from time to
time on and after the Original Effective Date and prior to the 30th day prior
to the Final Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower, one or more Letters of
Credit as are permitted to remain outstanding without giving rise to a Default
or an Event of Default, provided that no Issuing Bank shall be under any
obligation to issue any Letter of Credit of the types described above if at the
time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Issuing Bank from issuing such Letter of Credit or any
requirement of law applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over such Issuing Bank shall
prohibit, or request that such Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon such Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which
such Issuing Bank is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable or in effect with respect to such Issuing Bank as of the
date hereof and which such Issuing Bank reasonably and in good faith
deems material to it; or
(ii) such Issuing Bank shall have received notice from the
Borrower or the Required Banks prior to the issuance of such Letter of
Credit of the type described in the second sentence of Section
2.03(b).
(c) Each Issuing Bank agrees to provide to the Administrative
Agent (who shall promptly forward a copy to each Bank) by facsimile promptly on
the first Business Day of each quarter the daily aggregate Stated Amount of all
Letters of Credit issued by such Issuing Bank for the immediately preceding
quarter.
(d) The Borrower agrees (i) that its request for a Letter of
Credit shall be governed by the Uniform Customs and Practice for Documentary
Credits (1993 revision), International Chamber of Commerce Publication No. 500,
or any subsequent revision
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thereof and (ii) to promptly examine and advise the Issuing Bank if it notices
any irregularity or non-conformance with its instructions in any Letter of
Credit or related document issued by an Issuing Bank.
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, as of the
effective date of such Letter of Credit, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such effective
date would exceed either (x) $15,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding, an amount equal to
the Total Revolving Loan Commitment at such time and (ii) each Letter of Credit
shall by its terms terminate on or before the date that is four Business Days
(or 30 days in the case of a trade Letter of Credit) prior to the Final
Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a)
Whenever the Borrower desires that a Letter of Credit be issued for its
account, the Borrower shall give the Administrative Agent and the respective
Issuing Bank at least five Business Days' (or such shorter period as is
acceptable to such Issuing Bank) written notice thereof. Each notice shall be
in the form of Exhibit C (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.02. Unless the respective Issuing Bank has received notice from
the Borrower or the Required Banks before it issues a Letter of Credit that one
or more of the conditions specified in Section 5 or 6 are not then satisfied,
or that the issuance of such Letter of Credit would violate Section 2.02, then
such Issuing Bank shall, subject to the terms and conditions of this Agreement,
issue the requested Letter of Credit for the account of the Borrower in
accordance with such Issuing Bank's usual and customary practices. Upon its
issuance of or amendment to any standby Letter of Credit, the respective
Issuing Bank shall promptly notify the Borrower, each Participant and the
Administrative Agent of such issuance or amendment and such notification shall
be accompanied by a copy of the issued standby Letter of Credit or amendment.
Notwithstanding anything to the contrary contained in this Agreement, in the
event that a Bank Default exists, no Issuing Bank shall be required to issue
any Letter of Credit unless such Issuing Bank has entered into an arrangement
satisfactory to it and the Borrower to eliminate such Issuing Bank's risk with
respect to the participation in Letters of Credit by the Defaulting Bank or
Banks, including by cash collateralizing such Defaulting Bank's or Banks' RL
Percentage of the Letter of Credit Outstandings.
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<PAGE> 20
2.04 Letter of Credit Participations. (a) Immediately upon
the issuance by each Issuing Bank of any Letter of Credit, such Issuing Bank
shall be deemed to have sold and transferred to each Bank, other than such
Issuing Bank (each such Bank, in its capacity under this Section 2.04, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's RL Percentage, in such Letter of Credit, each drawing or
payment made thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Loan Commitments or RL
Percentages of the Banks pursuant to Section 1.12 or 15.04, it is hereby agreed
that, with respect to all outstanding Letters of Credit and Unpaid Drawings,
there shall be an automatic adjustment to the participations pursuant to this
Section 2.04 to reflect the new RL Percentages of the assignor and assignee
Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit
issued by it, no Issuing Bank shall have an obligation relative to the other
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or
in connection with any Letter of Credit issued by it if taken or omitted in
accordance with the relevant standards of care mandated by the law governing
the applicable Letter of Credit and in the absence of gross negligence or
willful misconduct, shall not create for such Issuing Bank any resulting
liability to the Borrower, any other Credit Party, any Bank or any other
Person.
(c) In the event that any Issuing Bank makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Issuing Bank pursuant to Section
2.05(a), such Issuing Bank shall promptly notify the Administrative Agent,
which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to such Issuing Bank the
amount of such Participant's RL Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so notifies, prior
to 11:00 A.M. (New York time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the respective Issuing Bank in Dollars such Participant's RL Percentage of
the amount of such payment on such Business Day in same day funds. If and to
the extent such Participant shall not have so made its RL Percentage of the
amount of such payment available to the respective Issuing Bank, such
Participant agrees to pay to such Issuing Bank, forthwith on demand such
amount, together with interest thereon, for each day from such date until the
date such amount is paid to such Issuing Bank at the overnight Federal Funds
Rate for the first three days and at the interest rate applicable to Base Rate
Loans for each day thereafter. The failure of any Participant
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to make available to the respective Issuing Bank its RL Percentage of any
payment under any Letter of Credit shall not relieve any other Participant of
its obligation hereunder to make available to such Issuing Bank its RL
Percentage of any Letter of Credit on the date required, as specified above,
but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Bank such other Participant's RL
Percentage of any such payment.
(d) Whenever an Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall pay to each
Participant which has paid its RL Percentage thereof, in Dollars and in same
day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, each Issuing Bank
shall furnish to such Participant copies of any standby Letter of Credit issued
by it and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to
each Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, any Issuing Bank, any
Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction
between the Borrower or any Subsidiary of the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
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<PAGE> 22
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower agrees to reimburse each Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by such Issuing Bank under any Letter of
Credit issued by it (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), not later than one Business Day following receipt by the Borrower of
notice of such payment or disbursement (provided that no such notice shall be
required to be given if an Event of Default under Section 10.05 shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrower)), with interest on the amount
so paid or disbursed by such Issuing Bank, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date such Issuing
Bank was reimbursed by the Borrower therefor at a rate per annum which shall be
the Base Rate in effect from time to time; provided, however, to the extent
such amounts are not reimbursed prior to 12:00 Noon (New York time) on the
third Business Day following the receipt by the Borrower of notice of such
payment or disbursement or during the continuance of an Event of Default under
Section 10.05, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the Borrower) at a rate
per annum which shall be the Base Rate in effect from time to time plus 2%, in
each such case, with interest to be payable on demand. Each Issuing Bank shall
use its best efforts to give the Borrower notice of the date and amount of any
draft presented under any Letter of Credit prior to payment thereof and shall
give the Borrower prompt written notice of each Drawing under any Letter of
Credit issued by it, provided that the failure to give any such notice shall in
no way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05
to reimburse each Issuing Bank with respect to Unpaid Drawings (including, in
each case, interest thereon) shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Bank (including in
its capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing or
payment under a Letter of Credit (each a "Drawing") to conform to the terms of
the Letter of Credit or any nonapplication or misapplication by the beneficiary
of the proceeds of such Drawing; provided, however, that the Borrower shall not
be obligated to reimburse the respective Issuing Bank for any wrongful payment
made by such Issuing Bank under a Letter of Credit issued by it as a result of
acts or omissions taken in
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contravention of the standards of care mandated by the law governing the
applicable Letter of Credit or constituting willful misconduct or gross
negligence on the part of such Issuing Bank.
2.06 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by the NAIC or any governmental authority charged with
the interpretation or administration thereof, or compliance by any Issuing Bank
or any Participant with any request or directive by the NAIC or by any such
authority (whether or not having the force of law), shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by any Issuing Bank or
participated in by any Participant, or (ii) impose on any Issuing Bank or any
Participant any other conditions relating, directly or indirectly, to this
Agreement; and the result of any of the foregoing is to increase the cost to
any Issuing Bank or any Participant of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount of any sum received or receivable by
any Issuing Bank or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate
of tax on, or determined by reference to, the net income or profits of such
Issuing Bank or such Participant pursuant to the laws of the jurisdiction in
which it is organized or in which its principal office or applicable lending
office is located or any subdivision thereof or therein), then, upon the
delivery of the certificate referred to below to the Borrower by such Issuing
Bank or such Participant (a copy of which certificate shall be sent by such
Issuing Bank or such Participant to the Administrative Agent), the Borrower
shall pay to such Issuing Bank or such Participant such additional amount or
amounts as will compensate such Issuing Bank or such Participant for such
increased cost or reduction in the amount receivable or reduction on the rate
of return on its capital. Each Issuing Bank or Participant, upon determining
that any additional amounts will be payable to it pursuant to this Section
2.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by such Issuing Bank or
such Participant (a copy of which certificate shall be sent by such Issuing
Bank or such Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate such Issuing Bank or such Participant. The
certificate required to be delivered pursuant to this Section 2.06 shall,
absent manifest error, be final and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the
Administrative Agent for distribution to each Non-Defaulting Bank, a commitment
commission (the "Commitment Commission") for the period from and including the
Original Effective Date to but
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<PAGE> 24
excluding the Final Maturity Date (or such earlier date on which the Total
Revolving Loan Commitment shall have been terminated), computed at a rate for
each day equal to 1/2 of 1% per annum on the daily average Unutilized Revolving
Loan Commitment of such Non-Defaulting Bank. Accrued Commitment Commission
shall be due and payable quarterly in arrears on each Quarterly Payment Date
and on the Final Maturity Date (or such earlier date on which the Total
Revolving Loan Commitment shall have been terminated).
(b) The Borrower agrees to pay to the Administrative Agent
for distribution to each Bank (based on each such Bank's respective RL
Percentage) a fee in respect of each Letter of Credit issued hereunder (the
"Letter of Credit Fee") for the period from and including the date of issuance
of such Letter of Credit to and including the date of termination or expiration
of such Letter of Credit, computed at a rate per annum equal to the Applicable
Eurodollar Rate Margin in effect from time to time on the daily Stated Amount
of such Letter of Credit. Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the first day after
the termination of the Total Revolving Loan Commitment upon which no Letters of
Credit remain outstanding. In the event any Letter of Credit is paid, returned
or otherwise retired prior to the stated date of termination or expiration
thereof, any unearned Letter of Credit Fee shall be promptly repaid by the
Banks to the Administrative Agent for distribution to the Borrower.
(c) The Borrower agrees to pay to each Issuing Bank, for its
own account, a facing or fronting fee in respect of each Letter of Credit
issued by such Issuing Bank hereunder upon such terms and conditions as are
separately agreed to between such Issuing Bank and the Borrower.
(d) The Borrower agrees to pay to each of the Administrative
Agent and the Documentation Agent, for their respective accounts, such other
fees as have been agreed to in writing by the Borrower and the Administrative
Agent or the Documentation Agent, as the case may be.
3.02 Voluntary Termination of Unutilized Commitments. Upon
at least five Business Day's prior written notice to the Administrative Agent
at the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), the Borrower shall have the right, at any time
or from time to time, without premium or penalty, to terminate the Total
Unutilized Revolving Loan Commitment, in whole or in part, pursuant to this
Section 3.02, in an integral multiple of $5,000,000, in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment, provided that
each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank.
3.03 Mandatory Reduction of Commitments. (a) In addition to
any other mandatory commitment reductions pursuant to this Section 3.03, on
each date upon which
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a mandatory prepayment of Revolving Loans is required pursuant to Section
4.02(d), the Total Revolving Loan Commitment shall be permanently reduced on
such date by an amount equal to 50% of the amount required to be applied to
prepay Revolving Loans pursuant to Section 4.02(d).
(b) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, on each date upon which a mandatory
prepayment of Revolving Loans is required pursuant to Section 4.02(e) or
4.02(f), the Total Revolving Loan Commitment shall be permanently reduced on
such date by an amount equal to 100% of the amount required to be applied to
prepay Revolving Loans pursuant to Section 4.02(e) or 4.02(f), as the case may
be; provided that (i) so long as no Default or Event of Default then exists, if
the Borrower shall have delivered a certificate to the Administrative Agent on
or prior to such date stating that PESCO or its Subsidiaries intends to use all
or any portion of such proceeds, or intends to enter into contractual
arrangements to use all or any portion of such proceeds, within 90 days of such
Material Asset Sale, to purchase or construct assets to be used in the business
of PESCO or any of its Subsidiaries, then the Total Revolving Loan Commitment
shall not be reduced on such date by the amount that the Borrower so certifies
it intends to use, or contractually commit to use, and provided further, that
(1) if, within such 90 day period, all or such portion of such Net Sale
Proceeds are not so used (or contractually committed to be used, with a copy of
any contracts or agreements evidencing such commitments to be provided to the
Administrative Agent) or PESCO or its Subsidiaries have not commenced
construction (or contractually committed to acquire assets to be used in such
construction) (such commencement or contractual commitment to be evidenced (x)
in the case of a Permitted Acquisition, by a certificate in the form of Exhibit
L hereto and (y) in any other case, by a certificate of the Borrower, together
with copies of such agreements or documents as the Administrative Agent may
reasonably request in connection therewith), then the Total Revolving Loan
Commitment shall be reduced by such remaining portion on the last day of such
period and (2) if the Total Revolving Loan Commitment is not reduced by all or
any portion of such Net Sale Proceeds on the 90th day referred to in clause (1)
above because such amount is contractually committed to be used or because
PESCO or its Subsidiaries have commenced construction (or contractually
committed to acquire assets to be used in such construction), and subsequent to
such date such construction ceases or such contract is terminated or expires
without such portion being so used, then the Total Revolving Loan Commitment
shall be reduced by such remaining portion on the fifth Business Day following
the date of such termination, expiration or cessation and (ii) to the extent
the Borrower shall have consummated a Permitted Acquisition and any asset
acquired or constructed pursuant to such Permitted Acquisition is subsequently
transferred, sold or otherwise disposed of by PESCO or any of its Subsidiaries
in a transaction which constitutes a Material Asset Sale, so long as no Default
or Event of Default then exists, the Total Revolving Loan Commitment shall not
be required to be reduced by the Net Sale Proceeds received from such Material
Asset Sale, and provided further, that in the event the asset sold pursuant to
such Material Asset Sale
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was an existing asset which was renovated or refurbished pursuant to such
Permitted Acquisition, unless clause (i) applies, the Total Revolving Loan
Commitment shall be reduced by an amount equal to the excess, if any, of the
Net Sale Proceeds received over the amount expended in connection with such
renovation or refurbishment.
(c) In addition to any other mandatory commitment
reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Bank) shall terminate in its
entirety on the Final Maturity Date.
(d) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall apply proportionately to reduce the
Revolving Loan Commitment of each Bank.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the
right to prepay the Revolving Loans, without premium or penalty, in whole or in
part at any time and from time to time on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent prior to 12:00 Noon (New
York time) at the Notice Office at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay Revolving Loans, the amount of such prepayment and the Types of
Revolving Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment of Revolving Loans pursuant to this Section 4.01 shall be in an
aggregate principal amount of at least $2,000,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding principal amount of Eurodollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing may not be continued as a Borrowing of Eurodollar
Loans and any election of an Interest Period with respect thereto given by the
Borrower shall have no force or effect; and (iii) each prepayment pursuant to
this Section 4.01 in respect of any Revolving Loans made pursuant to a
Borrowing shall be applied pro rata among such Revolving Loans.
4.02 Mandatory Repayments. (a) On any day on which the sum
of (I) the aggregate outstanding principal amount of all Revolving Loans (after
giving effect to all other repayments thereof on such date), and (II) the
aggregate amount of all Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall prepay on the
Business Day immediately following such day the principal of Revolving Loans in
an amount equal to such excess. If, after giving effect to the prepayment of
all outstanding Revolving Loans, the aggregate amount of the Letter of Credit
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Outstandings exceeds the Total Revolving Loan Commitment as then in effect, the
Borrower shall deposit with the Administrative Agent at the Payment Office on
such day an amount of cash and/or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Banks and the Banks hereunder in an
interest bearing cash collateral account to be established at such time with
the Administrative Agent.
(b) In addition to any other mandatory repayments required
pursuant to this Section 4.02, on the Business Day immediately following each
date on or after the Restatement Effective Date of the receipt thereof by PESCO
and/or any of its Subsidiaries, an amount equal to 100% of the cash proceeds
(net of underwriting discounts and commissions and other reasonable transaction
costs associated therewith) received by the issuer thereof from any sale or
issuance of preferred or common equity pursuant to any public offering thereof
by PESCO and/or any of its Subsidiaries shall be applied to prepay outstanding
Revolving Loans.
(c) In addition to any other mandatory repayments required
pursuant to this Section 4.02, on the Business Day immediately following each
date on or after the Restatement Effective Date on which PESCO, Holding and/or
the Borrower receives any Net Debt Proceeds from any incurrence of Permitted
Subordinated Indebtedness (other than the 1998 Senior Subordinated Notes), an
amount equal to 100% of the Net Debt Proceeds of the incurrence of such
Permitted Subordinated Indebtedness shall be applied to prepay outstanding
Revolving Loans.
(d) In addition to any other mandatory repayments required
pursuant to this Section 4.02, on the Business Day immediately following each
date on or after the Restatement Effective Date on which PESCO and/or any of
its Subsidiaries receives any Net Debt Proceeds from any incurrence of Funded
Debt for borrowed money (other than Permitted Subordinated Indebtedness and
other than Funded Debt permitted pursuant to Section 9.04) by PESCO and/or any
of its Subsidiaries, an amount equal to 100% of the Net Debt Proceeds of the
respective incurrence of Funded Debt shall be applied to prepay outstanding
Revolving Loans.
(e) In addition to any other mandatory repayments required
pursuant to this Section 4.02, within 10 days following each date on or after
the Restatement Effective Date on which PESCO and/or any of its Subsidiaries
receives any Net Insurance Proceeds from any Recovery Event, an amount equal to
100% of the Net Insurance Proceeds of such Recovery Event shall be applied to
prepay outstanding Revolving Loans, provided that (i) so long as no Default or
Event of Default then exists, to the extent that the Borrower has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such proceeds have been used, or shall be used, to replace or restore any
properties or assets in
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respect of which such proceeds were paid (which certificate shall set forth the
proceeds so expended or the estimates of the proceeds to be so expended, as the
case may be), the amount of such proceeds which were used, or to be used, to
replace or restore such property or assets shall not be applied to prepay
Revolving Loans, (ii) upon completion of such replacement or restoration, the
Borrower shall deliver a certificate to the Administrative Agent stating that
such replacement or restoration has been completed, the costs therefor and
whether there are any cash proceeds in excess of such costs and, if so, the
Revolving Loans shall be repaid in an amount equal to such excess, and (iii) if
the Borrower has not so used, or committed to so use, all of such proceeds
within 180 days following the date of its receipt of such proceeds, the
Revolving Loans shall be repaid on the last day of such period by an amount
equal to such remaining portion.
(f) In addition to any other mandatory repayments pursuant to
this Section 4.02, on the Business Day immediately following each date on or
after the Restatement Effective Date on which PESCO and/or any of its
Subsidiaries receives Net Sale Proceeds from any Material Asset Sale, an amount
equal to 100% of the Net Sale Proceeds therefrom shall be applied to prepay
outstanding Revolving Loans.
(g) With respect to each repayment of Revolving Loans
required by this Section 4.02, the Borrower may designate the Types of
Revolving Loans which are to be repaid and, in the case of Eurodollar Loans,
the specific Borrowing or Borrowings pursuant to which made, provided that:
(i) repayments of Eurodollar Loans pursuant to this Section 4.02 may only be
made on the last day of an Interest Period applicable thereto unless all
Eurodollar Loans with Interest Periods ending on such date of required
repayment and all Base Rate Loans have been paid in full; (ii) if any repayment
of Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Revolving Loans made pursuant
to a Borrowing shall be applied pro rata among such Revolving Loans. In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion.
(h) If, after repaying all Base Rate Loans then outstanding,
the Borrower is still obligated to make a further mandatory repayment pursuant
to Section 4.02(b) through (f), the remaining amount to be repaid shall be due
and payable on the last day of the Interest Period or Interest Periods next
expiring, until all such amounts required to be prepaid pursuant to such
Sections have been paid in full.
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(i) Notwithstanding anything to the contrary contained in
this Agreement or in any other Credit Document, all then outstanding Revolving
Loans shall be repaid in full on the Final Maturity Date.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or under any
Note shall be made to the Administrative Agent for the account of the Bank or
Banks entitled thereto not later than 12:00 Noon (New York time) on the date
when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Administrative Agent. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Bank pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to
the preceding sentence, the Borrower agrees to reimburse each Bank, upon the
written request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank pursuant to the laws of the jurisdiction in
which such Bank is organized or in which the principal office or applicable
lending office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Bank is
organized or in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank, in respect of such amounts so paid
to or on behalf of such Bank pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Bank pursuant to this sentence.
The Borrower will furnish to the Administrative
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Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law evidence of such payment by the Borrower. The Borrower agrees
to indemnify and hold harmless each Bank, and reimburse such Bank upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Bank.
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Restatement Effective Date, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to Section
1.12 or 15.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor
forms) certifying to such Bank's entitlement to a complete exemption from
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Bank is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. In addition, each Bank agrees that from
time to time after the Restatement Effective Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, such Bank will deliver to the Borrower and
the Administrative Agent two new accurate and complete original signed copies
of Internal Revenue Service Form 4224 or 1001 (or successor forms), or Form W-8
(or successor form) and a Section 4.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Bank to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or such Bank shall immediately notify the Borrower and the Administrative
Agent of its inability to deliver any such Form or Certificate, in which case
such Bank shall not be required to deliver any such Form or Certificate
pursuant to this Section 4.04(b). Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 15.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, Fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated
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pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such
Bank has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 4.04(b) or
(II) in the case of a payment, other than interest, to a Bank described in
clause (ii) above, to the extent that such Forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 4.04
and except as set forth in Section 15.04(b), the Borrower agrees to pay any
additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any Taxes deducted or withheld by
it as described in the immediately preceding sentence as a result of any
changes after the Restatement Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this
Section 4.04 to a Bank and such Bank determines in its sole discretion that it
has actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Banks shall pay to
the Borrower an amount that the Bank shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Bank in such
year as a consequence of such refund, reduction or credit.
SECTION 5. Conditions Precedent to the Restatement Effective
Date. The occurrence of the Restatement Effective Date pursuant to Section
15.10 is subject to the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the
Restatement Effective Date, (i) this Agreement shall have been executed and
delivered as provided in Section 15.10 and (ii) there shall have been delivered
to the Administrative Agent for the account of each of the Banks the
appropriate Note executed by the Borrower in the amount, maturity and as
otherwise provided herein.
5.02 Officers' Certificate. On the Restatement Effective
Date, the Administrative Agent shall have received a certificate, dated the
Restatement Effective Date and signed on behalf of the Borrower by its Chairman
of the Board, Chief Executive Officer, President or any of its Vice Presidents,
to the effect that (i) the conditions precedent set forth in Sections 5.05,
5.07, 5.08 and 5.09 have been satisfied in all material respects and (ii) no
Default or Event of Default has occurred and is continuing, or will result from
the consummation of the Sea Mar Acquisition.
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5.03 Opinions of Counsel. On the Restatement Effective Date,
the Administrative Agent shall have received from each of (a) Gardere Wynne
Sewell & Riggs, L.L.P., special counsel to the Credit Parties, (b) Geoffrey
Arms, Esq., general counsel of the Borrower, and (c) Louisiana counsel to Sea
Mar, an opinion addressed to the Agents and each of the Banks and dated the
Restatement Effective Date covering the matters set forth in Exhibits E-1, E-2
and E-3, respectively, and such other matters incident to the transaction
contemplated herein as the Administrative Agent may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the
Restatement Effective Date, the Administrative Agent shall have received a
certificate from each Person becoming a Credit Party as a result of the Sea Mar
Acquisition, dated the Restatement Effective Date, signed by the Chairman of
the Board, the Chief Executive Officer, the President or any Vice President of
such Credit Party, and attested to by the Secretary or any Assistant Secretary
of such Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the certificate or articles of incorporation (or
equivalent organizational document) and by-laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be in form and substance reasonably acceptable to the
Administrative Agent.
(b) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Credit Documents shall be reasonably satisfactory in
form and substance to each Agent and the Administrative Agent shall have
received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams or facsimiles, if any, which such Agent
reasonably may have requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate or governmental
authorities.
5.05 Sea Mar Acquisition. On the Restatement Effective Date,
the Sea Mar Acquisition shall have been consummated.
5.06 Reserved.
5.07 Adverse Change. Nothing shall have occurred (and
neither the Administrative Agent, the Documentation Agent nor the Banks shall
have become aware of any facts or conditions not previously known) which the
Administrative Agent, the Documentation Agent or the Required Banks shall
reasonably determine (a) has had, or could reasonably be expected to have, a
material adverse effect on the rights or remedies of the Banks, the
Documentation Agent or the Administrative Agent, or on the ability of any
Credit Party to perform its obligations to the Banks, the Documentation Agent
or the Administrative Agent hereunder or under any other Credit Document or (b)
has had, or could reasonably be expected to have, a material adverse effect on
the business, operations,
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property, assets, liabilities, condition (financial or otherwise) or prospects
of PESCO or of the Borrower and its Subsidiaries, taken as a whole.
5.08 Approvals. On or prior to the Restatement Effective
Date, all necessary governmental (domestic and foreign) and third party
approvals and/or consents in connection with the Sea Mar Acquisition and the
transactions contemplated by this Agreement and the other Credit Documents and
otherwise referred to herein or therein shall have been obtained and remain in
effect. Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Sea Mar Acquisition or the other transactions contemplated
by this Agreement and the other Credit Documents or otherwise referred to
herein or therein.
5.09 Litigation. On the Restatement Effective Date, there
shall be no actions, suits or proceedings pending or threatened (i) with
respect to this Agreement or any other Credit Document or (ii) which the
Administrative Agent, the Documentation Agent or the Required Banks shall
reasonably determine could reasonably be expected to have a material adverse
effect on (a) the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or of the Borrower and
its Subsidiaries taken as a whole, (b) the rights or remedies of the Banks, the
Documentation Agent or the Administrative Agent hereunder or under any other
Credit Document or (c) the ability of any Credit Party to perform its
respective obligations to the Banks, the Documentation Agent or the
Administrative Agent hereunder or under any other Credit Document.
5.10 Pledge Agreement. On or prior to the Restatement
Effective Date, each Pledgor shall have duly authorized, executed and delivered
the Pledge Agreement in the form of Exhibit G (as amended, modified or
supplemented from time to time, the "Pledge Agreement") and shall have
delivered to the Administrative Agent, as Pledgee thereunder, all of the
Pledged Securities, if any, referred to therein and owned by the Borrower
together with executed and undated stock powers in the case of capital stock
constituting Pledged Securities. Notwithstanding anything to the contrary
contained herein, Pool International Ltd. shall not be required to pledge the
stock of Pool International (Malaysia) Sdn. Bhd.
5.11 Subsidiaries Guaranty. On or prior to the Restatement
Effective Date, Sea Mar and each of its Subsidiaries that subsequent to the Sea
Mar Acquisition will be a Domestic Subsidiary shall have become a party to the
Subsidiaries Guaranty.
5.12 Reserved.
5.13 Fees, etc. On or prior to the Restatement Effective
Date, the Borrower shall have paid to the Administrative Agent, the
Documentation Agent, the
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Arranger, the Issuing Bank and each Bank all costs, fees and expenses
(including, without limitation, reasonable legal fees and expenses) payable to
such Persons to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Revolving Loans (including Revolving Loans made
on the Restatement Effective Date), and the obligation of each Issuing Bank to
issue Letters of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:
6.01 Restatement Effective Date. The Restatement Effective
Date shall have occurred.
6.02 No Default; Representations and Warranties. At the time
of each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
6.03 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each Revolving Loan, the Administrative Agent shall have
received a Notice of Borrowing meeting the requirements of Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03.
6.04 Absence of Material Adverse Change. Since the date of
the most recent financial statements delivered pursuant to Section 8.01, the
Required Banks shall not have concluded, in their reasonable good faith
judgment, that there has been a material adverse change in the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of PESCO or of the Borrower and its Subsidiaries taken as a whole.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to the Agents and
each of the Banks that all the conditions specified in Section 5 (with respect
to Credit Events on the Restatement Effective Date) and in this Section 6 (with
respect to Credit Events on or after the
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Restatement Effective Date) and applicable to such Credit Event exist as of
that time. All of the Notes, certificates, legal opinions and other documents
and papers referred to in Section 5 and in this Section 6, unless otherwise
specified, shall be delivered to the Administrative Agent at the Notice Office
for the account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the
Revolving Loans, and issue (or participate in) the Letters of Credit as
provided herein, each of PESCO, Holding and the Borrower makes the following
representations, warranties and agreements, all of which shall survive the
execution and delivery of this Agreement and the Notes and the making of the
Revolving Loans and issuance of the Letters of Credit, with the occurrence of
the Restatement Effective Date and the occurrence of each Credit Event on or
after the Restatement Effective Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct on and as of the Restatement Effective Date and on the date of
each such Credit Event (it being understood and agreed that (i) any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date and
(ii) for purposes of such representations and warranties Sea Mar and its
Subsidiaries shall be deemed Credit Parties and Subsidiaries of the Borrower as
of, but not prior to, the Restatement Effective Date.)
7.01 Corporate Status. Except as disclosed in writing to the
Administrative Agent on or prior to the Restatement Effective Date, each of
PESCO and each of its Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate power and authority to own its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the ownership, leasing or
operation of its property or the conduct of its business requires such
qualifications except for failures to be so qualified which, individually or in
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO or of the Borrower and its
Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit
Party has the corporate power and authority to execute, deliver and perform the
terms and provisions of each of the Credit Documents to which it is party and
has taken all necessary corporate action to authorize the execution, delivery
and performance by it of each of such Credit Documents. Each Credit Party has
duly executed and delivered each of the Credit Documents to which it is party,
and each of such Credit Documents constitutes its legal,
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valid and binding obligation enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, (i) will contravene
any provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Pledge Agreement) upon any of the property or assets of
PESCO or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement, or any other
material agreement, contract or instrument, to which PESCO or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of the
certificate or articles of incorporation or by-laws (or equivalent
organizational documents) of PESCO or any of its Subsidiaries.
7.04 Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made and which remain in
full force and effect), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required by any Credit Party to
authorize, or is required in connection with, (i) the execution, delivery and
performance of any Credit Document by any Credit Party or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document against
any Credit Party.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities. (a) The consolidated audited balance sheets of PESCO and its
Subsidiaries for the fiscal year ended on December 31, 1997 and the related
consolidated statements of income, cash flows and shareholders' equity of PESCO
and its Subsidiaries for the fiscal year ended on such date, copies of which
have been furnished to the Banks on or prior to the Restatement Effective Date,
present fairly in all material respects the consolidated financial position of
PESCO and its Subsidiaries at the dates of such balance sheets and the
consolidated results of the operations of PESCO and its Subsidiaries for the
periods covered thereby. All of the foregoing financial statements have been
prepared in accordance with GAAP consistently applied.
(b) On and as of the Restatement Effective Date and after
giving effect to any Revolving Loans being incurred on the Restatement
Effective Date, (a) the sum of the assets, at a fair valuation, of each of the
Borrower on a stand-alone basis and of the
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Borrower and its Subsidiaries taken as a whole will exceed its debts; (b) each
of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries
taken as a whole (without duplication of indebtedness for which the Borrower
and/or one or more of its Subsidiaries may be liable) has not incurred and does
not intend to incur, and does not believe that it will incur, debts beyond its
ability to pay such debts as such debts mature; and (c) each of the Borrower on
a stand alone basis and the Borrower and its Subsidiaries taken as a whole will
have sufficient capital with which to conduct its business. For purposes of
this Section 7.05(b), "debt" means any liability on a claim, and "claim" means
(i) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(c) Except for liabilities and obligations incurred in the
ordinary course of business or otherwise fully disclosed in the financial
statements delivered pursuant to Section 7.05(a), there were as of the
Restatement Effective Date no liabilities or obligations with respect to PESCO
or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which would reasonably be
expected to have a material adverse effect on the financial condition of PESCO
and its Subsidiaries, taken as a whole. As of the Restatement Effective Date,
neither PESCO nor the Borrower know of any basis for the assertion against
PESCO or any of its Subsidiaries of any liability or obligation of any nature
whatsoever that is not fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) which, either individually or in the aggregate,
could reasonably be expected to be material to PESCO and its Subsidiaries taken
as a whole.
7.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of PESCO or any of its Subsidiaries,
threatened (i) with respect to this Agreement or any other Credit Document,
(ii) with respect to any material Funded Debt of PESCO or any of its
Subsidiaries or (iii) that are reasonably likely to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO or of the Borrower and its
Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by PESCO or any of its Subsidiaries in writing to
the Administrative Agent, the Documentation Agent, the Arranger or any Bank
(including, without limitation, all information contained in the Credit
Documents) for purposes of or in connection with
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this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by any such Persons in writing to the Administrative Agent,
the Documentation Agent, the Arranger or any Bank will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds
of the Revolving Loans shall be used for the working capital, letters of credit
and general corporate purposes for PESCO and its Subsidiaries (including,
without limitation, for Capital Expenditures, the Sea Mar Acquisition,
Identified Acquisitions and Permitted Acquisitions).
(b) No part of any Credit Event (or the proceeds thereof)
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Revolving Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
7.09 Tax Returns and Payments. (a) Each of PESCO and each of
its Subsidiaries has filed all federal and state income tax returns and all
other material tax returns, domestic and foreign, required to be filed by it
and has paid all taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of PESCO and its Subsidiaries in
accordance with GAAP. PESCO and each of its Subsidiaries have paid, or have
provided reserves in accordance with GAAP (specifically under FAS 109) for the
payment of, all federal, state, local and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to date. There is no
material action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of PESCO or any of its Subsidiaries threatened, by any
authority regarding any taxes relating to PESCO or any of its Subsidiaries. As
of the Restatement Effective Date, neither PESCO nor any of its Subsidiaries
has entered into an agreement or waiver or been requested to enter into an
agreement or waiver extending any statute of limitations relating to the
payment or collection of any material amount of taxes of PESCO or any of its
Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of PESCO or any of its Subsidiaries not to be
subject to the normally applicable statute of limitations.
(b) Notwithstanding anything to the contrary in Section
7.09(a), the representations made in Section 7.09(a) shall not be untrue as to
any Credit Party within
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45 days of such Person becoming a Credit Party unless the falsity of any such
representation (i) is actually known by an officer of PESCO or a chief
financial officer of any other Credit Party and (ii) could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of PESCO or the Borrower and its Subsidiaries taken as a whole.
7.10 Compliance with ERISA. (a) Each Plan (and each related
trust, insurance contract or fund) is in substantial compliance with its terms
and with all applicable laws, including without limitation ERISA and the Code;
each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a determination letter from the
Internal Revenue Service to the effect that it meets the requirements of
Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred and is
continuing; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization
period, within the meaning of Section 412 of the Code or Section 303 or 304 of
ERISA; all contributions required to be made with respect to a Plan have been
made and no material liability has occurred as a result of any failure to make
any such contribution in a timely manner; neither PESCO nor any Subsidiary of
PESCO nor any ERISA Affiliate has incurred any material liability (including
any indirect, contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or
expects to incur any such material liability under any of the foregoing
sections with respect to any Plan; no condition exists which presents a
material risk to PESCO or any Subsidiary of PESCO or any ERISA Affiliate of
incurring a material liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been instituted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of
any Plan (other than routine claims for benefits) is pending, expected or, to
the best knowledge of PESCO, threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of PESCO and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not exceed $500,000; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of PESCO, any
Subsidiary of PESCO, or any ERISA Affiliate has at all times been operated in
substantial compliance with the provisions of Part 6 of subtitle B of Title I
of ERISA and Section 4980B of the
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Code and any failure to so comply would not result in a material liability; no
lien imposed under the Code or ERISA on the assets of PESCO or any Subsidiary
of PESCO or any ERISA Affiliate exists or, to the best knowledge of PESCO, is
likely to arise on account of any Plan; and PESCO and its Subsidiaries may
cease contributions to or terminate any employee benefit plan maintained by any
of them without incurring any material liability.
(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been made and no material liability has occurred as a result
of any failure to make any such contribution in a timely manner. Neither PESCO
nor any of its Subsidiaries has incurred any obligation in connection with the
termination of or withdrawal from any Foreign Pension Plan. The present value
of the accrued benefit liabilities (whether or not vested) under each Foreign
Pension Plan, determined as of the end of PESCO's most recently ended fiscal
year on the basis of actuarial assumptions, each of which is reasonable, did
not exceed the current value of the assets of such Foreign Pension Plan
allocable to such benefit liabilities.
(c) Notwithstanding anything to the contrary in Section
7.10(a) or 7.10(b), the representations made in Sections 7.10(a) and 7.10(b)
shall not be untrue as to any Credit Party within 45 days of such Person
becoming a Credit Party unless the falsity of any such representation (i) is
actually known by an officer of PESCO or a chief financial officer of any other
Credit Party and (ii) could reasonably be expected to have a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO or the Borrower and its
Subsidiaries taken as a whole.
7.11 The Pledge Agreement. The Pledged Securities described
in Pledge Agreement are subject to no security interests in favor of any Person
other than the Administrative Agent, as Pledgee under the Pledge Agreement.
7.12 Properties. PESCO and each of its Subsidiaries have
good and indefeasible title to all material properties owned by them, including
all property shown as assets in the balance sheets referred to in Section
7.05(a) (except as sold or otherwise disposed of since the date of such balance
sheet in the ordinary course of business or as permitted by the terms of this
Agreement), free and clear of all Liens, other than Permitted Liens.
7.13 Capitalization. (a) On the Restatement Effective Date,
the authorized capital stock of PESCO shall consist of (i) 40,000,000 shares of
common stock, no par value per share and (ii) 1,000 shares of preferred stock,
no par value per share. All outstanding shares of capital stock of PESCO have
been duly and validly issued and are fully
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paid and non-assessable. Except for the Shareholders Rights Plan described in
the notes to the consolidated financial statements of PESCO delivered pursuant
to Section 7.05(a), PESCO does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
except for options or warrants to purchase shares of PESCO's common stock which
may be issued from time to time.
(b) On the Restatement Effective Date, the authorized
capital stock of Holding shall consist of 100 shares of common stock, $100.00
par value per share. All outstanding shares of capital stock of Holding have
been duly and validly issued and are fully paid and non-assessable. Holding
does not have outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock, except for options or warrants to
purchase shares of Holdings' common stock which may be issued from time to
time.
(c) On the Restatement Effective Date, the authorized
capital stock of the Borrower shall consist of 200,000 shares of common stock,
$100.00 par value per share. All outstanding shares of capital stock of the
Borrower have been duly and validly issued and are fully paid and
non-assessable. The Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
except for options or warrants to purchase shares of the Borrowers' common
stock which may be issued from time to time.
7.14 Subsidiaries. As of the Restatement Effective Date,
PESCO has no Subsidiaries other than Holding and its Subsidiaries, Holding has
no Subsidiaries other than the Borrower and its Subsidiaries and the Borrower
has no Subsidiaries other than those Subsidiaries listed on Schedule III.
Schedule III correctly sets forth, as of the Restatement Effective Date, the
percentage ownership (direct or indirect) of PESCO in each class of capital
stock or other equity of each of its Subsidiaries and also identifies the
direct owner thereof.
7.15 Compliance with Statutes, etc. Each of PESCO and each
of its Subsidiaries is in compliance with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and
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controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of PESCO or of the Borrower and its Subsidiaries taken
as a whole.
7.16 Investment Company Act. Neither PESCO nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.17 Public Utility Holding Company Act. Neither PESCO nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.18 Environmental Matters. (a) Each of PESCO and each of
its Subsidiaries have complied with, and on the date of each Credit Event are
in compliance with, all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws. There are no pending or, to
the best knowledge of PESCO, threatened Environmental Claims against PESCO or
any of its Subsidiaries (including any such claim arising out of the ownership
or operation by PESCO or any of its Subsidiaries of any Real Property no longer
owned or operated by PESCO or any of its Subsidiaries) or any Real Property
owned or operated by PESCO or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences with respect to the business or
operations of PESCO or any of its Subsidiaries, or any Real Property owned or
operated by PESCO or any of its Subsidiaries (including any Real Property
formerly owned or operated by PESCO or any of its Subsidiaries but no longer
owned or operated by PESCO or any of its Subsidiaries) or any property
adjoining or adjacent to any such Real Property that could be expected (i) to
form the basis of an Environmental Claim against PESCO or any of its
Subsidiaries or any Real Property owned or operated by PESCO or any of its
Subsidiaries or (ii) to cause any Real Property owned or operated by PESCO or
any of its Subsidiaries to be subject to any restrictions on the ownership,
occupancy or transferability of such Real Property by PESCO or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by PESCO or any of its Subsidiaries where such generation, use,
treatment or storage has violated or could be expected to violate any
Environmental Law. Hazardous Materials have not at any time been Released on
or from any Real Property owned or operated by PESCO or any of its Subsidiaries
where such Release has violated or could be expected to violate any applicable
Environmental Law.
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(c) Notwithstanding anything to the contrary in this Section
7.18, the representations made in this Section 7.18 shall not be untrue unless
an officer of PESCO or a chief financial officer of any other Credit Party has
actual knowledge of the falsity of any such representation and the aggregate
effect of all uninsured and unindemnified violations, claims, restrictions,
failures and noncompliances of the types described above could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of PESCO or the Borrower and its Subsidiaries taken as a whole.
7.19 Labor Relations. Neither PESCO nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on PESCO or the Borrower and its
Subsidiaries taken as a whole. There is (i) no unfair labor practice complaint
pending against PESCO or any of its Subsidiaries or threatened against any of
them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against PESCO or any of its Subsidiaries or, to the
best knowledge of PESCO, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against PESCO or any of its Subsidiaries
or, to the best knowledge of PESCO, threatened against PESCO or any of its
Subsidiaries and (iii) no union representation question exists with respect to
the employees of PESCO or any of its Subsidiaries, except (with respect to any
matter specified in clause (i), (ii) or (iii) above, either individually or in
the aggregate) such as could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or the Borrower and
its Subsidiaries taken as a whole.
7.20 Patents, Licenses, Franchises and Formulas. Each of
PESCO and each of its Subsidiaries owns or has the right to use all the
patents, trademarks, permits, service marks, trade names, copyrights, licenses,
franchises, proprietary information (including but not limited to rights in
computer programs and databases) and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, could reasonably be expected to result in a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or the Borrower and
its Subsidiaries taken as a whole.
7.21 Funded Debt. Schedule IV sets forth a true and complete
list of all Funded Debt (including Contingent Obligations) of PESCO and its
Subsidiaries as of the Restatement Effective Date (excluding the Sea Mar
Assumed Debt, the Revolving Loans and any Letters of Credit, but including the
1998 Senior Subordinated Notes, such outstanding Funded Debt the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof,
the name of the respective borrower and any Credit Party or any
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of its Subsidiaries which directly or indirectly guarantees such debt and
describing any assets pledged to secure such Funded Debt.
7.22 Inactive Subsidiaries. Each Inactive Subsidiary
conducts no business and has no material amount of assets or liabilities except
as disclosed in the financial statements delivered pursuant to Section 7.05(a).
7.23 No Tax Sharing Agreements. There are no tax sharing,
tax allocation or other similar agreements entered into by PESCO or any of its
Subsidiaries.
SECTION 8. Affirmative Covenants. PESCO, Holding and the
Borrower hereby covenant and agree that on and after the Restatement Effective
Date and until the Total Revolving Loan Commitment and all Letters of Credit
have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full:
8.01 Information Covenants. PESCO and the Borrower will
furnish to the Administrative Agent (with sufficient copies for each Bank):
(a) Quarterly Financial Statements. (i) Within 60 days after
the close of the first three quarterly accounting periods in each
fiscal year of PESCO, the consolidated balance sheet of PESCO and its
Subsidiaries, as at the end of such quarterly accounting period and
the related statements of income and retained earnings and statement
of cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period, all as filed with PESCO's Form 10-Q for such
quarter, and in each case setting forth comparative figures for the
related periods in the prior fiscal year, all of which shall be
certified by a principal financial officer of PESCO, subject to normal
year-end audit adjustments and the absence of footnotes.
(ii) Within seventy-five (75) days after the close of the
first three quarterly accounting periods in each fiscal year of PESCO,
the unconsolidated balance sheet for each of PESCO and the Borrower,
as of the end of such quarterly accounting period, and the related
statements of income, retained earnings and cash flow for such
quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period, in
each case setting forth comparative figures for the related periods in
the prior fiscal year, all of which shall be certified by a principal
financial officer of PESCO, subject to normal year-end audit
adjustments and the absence of footnotes.
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(b) Annual Financial Statements. (i) Within 120 days after
the close of each fiscal year of PESCO, the consolidated and
consolidating balance sheets of PESCO and its Subsidiaries as at the
end of such fiscal year, the related consolidated and consolidating
statements of income, and the related consolidated statements of
retained earnings and cash flow for such fiscal year, setting forth
comparative figures for the preceding fiscal year and in the case of
the consolidated financial statements, certified by Deloitte & Touche
or such other independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent,
all as filed with PESCO's Form 10-K for such year, together with a
report of such accounting firm stating that in the course of its
regular audit of the financial statements of PESCO and its
Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such consolidated financial statements
present fairly, in all material respects, the financial position of
PESCO and its Subsidiaries for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years. Such
opinion shall not be qualified or limited because of a restricted or
limited examination by such accountant of any material portion of
PESCO's or any of its Subsidiary's records. All consolidating
financial statements shall be certified by a principal financial
officer of PESCO.
(ii) Within 120 days after the close of each fiscal year of
PESCO, the unaudited consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and statement
of cash flows for such fiscal year setting forth comparative figures
for the preceding fiscal year, certified by a principal financial
officer of the Borrower, subject to normal year-end audit adjustments
and the absence of footnotes.
(c) Budgets and Projections. (i) No later than 15 days
following approval by the Board of Directors of PESCO, the annual
consolidated budget (substantially in the form of its annual
consolidated budgets for prior fiscal years) (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by PESCO for each of the twelve months of such fiscal year
prepared in detail setting forth, with appropriate discussion, the
principal assumptions upon which such budgets are based; and (ii)
budgets and projections of PESCO, Holding and the Borrower, and,
promptly upon request, such additional information as may from time to
time be reasonably requested by the Administrative Agent.
(d) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 8.01(a)(i) and
8.01(b), a certificate of a principal financial officer of PESCO to
the effect that, to the best of such officer's knowledge, no Default
or Event of Default has occurred and is continuing or, if any
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Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof, which certificate shall be in
substantially the form of Exhibit K hereto and shall set forth in
reasonable detail the calculations required to establish whether PESCO
and its Subsidiaries were in compliance with the provisions of
Sections 4.02, 9.04 and 9.07 through 9.11, inclusive, at the end of
such fiscal quarter or year, as the case may be.
(e) Notice of Default or Litigation. Promptly upon, and in
any event within three Business Days after, an officer of PESCO or a
chief financial officer of any other Credit Party obtains actual
knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and/or (ii) any
litigation or governmental investigation or proceeding pending (x)
against PESCO or any of its Subsidiaries which could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of PESCO or the Borrower and its Subsidiaries taken as a
whole, (y) with respect to any material Funded Debt of PESCO or any of
its Subsidiaries or (z) with respect to any Credit Document.
(f) Other Reports and Filings. Within 10 Business Days after
the filing or delivery thereof, copies of all reports on Forms 10-K,
10-Q and 8-K, all proxy materials, if any, and any other material
documents which PESCO or any of its Subsidiaries shall publicly file
with the Securities and Exchange Commission or any successor thereto
(the "SEC").
(g) Environmental Matters. Promptly after an officer of
PESCO or a senior operating officer of any other Credit Party obtains
knowledge thereof, notice of one or more of the following
environmental matters, unless such environmental matters could not,
individually or when aggregated with all other such environmental
matters, be reasonably expected to materially and adversely affect the
business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of PESCO and its Subsidiaries
taken as a whole:
(i) any pending or threatened Environmental Claim
against PESCO or any of its Subsidiaries or any Real Property
owned or operated by PESCO or any of its Subsidiaries;
(ii) any condition or occurrence on or arising
from any Real Property owned or operated by PESCO or any of
its Subsidiaries that (a) results in noncompliance by PESCO
or any of its Subsidiaries with any applicable Environmental
Law or (b) could be expected to form the basis of an
Environmental Claim against PESCO or any of its Subsidiaries
or any such Real Property;
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(iii) any condition or occurrence on any Real
Property owned or operated by PESCO or any of its
Subsidiaries that could be expected to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by PESCO or any of its
Subsidiaries of such Real Property under any Environmental
Law; and
(iv) the taking of any removal or remedial action
in response to the actual or alleged presence of any
Hazardous Material on any Real Property owned or operated by
PESCO or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency; provided, that in any event PESCO shall deliver to
each Bank all notices received by PESCO or any of its
Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify PESCO or any of
its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify PESCO or any of
its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the
nature of the claim, investigation, condition, occurrence or removal
or remedial action and PESCO's or such Subsidiary's response thereto.
(h) Annual Meetings with Banks. At a date to be mutually
agreed upon between the Administrative Agent and the Borrower
occurring on or prior to the 150th day after the close of each fiscal
year of the Borrower, the Borrower shall, at the request of the
Administrative Agent, hold a meeting with all of the Banks at which
meeting shall be reviewed the financial results of the Borrower and
its Subsidiaries for the previous fiscal year and the budgets
presented for the current fiscal year of the Borrower.
(i) Acquisition Certificate. At the time of the delivery of
the officer's certificate pursuant to Section 8.01(d), a certificate
of a principal financial officer of the Borrower substantially in the
form of Exhibit L with respect to all Permitted Acquisitions
consummated during such quarterly period for which a certificate in
the form of Exhibit L has not been previously delivered.
(j) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to
PESCO or any of its Subsidiaries as either Agent may reasonably
request.
8.02 Books, Records and Inspections. PESCO will, and will
cause each of its Subsidiaries to, keep proper books of record and accounts in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all
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dealings and transactions in relation to its business and activities. Subject
to such limitations or restrictions as may be imposed by governmental bodies,
domestic or foreign, or applicable health and safety regulations or
requirements or any of PESCO's or its Subsidiary's customers, PESCO will, and
will cause each of its Subsidiaries to, permit officers and designated
representatives of either Agent or any Bank (who shall comply with such
Person's safety rules and regulations applicable in the ordinary course of
business to each specific location and at their own cost) to visit and inspect,
under guidance of officers of PESCO or such Subsidiary, any of the properties
of PESCO or such Subsidiary, and to examine the books of account of PESCO or
such Subsidiary and discuss the affairs, finances and accounts of the Borrower
or such Subsidiary with, and be advised as to the same by, its and their
officers, all at such reasonable times and intervals and to such reasonable
extent as such Agent or Bank may reasonably request.
8.03 Maintenance of Property; Insurance. PESCO will, and
will cause each of its Subsidiaries to, (i) keep all property necessary to the
business of PESCO and its Subsidiaries in reasonably good working order and
condition, ordinary wear and tear excepted, (ii) maintain insurance with
responsible insurance companies on all such property in at least such amounts
and against at least such risks as is consistent and in accordance with
industry practice for companies similarly situated owning similar properties in
the same general areas in which PESCO or any of its Subsidiaries operates and
naming the Administrative Agent as an additional insured and (iii) furnish to
the Administrative Agent or any Bank, upon written request, all reasonably
requested information as to the insurance carried. If, after the occurrence of
any Default or Event of Default, PESCO or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, the Administrative
Agent shall have the right (but shall be under no obligation), upon prior
written notice to the Borrower, to procure such insurance and the Borrower
agrees to reimburse the Administrative Agent for all costs and expenses of
procuring such insurance.
8.04 Corporate Franchises. PESCO will, and will cause each
of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 8.04 shall prevent (i) sales of assets and other transactions by
PESCO or any of its Subsidiaries in accordance with Section 9.02 or (ii) the
withdrawal by PESCO or any of its Subsidiaries of its qualification as a
foreign corporation in any jurisdiction where such withdrawal could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of PESCO and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. PESCO will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect
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of the conduct of its business and the ownership of its property (including
applicable statutes, regulations, orders and restrictions relating to
environmental standards and controls), except such noncompliances (x) as could
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of PESCO or the
Borrower and its Subsidiaries taken as a whole or (y) as are being contested in
good faith by PESCO or such Subsidiary through appropriate proceedings which
are being diligently prosecuted.
8.06 Compliance with Environmental Laws. PESCO will, and
will cause each of its Subsidiaries to, comply with all Environmental Laws
applicable to the ownership or use of its Real Property now or hereafter owned
or operated by PESCO or any of its Subsidiaries, will promptly pay or cause to
be paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws. Neither PESCO nor any of
its Subsidiaries will generate, use, treat, store, Release or dispose of, or
permit the generation, use, treatment, storage, Release or disposal of
Hazardous Materials on any Real Property now or hereafter owned or operated by
PESCO or any of its Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property, except for Hazardous
Materials generated, used, treated, stored, Released or disposed of at any such
Real Properties in compliance in all material respects with all applicable
Environmental Laws and reasonably required in connection with the operation,
use and maintenance of the business or operations of PESCO or any of its
Subsidiaries. Notwithstanding anything to the contrary contained herein, it
will not be a violation of this covenant if any noncompliance (x) would not,
individually or in the aggregate, reasonably be expected to have a material
adverse affect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of PESCO or the Borrower and
its Subsidiaries taken as a whole or (y) is being contested in good faith by
PESCO or such Subsidiary through appropriate proceedings which are being
diligently prosecuted.
8.07 ERISA. As soon as possible and, in any event, within
ten (10) days after PESCO, any Subsidiary of PESCO or any ERISA Affiliate knows
of the occurrence of any of the following, PESCO will deliver to each of the
Banks a certificate of the Chief Financial Officer of PESCO setting forth the
full details as to such occurrence and the action, if any, that PESCO, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by PESCO,
the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred
(except to the extent that PESCO has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is
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subject to the advance reporting requirement of PBGC Regulation Section 4043.61
(without regard to subparagraph (b)(1) thereof), and an event described in
subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043
is reasonably expected to occur with respect to such Plan within the following
30 days; that an accumulated funding deficiency, within the meaning of Section
412 of the Code or Section 302 of ERISA, has been incurred or an application
may be reasonably expected to be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments)
or an extension of any amortization period under Section 412 of the Code or
Section 303 or 304 of ERISA with respect to a Plan; that any contribution
required to be made with respect to a Plan or Foreign Pension Plan has not been
timely made; that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability; that proceedings may be reasonably expected to be
or have been instituted to terminate or appoint a trustee to administer a Plan
which is subject to Title IV of ERISA; that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a
Plan; that PESCO, any Subsidiary of PESCO or any ERISA Affiliate will or may
incur any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code; or that PESCO or any Subsidiary of PESCO may
be reasonably expected to incur any material liability pursuant to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) that provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. Upon the
request of the Administrative Agent, PESCO will deliver to each of the Banks
(i) a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service and (ii) copies of any records, documents or
other information that must be furnished to the PBGC with respect to any Plan
pursuant to Section 4010 of ERISA. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of any
records, documents or other information that must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, and any notices that
could reasonably be expected to result in any material liability received by
PESCO, any Subsidiary of PESCO or any ERISA Affiliate with respect to any Plan
or Foreign Pension Plan shall be delivered to the Banks no later than ten (10)
days after the date or such records, documents and/or information has been
furnished to the PBGC or such notice has been received by PESCO, the Subsidiary
or the ERISA Affiliate, as applicable.
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8.08 End of Fiscal Years; Fiscal Quarters. PESCO will cause
(i) its fiscal year to end on December 31 and (ii) its fiscal quarters to end
on March 31, June 30, September 30 and December 31.
8.09 Performance of Obligations. PESCO will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement, loan agreement or credit
agreement and each other material agreement, contract or instrument by which it
is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of PESCO or the Borrower and its Subsidiaries taken as
a whole.
8.10 Payment of Taxes. PESCO will pay and discharge, and
will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for sums that have become
due and payable which, if unpaid, might become a Lien not otherwise permitted
under Section 9.01(i); provided, that neither PESCO nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
8.11 Foreign Subsidiaries Guaranty, etc. If following a
change in the relevant sections of the Code or the regulations, rules, rulings,
notices or other official pronouncements issued or promulgated thereunder,
counsel for PESCO reasonably acceptable to the Administrative Agent does not
within 30 days after a request from either Agent deliver evidence, in form and
substance mutually satisfactory to the Administrative Agent and PESCO, with
respect to any Foreign Subsidiary of PESCO which has not already had all of its
stock pledged pursuant to the Pledge Agreement that (i) a pledge of 66-2/3% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, and (ii) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the Subsidiaries
Guaranty, in any such case could reasonably be expected to cause (I) the
undistributed earnings of such Foreign Subsidiary as determined for federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for federal income tax purposes or (II) other
material adverse federal income tax consequences to the Credit Parties, then in
the case of a failure to deliver the evidence described in clause (i) above,
that portion of such Foreign Subsidiary's outstanding capital stock owned by
any Credit Party and not theretofore pledged pursuant to the Pledge Agreement
shall be pledged to the Administrative Agent for the benefit of the Secured
Creditors pursuant to the Pledge Agreement and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver (x) the Subsidiaries Guaranty (or another guaranty in
substantially
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similar form if needed), guaranteeing the Obligations of the Borrower under the
Credit Documents and under any Interest Rate Protection Agreement or Other
Hedging Agreement and (y) the Pledge Agreement (or another pledge agreement in
substantially similar form if needed) securing such Foreign Subsidiaries'
obligations under the Subsidiaries Guaranty, in each case to the extent that
the entering into the Subsidiaries Guaranty and Pledge Agreement is permitted
by the laws of the respective foreign jurisdiction and with all documents
delivered pursuant to this Section 8.11 to be in form and substance reasonably
satisfactory to the Administrative Agent.
8.12 Margin Stock. PESCO will, and will cause each of the
Pledgors to, take any and all actions as may be required to ensure that no
capital stock pledged, or required to be pledged, pursuant to the Pledge
Agreement shall constitute Margin Stock.
SECTION 9. Negative Covenants. PESCO, Holding and the
Borrower hereby covenant and agree that on and after the Restatement Effective
Date and until the Total Revolving Loan Commitment and all Letters of Credit
have terminated and the Revolving Loans, Notes and Unpaid Drawings, together
with interest, Fees and all other Obligations incurred hereunder and
thereunder, are paid in full:
9.01 Liens. PESCO will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
PESCO or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to PESCO or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 9.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or not yet delinquent and payable
without any penalty of any kind or character or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have
been established in accordance with GAAP;
(ii) Liens in respect of property or assets of PESCO or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Funded Debt for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in
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the ordinary course of business, and (x) which do not in the aggregate
materially detract from the value of PESCO's or such Subsidiary's
property or assets or materially impair the use thereof in the
operation of the business of PESCO or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of
the property or assets subject to any such Lien;
(iii) Liens in existence on the Original Effective Date
which are listed, and the property subject thereto described, in
Schedule V, but only to the respective date, if any, set forth in such
Schedule V for the removal, replacement and termination of any such
Liens, without giving effect to any extension or renewal thereof;
(iv) Liens created pursuant to the Pledge Agreement;
(v) Liens upon assets of PESCO or any of its Subsidiaries
subject to Capitalized Lease Obligations to the extent such
Capitalized Lease Obligations are permitted by Section 9.04(iii),
provided that (x) such Liens only serve to secure the payment of
Funded Debt arising under such Capitalized Lease Obligation and (y)
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of PESCO or any
Subsidiary of PESCO;
(vi) Liens placed upon assets used in the ordinary course
of business of PESCO or any of its Subsidiaries at the time of the
acquisition thereof by PESCO or any such Subsidiary or within 90 days
thereafter to secure Funded Debt incurred to pay all or a portion of
the purchase price thereof or to secure Funded Debt incurred solely
for the purpose of financing the acquisition of any such assets or
extensions, renewals or replacements of any of the foregoing for the
same or a lesser amount of Funded Debt, provided that (x) such Funded
Debt is permitted in Section 9.04 and (y) in all events, the Lien
encumbering the assets so acquired does not encumber any other asset
of PESCO or such Subsidiary;
(vii) easements, rights-of-way, zoning and other
restrictions, encroachments and other similar charges or encumbrances,
and minor title deficiencies, in each case not securing Funded Debt
and not materially interfering with the conduct of the business of
PESCO or any of its Subsidiaries;
(viii) Liens arising from precautionary UCC financing
statement filings regarding operating leases;
(ix) Liens arising out of the existence of judgments or
awards in respect of which PESCO or any of its Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review in
respect of which there shall have been secured
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a subsisting stay of execution pending such appeal or proceedings,
provided that the aggregate amount of any cash and the fair market
value of any property subject to such Liens do not exceed $500,000 at
any time outstanding;
(x) statutory and common law landlords' liens under
leases to which PESCO or any of its Subsidiaries is a party;
(xi) Liens (other than Liens imposed under ERISA) incurred
in the ordinary course of business in connection with workers
compensation claims, unemployment insurance and social security
benefits;
(xii) Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, statutory
obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business (exclusive
of obligations in respect of the payment for borrowed money), provided
that the aggregate outstanding amount of obligations secured by Liens
permitted by this clause (xii) (and the value of all cash and property
encumbered by Liens permitted pursuant to this clause (xii)) shall not
at any time exceed $2,000,000;
(xiii) Liens on property or assets acquired pursuant to a
Permitted Acquisition, an Identified Acquisition or the Sea Mar
Acquisition, or on property or assets of a Subsidiary of the Borrower
in existence at the time such Subsidiary is acquired pursuant to a
Permitted Acquisition, an Identified Acquisition or the Sea Mar
Acquisition, to the extent permitted pursuant to Section 9.02(viii),
9.02(ix) or 9.02(xv);
(xiv) Liens in favor of any Credit Party; and
(xv) Liens placed upon assets of any Subsidiary which is a
Foreign Subsidiary to secure Funded Debt incurred by such Subsidiary,
provided that the aggregate amount of any Funded Debt secured by such
Liens shall not exceed $2,500,000 in the aggregate at any one time.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
PESCO will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part
of its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
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(i) PESCO and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(ii) PESCO and its Subsidiaries may sell obsolete or
worn-out equipment or materials, in the ordinary course of business;
(iii) PESCO and its Subsidiaries may sell or discount, in
each case without recourse and in the ordinary course of business,
accounts receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof;
(iv) PESCO and its Subsidiaries may sell other assets
which do not constitute Material Asset Sales in the ordinary course of
business so long as the gross proceeds generated from all such asset
sales in any fiscal year of PESCO do not to exceed $3,000,000;
(v) PESCO and its Subsidiaries may make Material Asset
Sales, so long as (i) no Default or no Event of Default then exists or
would result therefrom, (ii) each such sale is in an arm's-length
transaction and PESCO or the respective Subsidiary receives at least
fair market value (as determined in good faith by PESCO or such
Subsidiary, as the case may be), (iii) the total consideration
received by PESCO or such Subsidiary is at least 90% cash and is paid
at the time of the closing of such sale and (iv) the Net Sale Proceeds
from any Material Asset Sales are applied as (and to the extent)
required by Section 3.03(b) and 4.02(f), provided, however, that if,
following the sale of equipment, a replacement is necessary for the
operation of the business of PESCO or such Subsidiary, PESCO or such
Subsidiary shall promptly replace the sold equipment with adequate
replacement equipment;
(vi) Investments may be made to the extent permitted by
Section 9.05;
(vii) PESCO and its Subsidiaries may lease (as lessee) real
or personal property (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
9.04(iii));
(viii) the Borrower and its Wholly-Owned Subsidiaries may
consummate the Identified Acquisitions so long as (i) no Default or
Event of Default then exists or would result therefrom, (ii) each of
the representations and warranties contained in Section 7 shall be
true and correct in all material respects both before and after giving
effect to such Identified Acquisition, and (iii) any Liens or Funded
Debt assumed or issued in connection with such acquisition shall be
issued or assumed only by the Borrower;
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(ix) the Borrower and its Wholly-Owned Subsidiaries may
consummate a Permitted Acquisition, so long as (i) the Person acquired
(or whose assets were acquired) was, immediately prior to such
acquisition, engaged primarily in the Business or such assets
constitute Equipment, (ii) no Default or Event of Default then exists
or would result therefrom, (iii) each of the representations and
warranties contained in Section 7 shall be true and correct in all
material respects both before and after giving effect to such
Permitted Acquisition, (iv) any Liens or Funded Debt assumed or issued
in connection with such acquisition shall be issued or assumed only by
the Borrower and shall otherwise be on terms and conditions
satisfactory to the Administrative Agent, (v) the Pro Forma Leverage
Ratio, after giving effect to such Permitted Acquisition, shall not
exceed the Applicable Pro Forma Leverage Ratio and, if such Permitted
Acquisition is of the type described in clause (a) or (b) of the
definition of Permitted Acquisition, the anticipated cash flow from
such Permitted Acquisition is positive, (vi) on or prior to the
Applicable Notice Time with respect to any Permitted Acquisition in
excess of $10,000,000, the Borrower shall deliver to the
Administrative Agent and each of the Banks a certificate of a
principal financial officer of the Borrower substantially in the form
of Exhibit L hereto certifying (and showing the calculations therefor
in reasonable detail) that the Pro Forma Leverage Ratio shall not
exceed the Applicable Pro Forma Leverage Ratio at such time and (vii)
on or prior to the Applicable Notice Time with respect to any
Permitted Acquisition which results in aggregate Permitted
Acquisitions in excess of $25,000,000 during any quarterly accounting
period of PESCO, and on or prior to the Applicable Notice Time with
respect to each subsequent Permitted Acquisition which results in
aggregate Permitted Acquisitions in excess of an additional
$25,000,000 during such quarterly accounting period, the Borrower
shall deliver to the Administrative Agent and each of the Banks a
certificate of a principal financial officer of the Borrower
substantially in the form of Exhibit L hereto certifying (and showing
the calculations therefor in reasonable detail) that the Pro Forma
Leverage Ratio shall not exceed the Applicable Pro Forma Leverage
Ratio at such time;
(x) PESCO or its Subsidiaries may grant leases or
subleases to other Persons not materially interfering with the conduct
of the business of PESCO or any of its Subsidiaries;
(xi) PESCO, Holding and any Subsidiary of the Borrower may
be merged or consolidated with or into the Borrower so long as the
Borrower is the surviving corporation of such merger or consolidation;
(xii) any Subsidiary of the Borrower may be merged or
consolidated with or into any other Subsidiary of the Borrower so long
as (i) in the case of any such merger or consolidation involving a
Subsidiary Guarantor, the Subsidiary Guarantor
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is the surviving corporation of such merger or consolidation and (ii)
in the case of any such merger consolidation involving a Wholly-Owned
Subsidiary of the Borrower, the Wholly-Owned Subsidiary is the
surviving corporation of such merger or consolidation;
(xiii) PESCO and any of its Subsidiaries may transfer
assets between or among themselves in the ordinary course of business;
(xiv) Holding may dissolve and liquidate, so long as all
of its assets and liabilities are distributed to and assumed by PESCO,
and any Wholly-Owned Subsidiary of the Borrower may dissolve and
liquidate, so long as all of the assets and liabilities of such
Wholly-Owned Subsidiary are distributed to and assumed by the
Borrower;
(xv) PESCO and the Borrower may consummate the Sea Mar
Acquisition, provided, however, that the acquisition of any vessels
pursuant to the Vessel Construction Contract shall be subject to
compliance with the provisions of Section 9.02(ix) at the time of
delivery of each relevant vessel;
(xvi) PESCO and any of its Subsidiaries may charter, lease
or rent vessels and other equipment in the ordinary course of their
respective businesses; and
(xvii) the Borrower may be merged into Holding.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Pledge Agreement Collateral, or any Pledge Agreement
Collateral is sold as permitted by this Section 9.02 (other than to PESCO or a
Subsidiary thereof), such Pledge Agreement Collateral shall be sold free and
clear of the Liens created by the Pledge Agreement and the Administrative Agent
and the Pledgee shall be authorized to take any actions deemed appropriate in
order to effect the foregoing.
9.03 Dividends. PESCO will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to
PESCO or any of its Subsidiaries, except that:
(i) any Subsidiary (including any Excluded Subsidiary) of
the Borrower may pay cash Dividends to the Borrower or to any
Subsidiary of the Borrower;
(ii) any non-Wholly-Owned Subsidiary of PESCO may pay cash
Dividends to its shareholders generally so long as PESCO or its
respective Subsidiary which owns the equity interest in the Subsidiary
paying such Dividends receives at least its proportionate share
thereof (based upon its relative holding of
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the equity interest in the Subsidiary paying such Dividends and taking
into account the relative preferences, if any, of the various classes
of equity interests of such Subsidiary);
(iii) Holding may pay cash Dividends to PESCO so long as
the proceeds thereof are promptly used by PESCO to pay the currently
due state and local taxes payable by PESCO and the reasonable expenses
of preparing returns reflecting such taxes; and
(iv) the Borrower may pay cash Dividends to Holding to
permit Holding to pay, and to pay amounts to PESCO to permit PESCO to
pay, then currently due state and local taxes payable by Holding
and/or PESCO and the reasonable expenses of preparing returns
reflecting such taxes.
9.04 Funded Debt. PESCO will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Funded Debt, except:
(i) Funded Debt incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness outstanding on the Original
Effective Date and listed on Schedule IV, without giving effect to any
subsequent extension, renewal or refinancing thereof;
(iii) Funded Debt of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations and purchase money Funded
Debt subject to Liens permitted under Section 9.01(vi), provided that
in no event shall the sum of (I) the aggregate principal amount of all
Capitalized Lease Obligations and (II) the aggregate principal amount
of all purchase money Funded Debt exceed $2,000,000 at any time
outstanding;
(iv) intercompany Funded Debt among PESCO and its
Subsidiaries to the extent permitted by Sections 9.05(viii) and
(xiii);
(v) Funded Debt consisting of guaranties by PESCO and its
Subsidiaries of (x) Funded Debt of Excluded Subsidiaries in an
aggregate principal amount not to exceed $5,000,000 outstanding at any
one time and (y) other Funded Debt of the Borrower and its
Subsidiaries otherwise permitted to be incurred under this Section
9.04;
(vi) Funded Debt under Interest Rate Protection Agreements
and Other Hedging Agreements providing protection against fluctuations
in currency values
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in connection with PESCO's or any of its Subsidiaries' operations so
long as management of PESCO or such Subsidiary, as the case may be,
has determined that the entering into of such Interest Rate Protection
Agreements or Other Hedging Agreements are bona fide hedging
activities and are not for speculative purposes;
(vii) additional unsecured Funded Debt of PESCO, Holding or
the Borrower issued on a subordinated basis (together with the 1998
Senior Subordinated Notes, "Permitted Subordinated Indebtedness") so
long as all of the terms and conditions (and the documentation) in
connection therewith (including, without limitation, the amortization,
maturity, interest rates, limitations on cash interest payable,
covenants, defaults, remedies, sinking fund provisions, subordination
provisions and other terms) and the purchasers or lenders thereof
shall be satisfactory to the Required Banks;
(viii) the Borrower may assume Funded Debt of a Subsidiary
pursuant to a Permitted Acquisition or Identified Acquisition (or the
Borrower may assume Funded Debt at the time of a Permitted Acquisition
or Identified Acquisition of an asset securing such Funded Debt), to
the extent permitted in connection with a Permitted Acquisition;
(ix) additional Funded Debt constituting overdraft lines
of PESCO and its Subsidiaries in an aggregate principal amount not to
exceed $5,000,000.00 at any one time outstanding (calculated so as to
not include both the overdraft line and any related guaranty);
(x) up to $150,000,000 principal amount of 1998 Senior
Subordinated Notes;
(xi) the Assumed Sea Mar Debt; and
(xii) in addition to all other Funded Debt permitted
pursuant to this Section 9.04, additional unsecured Funded Debt
incurred by PESCO and its Subsidiaries in an aggregate principal
amount not to exceed $2,000,000.00 at any one time outstanding.
9.05 Advances, Investments and Loans. PESCO will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, (each of the
foregoing
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an "Investment" and, collectively, "Investments"), except that the following
shall be permitted:
(i) PESCO and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of their business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such
Subsidiary;
(ii) PESCO and its Subsidiaries may acquire and hold cash
and Cash Equivalents;
(iii) PESCO and its Subsidiaries may hold the Investments
held by them, and maintain the Intercompany Loans outstanding, on the
Original Effective Date and described on Schedule VI, provided that
any additional Investments made with respect thereto or any extensions
or renewals of any Intercompany Loans shall be permitted only if
independently justified under the other provisions of this Section
9.05;
(iv) PESCO and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
good faith settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of
business;
(v) PESCO and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
officers, directors and employees so long as the principal amount
thereof at any time outstanding (determined without regard to any
write-downs or write-offs of such loans and advances) shall not exceed
$25,000 for any one officer, director or employee and shall not exceed
in the aggregate $500,000 at any one time;
(vi) PESCO may acquire and hold obligations of one or more
officers or other employees of PESCO or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of PESCO so long as no cash is paid by PESCO or any of
its Subsidiaries to such officers or employees in connection with the
acquisition of any such obligations;
(vii) PESCO and its Subsidiaries may enter into Interest
Rate Protection Agreements and Other Hedging Agreements to the extent
permitted by Section 9.04(vi);
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(viii) in addition to the accounts that may be held, paid,
created, acquired or discharged pursuant to Section 9.05(i), PESCO and
its Subsidiaries may make intercompany loans and advances between or
among one another (collectively, "Intercompany Loans"), so long as (i)
each Intercompany Loan made to a Foreign Subsidiary shall only be made
by the Borrower and shall be evidenced by an Intercompany Note that is
pledged to the Collateral Agent pursuant to the Pledge Agreement,
provided that (x) Intercompany Loans to Foreign Subsidiaries (other
than Pool International (Malaysia) Sdn. Bhd.) which are outstanding
on the Original Effective Date as set forth in Schedule VI shall not
be subject to this requirement and (y) any advances which represent
charges to a Subsidiary for Trade Advances shall not be subject to
this requirement, so long as the aggregate amount of all such Trade
Advances not evidenced by an Intercompany Note at any one time
outstanding shall not exceed $2,000,000, and (ii) the aggregate
outstanding principal amount of all Intercompany Loans made by the
Credit Parties to Foreign Subsidiaries, in addition to those described
on Schedule VI and in addition to those described in Section
9.05(xiii), shall not exceed $15,000,000 at any time outstanding
(determined without regard to any write-downs or write-offs of such
Intercompany Loans);
(ix) PESCO may make equity contributions to the capital of
Holding, Holding may make equity contributions to the capital of the
Borrower, the Borrower may make equity contributions to the capital of
the Subsidiary Guarantors and the Subsidiary Guarantors may make
equity contributions to the capital of their respective Subsidiaries
which are Subsidiary Guarantors;
(x) PESCO, Holding, the Borrower and the Subsidiary
Guarantors may make equity contributions to the capital of
Subsidiaries of PESCO which are not Subsidiary Guarantors and to
Excluded Subsidiaries (i) for the purpose of enabling Wholly-Owned
Subsidiaries to consummate Permitted Acquisitions or (ii) for any
other purpose, so long as the aggregate outstanding amount of all such
equity contributions for such other purposes, in addition to the
amounts described as "shareholder advances (treated as equity for
accounting purposes)" on Schedule VI, does not exceed the sum of
$5,000,000 and the aggregate sum of all cash distributions received by
PESCO, Holding, the Borrower and the Subsidiary Guarantors after the
Original Effective Date from Excluded Subsidiaries and Subsidiaries of
PESCO which are not Subsidiary Guarantors;
(xi) Permitted Acquisitions, Identified Acquisitions and
the Sea Mar Acquisition shall be permitted pursuant to Section
9.02(viii), Section 9.02(ix) and Section 9.02(xv), respectively;
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(xii) PESCO and its Subsidiaries may acquire and hold
promissory notes issued by the purchaser of assets in connection with
a sale of such assets to the extent permitted by Sections 9.02(v);
(xiii) in addition to the accounts that may be held, paid,
created, acquired or discharged pursuant to Section 9.05(i), PESCO and
the Subsidiary Guarantors may make additional Intercompany Loans (A)
to other Subsidiary Guarantors for the purpose of enabling such
Subsidiary Guarantor to consummate Permitted Acquisitions or
Identified Acquisitions and (B) to Foreign Subsidiaries for the
purpose of enabling such Foreign Subsidiary to consummate Permitted
Acquisitions or Identified Acquisitions so long as each such
Intercompany Loan to a Foreign Subsidiary shall be made only by the
Borrower and shall be evidenced by an Intercompany Note that is
pledged to the Collateral Agent pursuant to the Pledge Agreement;
(xiv) PESCO and its Subsidiaries may hold receivables owing
to any of them in the ordinary course of business with respect to
insurance claims; and
(xv) in addition to all other Investments and advances
permitted by this Section 9.05, PESCO and its Subsidiaries may make
additional Investments in an aggregate amount outstanding at any time
not to exceed $2,000,000.00.
9.06 Transactions with Affiliates. PESCO will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions with any Affiliate of PESCO or any of its Subsidiaries,
other than in the ordinary course of business and on terms and conditions
substantially as favorable to PESCO or such Subsidiary as would reasonably be
obtained by PESCO or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:
(i) Dividends may be paid to the extent provided in
Section 9.03;
(ii) loans may be made and other transactions may be
entered into by PESCO and its Subsidiaries to the extent permitted by
Sections 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors
of PESCO and its Subsidiaries; and
(iv) transactions between or among PESCO and its
Subsidiaries (including Excluded Subsidiaries) to the extent that such
transactions are otherwise permitted under this Agreement.
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9.07 Consolidated Interest Coverage Ratio. None of the
Parties will permit the Consolidated Interest Coverage Ratio for any Test
Period to be less than 3.00:1.00.
9.08 Fixed Charge Coverage Ratio. None of the Parties will
permit the Fixed Charge Coverage Ratio for any Test Period up to and ending on
the last day of a fiscal quarter of PESCO set forth below to be less than the
ratio set forth opposite such fiscal quarter below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending Ratio
--------------------- -----
<S> <C>
March 31, 1998 1.25:1.00
September 30, 1998 1.40:1.00
March 31, 1999 1.55:1.00
June 30, 1999 and 1.75:1.00
the last day of each
fiscal quarter
thereafter
</TABLE>
9.09 Maximum Leverage Ratio. None of the Parties will permit
the Leverage Ratio at any time to be greater than 3.25:1.00.
9.10 Maximum Debt-to-Total Capital Ratio. None of the
Parties will permit the ratio of Consolidated Funded Debt to Total Capital at
the end of any fiscal quarter of PESCO to be greater than 0.45:1.00.
9.11 Minimum Consolidated Net Worth. None of the Parties
will permit the Consolidated Net Worth of PESCO and its Subsidiaries (plus net
income of Excluded Subsidiaries (after giving effect to deductions for
interests held by Persons other than PESCO and its Subsidiaries)) at any time
to be less than $175,000,000, plus (x) 50% of the cumulative Consolidated Net
Income for the period from July 1, 1997 until December 31, 1997 and for each
fiscal year thereafter (without reduction to the extent Consolidated Net Income
for any such fiscal year is negative), (y) 50% of the cash proceeds (net of
underwriting discounts and commissions and other reasonable transaction costs
associated therewith) received by PESCO or any of its Subsidiaries for of any
sale of equity on or after July 1, 1997 and (z) 100% of the increase of the
Consolidated Net Worth of PESCO and its Subsidiaries attributable to the
consummation of the Sea Mar Acquisition, such amount to be determined in good
faith by PESCO and reported to the Administrative Agent in writing no later
than 60 days after the Restatement Effective Date, less any decrease as a
result of any return of Pool Stock to PESCO pursuant to the Escrow Agreement.
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9.12 Limitation on Modifications of Certificate of
Incorporation and By-Laws; Limitation on Voluntary Payments and Modifications
of Funded Debt. (a) PESCO will not, and will not permit any of its
Subsidiaries to, amend, modify or change its certificate or articles of
incorporation (including, without limitation, by the filing or modification of
any certificate of designation) or by-laws (or the equivalent organizational
documents) unless such amendment, modification or change could not be adverse
to the interests of the Banks.
(b) PESCO will not, and will not permit any of its
Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities
before due for the purpose of paying when due) any Existing
Indebtedness (it being understood and agreed that the provisions of
this Section 9.12(b) shall not apply to the Assumed Sea Mar Debt);
provided that, to the extent the Borrower and the holders of the DA&S
Subordinated Notes enter into arrangements for the defeasance of the
DA&S Subordinated Notes, the Borrower may deposit money or securities
with an escrow agent or other Person prior to the date payment is due
under the DA&S Subordinated Notes in accordance with such arrangements
so long as (x) no Default or Event of Default is then in existence,
and (y) concurrently with the making of such deposit, (1) the Borrower
is unconditionally released from its obligations with respect to the
DA&S Subordinated Notes, and (2) any and all Liens held by the holders
of the DA&S Subordinated Notes (or their representative) are
unconditionally released, in each case in a manner satisfactory to the
Administrative Agent;
(ii) amend or modify, or permit the amendment or
modification of, any provision of any Hillman Subordinated Debt
Document, DA&S Subordinated Debt Document or 1998 Senior Subordinated
Notes Document unless such amendment or modification could not be
adverse to the interests of the Banks; or
(iii) amend or modify, or permit the amendment or
modification of, any provision of Section 2 of the Sea Mar Acquisition
Agreement unless such amendment or modification could not be adverse
to the interests of the Banks.
9.13 Limitation on Certain Restrictions on Subsidiaries.
PESCO will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by PESCO or any Subsidiary of
PESCO, or pay any Funded Debt owed to PESCO or any Subsidiary of PESCO, (b)
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make loans or advances to PESCO or any Subsidiary of PESCO or (c) transfer any
of its properties or assets to PESCO or any Subsidiary of PESCO, except for
such encumbrances or restrictions existing under or by reason of (i) applicable
law, (ii) this Agreement and the other Credit Documents, (iii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of PESCO or any Subsidiary of PESCO, (v) customary
provisions restricting assignment of any licensing agreement entered into by
PESCO or any Subsidiary of PESCO in the ordinary course of business and (vi)
restrictions on the transfer of any asset subject to a Lien permitted by
Sections 9.01 (vi).
9.14 Limitation on Issuance of Capital Stock. PESCO will not
permit any of its Subsidiaries to issue any capital stock (including by way of
sales of treasury stock) or any options or warrants to purchase, or securities
convertible into, capital stock, except (i) for transfers and replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock
dividends and issuances which do not decrease the percentage ownership of PESCO
or any of its Subsidiaries in any class of the capital stock of such
Subsidiary, (iii) to qualify directors to the extent required by applicable law
or (iv) for issuances by newly created or acquired Subsidiaries in accordance
with the terms of this Agreement, provided that if the stock of the respective
Subsidiary is pledged pursuant to the Pledge Agreement, then any shares issued
pursuant to the proceeding clauses shall be delivered directly to the
Collateral Agent for pledge pursuant to the Pledge Agreement.
9.15 Business. (a) PESCO and its Subsidiaries will not
engage in any businesses other than the businesses engaged in by PESCO and its
Subsidiaries as of the Original Effective Date and activities directly related
thereto, the offshore supply vessel business and similar or related businesses.
(b) No Inactive Subsidiary shall conduct any business or
possess any material amount of assets or liabilities, except as disclosed in
the financial statements delivered pursuant to Section 7.05(a).
9.16 Limitation on Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, PESCO will not, and will
not permit any of its Subsidiaries to, establish, create or acquire after the
Original Effective Date any Subsidiary, provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish or create by
acquisition or otherwise Wholly-Owned Subsidiaries so long as within 10 days of
such Wholly-Owned Subsidiary being established or created (i) the capital stock
or other equity interests of each such new Wholly-Owned Subsidiary (to the
extent owned by a Credit Party) is pledged pursuant to, and to the extent
required by, the Pledge Agreement, (ii) each such new Wholly-Owned Subsidiary
(other than a Foreign Subsidiary except to the extent required pursuant to
Section 8.11) executes a counterpart of the Subsidiaries Guaranty and, if
applicable, the Pledge Agreement and (iii) copies of the certificate of
incorporation (or comparable document), by-laws and relevant board resolutions
of such
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new Wholly-Owned Subsidiary, certified by the Secretary or an Assistant
Secretary of such Wholly-Owned Subsidiary, are delivered to the Administrative
Agent.
9.17 Senior Debt. PESCO will not, and will not permit any of
its Subsidiaries to, designate any Funded Debt (other than the Obligations) as
"Senior Debt" for purposes of, and as defined in, each of the Hillman Deferred
Payment Agreements and the Hillman Subordinated Notes and the DA&S Stock
Purchase Agreement and the DA&S Subordinated Notes.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the
payment when due of any principal of any Revolving Loan or any Note or (ii)
default, and such default shall continue unremedied for two or more Business
Days, in the payment when due of any interest on any Revolving Loan or Note,
any Unpaid Drawing or any Fees or any other amounts owing hereunder or
thereunder; or
10.02 Representations, etc. Any representation, warranty or
statement made (or deemed made) by any Credit Party herein or in any other
Credit Document or in any certificate delivered to either Agent or any Bank
pursuant hereto or thereto shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 8.01(e)(i) or Section 9 (other than any default under
clause (vi) of Section 9.01, clause (iv) of Section 9.02 and clause (iii) of
Section 9.04 which occurs solely as a result of a permitted transaction or
transactions exceeding the dollar limitations set forth therein and other than
a default under Section 9.17) or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
10.01 and 10.02) and such default shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by the Agents or the
Required Banks; or
10.04 Default Under Other Agreements. (i) PESCO or any of
its Subsidiaries shall (x) default in any payment of any Funded Debt (other
than the Notes) beyond the period of grace, if any, provided in the instrument
or agreement under which such Funded Debt was created or (y) default in the
observance or performance of any agreement or condition relating to any Funded
Debt (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, beyond the applicable grace period or
any other event shall occur or condition exist, the effect of which default or
other
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event or condition is to cause, or to permit the holder or holders of such
Funded Debt (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Funded Debt to become due prior to its stated maturity, or (ii) any Funded Debt
(other than the Notes) of PESCO or any of its Subsidiaries shall be declared to
be (or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
Section 10.04 unless the aggregate principal amount of all Funded Debt as
described in preceding clauses (i) and (ii) is at least $5,000,000; or
10.05 Bankruptcy, etc. PESCO or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against PESCO or any of its Subsidiaries, and the petition is not controverted
within 10 days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of PESCO or any of
its Subsidiaries, or PESCO or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to PESCO or any of its
Subsidiaries, or there is commenced against PESCO or any of its Subsidiaries
any such proceeding which remains undismissed for a period of 60 days, or PESCO
or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
PESCO or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or PESCO or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by PESCO or any of its Subsidiaries for the purpose
of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to
occur with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or
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to be the subject of termination proceedings under ERISA, any Plan shall have
an Unfunded Current Liability, a contribution required to be made with respect
to a Plan or a Foreign Pension Plan has not been timely made, PESCO or any
Subsidiary of PESCO or any ERISA Affiliate has incurred or is likely to incur
any liability to or on account of a Plan under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or on account of a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B
of the Code, or PESCO or any Subsidiary of PESCO has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
Plans or Foreign Pension Plans; (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, has had,
or could reasonably be expected to have, a material adverse effect on the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) or prospects of PESCO and its Subsidiaries taken as a whole; or
10.07 Pledge Agreement. At any time after the execution and
delivery thereof, the Pledge Agreement shall cease to be in full force and
effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby and in each such case the Pledgors shall fail to promptly take
any and all steps requested by the Agents to remedy such situation; or
10.08 Guaranties. The Guaranties or any material provision
thereof shall cease to be in full force or effect as to any Guarantor, or any
Guarantor or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under any Guaranty or any Guarantor
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any Guaranty and
such Guarantor shall fail to promptly take any and all steps requested by the
Agents to remedy such default; or
10.09 Judgments. One or more judgments or decrees shall be
entered against PESCO or any Subsidiary of PESCO involving in the aggregate for
PESCO and its Subsidiaries a liability (not paid or fully covered (other than
the deductible maintained with respect thereto) by a reputable and solvent
insurance company) and such judgments and decrees either shall be final and
non-appealable or shall not be vacated, discharged or stayed or bonded pending
appeal for any period of 60 consecutive days, and the aggregate amount of all
such judgments equals or exceeds $1,000,000; or
10.10 Change of Control. A Change of Control shall occur;
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then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Bank or the holder of any Note to enforce its claims
against any Credit Party (provided, that, if an Event of Default specified in
Section 10.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Revolving Loan Commitment
terminated, whereupon the Revolving Loan Commitment of each Bank shall
forthwith terminate immediately and any Commitment Commission shall forthwith
become due and payable without any other notice of any kind; (ii) declare the
principal of and any accrued interest in respect of all Revolving Loans and the
Notes and all Obligations owing hereunder and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Credit Party; (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms; (iv) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 10.05 with respect to the Borrower, it will pay)
to the Administrative Agent at the Payment Office such additional amount of
cash or Cash Equivalents, to be held as security by the Administrative Agent,
as is equal to the aggregate Stated Amount of all Letters of Credit issued for
the account of the Borrower and then outstanding; (v) enforce, as
Administrative Agent, all Liens, rights and remedies created pursuant to the
Pledge Agreement; and (vi) apply any cash collateral held by the Administrative
Agent pursuant to Section 4.02 to the repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" shall mean Credit Lyonnais, in its
capacity as Administrative Agent for the Banks hereunder, and shall include any
successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (ii) to direct or cause the direc-
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tion of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean and include the Administrative Agent and
the Documentation Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Base Rate Margin" shall mean the percentage per
annum determined by reference to the Leverage Ratio in effect from time to
time, all as set forth below, it being understood and agreed that for purposes
of determining Applicable Base Rate Margin (i) the Leverage Ratio for a
particular Test Period shall be effective from the first day of the calendar
quarter immediately succeeding the day on which the financial statements
relating to such Test Period are delivered pursuant to Section 5.12, 8.01(a) or
8.01(b), as the case may be, until the first day of the calendar quarter
immediately succeeding the day on which the financial statements relating to
the immediately succeeding Test Period are so delivered and (ii) in the event
financial statements for a particular Test Period are not delivered on or prior
to the date required pursuant to Section 5.12, 8.01(a) or 8.01(b), as the case
may be, the Leverage Ratio for such Test Period shall be deemed to be 3.00:
<TABLE>
<CAPTION>
Leverage Ratio Applicable Base Rate Margin
-------------- ---------------------------
<S> <C>
greater than or equal to 3.00 0.50%
less than 3.00 0
</TABLE>
"Applicable Eurodollar Rate Margin" shall mean the percentage
per annum determined by reference to the Leverage Ratio in effect from time to
time, all as set forth below, it being understood and agreed (i) that at no
time prior to the first anniversary of the Original Effective Date shall the
Applicable Eurodollar Rate Margin be less than 1.50%, (ii) that for purposes of
determining Applicable Eurodollar Rate Margin (a) the Leverage Ratio for a
particular Test Period shall be effective from the first day of the calendar
quarter immediately succeeding the day on which the financial statements
relating to such Test Period are delivered pursuant to Section 5.12, 8.01(a) or
8.01(b), as the case may be, until the first day of the calendar quarter
immediately succeeding the day on which the financial statements relating to
the immediately succeeding Test Period are so delivered, and (b) in the event
financial statements are not delivered on or prior to the date required
pursuant to Section 5.12, 8.01(a) or 8.01(b), as the case may be, the Leverage
Ratio for such Test Period shall be deemed to be 3.00, and (iii) that for
purposes of determining the interest payable with respect to a Eurodollar Loan,
the Applicable Eurodollar Rate Margin
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for the Interest Period for such Eurodollar Loan shall be the Applicable
Eurodollar Rate Margin in effect on the first day of such Interest Period,
notwithstanding whether the Applicable Eurodollar Rate Margin changes during
such Interest Period:
<TABLE>
<CAPTION>
Leverage Ratio Applicable Eurodollar Rate Margin
-------------- ---------------------------------
<S> <C>
greater than or equal to 3.00 1.75%
greater than or equal to 2.50 1.50
less than 2.50 1.00
</TABLE>
"Applicable Notice Time" shall mean (i) in the case of a
Permitted Acquisition which consists of an acquisition of all or substantially
all of the assets of any Person, an acquisition of the capital stock of any
Person or the acquisition of any Equipment of any Person, at least 10 Business
Days prior to the consummation of such Permitted Acquisition, (ii) in the case
of a Permitted Acquisition which consists of the construction, renovation or
refurbishment of Equipment pursuant to a contract, agreement or undertaking
with a Person other than PESCO or its Subsidiaries, the date which is the
earlier of (x) 10 Business Days following the entering into of such contract,
agreement or undertaking and (y) at least ten Business Days prior to the first
payment by PESCO or its Subsidiaries under such contract, agreement or
undertaking and (iii) in the case of a Permitted Acquisition which consists of
the construction, renovation or refurbishment of Equipment by PESCO or its
Subsidiaries, the date which is the earlier of (x) 10 Business Days following
the commencement of a substantial portion of such construction, renovation or
refurbishment and (y) at least 10 Business Days prior to the incurrence,
issuance or assumption of any Funded Debt in connection therewith.
"Applicable Pro Forma Leverage Ratio" shall mean 2.50:1.00.
"Arranger" shall have the meaning provided in the first
paragraph hereof.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Borrower or any of its Subsidiaries to any Person (including
by-way-of redemption by such Person) other than to the Borrower or a
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of, or equity interests in,
another Person) other than sales of assets pursuant to Sections 9.02(i), (ii),
(iii), (iv), (x) and (xiii).
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit I (appropriately
completed).
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"Assumed Sea Mar Debt" shall mean indebtedness of Sea Mar
outstanding at the time of the consummation of the Sea Mar Acquisition in the
approximate aggregate principal amount of $17,000,000.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Bank" hereunder pursuant to
Section 1.12 or 15.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing or to fund its portion of any unreimbursed payment under Section
2.04(c) or (ii) a Bank having notified in writing the Borrower and/or the
Administrative Agent that such Bank does not intend to comply with its
obligations under Section 1.01 or 2, in the case of either clause (i) or (ii)
as a result of any takeover or control (including, without limitation, as a
result of the occurrence of any event of the type described in Section 10.05
with respect to such Bank) of such Bank by any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" shall mean, at any time, the higher of (i) the
Prime Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean each Revolving Loan designated or
deemed designated as such by the Borrower at the time of the incurrence thereof
or conversion thereto.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Revolving
Loan from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"Business" shall mean the provision of well-servicing,
workover, drilling and/or other energy production services, whether on land or
offshore, including, without limitation, the offshore supply vessel business.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City, New York or Houston, Texas, a legal holiday or a day
on which banking institutions are authorized or required by law or other
government action to close and (ii)
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with respect to all notices and determinations in connection with, and payments
of principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and
between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all maintenance expenditures by such Person which should be capitalized in
accordance with GAAP, plus rig modifications and enhancements where the
individual project cost is not in excess of $750,000 (excluding top drives) but
excluding (i) the amount of Capitalized Lease Obligations incurred by such
Person and (ii) the amount of any Permitted Acquisitions and Identified
Acquisitions.
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under GAAP, are or
will be required to be capitalized on the books of such Person, in each case
taken at the amount thereof accounted for as indebtedness in accordance with
such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii)
Dollar denominated time deposits and certificates of deposit of either Agent or
any commercial bank having, or which is the principal banking subsidiary of a
bank holding company having, a long-term unsecured debt rating of at least
"BBB-" or the equivalent thereof from Standard & Poor's Ratings Services or
"Baa1" or the equivalent thereof from Moody's Investors Service, Inc. with
maturities of not more than six months from the date of acquisition by such
Person, (iii) Dollar denominated time deposits and certificates of deposit of
any commercial bank organized under the laws of the United States which are
insured by the Federal Deposit Insurance Corporation, (iv) Eurodollar
investments with financial institutions (A) having combined capital, surplus
and undivided profits of not less than U.S. $100,000,000.00 and (B) with
commercial paper rated at least "P-1" or "A" by Moody's Investor Service, Inc.
or Standard & Poor's Ratings Services, respectively, or, if any institution
does not have a commercial paper rating, a comparable bond rating of at least
"A" or "Baa1" by Moody's Investor Service, Inc. or Standard & Poor's Ratings
Services, respectively, (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (vi) commercial paper issued by any Person incorporated in the United
States rated at least A-1 or the equivalent thereof by Standard & Poor's
Ratings Services or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than six months after the date
of acquisition by such Person, (vii) marketable direct obligations issued by
the District of Columbia or any State of the United States or any political
subdivision of any such State
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<PAGE> 74
or any public instrumentality thereof maturing within six months from the date
of acquisition and, at the time of acquisition, having one of the two highest
ratings obtainable from either Standard & Poor's Ratings Services or Moody's
Investors Service, Inc. and (viii) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (v) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale,
the aggregate cash payments (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset Sale
or pursuant to a receivable or otherwise, other than (in each case) the portion
of such deferred payment constituting interest, but only as and when so
received) received by PESCO and/or any of its Subsidiaries from such Asset
Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. Section 9601 et seq.
"Change of Control" shall mean, except as permitted by Section
9.02, (i) PESCO shall cease to own directly 100% on a fully diluted basis of
the economic and voting interest in Holding's capital stock, (ii) Holding shall
cease to own directly 100% on a fully diluted basis of the economic and voting
interest in the Borrower's capital stock, (iii) any Person or "group" (within
the meaning of Section 13(d) and 14(d) under the Securities Exchange Act, as in
effect on the Original Effective Date), shall (A) have acquired beneficial
ownership of 25% or more on a fully diluted basis of the voting and/or economic
interest in PESCO's capital stock or (B) obtained the power (whether or not
exercised) to elect a majority of the directors of PESCO, Holding or the
Borrower or (iv) the Board of Directors of PESCO shall cease to consist of a
majority of Continuing Directors.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the "Code" are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean the Pledge Agreement Collateral and
all cash and Cash Equivalents delivered as collateral pursuant to Section 4.02
or 10.
"Collateral Agent" shall mean the Administrative Agent acting
as collateral agent for the Secured Creditors pursuant to the Pledge Agreement.
"Commitment Commission" shall have the meaning set forth in
Section 3.01.
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"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period, before Consolidated Interest Expense and provision
for income taxes for such period and without giving effect (x) to any
extraordinary gains or losses and (y) to any gains or losses from sales of
assets other than from sales of assets in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by adding thereto the amount of all amortization
of intangibles and depreciation that were deducted in arriving at Consolidated
EBIT for such period (it being understood and agreed that with respect to any
Test Period that includes a quarterly financial period commencing prior to the
Restatement Effective Date, there shall be added to Consolidated EBIT (to
account for the Sea Mar Acquisition) an amount equal to the product of $79,500
and the number of days in such Test Period occurring prior to the Restatement
Effective Date), provided that there shall be excluded from the calculation of
Consolidated EBITDA lease payments in respect of the San Angelo Lease (net of
sublease payments received with respect thereto to the extent not included in
Consolidated Net Income) and, provided further, that (i) the net income of any
other Person which is not a Subsidiary of PESCO or is accounted for by the
equity method of accounting shall be included only to the extent of the payment
of dividends or distributions by such other Person to PESCO or a Subsidiary
thereof during such period, (ii) Consolidated EBITDA shall be reduced by the
amount of equity contributions made after the Original Effective Date to
Excluded Subsidiaries or Subsidiaries of PESCO which are not Subsidiary
Guarantors and (iii) the net income of any Subsidiary of PESCO or any Excluded
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Person of its income is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument or law applicable to such Person.
"Consolidated Funded Debt" shall mean, at any time, the
principal amount of all Funded Debt of PESCO and its Subsidiaries at such time
as determined on a consolidated basis.
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of Consolidated EBITDA to Consolidated Interest Expense for
such period.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated cash interest expense (including any interest which is
capitalized in accordance with FASB 34) of PESCO and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, (x) that portion of Capitalized Lease Obligations of
PESCO and its Subsidiaries representing the interest factor for such period,
(y) Letter of Credit Fees payable during such period and (z) for any Test
Period that includes a quarterly financial period commencing prior to the
Restatement Effective Date, an amount equal to the product of $18,500 and the
number of days in such Test
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<PAGE> 76
Period occurring prior to the Restatement Effective Date; provided that the
amortization of deferred financing costs with respect to this Agreement shall
be excluded from Consolidated Interest Expense to the extent same would
otherwise have been included therein.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of PESCO and its Subsidiaries for such period, determined on a
consolidated basis (and without giving effect to the net income (or loss) of
any of the Excluded Subsidiaries).
"Consolidated Net Worth" shall mean, at any time, the Net
Worth of PESCO, its Subsidiaries and the Excluded Subsidiaries (without
duplication of any investments held by PESCO or its Subsidiaries in such
Excluded Subsidiaries) determined on a consolidated basis after appropriate
deduction for any minority interests in Subsidiaries and Excluded Subsidiaries,
all in accordance with GAAP.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Funded Debt, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include (A) endorsements
of instruments for deposit or collection in the ordinary course of business,
(B) guarantees by Pool California Energy Services, Inc. of up to $400,000 (in
the aggregate outstanding at any time) with respect to vehicle lease
obligations of its employees, (C) obligations of Pool Alaska, Inc., as a
general partner in Kuupik/Pool Arctic Alaska, an Alaska general partnership,
(D) guarantees relating to bid bonds and surety bonds (or other similar
instruments) issued in the ordinary course of business with respect to
performance obligations of PESCO or any of its Subsidiaries, (E) performance
guarantees for contractual performance obligations of PESCO or any of its
Subsidiaries made in the ordinary course of business, (F) contractual
indemnities made in the ordinary course of business with respect to claims for
personal injuries and property damages, (G) PESCO's guarantee of the Borrower's
obligations relating to the Ranger Rigs sale/leaseback, (H) PESCO's obligation
to repay ENSERCH Corporation for any costs incurred under its guarantee of
Borrower's obligations under the San Angelo Lease, (I) any obligations to repay
ENSERCH
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<PAGE> 77
corporation for any costs it incurs with respect to claims covered by its
pre-1990 insurance program, (J) any obligations of PESCO to the United States
Coast Guard with respect to any financial responsibility guarantees for water
pollution with respect to rigs (only to the extent fully covered (other than
the deductible maintained with respect thereto) by insurance maintained with a
reputable and solvent insurance company), (K) any guarantees of operating
leases of the Borrower or its Subsidiaries entered into in the ordinary course
of business and (L) any guarantees relating to the obligations of PESCO or its
Subsidiaries under Interest Rate Protection Agreements or Other Hedging
Agreements which are permitted hereunder. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of PESCO on
the Original Effective Date and each other director if (a) such director's
nomination for election to the Board of Directors of PESCO is recommended by a
majority of the then Continuing Directors or (b) such director is elected by
the vote of the shareholders of PESCO prior to the occurrence of a Change of
Control.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Subsidiaries Guaranty and the Pledge Agreement.
"Credit Event" shall mean the making of any Revolving Loan or
the issuance of any Letter of Credit.
"Credit Lyonnais" shall mean Credit Lyonnais New York Branch,
in its individual capacity, and any successor corporation thereto by merger,
consolidation or otherwise.
"Credit Party" shall mean and include each Parent Guarantor,
the Borrower and each Subsidiary Guarantor and any successor entity permitted
by Section 9.02.
"DA&S Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated June 19, 1997, among the Sellers named therein, DA&S Oil Well
Servicing, Incorporated, a New Mexico corporation, and the Borrower, providing
for the issuance by the Borrower of $10,050,000 principal amount of 9%
subordinated notes due January 15, 2003.
"DA&S Subordinated Debt Documents" shall mean and include the
DA&S Stock Purchase Agreement, each DA&S Subordinated Note, each amendment,
modification
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or supplement thereto, together with all other agreements, instruments and
documents executed or delivered pursuant thereto or in connection therewith
(including, without limitation, any promissory notes, guaranties and security
documents).
"DA&S Subordinated Notes" shall mean each of the subordinated
promissory notes issued pursuant to the DA&S Stock Purchase Agreement.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividend" shall mean, with respect to any Person, that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class
of its capital stock or any partnership interests outstanding on or after the
Original Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock or any partnership interests of such Person outstanding on or after the
Original Effective Date (or any options or warrants issued by such Person with
respect to its capital stock). Without limiting the foregoing, "Dividends"
with respect to any Person shall also include all payments made or required to
be made by such Person with respect to any stock appreciation rights plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes.
"Documentation Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower that is incorporated under the laws of the United States or any State
or territory thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
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"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in bank loans or any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment
due to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written
policy and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any
state and local or foreign counterparts or equivalents, in each case as amended
from time to time.
"Equipment" shall mean and include rigs, other well-servicing
equipment and any other related equipment utilized in the Business.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with PESCO or a Subsidiary of PESCO would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or
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(ii) as a result of PESCO or a Subsidiary of PESCO being or having been a
general partner of such person.
"Escrow Agreement" shall have the meaning provided such term
in the Sea Mar Acquisition Agreement.
"Eurodollar Loan" shall mean each Revolving Loan designated as
such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Eurodollar Rate" shall mean (a) the offered rate (rounded
upwards, if necessary, to the next higher 1/100th of 1%) which appears on the
Telerate Page 3750, British Bankers Association Interest Settlement Rates (or
such other system for the purpose of displaying rates of leading reference
banks in the London interbank market that replaces such system) as of 11:00
a.m. (London time) for deposits in Dollars on the day two (2) Business Days
prior to the first day of such Interest Period in an amount approximately equal
to the principal amount of the Eurodollar Rate Loan to which such Interest
Period is to apply and for a period of time comparable to such Interest Period,
divided (and rounded upward to the nearest 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section
10.
"Excluded Subsidiary" shall mean and include Pool Arabia Ltd.,
Intairdril Oman, L.L.C. and PIASA.
"Existing Indebtedness" shall have the meaning provided in
Section 7.21.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
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"Final Maturity Date" shall mean October 2, 2000, as such date
may be extended pursuant to Section 1.13.
"Fixed Charge Coverage Ratio" shall mean the ratio of
Consolidated EBITDA (minus the amount of all cash taxes paid, net of cash tax
refunds, for the period for which Consolidated EBITDA is calculated) to Fixed
Charges.
"Fixed Charges" for any period shall mean the sum of (i)
Consolidated Interest Expense for such period, (ii) the amount of Capital
Expenditures made by PESCO and its Subsidiaries on a consolidated basis during
such period and (iii) the amount of scheduled repayments of Consolidated Funded
Debt required to be made during such period.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by PESCO or any
one or more of its Subsidiaries primarily for the benefit of employees of PESCO
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower which is not a Domestic Subsidiary.
"Funded Debt" shall mean, as to any Person, without
duplication, (i) the principal portion of all indebtedness of such Person for
borrowed money (which, for the avoidance of doubt, is funded and outstanding)
or for the deferred purchase price of property or services other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices, including all obligations evidenced by
bonds, debentures, notes or similar instruments, or any other obligations
which, in accordance with GAAP, should be classified upon such Person's balance
sheet as liabilities, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all indebtedness secured by any
Lien on any property owned by such Person, whether or not such indebtedness has
been assumed by such Person, (iv) the aggregate amount required in accordance
with GAAP to be capitalized under leases under which such Person is the lessee,
(v) all obligations of such person to pay a specified purchase price for goods
or services, whether or not delivered or accepted, i.e., take-or-pay and
similar obligations and (vi) all Contingent Obligations of such Person;
provided, however, that Funded Debt shall not include (a) any additional
consideration payable pursuant to Section 2.3 or 2.4 of the Sea Mar Acquisition
Agreement until such time as the payment obligation of the Borrower with
respect thereto is no longer contingent and has been definitively
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determined in accordance with the provisions of the Sea Mar Acquisition
Agreement, (b) any amounts due, directly or as a Contingent Obligation, under
the Vessel Construction Contract with respect to vessels that have not been
delivered or (c) any indebtedness assumed in connection with any Permitted
Acquisition, any Identified Acquisition or the Sea Mar Acquisition, to the
extent of the aggregate amount of any cash and cash equivalents on the
consolidated balance sheet of PESCO and its Subsidiaries immediately following
the relevant acquisition, for a period of 45 days following such acquisition.
"GAAP" shall mean generally accepted accounting principles in
the United States as in effect from time to time applied on a consistent basis
(i) as set forth in Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants ("AICPA") and in statements of the
Financial Accounting Standards Board which are applicable in the circumstances
as of the date in question, and (ii) where not inconsistent with such opinions
and statements, as set forth in other AICPA publications and guidelines or
which otherwise arise by custom for the particular industry; and the requisite
that such principles be applied on a consistent basis means that the accounting
principles in a current period are comparable in all material respects to those
applied in a preceding period.
"Guaranteed Creditors" shall mean and include each of the
Administrative Agent, the Arranger, the Documentation Agent, the Collateral
Agent, the Banks and each party (other than any Credit Party) party to an
Interest Rate Protection Agreement or Other Hedging Agreement to the extent
that such party constitutes a Secured Creditor under the Pledge Agreement.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the principal and interest on each Note issued by the Borrower to each Bank,
and Revolving Loans made, under this Agreement and all reimbursement
obligations and Unpaid Drawings with respect to Letters of Credit, together
with all the other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities (including, without limitation, indemnities, fees and interest
thereon) of the Borrower to such Bank, the Administrative Agent, the Arranger,
the Documentation Agent, and the Collateral Agent now existing or hereafter
incurred under, arising out of or in connection with this Agreement or any
other Credit Document and the due performance and compliance with all the
terms, conditions and agreements contained in the Credit Documents by the
Borrower and (ii) the full and prompt payment when due (whether by acceleration
or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due)
and liabilities of the Borrower or any of its Subsidiaries owing under any
Interest Rate Protection Agreement or Other Hedging Agreement entered into by
the Borrower or any of its Subsidiaries with any Bank or any affiliate thereof
(even if such Bank subsequently
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ceases to by a Bank under this Agreement for any reason) so long as such Bank
or affiliate participate in such Interest Rate Protection Agreement or Other
Hedging Agreement, and their subsequent assigns, if any, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantor" shall mean each Parent Guarantor and each
Subsidiary Guarantor.
"Guaranty" shall mean and include each of the Parents Guaranty
and the Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, the Release of which is
prohibited, limited or regulated by any governmental authority.
"Hillman Deferred Payment Agreement" shall mean the Agreement
regarding Deferred Payment of Purchase Price, dated June 13, 1995 among Robert
D. Hillman, Barbara A. Hillman, Richard H. Hillman, Robert D. Hillman, Jr. and
the Borrower providing for the issuance by the Borrower of $11,500,000
principal amount of 10% subordinated notes due June 13, 2005.
"Hillman Subordinated Debt Documents" shall mean and include
the Hillman Deferred Payment Agreement, each Hillman Subordinated Note, each
amendment, modification or supplement thereto, together with all other
agreements, instruments and documents executed or delivered pursuant thereto or
in connection therewith (including, without limitation, any promissory notes,
guaranties and security documents).
"Hillman Subordinated Notes" shall mean each of the
subordinated promissory notes issued pursuant to the Hillman Deferred Payment
Agreement.
"Holding" shall have the meaning provided in the first
paragraph of this Agreement.
"Identified Acquisitions" shall mean and include the R&H
Acquisition and the Rig #16.
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"Inactive Subsidiary" shall mean and include each of The
International Air Drilling Company, a Texas corporation, Pool Australia, Inc.,
a Texas corporation, Pool Americas, Inc., a Texas corporation and ENS Equipment
Leasing, B.V.
"Intercompany Loan" shall have the meaning provided in Section
9.05(viii).
"Intercompany Note" shall mean a promissory note, in the form
of Exhibit J or such other form as may be reasonably acceptable to the
Administrative Agent, in either case evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean Credit Lyonnais New York Branch,
Bank One, Texas, N.A., The Hongkong & Shanghai Banking Corporation Limited, the
other Agent, and any other Bank which at the request of the Borrower and with
the consent of the Administrative Agent agrees, in such Bank's sole discretion,
to become an Issuing Bank for the purpose of issuing Letters of Credit pursuant
to Section 2.
"L/C Supportable Obligations" shall mean (i) obligations of
PESCO or any of its Subsidiaries with respect to liability insurance, all-risk
insurance, workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of PESCO or any of its Subsidiaries
as are reasonably acceptable to the respective Issuing Bank and otherwise
permitted to exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
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"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all effective and outstanding Letters
of Credit at such time and (ii) the amount of all Unpaid Drawings at such time.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Funded Debt at such time to Consolidated EBITDA for the Test
Period then most recently ended, provided that, for purposes of calculating
either the Applicable Base Rate Margin or the Applicable Eurodollar Rate
Margin, the foregoing numerator shall instead be the sum of (i) Consolidated
Funded Debt (excluding Revolving Outstandings) at such time plus (ii) the
average Revolving Outstandings for the then most recently ended fiscal quarter
of PESCO.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Asset Sale" shall mean any Asset Sale of assets
generating gross cash sale proceeds to PESCO and/or its Subsidiaries in excess
of $3,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$5,000,000 and (ii) for Eurodollar Loans, $10,000,000.
"NAIC" shall mean the National Association of Insurance
Commissioners.
"Net Debt Proceeds" shall mean, with respect to any incurrence
of Funded Debt for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such Funded
Debt for borrowed money, but shall not include proceeds deemed received
pursuant to a refinancing of Funded Debt to the extent permitted pursuant to
Section 9.04.
"Net Insurance Proceeds" shall mean, with respect to any
Recovery Event, the cash proceeds (net of reasonable costs and any incremental
taxes paid or payable in connection with such Recovery Event) received by the
respective Person in connection with the respective Recovery Event.
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"Net Sale Proceeds" shall mean, for any Material Asset Sale,
the gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as and when
received) received from such Material Asset Sale, net of the reasonable costs
of such sale (including fees and commissions, payments of unassumed liabilities
relating to the assets sold and required payments of any Funded Debt which is
secured by the respective assets which were sold), and any incremental taxes
paid or payable as a result of such Material Asset Sale.
"Net Worth" shall mean, as to any Person, the sum of its
capital stock (including, without limitation, any preferred stock, but
excluding any such capital stock subject to mandatory redemption), capital in
excess of par or stated value of shares of its capital stock, retained
earnings, currency translation adjustments and any other account which, in
accordance with GAAP constitutes stockholders equity, excluding any treasury
stock.
"1998 Indenture" shall mean __________________.
"1998 Senior Subordinated Notes" shall mean PESCO's Senior
Subordinated Notes due 2008 issued in the original aggregate principal amount
of $150,000,000 and any notes issued in exchange therefor pursuant to the
provisions of the 1998 Indenture.
"1998 Senior Subordinated Notes Documents" shall mean and
include the 1998 Indenture, each 1998 Senior Subordinated Note and each other
agreement, instrument and document executed or delivered pursuant thereto or in
connection therewith.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Administrative
Agent located at 1000 Louisiana, Suite 5360, Houston, TX 77002, Attention: C.
Page Dillehunt or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Arranger, the Documentation Agent, the Collateral
Agent, any Issuing Bank or any Bank pursuant to the terms of this Agreement or
any other Credit Document.
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"Original Credit Agreement" shall have the meaning provided in
the first recital of this Agreement.
"Original Effective Date" shall mean September 30, 1997.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Parent Guarantor" shall mean and include each of PESCO and
Holding.
"Parents Guaranty" shall have the meaning provided in Section
14.
"Participant" shall have the meaning provided in Section
2.04(a).
"Parties" shall mean PESCO, Holding and the Borrower.
"Payment Office" shall mean the office of the Administrative
Agent located at 1000 Louisiana, Suite 5360, Houston, TX 77002, or such other
office as the Administrative Agent may hereafter designate in writing as such
to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean (a) an acquisition of all
or substantially all of the assets of any Person (or all or substantially all
of the assets of a product line or division of any Person), (b) an acquisition
of 100% of the capital stock of any Person or (c) any acquisition,
construction, renovation or refurbishment of Equipment (including (i) rig
modifications and enhancements where the individual project cost is equal to or
in excess of $750,000 and (ii) top drives) or other property or assets used in
the Business, in any case, which satisfies the conditions set forth in Section
9.02(ix).
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Permitted Subordinated Indebtedness" shall have the meaning
provided in Section 9.04(vii).
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, limited liability company, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
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"PESCO" shall have the meaning provided in the first paragraph
of this Agreement.
"PIASA" shall mean Pool International Argentina S.A.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) PESCO or a Subsidiary of PESCO or an ERISA
Affiliate, and each such plan for the five year period immediately following
the latest date on which PESCO, or a Subsidiary of PESCO or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.10.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the Pledge Agreement.
"Pledgee" shall have the meaning provided in the Pledge
Agreement.
"Pledgor" shall mean and include each "Pledgor" party to the
Pledge Agreement, which, as of the Restatement Effective Date, shall mean the
Borrower and/or each Subsidiary of the Borrower which owns any capital stock,
Partnership Interest (as defined in the Pledge Agreement) or Membership
Interest (as defined in the Pledge Agreement) of any Wholly-Owned Foreign
Subsidiary.
"Pool Stock" shall have the meaning provided such term in the
Sea Mar Acquisition Agreement.
"Prime Lending Rate" shall mean the rate which the
Administrative Agent establishes from time to time as its base lending rate,
the Prime Lending Rate to change when and as such base lending rate changes.
The Prime Lending Rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. The Administrative
Agent may make commercial loans or other loans at rates of interest at, above
or below the Prime Lending Rate.
"Prior Permitted Acquisition Certificate" shall have the
meaning provided in Exhibit L.
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"Pro Forma Leverage Ratio" shall mean, at any time prior to a
particular Permitted Acquisition, the ratio of Consolidated Funded Debt (to be
determined on a pro forma basis at such time as if such Permitted Acquisition
had been consummated at such time (and assuming that (x) the entire purchase
price for such Permitted Acquisition (or cost of construction, renovation or
refurbishment) (other than such portion of such purchase price paid in common
stock of PESCO) had been borrowed at such time and (y) any Funded Debt (without
duplication) incurred, issued or assumed in connection with such Permitted
Acquisition had been outstanding at such time)) to Consolidated EBITDA for the
Test Period then most recently ended (and for which financial statements have
been delivered) prior to the date of consummation of such Permitted Acquisition
(with such Consolidated EBITDA to be determined on a pro forma basis as if such
Permitted Acquisition had been consummated on the first day of such Test
Period).
"Quarterly Payment Date" shall mean the last Business Day of
each September, December, March and June occurring after the Original Effective
Date.
"R&H Acquisition" shall mean the acquisition of R&H Well
Service, Inc. by the Borrower for a purchase price not to exceed $38.0 million,
provided that all existing Funded Debt, relating to R&H Well Services shall
have been paid with proceeds of Loans.
"RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" shall mean the receipt by PESCO or any of its
Subsidiaries of any cash insurance proceeds or condemnation awards payable (i)
by reason of theft, loss, physical destruction, damage, taking or any other
similar event occurring on or after the Original Effective Date with respect to
any property or assets of PESCO or any of its Subsidiaries and (ii) under any
policy of insurance required to be maintained under Section 8.03.
"Register" shall have the meaning provided in Section 15.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
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"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.12.
"Replacement Bank" shall have the meaning provided in Section
1.12.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose Revolving Loan Commitments (or after the termination thereof, outstanding
Revolving Loans and RL Percentages of Letter of Credit Outstandings) represent
an amount at least 66 2/3% of the sum of the Total Revolving Loan Commitment
less the Revolving Loan Commitments of all Defaulting Banks (or after the
termination thereof, the sum of the then total outstanding Revolving Loans of
Non-Defaulting Banks and the aggregate RL Percentages of Non-Defaulting Banks
of the total Letter of Credit Outstandings at such time).
"Restatement Effective Date" shall have the meaning provided
in Section 15.10.
"Revolving Loan" shall have the meaning provided in Section
1.01.
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant
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to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time to time as a result
of assignments to or from such Bank pursuant to Section 1.12 or 15.04(b).
"Revolving Outstandings" shall mean, at any time, the sum of
the aggregate principal amount of all Revolving Loans then outstanding plus the
aggregate amount of all Letter of Credit Outstandings at such time.
"Rig #16" shall mean the construction of "Rig #16".
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"San Angelo Lease" shall mean the Sublease Agreement, dated
March 15, 1983, between the Borrower and Olo Associates Limited Partnership.
"Sea Mar" shall have the meaning provided in the second
recital of this Agreement.
"Sea Mar Acquisition" shall mean the acquisition of all of the
issued and outstanding capital stock of Sea Mar by the Borrower pursuant to,
and the related transactions contemplated by, the Sea Mar Acquisition
Agreement.
"Sea Mar Acquisition Agreement" shall have the meaning
provided in the second recital of this Agreement.
"SEC" shall have the meaning provided in Section 8.01(f).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the Pledge Agreement.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
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"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Subsidiaries Guaranty" shall mean the Subsidiaries Guaranty,
dated as of September 30, 1997, as in effect from time to time, made by the
Subsidiary Guarantors and substantially in the form of Exhibit H to the
Original Credit Agreement.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time, excluding each Excluded Subsidiary.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of
the Borrower and, to the extent provided in Section 8.11, each Foreign
Subsidiary of the Borrower.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Period" shall mean the four consecutive fiscal quarters
of PESCO then last ended (in each case taken as one accounting period). The
first Test Period of PESCO shall be for the four consecutive fiscal quarters
ending June 30, 1997.
"Total Capital" shall mean, at any time, an amount equal to
the sum of (x) the Consolidated Funded Debt at such time and (y) the
Consolidated Net Worth at such time.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less (y) the sum of the aggregate principal amount of
all Revolving Loans then outstanding plus the then aggregate amount of all
Letter of Credit Outstandings.
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"Trade Advances" shall mean any advances which represent
charges to a Subsidiary for (w) PESCO's insurance program, (x) allocation of
overhead, (y) services rendered for the benefit of such Subsidiary (including,
without limitation, those rendered by financial, legal or engineering
professionals), or (z) assets purchased by such Subsidiary in the ordinary
course of its business.
"Type" shall mean the type of Revolving Loan determined with
regard to the interest option applicable thereto, i.e., whether a Base Rate
Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year,
determined in accordance with actuarial assumptions at such time consistent
with Statement of Financial Accounting Standards No. 87, exceeds the market
value of the assets allocable thereto.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" shall mean, with
respect to any Bank at any time, such Bank's Revolving Loan Commitment at such
time less the sum of (i) the aggregate outstanding principal amount of all
Revolving Loans made by such Bank at such time and (ii) such Bank's RL
Percentage of the Letter of Credit Outstandings at such time.
"Vessel Construction Contract" shall mean the Vessel
Construction Contract dated August 1, 1997 between Sea Mar Equipment, Inc. and
Halter Marine, Inc. in the form assigned to Sea Mar or the Borrower and as in
effect from time to time.
"Wholly-Owned Foreign Subsidiary" shall mean each Foreign
Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the
Borrower.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest
at such time, excluding each Excluded Subsidiary.
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SECTION 12. The Administrative Agent.
12.01 Appointment. The Banks hereby irrevocably designate
Credit Lyonnais as Administrative Agent to act as specified herein and in the
other Credit Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably
to authorize, the Administrative Agent to take such action on their behalf
under the provisions of this Agreement, the other Credit Documents and any
other instruments and agreements referred to herein or therein and to exercise
such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of its duties hereunder by or through
its officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative Agent
nor any of its officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted to be taken by it or any such Person
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary relationship in respect
of any Bank or the holder of any Note; and nothing in this Agreement or any
other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations in respect
of this Agreement or any other Credit Document except as expressly set forth
herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Each
Bank represents to the Administrative Agent that it has made and will continue
to make, independently and without reliance upon the Administrative Agent, to
the extent it deemed or deems appropriate (i) its own independent investigation
of the business, prospects, operations, property, financial condition and other
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Revolving Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Borrower and its Subsidiaries and, except as expressly
provided in this Agreement, the Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Revolving
Loans or at any time or times thereafter. The Administrative Agent shall not
be responsible to any Bank or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other
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writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower or any of its Subsidiaries or the existence
or possible existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Bank by reason of
so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or refraining from acting
hereunder or under any other Credit Document in accordance with the
instructions of the Required Banks.
12.05 Reliance. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and
thereunder, upon advice of counsel selected by the Administrative Agent.
12.06 Indemnification. The Banks agree to indemnify upon
demand the Administrative Agent (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably
according to the respective amounts of their RL Percentages in effect on the
date indemnification is sought under this Section 12.06 (or, if indemnification
is sought after the date upon which the Commitments have terminated and the
Obligations have been paid in full, ratably in accordance with their respective
RL Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including at any time following the payment of the Obligations) be
imposed on, incurred by or asserted against the Administrative Agent in
connection with this Agreement or any other Credit Document; provided, however,
that no Bank shall be liable for (a) the payment of any arrangement fees or (b)
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent it
results from the Administrative Agent's gross negligence or willful misconduct.
The agreements in this
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Section 12.06 shall survive the payment of the Obligations and the resignation
or replacement of the Administrative Agent.
12.07 The Administrative Agent in its Individual Capacity.
With respect to its obligation to make Revolving Loans, or issue or participate
in Letters of Credit, under this Agreement, the Administrative Agent shall have
the rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "Banks," "Required Banks," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its respective individual capacities. The
Administrative Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of banking, investment banking, trust or
other business with, or provide debt financing, equity capital or other
services (including financial advisory services) to, any Credit Party or any
Affiliate of any Credit Party (or any Person engaged in a similar business with
any Credit Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from any
Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Banks.
12.08 Holders. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee, assignee or
indorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its respective
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Banks. Such
resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation by the Administrative
Agent, the Required Banks shall appoint a successor Administrative Agent
hereunder or thereunder who shall be a commercial bank or trust company
reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been
so appointed within such 15 Business Day period, the Administrative Agent with
the consent of the Borrower (which consent shall not be unreasonably withheld
or delayed), shall then appoint
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a successor Administrative Agent who shall serve as Administrative Agent
hereunder or thereunder until such time, if any, as the Required Banks appoint
a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Required
Banks shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any, as
the Required Banks appoint a successor Administrative Agent as provided above.
SECTION 13. The Arranger; The Documentation Agent.
13.01 The Arranger; Documentation Agent. The Borrower hereby
confirms the designation of SBC Warburg Dillon Read Inc. as Arranger and Swiss
Bank Corporation, Stamford Branch, as Documentation Agent. Neither the
Arranger nor the Documentation Agent assumes any responsibility or obligation
hereunder for servicing, enforcement or collection of the Obligations, or any
duties as agent for the Banks. Neither the title "Arranger" nor the title
"Documentation Agent" implies any fiduciary responsibility on the part of the
Arranger or the Documentation Agent to the Administrative Agent, any Issuing
Bank or the Banks and the use of such title does not impose on the Arranger or
the Documentation Agent any duties or obligations under this Agreement or any
other Credit Document except as may be expressly set forth herein and therein.
13.02 Liability of the Arranger and the Documentation Agent.
Neither the Arranger nor the Documentation Agent nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates shall (a) be
liable for any action lawfully taken or omitted to be taken by it or any such
Person under or in connection with this Agreement or any other Credit Document
(except for its or such Person's own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Borrower or any officer
thereof, contained in this Agreement or in any other Credit Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Arranger or the Documentation Agent under or in
connection with, this Agreement or any other Credit Document or for the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other credit document or for any failure of the Issuer or any
other party to any other Credit Document to perform its obligations hereunder
or thereunder. Except as otherwise expressly stated herein, neither the
Arranger nor the Documentation Agent shall be under any obligation to any Bank
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this
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Agreement or any other Credit Document, or to inspect the properties, books or
records of the Borrower.
13.03 Indemnification. The Banks agree to indemnify upon
demand the Arranger and the Documentation Agent (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their RL Percentages in effect
on the date indemnification is sought under this Section 13.03 (or, if
indemnification is sought after the date upon which the Commitments have
terminated and the Obligations have been paid in full, ratably in accordance
with their respective RL Percentages immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including at any time following the payment
of the Obligations) be imposed on, incurred by or asserted against the Arranger
or the Documentation Agent in connection with this Agreement or any other
Credit Document; provided, however, that no Bank shall be liable for (a) the
payment of any arrangement fees or (b) any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent it results from the Arranger's or the
Documentation Agent's gross negligence or willful misconduct. The agreements
in this Section 13.03 shall survive the payment of the Obligations and the
resignation or replacement of the Arranger or the Documentation Agent.
13.04 Arranger and Documentation Agent in their Individual
Capacities. Each of the Arranger and the Documentation Agent and their
respective Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with PESCO or any of its Affiliates as though it
were not the Arranger or the Documentation Agent hereunder.
13.05 Credit Decision. Each Bank expressly acknowledges that
neither the Arranger nor the Documentation Agent nor any of their respective
Affiliates, officers, directors, employees, agents or attorneys-in-fact has
made any representation or warranty to it, and that no act by the Arranger or
the Documentation Agent hereafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Arranger or the Documentation Agent to any Bank. Each Bank represents to
the Arranger and the Documentation Agent that it has, independently and without
reliance upon the Arranger or the Documentation Agent, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial condition, creditworthiness and other affairs of the Borrower and its
affiliates and made its own decision to enter into this Agreement. Each Bank
also represents that it will, independently and without reliance upon the
Arranger or the Documentation Agent, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this
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Agreement and the other Credit Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial condition, creditworthiness and other affairs of the
Borrower. Neither the Arranger nor the Documentation Agent shall have any duty
or responsibility to provide any Bank with any information concerning the
business, prospects, operations, property, financial condition,
creditworthiness or other affairs of the Borrower which may come into the
possession of the Arranger or the Documentation Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates.
SECTION 14. Parents Guaranty.
14.01 The Guaranty. In order to induce the Banks to enter
into this Agreement and to extend credit hereunder and in recognition of the
direct benefits to be received by each Parent Guarantor from the proceeds of
the Revolving Loans and the issuance of the Letters of Credit, each Parent
Guarantor hereby agrees with the Banks as follows. Each Parent Guarantor
hereby unconditionally and irrevocably, jointly and severally, guarantees, as
primary obligor and not merely as surety, the full and prompt payment when due,
whether upon maturity, acceleration or otherwise, of any and all of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors. If any or
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors
becomes due and payable hereunder, each Parent Guarantor, jointly and
severally, and unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, on demand, together with any and all expenses which may
be incurred by the Guaranteed Creditors in collecting any of the Guaranteed
Obligations. If claim is ever made upon any Guaranteed Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any
of the Guaranteed Obligations and any of the aforesaid payees repays all or
part of said amount by reason of (i) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by
such payee with any such claimant (including the Borrower), then and in such
event each Parent Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon such Parent Guarantor,
notwithstanding any revocation of this Guaranty or any other instrument
evidencing any liability of the Borrower, and each Parent Guarantor shall be
and remain jointly and severally liable to the aforesaid payees hereunder for
the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
14.02 Bankruptcy. Additionally, each Parent Guarantor
unconditionally and irrevocably, jointly and severally, guarantees the payment
of any and all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors whether or not due or payable by the Borrower upon the occurrence of
any of the events specified in Section 10.05, and
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unconditionally, and jointly and severally, promises to pay such indebtedness
to the Guaranteed Creditors, or order, on demand, in lawful money of the United
States.
14.03 Nature of Liability. The liability of each Parent
Guarantor hereunder is joint and several and exclusive and independent of any
security for or other guaranty of the Guaranteed Obligations of the Borrower
whether executed by such Parent Guarantor, any other Parent Guarantor, any
other guarantor or by any other party, and the liability of each Parent
Guarantor hereunder is not affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor
or of any other party as to the Guaranteed Obligations of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel
by the Borrower, or (e) any payment made to the Guaranteed Creditors on the
Guaranteed Obligations which any such Guaranteed Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Parent
Guarantor waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
14.04 Independent Obligation. The obligations of each Parent
Guarantor hereunder are independent of the obligations of any other Parent
Guarantor, any other guarantor, any other party or the Borrower, and a separate
action or actions may be brought and prosecuted against each Parent Guarantor
whether or not action is brought against any other Parent Guarantor, any other
guarantor, any other party or the Borrower and whether or not any other
guarantor, any other party or the Borrower be joined in any such action or
actions. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to any Parent Guarantor.
14.05 Authorization. Each Parent Guarantor authorizes the
Guaranteed Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing
its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Guaranty herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed or altered;
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(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against
the Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission
or default under, this Agreement, any other Credit Document or any of
the instruments or agreements referred to herein or therein, or
otherwise amend, modify or supplement this Agreement, any other Credit
Document or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of any Parent Guarantor from its liabilities under this
Guaranty.
14.06 Reliance. It is not necessary for the Guaranteed
Creditors to inquire into the capacity or powers of the Borrower or the
officers, directors, partners or agents acting or purporting to act on their
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of the Borrower
now or hereafter owing to any Parent Guarantor is hereby subordinated to the
Guaranteed Obligations of the Borrower owing to the Guaranteed Creditors; and
if the Administrative Agent so requests at a time when an Event of Default
exists, all such indebtedness of the
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Borrower to any Parent Guarantor shall be collected, enforced and received by
such Parent Guarantor for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of
any Parent Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Parent Guarantor of any note or negotiable instrument
evidencing any of the indebtedness of the Borrower to such Parent Guarantor,
such Parent Guarantor shall mark such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, each Parent Guarantor hereby agrees with the
Guaranteed Creditors that it will not exercise any right of subrogation which
it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Each Parent Guarantor waives any right
(except as shall be required by applicable statute and cannot be waived) to
require any Guaranteed Creditor to (i) proceed against the Borrower, any other
Parent Guarantor, any other guarantor or any other party, (ii) proceed against
or exhaust any security held from the Borrower, any other Parent Guarantor, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Each Parent Guarantor waives any
defense based on or arising out of any defense of the Borrower, any other
Parent Guarantor, any other guarantor or any other party, other than payment in
full of the Guaranteed Obligations, based on or arising out of the disability
of the Borrower, any other Parent Guarantor, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Guaranteed Obligations. Each Parent
Guarantor waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of such Parent
Guarantor against the Borrower or any other party or any security.
(b) Each Parent Guarantor waives all presentments, demands
for performance, protests and notices, including, without limitation, notices
of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Guaranteed Obligations. Each Parent Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which each Parent Guarantor assumes and
incurs hereunder, and agrees that the Guaranteed Creditors shall have no duty
to advise any Parent Guarantor of information known to them regarding such
circumstances or risks.
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14.09 Nature of Liability. It is the desire and intent of
each Parent Guarantor and the Guaranteed Creditors that this Guaranty shall be
enforced against each Parent Guarantor to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. If, however, and to the extent that, the obligations of any Parent
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations of such Parent
Guarantor shall be deemed to be reduced and such Parent Guarantor shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
SECTION 15. Miscellaneous.
15.01 Payment of Expenses, etc. The Borrower shall: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case LLP) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
the Administrative Agent and the Arranger in connection with its syndication
efforts with respect to this Agreement and of the Administrative Agent and,
after the occurrence of an Event of Default, each of the Banks in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and, after the occurrence of an Event of Default, for each
of the Banks); (ii) pay and hold each of the Banks harmless from and against
any and all present and future stamp, excise and other similar documentary
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iii) indemnify the Administrative Agent, the Arranger, the
Documentation Agent and each Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed
against any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) any investigation, litigation or other proceeding
(whether or not the Administrative Agent, the Arranger or the Documentation
Agent or any Bank is a party thereto and whether or not such investigation,
litigation or other proceeding is brought by or on behalf of any Credit Party)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any
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Letter of Credit or the proceeds of any Revolving Loans hereunder or the
consummation of any of the transactions contemplated herein or in any other
Credit Document or the exercise of any of their rights or remedies provided
herein or in the other Credit Documents, or (b) the actual or alleged presence
of Hazardous Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned or at any time operated by the
Borrower or any of its Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials by the Borrower or any of its
Subsidiaries at any location, whether or not owned or operated by the Borrower
or any of its Subsidiaries, the non-compliance of any Real Property with
foreign, federal, state and local laws, regulations, and ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence, bad faith or willful misconduct of the Person
to be indemnified or incurred by reason of the breach by the Person to be
indemnified of any provision of this Agreement). To the extent that the
undertaking to indemnify, pay or hold harmless the Agents or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
15.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of an Event of Default, each Bank is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to
any Credit Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general
or special) and any other Funded Debt at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of any Credit Party against and on
account of the Obligations and liabilities of the Credit Parties to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank
pursuant to Section 15.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
15.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier or cable communication) and
mailed, telegraphed, telexed, telecopied,
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cabled or delivered: if to any Credit Party, at the address specified opposite
its signature below or in the other relevant Credit Documents or at such other
address as shall be designated by such party in written notice to the other
parties hereto; if to any Bank, at its address specified on Schedule II; and if
to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or Agent, at such other address as shall be designated by such party in a
written notice to the other parties hereto and, as to each Bank, at such other
address as shall be designated by such Bank in a written notice to the Borrower
and each Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
15.04 Benefit of Agreement; Assignments; Participations. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto;
provided, however, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of each of
the Banks and, provided further, that, although any Bank may transfer, assign
or grant participations in its rights hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitments hereunder except as provided in Sections 1.12 and
15.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, provided further, that no Bank
shall transfer, assign or grant any participation to any Person which is
engaged in the Business or any other business competitive with the business
conducted by PESCO and its Subsidiaries or under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Revolving Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Final Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Revolving Loan Commitment, shall not constitute a change
in the terms of such participation, and that an increase in any Revolving Loan
Commitment or Revolving Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Pledge Agreement Collateral (except as expressly
provided in the Credit Documents) supporting the Revolving Loans hereunder in
which such participant is participating. In the case of any such
participation, the
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<PAGE> 106
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Revolving Loan Commitment and related outstanding Obligations hereunder to (i)
its parent company and/or any affiliate of such Bank which is at least 50%
owned by such Bank or its parent company or to one or more Banks or (ii) in the
case of any Bank that is a fund that invests in bank loans, any other fund that
invests in bank loans and is managed by the same investment advisor of such
Bank or by an Affiliate of such investment advisor or (y) assign all, or if
less than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Bank or assigning Banks, of such Revolving Loan Commitment and
related outstanding Obligations hereunder to one or more Eligible Transferees
(treating any fund that invests in bank loans and any other fund that invests
in bank loans and is managed by the same investment advisor of such fund or by
an Affiliate of such investment advisor as a single Eligible Transferee), each
of which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that, (i) at such
time Schedule I shall be deemed modified to reflect the Revolving Loan
Commitments of such new Bank and of the existing Banks, (ii) upon the surrender
of the relevant Note by the assigning Bank (or, upon such assigning Bank's
indemnifying the Borrower for any lost Note pursuant to a customary
indemnification agreement) a new Note will be issued, at the Borrower's
expense, to such new Bank and to the assigning Bank upon the request of such
new Bank or assigning Bank, such new Note to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments and/or outstanding
Revolving Loans, as the case may be, (iii) the consent of the Administrative
Agent and, to the extent no Default or Event of Default is then in existence,
the Borrower shall be required in connection with any assignment to an Eligible
Transferee pursuant to clause (y) above (which consent shall not be
unreasonably withheld or delayed), (iv) the Administrative Agent shall receive
at the time of each such assignment, from the assigning or assignee Bank, the
payment of a non-refundable assignment fee of $3,500, (v) no such transfer or
assignment will be effective until recorded by the Administrative Agent on the
Register pursuant to Section 15.15 and (vi) no such transfer or assignment will
be effective if, after giving effect thereto, there would be fifteen (15) or
more Banks provided that, to the extent a Default or Event of Default is then
in existence, this requirement shall not be applicable. To the extent of any
assignment pursuant to this Section 15.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitment and outstanding Revolving Loans. At the time of each
assignment pursuant to this Section 15.04(b) to a Person which is not already a
Bank hereunder and which is not a United
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States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Bank shall, to the extent
legally entitled to do so, provide to the Borrower the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate)
described in Section 4.04(b). To the extent that an assignment of all or any
portion of a Bank's Revolving Loan Commitment and related outstanding
Obligations pursuant to Section 1.12 or this Section 15.04(b) would, at the
time of such assignment, result in increased costs under Section 1.10, 2.06 or
4.04 from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Revolving Loans and Note hereunder to a Federal Reserve
Bank in support of borrowings made by such Bank from such Federal Reserve Bank
and, with the consent of the Administrative Agent, any Bank which is a fund may
pledge all or any portion of its Revolving Loans and Note to its trustee in
support of its obligations to its trustee. No pledge pursuant to this clause
(c) shall release the transferor Bank from any of its obligations hereunder.
15.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, the Documentation Agent, any Issuing Bank
or any Bank in exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the Borrower or any
other Credit Party and the Administrative Agent, the Documentation Agent, any
Issuing Bank or any Bank shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Administrative Agent, the Documentation Agent, any Issuing Bank or
any Bank would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent, the Documentation Agent, any Issuing Bank or any
Bank to any other or further action in any circumstances without notice or
demand.
15.06 Payments Pro Rata. (a) Except as otherwise provided
in this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
Obligations hereunder, it shall distribute such payment to the Banks (other
than any Bank that has consented in writing to
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waive its pro rata share of any such payment) pro rata based upon their
respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Revolving Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received by
other Banks is in a greater proportion than the total of such Obligation then
owed and due to such Bank bears to the total of such Obligation then owed and
due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
participation by all the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 15.06(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to Defaulting
Banks.
15.07 Calculations; Computations; Accounting Terms. (a) The
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with GAAP consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by PESCO or the Borrower to the Banks). If any change or
proposed change after the Restatement Effective Date in GAAP as in effect on
the Restatement Effective Date shall result in a change in any calculation
required to determine compliance with any provision contained in this
Agreement, the Borrower and the Required Banks will negotiate in good faith to
amend such provision in a manner to reflect such change such that the
determination of compliance with such provision shall yield the same
substantive result as would have obtained prior to such change in GAAP. Until
such an amendment is entered into, covenants shall be calculated in accordance
with GAAP as in effect immediately preceding such change.
(b) All computations of interest, Commitment Commission and
other Fees hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day;
except that in the case of Letter of Credit Fees, the last day shall be
included) occurring in the period for which such interest, Commitment
Commission or Fees are payable.
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15.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH CREDIT PARTY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH CREDIT PARTY
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT
IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL
JURISDICTION OVER IT. EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS FOR NOTICES HEREUNDER, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH CREDIT PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH METHOD OF SECURING SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION
OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH
METHOD OF SECURING SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR
THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN
ANY OTHER JURISDICTION TO WHICH SUCH CREDIT PARTY IS SUBJECT.
(b) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
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<PAGE> 110
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT
ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(c) EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
15.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
15.10 Effectiveness. This Agreement shall become effective
on the date (the "Restatement Effective Date") on which (i) the Borrower,
PESCO, Holding, the Documentation Agent, the Arranger, the Administrative Agent
and each of the Banks shall have signed a counterpart hereof (whether the same
or different counterparts) and shall have delivered the same to the
Administrative Agent at its Notice Office or, in the case of the Banks, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written or telex notice (actually received) at such office that the same has
been signed and mailed to it and (ii) the conditions set forth in Section 5 are
met to the satisfaction of each Agent and the Required Banks. Unless the
Administrative Agent has received actual notice from any Bank that the
conditions contained in Section 5 have not been met to its satisfaction, upon
the satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon each Agent's good faith determination that the
conditions described in clause (ii) of the immediately preceding sentence have
been met, then the Restatement Effective Date shall have been deemed to have
occurred, regardless of any subsequent determination that one or more of the
conditions thereto had not been met (although the occurrence of the Restatement
Effective Date shall not release the Borrower from any liability for failure to
satisfy one or more of the applicable conditions contained in Section 5). The
Administrative Agent will give the Borrower and each Bank prompt written notice
of the occurrence of the Restatement Effective Date. Anything in this
Agreement to the contrary notwithstanding, if the Restatement Effective Date
does not occur on or prior to May 31, 1998 this Agreement shall never become
effective.
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<PAGE> 111
15.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
15.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks, provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank (other than a Defaulting
Bank), (i) extend the final scheduled maturity of any Revolving Loan or Note or
extend the stated expiration date of any Letter of Credit beyond the Final
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof (except to the extent
repaid in cash) (it being understood that any amendment or modification to the
financial definitions in this Agreement or to Section 15.07(a) shall not
constitute a reduction in the rate of interest or Fees for the purposes of this
clause (i)), (ii) release all or substantially all of the Pledge Agreement
Collateral (except as expressly provided in the Credit Documents), (iii) amend,
modify or waive any provision of this Section 15.12, (iv) release any Guarantor
from its obligations under its respective Guaranty except in accordance with
the terms thereof, (v) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the Revolving Loan Commitments are included on the Restatement
Effective Date) or (vi) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement; provided further,
that no such change, waiver, discharge or termination shall (v) increase the
Revolving Loan Commitment of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Revolving Loan Commitment shall not
constitute an increase of the Revolving Loan Commitment of any Bank, and that
an increase in the available portion of any Revolving Loan Commitment of any
Bank shall not constitute an increase of the Revolving Loan Commitment of such
Bank), (w) without the consent of any Issuing Bank, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (x) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 or any other provision as same
relates to the rights or obligations of the Administrative Agent, (y) without
the consent of the Arranger and the Documentation Agent, amend, modify or waive
any provision of Section 13 or any provision as same relates to the rights or
obligations of the Arranger or the Documentation Agent or (z) without the
consent of the Collateral Agent, amend, modify or waive any provision relating
to the rights or obligations of the Collateral Agent.
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<PAGE> 112
(b) Any request by a Credit Party for a consent or waiver
with respect to this Agreement or any other Credit Document shall be made in
writing to each of the Agents, and the Administrative Agent shall provide a
copy of such request to the Banks promptly following receipt thereof. The
Agents and each of the Banks agree to use their best efforts to respond to any
such request promptly.
15.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06, 13.03 and 15.01
shall survive the execution, delivery and termination of this Agreement and the
Notes and the making and repayment of the Obligations with respect to matters
occurring prior to the termination of this Agreement and the repayment of the
Obligations.
15.14 Domicile of Revolving Loans. Each Bank may transfer
and carry its Revolving Loans at, to or for the account of any office,
Subsidiary or Affiliate of such Bank.
15.15 Register. The Borrower hereby authorizes the
Administrative Agent to maintain a register (the "Register") on which it will
record the Revolving Loan Commitments from time to time of each of the Banks,
the Revolving Loans made by each of the Banks and each repayment in respect of
the principal amount of the Revolving Loans of each Bank. Failure to make any
such recordation, or any error in such recordation shall not affect the
Borrower's obligations in respect of such Revolving Loans. With respect to any
Bank, the transfer of the Revolving Loan Commitment of such Bank and the rights
to the principal of, and interest on, any Revolving Loan made pursuant to such
Revolving Loan Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect to
ownership of such Revolving Loan Commitment and Revolving Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Revolving Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Revolving Loan Commitments and Revolving Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 15.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the Administrative
Agent for acceptance and registration of assignment or transfer of all or part
of a Revolving Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Revolving Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank. The Borrower
agrees to indemnify the Administrative Agent from and against any and all
losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 15.15 (but excluding
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any losses, claims, damages or liabilities to the extent incurred by reason of
the gross negligence or willful misconduct of the Administrative Agent).
15.16 Confidentiality. (a) Subject to the provisions of
clause (b) of this Section 15.16, each Bank agrees that it will not disclose
without the prior consent of the Borrower (other than to its employees,
auditors, advisors or counsel who need to know such information in connection
with the transactions contemplated by this Agreement or to another Bank,
provided such Persons shall be subject to the provisions of this Section 15.16
to the same extent as such Bank) any information with respect to PESCO,
Holding, the Borrower or any of its Subsidiaries which is now or in the future
furnished pursuant to this Agreement or any other Credit Document; provided
that any Bank may disclose any such information (i) as has become generally
available to the public other than by virtue of a breach of this Section
15.16(a) by the respective Bank, (ii) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or Federal
regulatory body having or claiming to have jurisdiction over such Bank or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (iii) as may be required or appropriate in respect to any summons
or subpoena or in connection with any litigation, (iv) in order to comply with
any law, order, regulation or ruling applicable to such Bank, (v) to the
Administrative Agent or the Collateral Agent and (vi) to any prospective or
actual transferee or participant in connection with any contemplated transfer
or participation of any of the Notes or Revolving Loan Commitments or any
interest therein by such Bank, provided that such prospective transferee or
participant agrees in writing with the Borrower to be bound by the
confidentiality provisions contained in this Section 15.16.
(b) Each of PESCO, Holding and the Borrower hereby
acknowledges and agrees that, if necessary in connection with the transactions
contemplated by this Agreement, each Bank may share with any of its affiliates
any information related to PESCO or any of its Subsidiaries (including, without
limitation, any nonpublic customer information regarding the creditworthiness
of PESCO and its Subsidiaries), provided such Persons shall agree in writing
with the Borrower to be subject to the provisions of this Section 15.16 to the
same extent as such Bank.
15.17 Knowledge. Whenever the words "to the knowledge of
PESCO", "to the knowledge of the Borrower", or words of similar import are
used, the reference shall be to matters of which the Chief Financial Officer,
the Chief Accounting Officer or any principal financial officer are currently
aware (when referring to matters of a financial nature) and to matters of which
the President, the Group Vice President of U.S. Operations, the Group Vice
President of International Operations or the Vice President of Operations for
any of the Gulf Offshore, U.S. California or Alaska divisions are currently
aware (when referring to matters of an operational or environmental nature).
In no event shall any constructive or imputed knowledge or notice be implied.
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<PAGE> 114
15.18 Credit Documents. To the extent that any term,
provision or agreement contained in any Credit Document (other than this
Agreement) is inconsistent with any term, provision or agreement contained in
this Agreement, the terms, provisions and agreements of this Agreement shall
control.
15.19 Inactive Subsidiaries. Notwithstanding anything to the
contrary contained herein, except for Section 7.22 and Section 9.15(b),
Inactive Subsidiaries shall not be subject to, or bound by, the representations
set forth in Section 7 or the covenants set forth in Sections 8 and 9 hereof.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
- -------
10375 Richmond Avenue POOL ENERGY SERVICES CO.
Houston, TX 77042
Tel: 713-954-3084
Fax: 713-954-3244 By
Attn: Treasurer ----------------------
Name:
Title:
By
----------------------
Name:
Title:
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<PAGE> 115
10375 Richmond Avenue POOL ENERGY HOLDING, INC.
Houston, TX 77042
Tel: 713-954-3084
Fax: 713-954-3244 By
Attn: Treasurer -----------------------
Name:
Title:
By
-----------------------
Name:
Title:
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<PAGE> 116
10375 Richmond Avenue POOL COMPANY
Houston, TX 77042
Tel: 713-954-3084
Fax: 713-954-3244 By
Attn: Treasurer ------------------------
Name:
Title:
By
------------------------
Name:
Title:
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SBC WARBURG DILLON READ INC.,
as Arranger
By
----------------------------
Name:
Title:
By
----------------------------
Name:
Title:
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<PAGE> 118
CREDIT LYONNAIS NEW YORK
BRANCH, Individually and as
Administrative Agent
By
----------------------------
Name:
Title:
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<PAGE> 119
SWISS BANK CORPORATION,
STAMFORD BRANCH,
Individually and as Documentation Agent
By
----------------------------------------
Name:
Title:
By
----------------------------------------
Name:
Title:
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BANK ONE, TEXAS, N.A.,
Individually and as Co-Agent
By
-----------------------------
Name:
Title:
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<PAGE> 121
THE HONGKONG & SHANGHAI
BANKING CORPORATION
LIMITED, Individually and
as Co-Agent
By
--------------------------
Name:
Title:
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<PAGE> 122
ARAB BANKING CORPORATION
(B.S.C.)
By
----------------------
Name:
Title:
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<PAGE> 123
THE BANK OF NOVA SCOTIA
By
---------------------
Name:
Title:
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<PAGE> 124
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By
------------------------
Name:
Title:
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<PAGE> 125
DEN NORSKE BANK ASA
By
-----------------------
Name:
Title:
By
-----------------------
Name:
Title:
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<PAGE> 126
THE FUJI BANK, LIMITED,
HOUSTON AGENCY
By
-----------------------
Name:
Title:
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<PAGE> 127
GULF INTERNATIONAL BANK B.S.C.
By
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
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<PAGE> 128
HIBERNIA NATIONAL BANK
By
----------------------
Name:
Title:
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<PAGE> 129
NATEXIS BANQUE BFCE
By
------------------------
Name:
Title:
By
------------------------
Name:
Title:
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NATIONAL BANK OF ALASKA
By
-------------------------
Name:
Title:
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<PAGE> 131
THE SUMITOMO BANK, LIMITED
By
-------------------------
Name:
Title:
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<PAGE> 132
SCHEDULE I
REVOLVING LOAN COMMITMENTS
<TABLE>
<CAPTION>
Bank
---- Revolving Loan
Commitment
------------------
<S> <C>
Credit Lyonnais New York Branch $22,000,000
Bank One, Texas, N.A. 20,000,000
The Hongkong & Shanghai Banking
Corporation Limited 20,000,000
Hibernia National Bank 18,000,000
Swiss Bank Corporation, Stamford Branch 15,000,000
Den Norske Bank ASA 13,800,000
The Fuji Bank, Limited, Houston Agency 11,500,000
The Sumitomo Bank, Limited 11,500,000
Arab Banking Corporation (B.S.C.) 10,000,000
National Bank of Alaska 10,000,000
Gulf International Bank B.S.C. 7,500,000
Banque Nationale de Paris, Houston Agency 6,900,000
NATEXIS Banque 6,900,000
The Bank of Nova Scotia 6,900,000
</TABLE>
<PAGE> 133
SCHEDULE II
BANK ADDRESSES
<TABLE>
<CAPTION>
Bank Address
---- -------
<S> <C>
Arab Banking Corporation (B.S.C.) 277 Park Avenue
32nd Floor
New York, NY 10172
Loan Manager
Phone: 212-583-4771
Fax: 212-583-0932
The Bank of Nova Scotia 600 Peachtree Street N.E.
Atlanta, GA 36308
Dorothy Legista
Phone: 404-877-1535
Fax: 404-888-8998
Bank One, Texas, N.A. 910 Travis
Houston, TX 77002
Carol Shannon
Phone: 713-751-3581
Fax: 713-751-3894
Banque Nationale de Paris, Houston Agency
Houston Agency 333 Clay Street
Suite 3400
Houston, TX 77002
Donna Rose
Phone: 713-951-1240
Fax: 713-659-1414
</TABLE>
<PAGE> 134
SCHEDULE II
Page 2
<TABLE>
<S> <C>
Credit Lyonnais New York Branch 1000 Louisiana
Suite 5360
Houston, TX 77002
C. Page Dillehunt
Phone: 713-753-8719
Fax: 713-751-0307
Den Norske Bank ASA 200 Park Avenue
31st Floor
New York, NY 10166-0396
Bill Trivedi
Phone: 212-681-3841
Fax: 212-681-4123
The Fuji Bank, Limited 1221 McKinney
Suite 4100
Houston, TX 77010
Jenny Lin
Phone: 713-650-7821
Fax: 713-951-0590
Gulf International Bank B.S.C. 380 Madison Avenue
21st Floor
New York, NY 10017
Irene Wong
Phone: 212-922-2368
Fax: 212-922-2309
</TABLE>
<PAGE> 135
SCHEDULE II
Page 3
<TABLE>
<S> <C>
Hibernia National Bank 313 Carondelet Street
New Orleans, LA 70130
Virginia Bell
Phone: 504-533-5352
Fax: 504-533-5434
The Hongkong and Shanghai Banking
Corporation Limited 190 South LaSalle Street
Suite 1100
Chicago, IL 60603
Catherine Chan
Phone: 312-853-6430
Fax: 312-859-0502
NATEXIS Banque 645 Fifth Avenue
20th Floor
New York, NY 10022
Joan Rankine
Phone:
Fax: 212-872-5045
NATEXIS Banque 333 Clay Street
Suite 4340
Houston, TX 77002
Tanya McAllister
Phone: 713-759-9401
Fax: 713-759-9908
</TABLE>
<PAGE> 136
SCHEDULE II
Page 4
<TABLE>
<S> <C>
National Bank of Alaska P.O. Box 100600
Anchorage, AK 99510
Participation Desk
Phone: 907-265-2071
Fax: 907-265-2743
Swiss Bank Corporation, Stamford Branch 677 Washington Boulevard
Stamford, CT 06901
Lara A. Kavanagh
Phone: 203-719-4181
Fax: 203-719-4176
The Sumitomo Bank, Limited 700 Louisiana
Suite 1750
Houston, TX 77002
Robert Johnson
Phone: 713-238-8235
Fax: 713-759-0020
</TABLE>
<PAGE> 137
SCHEDULE III
SUBSIDIARIES
<PAGE> 138
SCHEDULE IV
EXISTING FUNDED DEBT
<PAGE> 139
SCHEDULE V
EXISTING LIENS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Filing File Original Description Permitted
Location Debtor Secured Party Number File Date of Collateral Refinancing
-------- ------ ------------- ------ --------- ------------- -----------
</TABLE>
<PAGE> 140
SCHEDULE VI
EXISTING INVESTMENTS; EXISTING INTERCOMPANY LOANS
<PAGE> 141
EXHIBIT A-1
FORM OF NOTICE OF BORROWING
[Date]
Credit Lyonnais New York Branch,
as Administrative Agent for the
Banks party to the Credit Agreement
referred to below
1000 Louisiana, Suite 5360
Houston, TX 77002
Attention: C. Page Dillehunt
Ladies and Gentlemen:
The undersigned, Pool Company (the "Borrower"), refers to the Amended
and Restated Credit Agreement, dated as of March 26, 1998 (as amended from time
to time, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among Pool Energy Services Co., Pool Energy Holding, Inc.,
the Borrower, the lenders from time to time party thereto (the "Banks"), SBC
Warburg Dillon Read Inc., as Arranger, Swiss Bank Corporation, Stamford Branch,
as Documentation Agent, and you, as Administrative Agent and as Collateral
Agent for such Banks, and hereby gives you notice, irrevocably, pursuant to
Section 1.03(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing of Revolving Loans under the Credit Agreement, and in that connection
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is ____________. 1/
- ---------------------
1/ Shall be a Business Day at least one Business Day after the delivery of this
notice with respect to Base Rate Loans and at least three Business Days after
the delivery of this notice with respect to Eurodollar Loans.
<PAGE> 142
EXHIBIT A-1
Page 2
(ii) The aggregate principal amount of the Proposed Borrowing is
$____________.
(iii) The Revolving Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is
[one] [two] [three] [six] month(s).] 2/
The Borrower hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of
the proceeds thereof.
Very truly yours,
POOL COMPANY
By
------------------------
Name:
Title:
- ---------------------
2/ To be included for a Proposed Borrowing of Eurodollar Loans.
<PAGE> 143
EXHIBIT A-2
FORM OF NOTICE OF CONVERSION/CONTINUATION
[Date]
Credit Lyonnais New York Branch,
as Administrative Agent for the
Banks party to the Credit Agreement
referred to below
1000 Louisiana, Suite 5360
Houston, TX 77002
Attention: C. Page Dillehunt
Ladies and Gentlemen:
The undersigned, Pool Company (the "Borrower"), refers to the Amended
and Restated Credit Agreement, dated as of March 26, 1998 (as amended from time
to time, the "Credit Agreement," the terms defined therein being used herein as
therein defined), among Pool Energy Services Co., Pool Energy Holding, Inc.,
the Borrower, the lenders from time to time party thereto (the "Banks"), SBC
Warburg Dillon Read Inc., as Arranger, Swiss Bank Corporation, Stamford Branch,
as Documentation Agent, and you, as Administrative Agent and as Collateral
Agent for such Banks, and hereby gives you notice, irrevocably, pursuant to
Section 1.06 of the Credit Agreement, that the undersigned hereby requests a
[conversion] [continuation] of a Loan or Loans under the Credit Agreement, and
in that connection sets forth below the information relating to such
[Conversion (the "Proposed Conversion")] [Continuation (the "Proposed
Continuation"] as required by Section 1.06 of the Credit Agreement:
(i) The Business Day of the Proposed [Conversion] [Continuation] is
____________. 1/
- ---------------------
1/ Shall be a Business Day at least one Business Day after the delivery of this
notice with respect to Base Rate Loans and at least three Business Days after
the delivery of this notice with respect to Eurodollar Loans.
<PAGE> 144
EXHIBIT A-2
Page 2
(ii) The aggregate principal amount of the Proposed [Conversion]
[Continuation] is $____________.
(iii) The Borrowing[s] pursuant to which the Loan[s] in clause (ii)
[was] [were] made [is] [are] currently outstanding as [Base Rate]
[Eurodollar] Loan[s], [is] [are] hereby requested to be converted into
[Eurodollar] [Base Rate] Loan[s] and [was] [were] made on [date].
[(iv) The duration of the Interest Period for the Proposed
[Conversion] [Continuation] is [one] [two] [three] [six] month(s).]2/
The Borrower hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed
[Conversion] [Continuation]:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed [Conversion] [Continuation] and to the application of the
proceeds thereof, as though made on such date, unless stated to relate to
a specific earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier
date; and
(B) no Default or Event of Default has occurred and is continuing,
or would result from such Proposed [Conversion] [Continuation] or from the
application of the proceeds thereof.
Very truly yours,
POOL COMPANY
By
------------------------
Name:
Title:
- ---------------------
2/ To be included in the event the Loan[s] [is] [are] to be [converted into]
[continued as] [a] Eurodollar Loan[s].
<PAGE> 145
EXHIBIT B
FORM OF NOTE
$__________ New York, New York
[Date]
FOR VALUE RECEIVED, POOL COMPANY, a Delaware corporation and
successor in interest to Pool Company, a Texas corporation (the "Borrower"),
hereby promises to pay to _______________ or its permitted assigns (the
"Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Credit Lyonnais New York Branch (the
"Administrative Agent") located at 1301 Avenue of the Americas, New York, New
York 10019, on the Final Maturity Date (as defined in the Agreement referred to
below) the principal sum of _____________ DOLLARS ($________) or, if less, the
unpaid principal amount of all Revolving Loans (as defined in the Credit
Agreement) made by the Bank pursuant to the Credit Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Credit Agreement.
This Note is one of the Notes referred to in the Amended and Restated
Credit Agreement, dated as of March 26, 1998, among Pool Energy Services Co.,
Pool Energy Holding, Inc., Pool Company, the lenders from time to time party
thereto (including the Bank), SBC Warburg Dillon Read Inc. as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent, and Credit Lyonnais
New York Branch, as Administrative Agent and as Collateral Agent (as amended,
restated, modified or supplemented from time to time, the "Credit Agreement")
and is entitled to the benefits thereof and of the other Credit Documents (as
defined in the Credit Agreement). This Note is secured by the Pledge Agreement
(as defined in the Credit Agreement) and is entitled to the benefits of the
Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is
subject to voluntary prepayment and mandatory repayment prior to the Final
Maturity Date, in whole or in part, as provided in the Credit Agreement.
In case an Event of Default (as defined in the Credit Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may become or be declared to be due and payable in the manner and with the
effect provided in the Credit Agreement.
<PAGE> 146
EXHIBIT B
Page 2
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note except as set forth in the Credit
Agreement or in any other Credit Document.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF.
POOL COMPANY
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
<PAGE> 147
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
No. 1/ Dated 2/
-------- ---------
Credit Lyonnais, as Administrative Agent under the
Amended and Restated Credit Agreement (as in effect from
time to time, the "Credit Agreement"), dated as of March 26,
1998, among Pool Energy Services Co., Pool Energy Holding,
Inc., Pool Company, the lenders from time to time party
thereto, SBC Warburg Dillon Read Inc. as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent,
and Credit Lyonnais New York Branch, as Administrative Agent
and as Collateral Agent
1000 Louisiana, Suite 5360
Houston, TX 77002
Attention: C. Page Dillehunt
[Name and Address of Issuing Bank]
Attention:
Ladies and Gentlemen:
The Borrower hereby requests that _________________, in its
individual capacity, issue a __________________ Letter of Credit for the
account of the undersigned
- -----------------------
1/ Letter of Credit Request number.
2/ Date of Letter of Credit Request.
<PAGE> 148
EXHIBIT C
Page 2
on ______3/________ (the "Date of Issuance") in the aggregate stated amount of
__________. The requested Letter of Credit shall be denominated in Dollars.
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be
______4/____, and such Letter of Credit will be in support of ______5/________
and will have a stated expiration date of ______6/________.
The Borrower hereby certifies that:
(1) The representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the issuance of the Letter of Credit requested hereby, on the Date of
Issuance (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be
required to be true and correct in all material respects only as of such
specified date).
(2) No Default or Event of Default has occurred and is continuing
nor, after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or an Event of Default occur and be
continuing.
- --------------------------
3/ Date of issuance, which shall be at least five Business Days from the date
hereof (or such shorter period as is acceptable to the Issuing Bank).
4/ Insert name and address of beneficiary.
5/ Insert description of L/C Supportable Obligations in the case of standby
letters of credit and insert description of commercial transaction in the case
of trade letters of credit.
6/ Insert the last date upon which drafts may be presented which may not be
later than the date that is the fourth Business Day prior to the Final Maturity
Date in the case of standby Letters of Credit or the 30th day prior to the Final
Maturity Date in the case of trade Letters of Credit.
<PAGE> 149
EXHIBIT C
Page 3
Copies of all documentation with respect to the supported transaction
are attached hereto.
POOL COMPANY
By
--------------------------
Name:
Title:
<PAGE> 150
EXHIBIT D
FORM OF SECTION 4.04(b)(ii) CERTIFICATE
Reference is hereby made to the Amended and Restated Credit
Agreement, dated as March 26, 1998, among Pool Energy Services Co., Pool Energy
Holding, Inc., Pool Company, the lenders from time to time party thereto, SBC
Warburg Dillon Read Inc., as Arranger, Swiss Bank Corporation, Stamford Branch,
as Documentation Agent, and Credit Lyonnais New York Branch, as Administrative
Agent and as Collateral Agent (as amended from time to time, the "Credit
Agreement"). Pursuant to the provisions of Section 4.04(b)(ii) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such
term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF BANK]
By
----------------------------
Name:
Title:
Date:
--------------------
<PAGE> 151
EXHIBIT F
FORM OF OFFICERS' CERTIFICATE
[Name of Credit Party], a corporation organized and existing under
the laws of the ____________________ (the "Company"), does hereby certify that:
1. This Certificate is furnished pursuant to Section 5.04(a) of the
Amended and Restated Credit Agreement, dated as of March 26, 1998, among Pool
Energy Services Co., Pool Energy Holding, Inc., Pool Company, the lenders from
time to time party thereto, SBC Warburg Dillon Read Inc., as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent, and Credit Lyonnais
New York Branch, as Administrative Agent and as Collateral Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called
the "Credit Agreement"). Unless otherwise defined herein, capitalized terms
used in this Certificate shall have the meanings set forth in the Credit
Agreement.
2. The following named individuals are elected officers of the
Company, each holds the office of the Company set forth opposite his or her
name and has held such office since prior to _________ __, 19__. 1/ The
signature written opposite the name and title of each such officer is his or
her genuine signature.
<TABLE>
<CAPTION>
Name 2/ Office Signature
------- ------ ---------
<S> <C> <C>
-------------- ----------- -------------
-------------- ----------- -------------
-------------- ----------- -------------
</TABLE>
- -----------------
1/ Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
2/ Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end of
this Certificate or related documentation.
<PAGE> 152
EXHIBIT F
Page 2
3. Attached hereto as Exhibit A is a certified copy of the
[Certificate of Incorporation] [Articles of Incorporation] of the Company, as
filed in the Office of ________ on ___________, 19__, together with all
amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company which were duly adopted, are in full force and effect on
the date hereof, and have been in effect since _____________, 19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 19__ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Credit Documents to which the Company is party.
6. On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects with the same effect as though such representations
and warranties had been made on the date hereof, both before and after giving
effect to the incurrence of Revolving Loans on the date hereof and the
application of the proceeds thereof, unless stated to relate to a specific
earlier date, in which case such representations and warranties were true and
correct in all material respects as of such earlier date.
7. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from the Borrowing to occur on the date
hereof or from the application of the proceeds thereof.
<PAGE> 153
EXHIBIT F
Page 3
8. There is no proceeding for the dissolution or liquidation of the
Company pending.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
[month], [year].
[NAME OF CREDIT PARTY]
By
-----------------------------------------
Name:
Title: [Chairman of the Board/
Chief Executive Officer/
President/Vice President]
<PAGE> 154
EXHIBIT F
Page 4
I, the undersigned, [Secretary/Assistant Secretary] of the Company,
do hereby certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [Chairman of the Board/Chief Executive Officer/President/Vice
President] of the Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4 and 5 above are true
and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
[month], [year].
[NAME OF CREDIT PARTY]
By
-----------------------
Name:
Title:
<PAGE> 155
EXHIBIT I
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Date: ___________________
Reference is made to the Credit Agreement described in Item 1 of
Annex I annexed hereto (as such Credit Agreement may hereafter be amended,
modified or supplemented from time to time, the "Credit Agreement"). Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined. _____________ (the "Assignor") and
______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the
percentage interest specified in Item 2 of Annex I (the "Assigned Share") of
all of the outstanding rights and obligations with respect to the Assigned
Share of the Total Revolving Loan Commitment and all outstanding Revolving
Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claims; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or
the other Credit Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of PESCO or any of its
Subsidiaries or the performance or observance by PESCO or any of its
Subsidiaries of any of their respective obligations under the Credit Agreement
or the other Credit Documents or any other instrument or document furnished
pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon either Agent,
<PAGE> 156
EXHIBIT I
Page 2
the Arranger, the Assignor or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) appoints and authorizes each Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to each Agent and the
Collateral Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; [and] (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank[; and (v)
attaches the Forms and/or Certificate set forth in the penultimate sentence of
Section 15.04(b) of the Credit Agreement.] 1/
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the
date of execution hereof by the Assignor and the Assignee, to the extent
required by the Credit Agreement, the receipt of the consent of the Arranger,
the Documentation Agent and the Administrative Agent, receipt by the
Administrative Agent of the assignment fee referred to in Section 15.04(b) of
the Credit Agreement, and the recordation by the Administrative Agent of the
assignment effected hereby in the Register, unless otherwise specified in Item
3 of Annex I (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Assumption Agreement, have the rights and obligations of a Bank thereunder
and under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights and
be released from its obligations under the Credit Agreement and the other
Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee
shall be entitled to (i) all interest on the Assigned Share of the Revolving
Loans at the rates specified in Item 4 of Annex I, (ii) all Commitment
Commission on the Assigned Share of the Total Revolving Loan Commitment at the
rate specified in Item 5 of Annex I hereto and (iii) all Letter of Credit Fees
on the Assignee's participation in all Letters of Credit at the rate
- --------------------
1/ If the Assignee is not already a Bank under the Credit Agreement and is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes.
<PAGE> 157
EXHIBIT I
Page 3
specified in Item 6 of Annex I hereto, which, in each case, accrue on and after
the Settlement Date, such interest, Commitment Commission and Letter of Credit
Fees to be paid by the Administrative Agent directly to the Assignee. It is
further agreed that all payments of principal made on the Assigned Share of the
Revolving Loans which occur on and after the Settlement Date will be paid
directly by the Administrative Agent to the Assignee. Upon the Settlement
Date, the Assignee shall pay to the Assignor an amount specified by the
Assignor in writing which represents the Assigned Share of the principal amount
of the respective Revolving Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Assumption Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written, such execution also being
made on Annex I hereto.
[NAME OF ASSIGNOR],
as Assignor
By
--------------------------------
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By
--------------------------------
Name:
Title:
<PAGE> 158
EXHIBIT I
Page 4
[Acknowledged and Agreed:
CREDIT LYONNAIS NEW YORK BRANCH, as Administrative Agent
By
----------------------------
Name:
Title:
POOL COMPANY, as Borrower
By
----------------------------
Name:
Title: ]
<PAGE> 159
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of March 26, 1998 among
Pool Energy Services Co., Pool Energy Holding, Inc., Pool Company, the
lenders from time to time party thereto, SBC Warburg Dillon Read Inc., as
Arranger, Swiss Bank Corporation, Stamford Branch, as Documentation Agent,
and Credit Lyonnais New York Branch, as Administrative Agent and as
Collateral Agent.
2. Revolving Loan Commitment (as of date of assignment and assumption):
a. Aggregate
Amount for
all Banks $
-------
b. Assigned Share %
-------
c. Amount of
Assigned Share $ 1/
-------
3. Settlement Date:
4. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).2/
- ----------------
1/ Which amount may not be less than $5,000,000, or result in the Assignor's
holding less than $5,000,000.
2/ The Borrower and the Agent shall, following recordation of such assignment by
the Agent on the Register, direct the entire amount of interest to the Assignee
at the rate set forth in Section 1.08 of the Credit Agreement, with the Assignor
and Assignee effecting any agreed upon sharing of interest through payments by
the Assignee to the Assignor.
<PAGE> 160
ANNEX I
Page 2
5. Commitment
Commission to
the Assignee: As set forth in Section 3.01(a) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).3/
6. Letter of Credit
Fee to the Assignee: As set forth in Section 3.01(b) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).4/
7. Notice: ASSIGNEE:
----------------------
----------------------
----------------------
----------------------
Attention:
Telephone:
Telecopier:
Reference:
- -----------------
3/ The Borrower and the Agent shall, following recordation of such assignment by
the Agent on the Register, direct the entire amount of the Commitment Commission
to the Assignee at the rate set forth in Section 3.01(a) of the Credit
Agreement, with the Assignor and the Assignee effecting any agreed upon sharing
of the Commitment Commission through payment by the Assignee to the Assignor.
4/ The Borrower and the Agent shall, following recordation of such assignment by
the Agent on the Register, direct the entire amount of the Letter of Credit Fee
to the Assignee at the rate set forth in Section 3.01(b) of the Credit
Agreement, with the Assignor and the Assignee effecting any agreed upon sharing
of the Letter of Credit Fee through payment by the Assignee to the Assignor.
<PAGE> 161
ANNEX I
Page 3
Payment Instructions: ASSIGNEE:
----------------------
----------------------
----------------------
----------------------
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE]
By
-----------------------
Name:
Title:
[NAME OF ASSIGNOR]
By
-----------------------
Name:
Title:
<PAGE> 162
EXHIBIT J
FORM OF INTERCOMPANY NOTE
New York, New York
[Date]
FOR VALUE RECEIVED, [NAME OF PAYOR] (the "Payor"), hereby promises to
pay on demand to the order of _____________ or its assigns (the "Payee"), in
lawful money of the United States of America in immediately available funds, at
such location in the United States of America as the Payee shall from time to
time designate, the unpaid principal amount of all loans and advances made by
the Payee to the Payor after the date hereof, in excess of $_______.
The Payor promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rate of ___% per annum.
Upon the commencement of any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar proceeding of any jurisdiction relating to the Payor, the unpaid
principal amount hereof shall become immediately due the payable without
presentment, demand, protest or notice of any kind in connection with this
Note.
This Note evidences certain permitted Intercompany Loans referred to
in the Amended and Restated Credit Agreement, dated as of March 26, 1998, among
Pool Energy Services Co., Pool Energy Holding, Inc., Pool Company, the lenders
party thereto from time to time, SBC Warburg Dillon Read Inc., as Arranger,
Swiss Bank Corporation, Stamford Branch, as Documentation Agent, and Credit
Lyonnais New York Branch, as Administrative Agent and as Collateral Agent (as
amended, restated, modified or supplemented from time to time, the "Credit
Agreement"), and is subject to the terms thereof, and shall be pledged by the
Payee pursuant to the Pledge Agreement (as defined in the Credit Agreement).
The Payor hereby acknowledges and agrees that the Collateral Agent pursuant to
and as defined in the Pledge Agreement, as in effect from time to time, may
exercise all rights provided therein with respect to this Note.
The Payee is hereby authorized to record all loans and advances made
by it to the Payor (all of which shall be evidenced by this Note), and all
repayments or
<PAGE> 163
EXHIBIT J
Page 2
prepayments thereof, in its books and records, such books and records
constituting prima facie evidence of the accuracy of the information contained
therein.
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS
THEREOF.
[NAME OF PAYOR]
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
[NAME OF PAYEE]
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
Pay to the order of:
- -----------------------------------
<PAGE> 164
EXHIBIT K
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (the "Certificate") is delivered to you
pursuant to Section 8.01(d) of the Amended and Restated Credit Agreement, dated
as of March 26, 1998 (as amended, restated, modified or supplemented from time
to time, the "Credit Agreement"), among Pool Energy Services Co., Pool Energy
Holding, Inc., Pool Company ("the Borrower"), the lenders from time to time
party thereto (the "Banks"), SBC Warburg Dillon Read Inc., as Arranger, Swiss
Bank Corporation, Stamford Branch, as Documentation Agent, and Credit Lyonnais
New York Branch, as Administrative Agent and as Collateral Agent for such
Banks. Terms defined in the Credit Agreement and not otherwise defined herein
are used herein as therein defined.
9. I am a duly elected, qualified and acting principal financial
officer of Pool Energy Services Co.
10. I have reviewed and am familiar with the contents of this
Certificate. I am providing this Certificate solely in my capacity as officer
of Pool Energy Services Co. The matters set forth herein are true to the best
of my knowledge, but I express no personal opinion as to any conclusions of law
or other legal matters.
11. I have reviewed the terms of the Credit Agreement and the other
Credit Documents and have made or caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of the Borrower
during the accounting period covered by the financial statements attached
hereto as Annex I. Such financial statements have been prepared in accordance
with the requirements of the Credit Agreement.
12. Attached hereto as Annex II are the computations showing
compliance with the covenants specified in Sections 9.07 through 9.11 of the
Credit Agreement. All such computations are true and correct, absent manifest
error.
5. At the end of [INSERT FISCAL QUARTER OR YEAR, AS THE CASE MAY
BE], PESCO and its Subsidiaries were in compliance with the provisions of
Section 9.04 relating to Funded Debt. With regard to Section 9.04(iii), at the
end of [INSERT FISCAL QUARTER OR YEAR, AS THE CASE MAY BE], the sum of (I) the
aggregate principal amount of all Capitalized Lease Obligations and (II) the
<PAGE> 165
EXHIBIT K
Page 2
aggregate principal amount of all purchase money Funded Debt amounts to
$______________. With regard to Section 9.04(v), at the end of [INSERT FISCAL
QUARTER OR YEAR, AS THE CASE MAY BE], Funded Debt consisting of guarantees by
PESCO or its Subsidiaries of Funded Debt of Excluded Subsidiaries amounts to
$_______________. With regard to Section 9.04(ix), at the end of [INSERT
FISCAL QUARTER OR YEAR, AS THE CASE MAY BE], additional Funded Debt
constituting overdraft lines of PESCO or its Subsidiaries amounts to
$________________. With regard to Section 9.04(x), at the end of [INSERT
FISCAL QUARTER OR YEAR, AS THE CASE MAY BE], additional unsecured Funded Debt
incurred by PESCO and its Subsidiaries amounts to $______________. With regard
to Sections 9.04(iv) and 9.05(viii), at the end of [INSERT FISCAL QUARTER OR
YEAR, AS THE CASE MAY BE], the aggregate outstanding principal amount of all
Intercompany Loans, excluding existing Intercompany Loans described on Schedule
VI to the Credit Agreement and excluding Intercompany Loans for the purpose of
consummating the Refinancing, Identified Acquisitions or Permitted Acquisitions
as provided in Section 9.05(xiii) of the Credit Agreement, made by the Credit
Parties to Foreign Subsidiaries amounts to $______________.
6. To the best of my knowledge, on the date hereof, no Default or
Event of Default has occurred and is continuing [, except as set forth below].
IN WITNESS WHEREOF, 1/ this Certificate has been executed on and as of
this ___ day of ___________, ____.
POOL ENERGY SERVICES CO.
By
--------------------------------
Name:
Title:
- --------------------
1/ TO BE DELIVERED PERIODICALLY, WITHIN 60 DAYS AFTER THE CLOSE OF THE FIRST
THREE QUARTERLY ACCOUNTING PERIODS OF PESCO AND 120 DAYS AFTER THE CLOSE OF EACH
FISCAL YEAR OF PESCO, IN EACH CASE IN ACCORDANCE WITH SECTION 8.01(d) OF THE
CREDIT AGREEMENT.
<PAGE> 166
ANNEX I to
COMPLIANCE CERTIFICATE
CONSOLIDATED FINANCIAL STATEMENTS
<PAGE> 167
ANNEX II to
COMPLIANCE CERTIFICATE
COMPLIANCE WORKSHEET
Test Period most recently ended on __________.
Part I.
Consolidated Interest Coverage Ratio
<TABLE>
<S> <C>
1. Consolidated Net Income for the Test Period most $______________
recently ended
2. Provision for taxes based on income for the Test Period $______________
most recently ended
3. Consolidated Interest Expense for the Test Period most $______________
recently ended
4. Losses on sales of assets (excluding sales in the $______________
ordinary course of business) and other extraordinary
losses for the Test Period most recently ended
5. Gains on sales of assets (excluding sales in the $______________
ordinary course of business) and other extraordinary
gains for the Test Period most recently ended
6. Consolidated EBIT (sum of Items 1 through 4 minus Item $______________
5)
7. Depreciation and amortization expense for the Test $______________
Period most recently ended
</TABLE>
<PAGE> 168
ANNEX II
Page 2
<TABLE>
<S> <C>
8. Dividends or distributions received from Excluded $______________
Subsidiaries during the Test Period most recently ended
(sum of (a), (b) and (c) below)
$______________
(a) dividends or distributions received from PIASA
$______________
(b) dividends or distributions received from Pool
Arabia Ltd. $______________
(c) dividends or distributions received from
Intairdril Oman, L.L.C.
9. Lease payments in respect of the San Angelo Lease for $______________
the Test Period most recently ended (net of sublease
payments received with respect thereto to the extent
not included in Consolidated Net Income)
10. Consolidated EBITDA (sum of Items 6, 7 and 8 minus Item $______________
9)
11. Consolidated Interest Expense for the Test Period most $______________
recently ended
12. Consolidated Interest Coverage Ratio (Item 10:Item 11) _________:1.00
13. Minimum Consolidated Interest Coverage Ratio pursuant 3.00:1.00
to Section 9.07
</TABLE>
<PAGE> 169
ANNEX II
Page 3
Part II.
Leverage Ratio
<TABLE>
<S> <C>
A. LEVERAGE RATIO FOR PURPOSES OF SECTION 9.09
1. Consolidated Funded Debt at [INSERT FISCAL QUARTER OR $______________
YEAR]
2. Consolidated EBITDA for the Test Period most recently $______________
ended, from Part I, Item 10
3. Leverage Ratio for purposes of calculations made :1.00
pursuant to Section 9.09 (Item 1:Item 2)
4. Maximum permitted Leverage Ratio pursuant to Section 3.25:1:00
9.09
</TABLE>
<PAGE> 170
ANNEX II
Page 4
B. LEVERAGE RATIO FOR PURPOSES OF CALCULATING EITHER THE APPLICABLE BASE
RATE MARGIN OR THE APPLICABLE EURODOLLAR RATE MARGIN
<TABLE>
<S> <C>
1. Consolidated Funded Debt at [INSERT FISCAL QUARTER OR $______________
YEAR]
2. Revolving Outstandings at [INSERT FISCAL QUARTER OR $______________
YEAR]
3. Average Revolving Outstandings for the most recently $______________
ended fiscal quarter of PESCO
4. Consolidated EBITDA for the Test Period most recently $______________
ended, from Part I, Item 10
5. Leverage Ratio for purposes of calculating either the ________:1.00
Applicable Base Rate Margin or the Applicable
Eurodollar Rate Margin ([Item B.1 minus Item B.2 plus
Item B.3]:Item B.4)
</TABLE>
<PAGE> 171
ANNEX II
Page 5
Part III.
Debt-to-Total Capital Ratio
<TABLE>
<S> <C>
1. Consolidated Funded Debt at end of [Fiscal Quarter or $______________
Fiscal Year]
2. Consolidated Net Worth at end of [Fiscal Quarter or $______________
Fiscal Year]
3. Total Capital (Item 1 plus Item 2) $______________
4. Debt-to-Total Capital Ratio (Item 1:Item 3) _________:1.00
5. Maximum Debt-to-Total Capital Ratio permitted pursuant
to Section 9.10 0.45:1.00
</TABLE>
<PAGE> 172
ANNEX II
Page 6
Part I.
Fixed Charge Coverage Ratio
<TABLE>
<S> <C>
1. Consolidated EBITDA for the Test Period most recently $______________
ended, from Part I, Item 10
2. Amount of cash income taxes paid, net of cash tax $______________
refunds, during the Test Period most recently ended
3. Item 1 less Item 2 $______________
4. Consolidated Interest Expense for the Test Period most $______________
recently ended
5. Capital Expenditures made by PESCO and its Subsidiaries $______________
during the Test Period most recently ended
6. Scheduled repayments of Funded Debt required to be made $______________
during the Test Period most recently ended
7. Fixed Charges (Item 4 plus Item 5 plus Item 6) $______________
8. Fixed Charge Coverage Ratio (Item 3:Item 7) _________:1.00
9. Minimum Fixed Charge Coverage Ratio pursuant to Section
9.08
a. If calculated for any Test Period up to and 1.25:1.00
ending on the last day of the fiscal quarter
ending March 31, 1998
b. If calculated for any Test Period up to and 1.40:1.00
ending on the last day of the fiscal quarter
ending September 30, 1998
</TABLE>
<PAGE> 173
ANNEX II
Page 7
<TABLE>
<S> <C>
c. If calculated for any Test Period up to and 1.55:1.00
ending on the last day of the fiscal quarter
ending March 31, 1999
d. If calculated for any Test Period ending on the 1.75:1.00
last day of the fiscal quarter ending June 30,
1999 or the last day of any fiscal quarter
thereafter
</TABLE>
<PAGE> 174
ANNEX II
Page 8
Part V.
Minimum Consolidated Net Worth
<TABLE>
<S> <C>
1. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the period from July
1, 1997 through December 31, 1997 $______________
2. The greater of Item 1 or $0.00 $______________
3. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the fiscal year of
PESCO ending December 31, 1998 $______________
4. The greater of Item 3 or $0.00 $______________
5. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the fiscal year of
PESCO ending December 31, 1999 $______________
6. The greater of Item 5 or $0.00 $______________
7. Cumulative Consolidated Net Income (plus net income of
Excluded Subsidiaries (after giving effect to
deductions for interests held by Persons other than
PESCO and its Subsidiaries)) for the fiscal year of
PESCO ending December 31, 2000 $______________
8. The greater of Item 7 or $0.00 $______________
</TABLE>
<PAGE> 175
ANNEX II
Page 9
<TABLE>
<S> <C>
9. Net cash proceeds (net of underwriting discounts and
commissions and other reasonable transaction costs
associated therewith), received by PESCO or any of its
Subsidiaries for any sale of equity on or after July 1,
1997 $______________
10. 50% of the sum of Item 2, Item 4, Item 6, Item 8 and
Item 9 $______________
11. 100% of the increase of Consolidated Net Worth of PESCO
and its Subsidiaries attributable to the consummation
of the Sea Mar Acquisition as determined in accordance
with the provisions of Section 9.11(z) $______________
12. Minimum permitted Consolidated Net Worth pursuant to
Section 9.11 ($175,000,000 plus Items 10 and 11) $______________
13. Consolidated Net Worth at end of [Fiscal Quarter or
Fiscal Year] $______________
</TABLE>
<PAGE> 176
EXHIBIT L
[FORM OF OFFICER'S CERTIFICATE
FOR PERMITTED ACQUISITIONS]
OFFICER'S CERTIFICATE
This Officer's Certificate (this "Certificate") is delivered to you
(i) in connection with [DESCRIBE PROPOSED ACQUISITION OR CONSTRUCTION,
RENOVATION OR REFURBISHMENT] 1/ (the "Permitted Acquisition") and (ii) pursuant
to Section [8.01(i)] [9.02(ix)(v)] [9.02(ix)(vi)] of the Amended and Restated
Credit Agreement, dated as of March __, 1998 (as amended, supplemented or
restated from time to time, the "Credit Agreement"), among Pool Energy Services
Co., Pool Energy Holding, Inc., Pool Company (the "Borrower"), the lenders from
time to time party thereto (the "Banks"), SBC Warburg Dillon Read Inc., as
Arranger, Swiss Bank Corporation, Stamford Branch, as Documentation Agent, and
Credit Lyonnais New York Branch, as Administrative Agent and as Collateral
Agent for the Banks. Capitalized terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.
1. I am a duly elected, qualified and acting principal financial
officer of the Borrower.
2. The Borrower hereby certifies to each Agent and each of the
Banks that the Pro Forma Leverage Ratio does not exceed the Applicable Pro
Forma Leverage Ratio, as demonstrated in the Annex I attached hereto.
3. The Person to be acquired (or whose assets are to be acquired)
pursuant to the Permitted Acquisition is, immediately prior to such
acquisition, engaged primarily in the Business or such assets constitute
Equipment.
4. To the best of my knowledge, no Default or Event of Default
exists on the date hereof or will exist immediately after giving effect to the
Permitted Acquisition.
5. To the best of my knowledge, all representations and warranties
contained in Section 7 of the Credit Agreement are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof (both before and after
giving effect to the Permitted Acquisition),
- --------------------
1/ If this Certificate applies to multiple Permitted Acquisitions, describe all
such Permitted Acquisitions and calculate all relevant amounts on an aggregate
basis. In addition, the tense of certain statements should be modified as
appropriate.
<PAGE> 177
EXHIBIT L
Page 2
unless such representation or warranty is stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date.
6. Any Liens or Funded Debt assumed or issued in connection with
the Permitted Acquisition are issued or assumed only by the Borrower.
For purposes of this Certificate, the term "consummation" or
"consummated" shall mean (i) in the case of a Permitted Acquisition which
consists of an acquisition of all or substantially all the assets of any
Person, an acquisition of the capital stock of any Person or the acquisition of
any Equipment of any Person, the date on which such purchase and sale is
completed, (ii) in the case of a Permitted Acquisition which consists of the
construction, renovation or refurbishment of Equipment pursuant to a contract,
agreement or undertaking with a Person other than PESCO or its Subsidiaries,
the date such construction, renovation or refurbishment is completed and, if
applicable, such Equipment has been delivered to PESCO or its Subsidiaries and
(iii) in the case of a Permitted Acquisition which consists of the
construction, renovation or refurbishment of Equipment by PESCO or its
Subsidiaries, the date such construction, renovation or refurbishment is
completed.
IN WITNESS WHEREOF, this Certificate has been executed this ___ day
of ___________, ____. 2/
POOL COMPANY
By
-----------------------
Name:
Title:
- --------------------
2/ To be delivered at each Applicable Notice Time or within 30 days after the
close of the relevant quarterly accounting period, as appropriate.
<PAGE> 178
ANNEX I TO EXHIBIT L
PERMITTED ACQUISITION WORKSHEET
Test Period most recently ended for which financial statements have been
delivered to the Agents: ___________.
Part I.
Consolidated EBITDA
<TABLE>
<S> <C>
1. Consolidated Net Income for the Test Period most
recently ended for which financial statements have
been delivered to the Agents $____________
2. Provision for taxes based on income for the Test
Period most recently ended for which financial
statements have been delivered to the Agents $____________
3. Consolidated Interest Expense for the Test Period most
recently ended for which financial statements have
been delivered to the Agents $____________
4. Losses on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
losses for the Test Period most recently ended for
which financial statements have been delivered to the $____________
Agents
5. Gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary
gains for the Test Period most recently ended for
which financial statements have been delivered to the $____________
Agents
6. Consolidated EBIT (sum of Items 1 through 4 minus Item 5) $____________
7. Depreciation and amortization expense for the Test
Period most recently ended for which financial
statements have been delivered to the Agents $____________
</TABLE>
<PAGE> 179
ANNEX I TO EXHIBIT L
Page 2
<TABLE>
<S> <C>
8. Dividends or distributions received from Excluded
Subsidiaries (sum of (a), (b) and (c) below) for such
period $____________
(a) dividends or distributions received from PIASA $____________
(b) dividends or distributions received from Pool
Arabia Ltd. $____________
(c) dividends or distributions received from
Intairdril Oman, L.L.C. $____________
9. (a) Lease payments in respect of the San Angelo
Lease for the Test Period most recently ended
for which financial statements have been
delivered to the Agents (net of sublease
payments received with respect thereto to the
extent not included in Consolidated Net Income) $____________
(b) Equity contributions made after the Effective
Date during such period to Excluded
Subsidiaries or Subsidiaries which are not $____________
Subsidiary Guarantors
10. Consolidated EBITDA (sum of Items 6, 7 and 8 minus
Items 9(a) and (b)) $____________
</TABLE>
<PAGE> 180
ANNEX I TO EXHIBIT L
Page 3
Part II.
Pro Forma Leverage Ratio
<TABLE>
<S> <C>
1. Pro Forma Consolidated Funded Debt
a. Consolidated Funded Debt as of the date hereof. $____________
b. Aggregate amount of Funded Debt (including
Revolving Loans) incurred, issued or assumed in
connection with the proposed Permitted Acquisition;
plus, to the extent not included in the amount of
Funded Debt described above, the purchase price (or
cost of construction, renovation or refurbishment) for
the proposed Permitted Acquisition (such purchase price
to exclude any portion thereof paid in common stock of
PESCO). $___________
c. The aggregate amount determined pursuant to clause
1.b. to Part II of Annex I on all previous Officer's
Certificates delivered to the Agents and the Banks with
respect to Permitted Acquisitions and Identified
Acquisitions (the "Prior Permitted Acquisition
Certificates") or with respect to Permitted
Acquisitions for which no Officer's Certificate is
required to be delivered, and in any event (i) which
have not been consummated as of the date hereof or (ii)
to the extent not included in the amount set forth in
clause 1.a. of this Part II above, which have been
consummated as of the date hereof; minus the amount
determined pursuant to clause 1.b. to Part II of Annex
I on all Prior Permitted Acquisition Certificates with
respect to (A) any non-consummated Permitted
Acquisition or Identified Acquisition which has been
abandoned or (B) any consummated Permitted Acquisition
or Identified Acquisition that the Borrower in good
faith does not anticipate funding with Revolving Loans. $___________
d. Pro Forma Consolidated Funded Debt (Item 1(a) plus
1(b), plus 1(c)) $___________
</TABLE>
<PAGE> 181
ANNEX I TO EXHIBIT L
Page 4
<TABLE>
<S> <C>
2. Pro Forma Consolidated EBITDA
a. Consolidated EBITDA from Part I, Item 10 $___________
[b. (i) EBITDA of the Person to be acquired pursuant
to the proposed Permitted Acquisition for the most
recently ended 12 month period for which financial
statements of such Person are available or, if such
financial statements are not available, a reasonable
estimate thereof; $___________
(ii) private company expenses of the Person to be
acquired for the most recently ended 12 month period
for which financial statements of such Person are
available; $___________
(iii) aggregate effect of any changes in
accounting which differ from those of PESCO [DESCRIBE]; $___________
(iv) sum of (i), (ii) and (iii)] 1/ $___________
[b. Amount of anticipated EBITDA to be obtained from
operation of the asset to be acquired, based upon a
written contract or such other agreements or
understandings (whether oral or written) which would
give rise to a reasonable expectation of such asset
generating revenue (the "Anticipated Agreement"), in
each case, for the 12 month period following
consummation of the proposed Permitted Acquisition.] 2/ $___________
c. Aggregate amount of EBITDA with respect to
Identified Acquisitions and Permitted Acquisitions
consummated prior to the date hereof from Part II, Item
2(b) on Prior Permitted Acquisition Certificates or
with respect to Permitted Acquisitions for which no
Officer's Certificate is required to be delivered;
minus (i) the
</TABLE>
- --------------------
1/ Insert this alternative clause 2.b. in the case of a Permitted Acquisition of
a business.
2/ Insert this alternative clause 2.b. in the case of a Permitted Acquisition of
Equipment. If there is no associated written contract, or other agreement or
understanding giving rise to expectations of revenue, the amount for this item
2.b. shall be zero.
<PAGE> 182
ANNEX I TO EXHIBIT L
Page 5
<TABLE>
<S> <C>
anticipated EBITDA for a Permitted Acquisition or
Identified Acquisition if (x) the construction,
renovation or refurbishment of such Permitted
Acquisition or Identified Acquisition has been
abandoned or (y) in the case of anticipated EBITDA
based on an Anticipated Agreement, the negotiations
with respect to definitive agreements evidencing the
Anticipated Agreement with respect to such Permitted
Acquisition or Identified Acquisition are terminated
and (ii) the excess, if any, of the anticipated EBITDA
based upon the Anticipated Agreement with respect to
any such Permitted Acquisition or Identified
Acquisition over the anticipated EBITDA based upon the
definitive agreement entered into with respect to such $___________
Anticipated Agreement.
d. Pro rata portion of amount in Item 2(c) above
determined by multiplying the amount from Part II, Item
2(b) of each Prior Permitted Acquisition Certificate by
a fraction (not greater than 1), the numerator of which
is the number of months elapsed from the date of
consummation of each Identified Acquisition and
Permitted Acquisition consummated prior to the date
that is the last day of the Test Period most recently
ended for which financial statements have been
delivered to the Agents, rounded to the nearest whole
month, and the denominator of which is 12. $___________
e. Item 2(c) minus item 2(d). $___________
f. Amount of anticipated EBITDA to be obtained for the
12-month period following consummation of the proposed
Permitted Acquisition with respect to Identified
Acquisitions and Permitted Acquisitions as to which
Prior Permitted Acquisition Certificates have been
submitted or with respect to Permitted Acquisitions for
which no Officer's Certificate is required to be
delivered, but in any event which have not been
consummated prior to the date hereof from Part II, Item
2(b) of such Prior Permitted Acquisition Certificates;
minus the anticipated EBITDA for a Permitted
Acquisition if (x) the construction, renovation or
refurbishment of such Permitted Acquisition or
Identified Acquisition has been abandoned or (y) in the
case of anticipated EBITDA based on an Anticipated
</TABLE>
<PAGE> 183
ANNEX I TO EXHIBIT L
Page 6
<TABLE>
<S> <C>
Agreement, the negotiations with respect to definitive
agreements evidencing the Anticipated Agreement with
respect to such Permitted Acquisition or Identified
Acquisition are terminated; and plus or minus, as the
case may be, the difference, if any, of the anticipated
EBITDA based upon the Anticipated Agreement with
respect to any such Permitted Acquisition or Identified
Acquisition and the anticipated EBITDA based upon the
definitive agreement entered into with respect to such
Anticipated Agreement. $___________
g. Pro Forma consolidated EBITDA (sum of items 2(a),
2(b), 2(e) and 2(f). $___________
3. Pro Forma Leverage Ratio (Item 1(d):Item 2(g)) _______:1.00
</TABLE>
<PAGE> 184
ANNEX II TO EXHIBIT L
<TABLE>
<CAPTION>
LIST OF PERMITTED ACQUISITIONS
<S> <C> <C> <C> <C>
Purchase Price/Cost of Revolving Loans Associated Date of
Permitted Acquisitions Construction or Renovation Incurred EBITDA Consummation
- ---------------------- -------------------------- -------- ------ ------------
</TABLE>
<PAGE> 1
[POOL ENERGY LOGO]
POOL ENERGY
SERVICES CO.
10375 Richmond Ave., Houston, Texas 77042 713/954-3000 NEWS RELEASE
- --------------------------------------------------------------------------------
POOL ENERGY SERVICES COMPLETES
SEA MAR ACQUISITION
Houston, TX, March 31, 1998 -- Pool Energy Services Co.(NASDAQ:PESC)
announced today that it has completed the previously announced acquisition of
Sea Mar, Inc., a privately-owned operator of offshore support vessels in the
Gulf of Mexico. The Company acquired all of the outstanding capital stock of Sea
Mar for approximately $76.1 million in cash (including an estimated $14.7
million in closing adjustments) and 1,538,462 common shares of the Company. The
Company has also agreed to pay additional cash consideration of up to $20
million that is contingent upon Sea Mar achieving certain performance targets in
1998 and 1999. Sea Mar has existing debt of approximately $16 million, which the
Company repaid immediately after closing.
Jim Jongeblood, Chairman, President and Chief Executive Officer said,
"We are pleased to have the well-regarded Sea Mar operation join forces with us
in the Gulf of Mexico, where the Company will now provide offshore support
vessel operations that complement its existing workover and drilling rig
services."
Pool Energy Services Co., headquartered in Houston, is a diversified
energy services company principally engaged in providing well-servicing,
workover and drilling rig services and related transportation services on land
and offshore in the U.S. and selected international markets.
Contact: David Oatman, (713) 954-3316
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[POOL ENERGY LOGO]
POOL ENERGY
SERVICES CO.
10375 Richmond Ave., Houston, Texas 77042 713/954-3000 NEWS RELEASE
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POOL ENERGY SERVICES ANNOUNCES
$150 MILLION SENIOR SUBORDINATED NOTES OFFERING
Houston, TX, April 1, 1998 - Pool Energy Services Co. (NASDAQ:PESC)
announced today the placement of a $150 million offering of Senior Subordinated
Notes due 2008. The Notes, issued at par and noncallable for five years, carry a
coupon of 8 5/8%. Proceeds from the offering were used to fund the cash portion
of the purchase price of Sea Mar, Inc., repay existing debt of Sea Mar and repay
approximately $56 million of borrowings under Pool's revolving line of credit.
The Notes were being issued in a Rule 144A private offering. The Notes
have not been registered under the Securities Act of 1993 and may not be offered
or sold in the United States in the absence of registration or an applicable
exemption from the registration requirements.
Jim Jongeblood, Chairman, President and Chief Executive Officer said,
"The successful completion of this offering provides long-term capital to help
finance the previously announced acquisition of Sea Mar and enhances our ability
to continue the pursuit of growth opportunities."
Pool Energy Services Co., headquartered in Houston, is a diversified
energy services company principally engaged in providing well-servicing,
workover and drilling rig services and related transportation services on land
and offshore in the U.S. and selected international markets.
Contact: David Oatman, (713) 954-3316
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