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As filed with Securities and Exchange Commission on October 28, 1999
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PATTERSON ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 75-2504748
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4510 Lamesa Highway
Snyder, Texas 79549
(915) 573-1104
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
Cloyce A. Talbott
4510 Lamesa Highway
Snyder, Texas 79549
(915) 573-1104
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Thomas H. Maxfield, Esq.
Baker & Hostetler LLP
303 East 17th Avenue, Suite 1100
Denver, Colorado 80203-1264
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of this Registration Statement
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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======================================================================================================================
Title of each class of Proposed maximum Proposed maximum
Securities to be Amount to be offering price per aggregate offering Amount of
registered registered(1) unit(2) price(3) registration fee
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities(4)
Preferred Stock,
par value $.01 per
Share(5)
Depositary Shares(6)
Warrants(7)
Common Stock,
par value $.01 per
share(8)
Total.......... $150,000,000 100% $150,000,000 $41,700
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(1) In U.S. dollars or the equivalent thereof in one or more foreign currencies,
currency units or composite currencies.
(2) The proposed maximum initial offering price per unit will be determined from
time to time by the Registrant.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). In no event will the aggregate initial offering price
of all securities offered from time to time pursuant to this Registration
Statement exceed $150,000,000 or the equivalent thereof in foreign currencies.
Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(4) Subject to Footnote (3), there is being registered hereunder an
indeterminate principal amount of debt securities as may be issued from time to
time by the Registrant. If any such debt securities are issued at an original
issue discount, then the offering price shall be in such greater principal
amount as shall result in an aggregate initial offering price of up to
$150,000,000.
(5) Subject to Footnote (3), there is being registered hereunder an
indeterminate number of shares of preferred stock as may be issued from time to
time by the Registrant.
(6) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of depositary shares as may be sold from time to time by
the Registrant.
(7) Subject to Footnote (3), there is being registered hereunder an
indeterminate number of warrants to purchase debt securities, preferred stock or
common stock as may be sold from time to time by the Registrant.
(8) Subject to Footnote (3), there is being registered hereunder an
indeterminate number of shares of common stock as may be (a) issued from time to
time by the Registrant, including common stock issuable upon conversion or
exchange of debt securities or preferred stock or upon exercise of warrants; and
(b) sold by or for the account of selling stockholders.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these Securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these Securities and we are not soliciting offers to buy these
Securities in any state where the offer is not permitted.
Prospectus subject to completion, October 28, 1999
[Insert Logo]
$150,000,000
PATTERSON ENERGY, INC.
DEBT SECURITIES PREFERRED STOCK WARRANTS COMMON STOCK
DEPOSITARY SHARES
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The following are types of Securities that Patterson may offer and sell
from time to time under this prospectus:
- debt securities consisting of notes, debentures, or other
evidences of indebtedness, in one or more series which may be
senior debt securities, senior subordinated debt securities or
subordinated debt securities;
- shares of preferred stock, $.01 par value per share, in one or
more series;
- warrants to purchase debt securities, preferred stock or
common stock;
- shares of common stock, $.01 par value per share; and
- depositary shares.
We will describe the specific terms of the particular Securities being
offered in an accompanying prospectus supplement.
Also, shares of common stock may be offered from time to time by our
stockholders. Any Selling Stockholders will be identified, and the number of
shares to be offered by them will be set forth in a supplement to this
prospectus.
The common stock is traded on the Nasdaq National Market under the
symbol "PTEN." On October 26, 1999, the closing price of the common stock on the
Nasdaq National Market was $14.75 per share. Each prospectus supplement will
indicate if the Securities offered thereby will be listed on any securities
exchange.
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You should carefully review "Risk Factors" beginning on page 6 for a
discussion of matters to consider when investing in Securities of Patterson.
This prospectus may not be used to consummate sales of Securities
unless accompanied by a prospectus supplement.
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The Securities and Exchange Commission and state securities regulators
have not approved or disapproved these Securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
__________, 1999
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS
SUPPLEMENT, IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND THE
ACCOMPANYING PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PATTERSON
OR ANY UNDERWRITER OR DEALER. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE FACTS
SET FORTH IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT, OR IN
THE AFFAIRS OF PATTERSON SINCE THE DATES HEREOF. THIS PROSPECTUS AND THE
ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
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Page
<S> <C>
Forward Looking Statements....................................................2
Incorporation of Certain Documents by Reference...............................3
Patterson.....................................................................5
Risk Factors..................................................................6
Use of Proceeds..............................................................11
Ratio of Earnings To Fixed Charges...........................................11
Selling Stockholders ........................................................11
Description of Debt Securities...............................................12
Description of Preferred Stock...............................................23
Description of Depositary Shares.............................................25
Description of Warrants......................................................28
Description of Capital Stock.................................................30
Plan of Distribution.........................................................33
Legal Matters................................................................35
Experts......................................................................35
Where You Can Find More Information..........................................35
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FORWARD LOOKING STATEMENTS
Some statements contained in this prospectus, any accompanying
prospectus supplement, and the documents incorporated by reference are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
statements include, without limitation, statements relating to the drilling and
completion of wells, well operations, utilization rates of drilling rigs, oil
and natural gas prices, reserve estimates (including related future net revenue
and present value estimates), business strategies and other plans and objectives
of our management for future operations and activities and other such matters.
The words "believes," "budgeted," "plan," "plans," "estimates," "expects,"
"intends," "strategy," "project," "will," "could," "may" and similar expressions
identify forward-looking statements. Actual results could differ materially from
those expressed in the forward-looking statements. Factors that could cause such
a difference include:
- Swings in oil and natural gas prices;
- Swings in demand for contract drilling services;
- Shortages of drill pipe and other drilling equipment;
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- Shortages of qualified drilling personnel;
- Effects of competition from other drilling contractors;
- Occurrence of operating hazards and uninsured losses; and
- Governmental regulation, among others described under "Risk
Factors" below.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately by us with the SEC. The
information incorporated by reference is considered to be part of this
prospectus, except for any information that is superseded by information that is
included directly in this document.
This prospectus includes by reference the documents listed below that
we have previously filed with the SEC and that are not included in or delivered
with this document. They contain important information about our company and its
financial condition.
(1) Patterson's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed with the SEC on March 31, 1998;
(2) Patterson's Current Report on Form 8-K dated March 1, 1999, filed
with the SEC on May 6, 1999;
(3) Patterson's Current Report on Form 8-K dated April 30, 1999, filed
with the SEC on April 22, 1999;
(4) Patterson's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999, filed with the SEC on May 14, 1999;
(5) Patterson's Current Report on Form 8-K dated May 24, 1999, filed
with the SEC on June 15, 1999;
(6) Patterson's Current Report on Form 8-K dated July 29, 1999, filed
with the SEC on August 31, 1999;
(7) Patterson's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1999, filed with the SEC on August 16, 1999; and
(8) The description of Patterson's common stock contained in the
Registration Statement on Form 8-A filed with the SEC on November 2, 1993.
We incorporate by reference additional documents that we may file with
the SEC between the date of this prospectus and the date of the closing of this
offering. These documents include periodic reports, such as Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You can obtain any of the documents incorporated by reference in this
document from us without charge, excluding any exhibits to those documents
unless the exhibit is specifically incorporated by reference as an exhibit to
this prospectus. You can obtain documents incorporated by reference in this
prospectus by requesting them in writing or by telephone from us at the
following address:
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Jonathan D. (Jody) Nelson
Chief Financial Officer
Patterson Energy, Inc.
4510 Lamesa Highway
P.O. Box 1416
Snyder, Texas 79550
(915) 573-1104
We have not authorized anyone to give any information or make any
representation about us that is different from, or in addition to, that
contained in this prospectus or in any of the materials that we have
incorporated by reference into this document. Therefore, if anyone does give you
information of this sort, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to purchase, the
Securities offered by this document is unlawful, or if you are a person to whom
it is unlawful to direct these types of activities, then the offer presented in
this document does not extend to you. The information contained in this document
speaks only as of the date of this document, unless the information specifically
indicates that another date applies.
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PATTERSON
Patterson is one of the leading providers of domestic land drilling
services to major and independent oil and natural gas companies. Formed in 1978
and reincorporated in 1993 as a Delaware corporation, Patterson conducts
operations in Texas, New Mexico, Oklahoma, Louisiana and Utah. We have a
drilling fleet of 119 rigs, 114 of which are currently operable. We are also
engaged in the development, exploration, acquisition and production of oil and
natural gas and provide contract drilling fluid services to other oil and
natural gas operators.
The Company has established a reputation for reliable, high quality
drilling equipment and well-trained crews. We continually seek to modify and
upgrade our equipment to maximize the performance and capabilities of our
drilling rig fleet, which we believe provides us with a competitive advantage.
Additionally, we have the in-house capability to design, manufacture, repair and
modify our drilling rigs. Of our drilling rigs, 93 are capable of drilling to
depths of 10,000 feet and greater, including 25 that are capable of drilling to
15,000 feet and greater. During the first six months of 1999, we drilled 278
wells for 105 non-affiliated customers maintaining an average utilization rate
of 34%.
Our oil and natural gas activities are designed to complement our land
drilling operations and diversify our overall business strategy. These
activities are primarily focused in mature producing regions in the Austin Chalk
Trend, the Permian Basin and South Texas. Oil and natural gas operations
comprised approximately 5.9% of our consolidated operating revenues in the first
six months of 1999. At December 31, 1998, our proved developed reserves were
approximately 1.5 million BOE and had a present value (discounted at 10% before
income taxes) of estimated future net revenues of approximately $5.4 million.
Our drilling fluid services are provided to operators of oil and gas
wells located in the Company's areas of operation. Operating revenues derived
from these activities constituted approximately 8.3% of Patterson's consolidated
operating revenues for the first six months of 1999. We believe that these
services integrate well with our other core operating activities. The drilling
fluid operations were added during 1998 with our acquisition of Lone Star Mud,
Inc., during January and Tejas Drilling Fluids, Inc. in September.
Our headquarters are located at 4510 Lamesa Highway, Snyder, Texas, and
our telephone number at that address is (915) 573-1104. We also have small
offices in Austin, Houston, Midland, San Angelo, Kilgore and Corpus Christi,
Texas and Oklahoma City, Oklahoma and Hobbs, New Mexico, and 15 yard facilities
variously located in our areas of operations.
You can obtain additional information about us in the reports and other
documents incorporated by reference in this prospectus. See "Incorporation of
Certain Documents by Reference" and "Where You Can Find More Information."
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RISK FACTORS
Ownership of Securities involves certain risks. In determining whether
to purchase Securities, you should carefully consider the following risk factors
and other information contained in or incorporated by reference in this
prospectus or in any applicable prospectus supplement.
RISKS RELATED TO PATTERSON'S BUSINESS GENERALLY
PATTERSON IS DEPENDENT ON THE OIL AND NATURAL GAS INDUSTRY AND MARKET PRICES FOR
OIL AND NATURAL GAS. DECLINES IN OIL AND NATURAL GAS PRICES HAVE ADVERSELY
AFFECTED PATTERSON'S OPERATIONS.
Patterson's revenue, profitability and rate of growth are substantially
dependent upon prevailing prices for oil and natural gas. In recent years, oil
and natural gas prices and, therefore, the level of drilling, exploration,
development and production, have been extremely volatile. Prices are affected by
market supply and demand factors as well as international military, political
and economic conditions and the ability of the Organization of Petroleum
Exporting Countries to set and maintain production and prices. All of these
factors are beyond our control. Low level commodity prices beginning in the
fourth quarter of 1997 and continuing into mid-1999 have materially adversely
affected our operations. We expect oil and natural gas prices to continue to be
volatile and to effect our financial condition and operations and ability to
access sources of capital.
INDUSTRY CONDITIONS FOR CONTRACT DRILLING SERVICES HAVE BEEN POOR FOR MUCH OF
THE TIME SINCE MID-1982.
The contract drilling business experienced increased demand for
drilling services from 1995 through the third quarter of 1997 due to stronger
oil and natural gas prices. However, except for that period and other occasional
upturns, the market for onshore contract drilling services has generally been
depressed since mid-1982. Since this time and except during the occasional
upturns, there have been substantially more drilling rigs available than
necessary to meet demand in most operating and geographic segments of the
domestic drilling industry. As a result, drilling contractors have had
difficulty sustaining profit margins.
In addition to adverse effects that future declines in demand could
have on Patterson, ongoing movement of drilling rigs from region to region or
reactivation of onshore drilling rigs or new construction of drilling rigs could
adversely effect utilization rates and pricing, even in an environment of
stronger oil and natural gas prices and increased drilling activity. We cannot
predict either the future level of demand for our contract drilling services or
future conditions in the contract drilling business. Notwithstanding the
significant improvement in oil and natural gas prices over the past few months,
the demand for contract drilling services, although improving, remains
relatively weak. There can be no assurance that the demand for contract drilling
services will increase proportionally with the current higher prices or of the
duration of the higher commodity prices.
SHORTAGES OF DRILL PIPE AND OTHER DRILLING EQUIPMENT COULD ADVERSELY AFFECT
PATTERSON'S DRILLING OPERATIONS.
The increase in domestic drilling demand from mid-1995 through the
third quarter of 1997 and related increase in contract drilling activity
resulted in a shortage of drill pipe in the industry. This shortage caused the
price of drill pipe to increase significantly and required that orders for new
drill pipe be placed at least one year in advance. The price increase and delay
in delivery of drill pipe caused Patterson to substantially increase capital
expenditures in its contract drilling segment. A return to higher demand levels
for contract drilling services could reinstate the problems associated with
drill pipe
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shortages and could cause shortages in other drilling rig parts. Severe
shortages could impair Patterson's ability to obtain the equipment required for
its contract drilling operations.
THE CONTRACT DRILLING INDUSTRY IN WHICH PATTERSON OPERATES IS HIGHLY
COMPETITIVE.
The inability to compete effectively in the contract drilling industry
would adversely impact Patterson's operations. Price is generally the most
important competitive factor. Other competitive factors include the availability
of drilling equipment and experienced personnel at or near the time and place
required by customers, the reputation of the drilling contractor and its
relationship with existing customers. We believe that we compete favorably with
respect to all of these factors. Competition is usually on a regional basis,
although drilling rigs are mobile and can be moved from one region to another in
response to increased demand. An oversupply of drilling rigs in any region may
result. Demand for land drilling equipment is also dependent on the exploration
and development budgets of oil and natural gas companies, which are in turn
influenced primarily by the financial condition of such companies, by general
economic conditions, by prices of oil and natural gas, and from time to time
political considerations and policies. It is not practical to estimate the
number of contract drilling competitors of Patterson, some of which have
substantially greater resources than Patterson. Also, in recent years, many
drilling companies have consolidated or merged with other companies. Although
this consolidation has decreased the total number of competitors, Patterson
believes the competition for drilling services will continue to be intense.
There is also substantial competition for the acquisition of oil and
natural gas leases suitable for exploration and for the hiring of experienced
personnel. Patterson's competitors in the exploration, development and
production segment of its operations include major integrated oil and natural
gas companies, numerous independent oil and natural gas companies, drilling and
production purchase programs and individual producers and operators. Patterson's
ability to increase its holdings of oil and natural gas reserves in the future
is directly dependent upon its ability to select, acquire and develop suitable
prospects in competition with those companies. Many competitors have financial
resources, staff, facilities and other resources significantly greater than
those of Patterson.
LABOR SHORTAGES COULD ADVERSELY AFFECT PATTERSON'S DRILLING OPERATIONS.
The increase in domestic drilling demand from mid-1995 through the
third quarter of 1997 and related increase in contract drilling activity caused
a shortage of qualified drilling rig personnel in the industry. This increase
adversely impaired our ability to attract and retain sufficient qualified
personnel and to market and operate our drilling rigs. Further, the labor
shortages resulted in wage increases, which impacted our operating margins. A
return to higher demand levels for contract drilling services could reinstate
the problems associated with labor shortages.
PATTERSON HAS SIGNIFICANT BANK-DEBT; FAILURE TO REPAY COULD RESULT IN
FORECLOSURE ON DRILLING RIGS.
Patterson has a bank term loan with a remaining principal balance of
$51.4 million at June 30, 1999. All of Patterson's contract drilling rigs are
pledged as collateral on the loan and the remainder of its assets are subject to
a negative pledge. The loan is payable in monthly principal installments of
$714,000 until January 1, 2001, when the loan matures and the balance of the
note becomes due and payable. A decline in general economic conditions in the
oil and gas industry could adversely affect Patterson's ability to repay the
loan. Failure to repay could, at the bank's election, result in acceleration of
the maturity date of the loan and foreclosure on the drilling rigs.
Additionally, the loan agreement contains a number of covenants, including
financial covenants, the failure of which to satisfy could also cause
acceleration of the maturity date and require immediate repayment.
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CONTINUED GROWTH THROUGH RIG ACQUISITIONS IS NOT ASSURED.
Patterson substantially increased its drilling rig fleet over the
four-year period ending in the first quarter of 1998 through strategic
acquisitions. Although the land drilling industry has experienced significant
consolidation over the past couple of years, Patterson believes that significant
acquisition opportunities are still available. However, there can be no
assurance that suitable acquisitions can be found, and we are likely to continue
to face intense competition from other companies for available acquisition
opportunities.
There can be no assurance that Patterson will have sufficient capital
resources to complete acquisitions, that acquisitions can be completed on terms
acceptable to us or that any completed acquisition would improve Patterson's
financial condition, results of operation, business or prospects in any material
manner. In fact, Patterson may incur substantial indebtedness to finance future
acquisitions and also may issue equity securities or convertible securities in
connection with any such acquisitions. Additional debt service requirements
could represent a significant burden on our results of operations and financial
condition and the issuance of additional equity or convertible shares could be
dilutive to our existing stockholders. Also, continued growth could strain
Patterson's management, operations, employees and resources.
PATTERSON'S OPERATIONS ARE SUBJECT TO OPERATING HAZARDS AND UNINSURED RISKS.
Contract drilling and oil and natural gas activities are subject to a
number of risks and hazards. These could cause serious injury or death to
persons, suspension of drilling operations, serious damage to equipment or
property of others, and damage to producing formations in surrounding areas. Our
operations could also cause environment damage, particularly through oil spills,
gas leaks, discharges of toxic gases or extensive uncontrolled fires. In
addition, we could become subject to liability for reservoir damages. The
occurrence of a significant event, including pollution or environmental damage,
could materially affect our operations and financial condition.
We believe we are adequately insured or indemnified against normal and
foreseeable risks in our operations in accordance with industry standards.
However, such insurance or indemnification may not be adequate to protect
Patterson against liability from all consequences of well disasters, extensive
fire damage or damage to the environment. There is no assurance that Patterson
will be able to maintain adequate insurance in the future at rates it considers
reasonable or that any particular types of coverage will be available. In
addition to insurance, Patterson generally seeks to obtain indemnity agreements
whenever possible from its customers requiring them to hold Patterson harmless
if production or reservoir damage occurs. However, even when we are successful
in obtaining contractual indemnification, the customer may not maintain adequate
insurance to support such indemnification.
VIOLATIONS OF ENVIRONMENTAL LAWS AND REGULATIONS COULD MATERIALLY ADVERSELY
AFFECT PATTERSON'S OPERATIONS.
Patterson's operations are subject to numerous domestic laws and
regulations that relate directly or indirectly to the drilling of oil and
natural gas wells, including laws and regulations controlling the discharge of
materials into the environment, requiring removal and clean-up under certain
circumstances, or otherwise relating to the protection of the environment. Laws
and regulations protecting the environment have generally become more stringent
in recent years, and may in certain circumstances impose strict liability,
rendering a person liable for environmental damage without regard to negligence
or to the fault on the part of such person. Such laws and regulations may expose
us to liability for the
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conduct of, or conditions caused by, others, or for our acts that were in
compliance with all applicable laws at the time such acts were performed.
Although we generally have been able to obtain some degree of
contractual indemnification from our customers in most of our day rate drilling
contracts against pollution and environmental damages, there is no assurance
that Patterson will be able to enforce the indemnification in all instances,
that the customer will be financially able in all cases to comply with its
indemnity obligations, or that Patterson will be able to obtain such
indemnification agreements in the future. No such indemnification is typically
available for turnkey contracts. While we also maintain insurance coverage
against certain environmental liabilities, including pollution caused by sudden
and accidental oil spills, we cannot assure that we will continue to be able to
secure or carry this insurance or, if Patterson were able to do so, that the
coverage would be adequate to cover the liabilities.
SOME OF PATTERSON'S CONTRACT DRILLING SERVICES ARE DONE UNDER TURNKEY CONTRACTS,
WHICH ARE FINANCIALLY RISKY.
A portion of Patterson's contract drilling is done under turnkey
contracts, which involve substantial risks. Under turnkey drilling contracts,
Patterson contracts to drill a well to a contract depth under specified
conditions for a fixed price. The risks to us under these types of drilling
contracts are substantially greater than on a well drilled on a daywork basis
since we assume most of the risks associated with the drilling operations
generally assumed by the operator of the well in a daywork contract, including
risk of blowout, machinery breakdowns and abnormal drilling conditions.
Accordingly, if severe drilling problems are encountered in drilling wells under
a turnkey contract, Patterson could suffer substantial losses associated with
that contract. Generally, the weaker the demand for our drilling services, the
higher the percentage of our turnkey contracts. For the years ended December 31,
1997 and 1998, and the six months ended June 30, 1999, the percentage of our
contract drilling revenues attributable to: turnkey contracts was 3.0%, 12.0%,
and 19%, respectively.
ESTIMATES OF PATTERSON'S OIL AND NATURAL GAS RESERVES ARE UNCERTAIN.
Estimates of our proved developed reserves and future net revenues are
based on engineering reports prepared by an independent petroleum engineer based
upon a review of production histories and other geologic, economic, ownership
and engineering data provided by Patterson. These estimates are based on several
assumptions that the SEC requires oil and natural gas companies to use,
including, for example, constant oil and natural gas prices. Such estimates are
inherently imprecise indications of future net revenues. Actual future
production, revenues, taxes, production costs and development costs may vary
substantially from those assumed in the estimates. Any significant variance
could materially affect the estimates. In addition, our reserves might be
subject to upward or downward adjustment based on future production, results of
future exploration and development, prevailing oil and natural gas prices and
other factors.
RISKS RELATED TO PATTERSON'S OPERATIONS
THE LOSS OF SERVICES OF KEY OFFICERS COULD HURT PATTERSON'S OPERATIONS.
Patterson is highly dependent on its executive officers and key
employees. The unexpected loss of the services of any of these individuals,
particularly Cloyce A. Talbott or A. Glenn Patterson, Chief Executive Officer
and the President, respectively, could have a detrimental affect on Patterson.
Patterson has no employment agreements with any of its executive officers. We
maintain key man life insurance on the lives of Messrs. Talbott and Patterson in
the amount of $3 million each.
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ANTI-TAKEOVER MEASURES IN PATTERSON'S CHARTER DOCUMENTS AND UNDER STATE LAW
COULD DISCOURAGE AN ACQUISITION OF PATTERSON AND THEREBY AFFECT THE RELATED
PURCHASE PRICE.
Patterson, as a Delaware corporation, is subject to the Delaware
General Corporation Law, including Section 203, an anti-takeover law enacted in
1988. Patterson has also enacted certain anti-takeover measures, including a
stockholders rights plan. In addition, our Board of Directors has the authority
to issue up to one million shares of preferred stock and to determine the price,
rights (including voting rights), conversion ratios, preferences and privileges
of that stock without further vote or action by the holders of the common stock.
As a result of these measures and others, potential acquirers of Patterson may
find it more difficult or be discouraged from attempting to effect an
acquisition transaction with us, thereby possibly depriving holders of Patterson
securities of certain opportunities to sell or otherwise dispose of such
securities at above-market prices pursuant to their transactions.
PATTERSON HAS PAID NO DIVIDENDS ON ITS COMMON STOCK AND HAS NO PLANS TO PAY
DIVIDENDS IN THE FORESEEABLE FUTURE.
Patterson has not declared or paid cash dividends on its common stock
in the past and does not expect to declare or pay any cash dividends on its
common stock in the foreseeable future. The terms of our existing bank term loan
prohibit payment of dividends by Patterson without the prior written consent of
the bank.
THERE IS NO ASSURANCE THAT A PUBLIC MARKET WILL DEVELOP FOR CERTAIN OF THE
SECURITIES WHICH MAY BE OFFERED AND SOLD UNDER THIS PROSPECTUS.
Any debt securities, preferred stock, depository shares and warrants
sold under this prospectus will be new issues of Securities of Patterson with no
established trading market. Underwriters to whom Patterson sells any of those
Securities for public offering and sale may make a market in such Securities,
but the underwriters will not be obligated to do so and may discontinue any
market-making at any time without notice. Consequently, no assurance can be
given as to the liquidity of any secondary market for any of those Securities.
PARTICIPATION BY PATTERSON DIRECTORS AND OFFICERS IN OIL AND NATURAL GAS
PROSPECTS COULD CREATE CONFLICTS OF INTEREST.
Certain of Patterson's directors and executive officers and their
respective affiliates have participated and may continue to participate from
time to time in oil and natural gas prospects and properties in which Patterson
has an interest. Conflicts of interest may arise between such persons and
Patterson as to the advisability of conducting drilling and recompletion
activities on these properties. Of the 134 wells operated by Patterson at June
30, 1999, Patterson's directors, officers and/or their respective affiliates
were working interest owners in approximately 96 wells.
PATTERSON BOARD MAY ISSUE PREFERRED STOCK WITH RIGHTS AND PREFERENCES ADVERSE TO
COMMON STOCK.
Patterson has a class of authorized preferred stock. Patterson's Board
of Directors, without stockholder approval, may issue shares of the preferred
stock with rights and preferences adverse to the voting power or other rights of
the holders of the Common Stock. Patterson has not issued any shares of
preferred stock. However, as of June 30, 1999, an aggregate of 325,170 shares of
preferred stock had been reserved for issuance upon exercise of the Rights
described under "Description of Capital Stock-Stockholder Rights Plan," below.
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USE OF PROCEEDS
Except as may otherwise be described in the prospectus supplement
relating to an offering of Securities, we will use the net proceeds from the
sale of the Securities offered under this prospectus and the prospectus
supplement for future acquisitions and for other general corporate purposes,
including working capital, investment in subsidiaries and payment or partial
payment of existing indebtedness. We will determine any specific allocation of
the net proceeds of an offering of Securities to a specific purpose at the time
of the offering and will describe the allocation in the related prospectus
supplement.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to
fixed charges (unaudited) for the periods shown:
<TABLE>
<CAPTION>
Six months
Ended Year ended December 31,
---------------- ---------------------------------------------------
June 30, 1999 1998 1997 1996 1995 1994
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges (1) (2) .96:1 14.03:1 1.91:1 2.71:1 8.66:1
</TABLE>
- ---------
(1) For purposes of computing the ratio of earnings to fixed charges, "earnings"
consist of pretax income from continuing operations plus fixed charges
(excluding capitalized interest). "Fixed charges" represent interest
incurred (whether expensed or capitalized), amortization of debt expense,
and that portion of rental expense on operating leases deemed to be the
equivalent of interest. No preferred stock was outstanding during any of the
periods presented and, as a result, the ratio of earnings to combined fixed
charges and preferred stock dividends was the same as the ratio of earnings
to fixed charges.
(2) There was a deficiency of $10.4 million in the ratio of earnings to fixed
charges for the six months ended June 30, 1999.
SELLING STOCKHOLDERS
An unspecified number of shares of common stock may be offered and sold
under this prospectus by selling stockholders. Identification of any such
selling stockholders will be contained in the applicable prospectus supplement.
Patterson will not receive proceeds of any sale of shares by selling
stockholders.
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DESCRIPTION OF DEBT SECURITIES
The debt securities may be issued from time to time in one or more
series under an Indenture (as defined below) between Patterson, as issuer, and
the trustee specified in the applicable prospectus supplement. The following
summaries of certain provisions of the debt securities do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture applicable to a particular series of
debt securities, including the definitions therein of certain terms. A copy of
the form of the Indenture is included as an exhibit to the Registration
Statement of which this prospectus is a part. The following summary is qualified
in its entirety by reference to such exhibit. See "Where You Can Find More
Information." Article and Section references used herein are references to the
Indenture. Capitalized terms not otherwise defined in this Description of Debt
Securities will have the meaning given in the Indentures. Whenever particular
Sections, Articles or defined terms in the Indenture are referred to, it is
intended that those Sections, Articles or defined terms shall be incorporated
herein by reference.
The debt securities will constitute either indebtedness designated as
Senior Indebtedness ("Senior Debt Securities"), indebtedness designated as
Senior Subordinated Indebtedness ("Senior Subordinated Debt Securities") or
indebtedness designated as Subordinated Indebtedness ("Subordinated Debt
Securities"). Senior Debt Securities, Senior Subordinated Debt Securities and
Subordinated Debt Securities will each be issued under a separate indenture
(individually an "Indenture" and collectively the "Indentures") to be entered
into prior to the issuance of the debt securities. The Indentures will be
substantially identical, except for provisions relating to subordination. See
"--Subordination of Senior Subordinated Debt Securities and Subordinated Debt
Securities," below. There will be a separate trustee under each Indenture.
Information regarding the trustee under an Indenture will be included in any
prospectus supplement relating to the debt securities issued thereunder.
The following description sets forth certain general terms and
provisions of the debt securities to which any prospectus supplement may relate.
The particular terms of the debt securities and the extent to which such general
provisions may apply will be described in a prospectus supplement relating to
such debt securities.
GENERAL
The debt securities offered pursuant to this Prospectus will be limited
to $150,000,000 aggregate principal amount or (i) its equivalent (based on the
applicable exchange rate at the time of sale), if the debt securities are issued
with principal amounts denominated in one or more foreign currencies, composite
currencies or currency units, or (ii) such greater amount, if the debt
securities are issued at an original issue discount, as shall result in
aggregate proceeds of $150,000,000 to Patterson. The Indentures provide that
additional debt securities may be issued thereunder up to the aggregate
principal amount authorized from time to time by Patterson's Board of Directors.
So long as a single trustee is acting for the benefit of the holders of all the
debt securities offered hereby and any such additional debt securities issued
under the Indentures, the debt securities and any such additional debt
securities are herein collectively referred to as the "Indenture Securities."
The Indentures also provide that there may be more than one trustee under the
Indentures, each with respect to one or more different series of Indenture
Securities. At any time when two or more trustees are acting, each with respect
to only certain series, the term "Indenture Securities" as used herein means the
one or more series with respect to which each respective trustee is acting and
the powers and the trust obligations of each such trustee as described herein
shall extend only to the one or more series of Indenture Securities for which it
is acting as trustee. If there is more than one trustee acting for different
series of Indenture Securities, then those Indenture Securities (whether of one
or more than one series) for which each trustee is acting would be treated as if
issued under a separate Indenture.
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The applicable prospectus supplement will set forth a description of
the particular series of debt securities being offered thereby, including but
not limited to (Indentures, Section 3.1):
(1) the designation or title of such debt securities;
(2) any limit on the aggregate principal amount of such debt
securities;
(3) the percentage of their principal amount at which such debt
securities will be offered;
(4) the date or dates on which the principal of such debt securities
will be payable and on which such debt securities will mature;
(5) the rate or rates (which may be fixed or variable) at which such
debt securities shall bear interest, or the method of determination of such rate
or rates at which such debt securities shall bear interest, if any;
(6) the date or dates from which interest will accrue or the method of
determination of such date or dates, and the date or dates on which any such
interest shall be payable;
(7) whether such debt securities will be secured;
(8) the currencies or currency units in which such debt securities are
issued or payable;
(9) the terms for redemption, extension or early repayment of such debt
securities, if any;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which such debt securities are authorized to be
issued;
(11) if applicable, the terms and conditions upon which conversion will
be effected, including the conversion price, the conversion period and other
conversion provisions;
(12) the provisions for a sinking fund, if any;
(13) whether such debt securities are issuable as a Global Security or
Securities (as defined below);
(14) any index or formula to be used to determine the amount of
payments of principal, premium, if any, and interest on such debt securities,
and any commodities, currencies, currency units or indices, or value, rate or
price, relevant to such determination;
(15) if the principal of, premium, if any, or interest on such debt
securities is to be payable, at the election of Patterson or a holder thereof,
in one or more currencies or currency units other than that or those in which
such debt securities are stated to be payable, the currencies or currency units
in which payment of the principal of, premium, if any, and interest on such debt
securities as to which election is made shall be payable, and the periods within
which and the terms and conditions upon which such election is to be made;
(16) if other than the principal amount thereof, the portion of the
principal amount of such debt securities of the series which will be payable
upon acceleration of the maturity thereof;
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<PAGE> 16
(17) whether such debt securities are subordinate in right of payment
to any Senior Indebtedness of Patterson and, if so, the terms and conditions of
such subordination and the aggregate principal amount of such Senior
Indebtedness outstanding as of a recent date;
(18) whether the interest, if any, on such debt securities is to be
payable in securities of Patterson and the terms and conditions applicable to
any such payment;
(19) any covenants to which Patterson may be subject with respect to
such debt securities;
(20) the applicability of the provisions described under "Defeasance
and Covenant Defeasance" below;
(21) United States income tax consequences, if any;
(22) the provisions for the payment of additional amounts with respect
to any withholding taxes in certain cases;
(23) any term or provision relating to such debt securities which is
not inconsistent with the provisions of the Indenture;
(24) the trustee; and
(25) any other special terms pertaining to such debt securities.
Unless otherwise specified in the applicable prospectus supplement, the
debt securities will not be listed on any securities exchange. One or more
series of debt securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. Any material federal income tax
consequences and other special considerations with respect to any series of debt
securities will be described in the prospectus supplement relating to any such
series of debt securities.
If the purchase price of any series of debt securities is denominated
in a foreign currency or currencies or a foreign currency unit or units or if
the principal of, premium, if any, and interest on any series of debt securities
are payable in a foreign currency or currencies or a foreign currency unit or
units, the restrictions, elections, general tax considerations, specific terms
and other information with respect to such series of debt securities will be set
forth in the applicable prospectus supplement.
Debt securities may be issued from time to time with payment terms
which are calculated by reference to the value, rate or price of one or more
commodities, currencies, currency units or indices. holders of such debt
securities may receive a principal amount (including premium, if any) on any
principal payment date, or a payment of interest on any interest payment date,
that is greater than or less than the amount of principal (including premium, if
any) or interest otherwise payable on such dates, depending upon the value, rate
or price on the applicable dates of the applicable currency, currency unit,
commodity or index. Information as to the methods for determining the amount of
principal, premium, if any, or interest payable on any date, the currencies,
currency units, commodities or indices to which the amount payable on such date
is linked and any additional tax considerations will be set forth in the
applicable prospectus supplement.
Except as may be set forth in the applicable prospectus supplement,
holders of debt securities will not have the benefit of any specific covenants
or provisions in the applicable Indenture or such debt securities in the event
that Patterson engages in or becomes the subject of a highly leveraged
transaction,
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other than the limitations on mergers, consolidations and transfers of
substantially all of Patterson's properties and assets as an entirety to any
person as described below under "--Consolidation, Merger and Sale of Assets."
Except as otherwise provided in the applicable prospectus supplement,
principal, premium, if any, and interest, if any, will be payable at an office
or agency to be maintained by Patterson in New York, New York, except that at
the option of Patterson interest may be paid by check mailed to the person
entitled thereto.
The debt securities will be issued only in fully registered form
without coupons and may be presented for the registration of transfer or
exchange at the corporate trust office of the trustee. Not all debt securities
of any one series need be issued at the same time, and, unless otherwise
provided, a series may be reopened for issuances of additional debt securities
of such series.
Since Patterson is a holding company, the rights of Patterson, and the
rights of its creditors, including the holders of the debt securities, to
participate in any distribution of the assets of any subsidiary upon its
liquidation or reorganization or otherwise are necessarily subject to the prior
claims of creditors of the subsidiary, except to the extent that Patterson may
be recognized as a creditor of the subsidiary. Generally, the debt securities
will be effectively subordinated to all existing and future indebtedness of the
operating subsidiaries of Patterson.
Unless otherwise specified in an applicable prospectus supplement, the
Indentures will not contain any provisions that limit the ability of Patterson
or any subsidiary of Patterson to incur indebtedness or that afford holders of
the debt securities protection in the event of a highly leveraged or similar
transaction involving Patterson or any of its subsidiaries.
SENIOR DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all other
unsubordinated debt of Patterson and senior to the Senior Subordinated Debt
Securities and Subordinated Debt Securities.
SUBORDINATION OF SENIOR SUBORDINATED DEBT SECURITIES AND SUBORDINATED DEBT
SECURITIES
The payment of the principal of, premium, if any, and interest on the
Senior Subordinated Debt Securities and the Subordinated Debt Securities will,
to the extent set forth in the respective Indentures and Indenture Supplements
governing such Senior Subordinated Debt Securities and Subordinated Debt
Securities, be subordinated in right of payment to the prior payment in full of
all Senior Indebtedness. (Indentures, Section 15.1.) Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution, winding
up, reorganization, assignment for the benefit of creditors, marshalling of
assets or any bankruptcy, insolvency or similar proceedings of Patterson, the
holders of all Senior Indebtedness will be entitled to receive payment in full
of all amounts due or to become due thereon before the holders of the Senior
Subordinated Debt Securities or the Subordinated Debt Securities will be
entitled to receive any payment in respect of the principal of, premium, if any,
or interest on such Senior Subordinated Debt Securities or Subordinated Debt
Securities, as the case may be. In the event of the acceleration of the maturity
of any Senior Subordinated Debt Securities or Subordinated Debt Securities, the
holders of all Senior Indebtedness will be entitled to receive payment in full
of all amounts due or to become due thereon before the holders of the Senior
Subordinated Debt Securities or Subordinated Debt Securities, as the case may
be, will be entitled to receive any payment upon the principal of, premium, if
any, or interest on such Senior Subordinated Debt Securities or Subordinated
Debt Securities, as the case may be. No payments on account of principal,
premium, if any, or interest in respect of the Senior Subordinated Debt
Securities or Subordinated Debt Securities may be made if there shall have
occurred and be continuing in
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a default in the payment of principal of, or premium, if any, or interest on any
Senior Indebtedness beyond any applicable grace period, or a default with
respect to any Senior Indebtedness permitting the holders thereof to accelerate
the maturity thereof, or if any judicial proceedings shall be pending with
respect to any such default. For purposes of the subordination provisions, the
payment, issuance or delivery of cash, property or securities (other than stock,
and certain subordinated securities, of Patterson) upon conversion or exchange
of a Senior Subordinated debt security or Subordinated debt security will be
deemed to constitute payment on account of the principal of such Senior
Subordinated debt security or Subordinated debt security, as the case may be.
By reason of such provisions, in the event of insolvency, holders of
Senior Subordinated Debt Securities and Subordinated Debt Securities may recover
less, ratably, than holders of Senior Indebtedness with respect thereto.
The term "Senior Indebtedness," when used with respect to any series of
Senior Subordinated Debt Securities or Subordinated Debt Securities, is defined
to include all amounts due on and obligations in connection with any of the
following, whether outstanding at the date of execution of the Indentures or
thereafter incurred, assumed, guaranteed or otherwise created (including,
without limitation, interest accruing on or after a bankruptcy or other similar
event, whether or not an allowed claim therein):
(a) indebtedness, obligations and other liabilities (contingent or
otherwise) of Patterson for money borrowed or evidenced by bonds, debentures,
notes or similar instruments;
(b) reimbursement obligations and other liabilities (contingent or
otherwise) of Patterson with respect to letters of credit or bankers'
acceptances issued for the account of Patterson and interest rate protection
agreements and currency exchange or purchase agreements;
(c) obligations and liabilities (contingent or otherwise) of Patterson
related to capitalized lease obligations;
(d) indebtedness, obligations and other liabilities (contingent or
otherwise) of Patterson related to agreements or arrangements designed to
protect Patterson against fluctuations in commodity prices, including without
limitation, commodity futures contracts or similar hedging instruments;
(e) indebtedness of others of the kinds described in the preceding
clauses (a) through (d) that Patterson has assumed, guaranteed or otherwise
assured the payment of, directly or indirectly;
(f) indebtedness of another person of the type described in the
preceding clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance on property owned or held by Patterson; and
(g) deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability
described in the preceding clauses (a) through (f) whether or not there is any
notice to or consent of the holders of such series of Senior Subordinated Debt
Securities or Subordinated Debt Securities, as the case may be; except that,
with respect to the Senior Subordinated Debt Securities, any particular
indebtedness, obligation, liability, guaranty, assumption, deferral, renewal,
extension or refunding shall not constitute "Senior Indebtedness" if it is
expressly stated in the governing terms, or in the assumption or guarantee,
thereof that the indebtedness involved is not senior in right of payment to the
Senior Subordinated Debt Securities or that such indebtedness is pari passu with
or junior to the Senior Subordinated Debt Securities and, with respect to
Subordinated Debt Securities, any particular indebtedness, obligation,
liability, guaranty, assumption, deferral, renewal, extension or refunding shall
not constitute "Senior Indebtedness" if it is expressly stated in the governing
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terms, or in the assumption or guarantee, thereof that the indebtedness involved
is not senior in right of payment to the Subordinated Debt Securities or that
such indebtedness is pari passu with or junior to the Subordinated Debt
Securities.
In certain circumstances, such as the bankruptcy or insolvency of
Patterson, bankruptcy or insolvency legislation may be applicable and the
application of such legislation may lead to different results with respect to,
for example, payments to be made to holders of debt securities, or priorities
between holders of the debt securities and holders of Senior Indebtedness, than
those provided for in the applicable Indenture.
If this prospectus is being delivered in connection with a series of
Senior Subordinated Debt Securities or Subordinated Debt Securities, the
accompanying prospectus supplement or the information incorporated herein by
reference will set forth the approximate amount of Senior Indebtedness
outstanding as of the end of Patterson's most recent fiscal quarter.
FORM, EXCHANGE, REGISTRATION, CONVERSION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities will be issued only in fully registered form in denominations of
U.S.$1,000 or integral multiples thereof. (Indenture, Section 3.2) Unless
otherwise indicated in the applicable prospectus supplement, payment of
principal, premium, if any, and interest on the debt securities will be payable,
and the exchange, conversion and transfer of debt securities will be
registerable, at the office or agency of Patterson maintained for such purposes.
No service charge will be made for any registration of a transfer or exchange of
the debt securities, but Patterson may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith.
All monies paid by Patterson to a Paying Agent for the payment of
principal of, premium, if any, or interest on any debt security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to Patterson and thereafter the holder of such debt
security may look only to Patterson for payment thereof.
EVENTS OF DEFAULT
Unless otherwise specified in the applicable prospectus supplement, the
following events are specified in the Indentures as Events of Default with
respect to debt securities of any series (Indentures, Section 5.1):
(a) failure to pay principal (or premium, if any) on any debt security
of that series at its maturity, whether or not such failure is a result of the
subordination provisions of the Indenture with respect to such series;
(b) failure to pay any interest on any debt security of that series
when due, continued for 30 days, whether or not such failure is a result of the
subordination provisions of the Indenture with respect to such series;
(c) failure to make any mandatory sinking fund payment, when due,
continued for 30 days, in respect of any debt security of that series;
(d) failure to perform any other covenant of Patterson in the
applicable Indenture or any other covenant to which Patterson may be subject
with respect to debt securities of that series (other than
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a covenant solely for the benefit of a series of debt securities other than that
series), continued for 90 days after written notice as provided in the
applicable Indenture;
(e) acceleration of any indebtedness for borrowed money in a principal
amount in excess of $15 million for which Patterson or any Significant
Subsidiary is liable, including debt securities of another series, or a default
by Patterson or any Significant Subsidiary in the payment at final maturity of
outstanding indebtedness for borrowed money in a principal amount in excess of
$15 million, and such acceleration or default at maturity shall not be waived,
rescinded or annulled within 30 days after written notice to Patterson thereof,
unless such acceleration or default at maturity shall be remedied or cured by
Patterson or such Significant Subsidiary or rescinded, annulled or waived by the
holders of such indebtedness, in which case such acceleration or default at
maturity shall not constitute an Event of Default under this provision;
(f) certain events of bankruptcy, insolvency or reorganization; and
(g) any other Event of Default provided with respect to the debt
securities of that series.
If an Event of Default with respect to outstanding debt securities of
any series shall occur and be continuing, either the trustee or the holders of
at least 25% in principal amount of the outstanding debt securities of that
series, by notice as provided in the applicable Indenture, may declare the
principal amount (or, if the debt securities of that series are original issue
discount securities, such portion of the principal amount as may be specified in
the terms of that series) of all debt securities of that series to be due and
payable immediately, except that upon the occurrence of an Event of Default
specified in (f) above, the principal amount (or in the case of original issue
discount securities, such portion) of all debt securities will be immediately
due and payable without notice. (Indentures, Section 5.2.) However, at any time
after a declaration of acceleration with respect to debt securities of any
series has been made, but before judgment or decree based on such acceleration
has been obtained, the holders of a majority in principal amount of the
outstanding debt securities of that series may, under certain circumstances,
rescind and annul such acceleration. For information as to waiver of defaults,
see "Modification and Waiver" below.
The Indentures will provide that, subject to the duty of the respective
trustees thereunder during an Event of Default to act with the required standard
of care, each such trustee will be under no obligation to exercise any of its
rights or powers under the respective Indentures at the request or direction of
any of the holders, unless such holders shall have offered to such trustee
reasonable security or indemnity. Subject to certain provisions, including those
requiring security or indemnification of the applicable trustee, the holders of
a majority in principal amount of the outstanding debt securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to such trustee, or to exercise any trust or
power conferred on such trustee, with respect to the debt securities of that
series.
No holder of a debt security of any series will have any right to
institute any proceeding with respect to the applicable Indenture or for any
remedy thereunder, unless (Indentures, Section 5.7):
(1) such holder shall have previously given to the applicable trustee
written notice of a continuing Event of Default;
(2) the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of the same series shall have made written requests,
and offered reasonable indemnity, to such trustee to institute such proceeding
as trustee; and
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(3) the trustee shall not have received from the holders of a majority
in aggregate principal amount of the outstanding debt securities of the same
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a holder of a
debt security for enforcement of payment of the principal of, or premium, if
any, and interest, if any, on such debt security on or after the respective due
dates expressed in such debt security or the right to convert that holder's debt
security in accordance with the Indentures (if applicable).
(Indentures, Section 5.8.)
Patterson will be required to furnish to the Trustees annually a
statement as to the performance by Patterson of its obligations under the
respective Indentures and as to any default in such performance.
MODIFICATION AND WAIVER
Without the consent of any holder of outstanding debt securities,
Patterson and the trustees may amend or supplement the Indentures or the debt
securities to cure any ambiguity, defect or inconsistency, or to make any change
that does not adversely affect the rights of any holder of debt securities.
(Indentures, Section 9.1.) Other modifications and amendments of the respective
Indentures may be made by Patterson and the applicable trustee with the consent
of the holders of not less than a majority in aggregate principal amount of the
outstanding debt securities of each series affected thereby; provided, however,
that no such modification or amendment may, without the consent of the holder of
each outstanding debt security affected thereby (Indentures, Section 9.2):
(a) change the stated maturity of the principal of, or any installment
of principal of, or premium, if any, or interest on any debt security;
(b) reduce the principal amount of, the rate of interest on, or the
premium, if any, payable upon the redemption of, any debt security;
(c) reduce the amount of principal of an original issue discount
security payable upon acceleration of the maturity thereof;
(d) change the place or currency of payment of principal of, premium,
if any, or interest on any debt security;
(e) impair the right to institute suit for the enforcement of any
payment on or with respect to any debt security on or after the stated maturity
or redemption date thereof;
(f) if applicable, modify the conversion provisions in a manner adverse
to the holders thereof;
(g) modify the subordination provisions applicable to Senior
Subordinated Debt Securities or Subordinated Debt Securities in a manner adverse
to the holders thereof;
(h) reduce the percentage in principal amount of outstanding debt
securities of any series, the consent of the holders of which is required for
modification or amendment of the applicable Indenture or for waiver of
compliance with certain provisions of the applicable Indenture or for waiver of
certain defaults; or
(i) modify any of the provisions of certain sections as specified in
the Indenture including the provisions summarized in this paragraph, except to
increase any such percentage or to designate
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additional provisions of the applicable Indenture, which, with respect to such
series, cannot be modified or waived without the consent of the holder of each
outstanding debt security affected thereby.
The holders of at least a majority in principal amount of the
outstanding debt securities of any series may, on behalf of the holders of all
debt securities of that series, waive, insofar as that series is concerned,
compliance by Patterson with certain covenants of the applicable Indenture. The
holders of not less than a majority in principal amount of the outstanding debt
securities of any series may, on behalf of the holders of all debt securities of
that series, waive any past default under the applicable Indenture with respect
to that series, except a default in the payment of the principal of, premium, if
any, or interest on, any debt security of that series or in respect of a
provision which under the applicable Indenture cannot be modified or amended
without the consent of the holder of each outstanding debt security of that
series affected. (Indentures, Section 9.8 and 5.13.)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Patterson, without the consent of any holders of any series of
outstanding debt securities, may consolidate with or merge into, or transfer or
lease its assets substantially as an entirety (treating Patterson and each of
its subsidiaries as a single consolidated entity) to, any corporation, and any
other corporation may consolidate with or merge into, or transfer or lease its
assets substantially as an entirety to, Patterson, provided that
(a) the corporation (if other than Patterson) formed by such
consolidation or into which Patterson is merged or which acquires or leases the
assets of Patterson substantially as an entirety is organized and existing under
the laws of the United States of America, a state thereof or the District of
Columbia, and assumes Patterson's obligations under each series of outstanding
debt securities and the Indentures applicable thereto;
(b) the Trustee is satisfied that the transaction will not result in
the successor being required to make any deduction or withholding on account of
certain taxes from any payments in respect of the Securities;
(c) after giving effect to such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing; and
(d) the trustee shall have received an officer's certificate and an
opinion of counsel with respect to compliance with the foregoing requirements.
(Indentures, Section 8.1.)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures allow Patterson to elect either (Indentures, Section 13.1):
(1) to defease and be discharged from all of its obligations with
respect to any series of debt securities including, in the case of Senior
Subordinated Debt Securities and Subordinated Debt Securities, the provisions
described under "-- Subordination of Senior Subordinated Debt Securities and
Subordinated Debt Securities" and except for the obligations to exchange or
register the transfer of such debt securities, to replace temporary, mutilated,
destroyed, lost or stolen debt securities, to maintain an office or agency in
respect of such debt securities, and to hold monies for payments in trust
("defeasance"); or
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(2) to be released from its obligations with respect to any series of
debt securities concerning the restrictions described under "--Consolidation,
Merger and Sale of Assets" and any other covenants applicable to such debt
securities including, in the case of Senior Subordinated Debt Securities and
Subordinated Debt Securities, the provisions described under "--Subordination of
Senior Subordinated Debt Securities and Subordinated Debt Securities," which are
subject to covenant defeasance ("covenant defeasance"), and the occurrence of an
event described and notice thereof in clauses (c) and (d) under "--Events of
Default" shall no longer be an Event of Default, in each case, upon the
irrevocable deposit with the trustee, in trust for such purpose, of money and
Government Obligations that, through the payment of principal and interest in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of, premium, if any, and interest, if any, on such debt securities
on the scheduled due dates therefor.
Such a trust may only be established if, among other things
(Indentures, Section 13.4),
(a) Patterson has delivered to the trustee (i) in the case of
defeasance, an opinion of counsel stating that (A) Patterson has received from,
or there has been published by, the Internal Revenue Service a ruling, or (B)
since the date of the applicable Indenture, there has been a change in the
applicable United States federal income tax law, in the case of either (A) or
(B) to the effect that the holders of such Securities will not recognize gain or
loss for United States federal income tax purposes as a result of the deposit,
defeasance and discharge to be effected with respect to such Securities and will
be subject to United States federal income tax on the same amount, in the same
manner and at the same times as would be the case if such deposit, defeasance
and discharge were not to occur or (ii) in the case of covenant defeasance, an
opinion of counsel to the effect that the holders of such debt securities will
not recognize gain or loss for United States federal income tax purposes as a
result of such deposit and covenant defeasance and will be subject to United
States federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such deposit and covenant defeasance
had not occurred, and
(b) no Event of Default or event which with the giving of notice or
lapse of time, or both, would become an Event of Default under the applicable
Indenture shall have occurred and be continuing on the date of such deposit, and
Patterson may exercise its defeasance option with respect to such debt
securities notwithstanding its prior exercise of its covenant defeasance option.
If Patterson exercises its defeasance option, payment of such debt securities
may not be accelerated because of an Event of Default. If Patterson exercises
its covenant defeasance option, payment of such debt securities may not be
accelerated by reference to the covenants noted under clause (2) above. If
Patterson omits to comply with its remaining obligations with respect to such
debt securities under the applicable Indenture after exercising its covenant
defeasance option, and if such debt securities are declared due and payable
because of the occurrence of any Event of Default, then the amount of money and
U.S. government obligations on deposit with the trustee may, in certain
circumstances, be insufficient to pay amounts due on such debt securities at the
time of the acceleration resulting from the Event of Default; however, Patterson
will remain liable for making such payments. (Indentures, Article 13.)
GOVERNING LAW
The Indentures and the debt securities will be governed by, and
construed in accordance with, the laws of the State of New York. (Indentures,
Section 1.12.)
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REGARDING THE TRUSTEES
The Indentures contain certain limitations on the right of each
trustee, should it become a creditor of Patterson, to obtain payment of claims
in certain cases, or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. Each Trustee will be
permitted to engage in certain other transactions with Patterson; however, if
the Trustee acquires any conflicting interest and there is a default under the
debt securities issued under the applicable Indenture, the Trustee must
eliminate such conflict or resign. (Indentures, Section 6.8.)
BOOK-ENTRY SYSTEM
The debt securities of a Series may be issued in the form of one or
more global certificates representing the debt securities (the "Global
Securities") that will be deposited with a depository (the "Depository") or with
a nominee for the Depository identified in the applicable prospectus supplement
and will be registered in the name of the Depository or a nominee thereof.
(Indentures, Section 3.1.) In such a case one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal amount of outstanding debt securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for debt securities in definitive certificated
form, a Global Security may be transferred, in whole but not in part, only to
another nominee of the Depository for such series, or to a successor Depository
for such series selected or approved by Patterson, or to a nominee of such
successor Depository. (Indentures, Sections 2.6, 2.7 and 3.5.)
The specific depository arrangement with respect to any series of debt
securities to be represented by a Global Security will be described in the
applicable prospectus supplement. Patterson expects that the following
provisions will apply to depository arrangements.
Upon the issuance of any Global Security, and the deposit of such
Global Security with or on behalf of the Depository for such Global Security,
the Depository will credit, on its book-entry registration and transfer system,
the respective principal amounts of the debt securities represented by such
Global Security to the accounts of institutions ("participants") that have
accounts with the Depository or its nominee. The accounts to be credited will be
designated by the underwriters or agents engaging in the distribution of such
debt securities or by Patterson, if such debt securities are offered and sold
directly by Patterson. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Security will be shown on, and the transfer of such beneficial interests will be
effected only through, records maintained by the Depository for such Global
Security or by its nominee. Ownership of beneficial interests in such Global
Security by persons that hold through participants will be shown on, and the
transfer of such beneficial interests within such participants will be effected
only through, records maintained by such participants. The laws of some
jurisdictions may require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing limitations and
such laws may impair the ability to own, pledge or transfer beneficial interests
in such Global Securities.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the debt
securities represented by such Global Security for all purposes under the
applicable Indenture. Unless otherwise specified in the applicable prospectus
supplement and except as specified below, owners of beneficial interests in such
Global Security will not be entitled to have debt securities of the series
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of debt securities of such series in
certificated form and will not be considered
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the holders thereof for any purposes under the Indenture. Accordingly, each
person owning a beneficial interest in such Global Security must rely on the
procedures of the Depository and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture.
Patterson understands that, under existing industry practices, if
Patterson requests any action of holders or an owner of a beneficial interest in
such Global Security desires to give any notice or take any action a holder is
entitled to give or take under the Indenture, the Depository would authorize the
participants to give such notice or take such action. In that case, participants
would authorize beneficial owners owning through such participants to give such
notice or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Unless otherwise specified in the applicable prospectus supplement,
payments with respect to principal, premium, if any, and interest, if any, on
debt securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to such Depository or its nominee, as the
case may be, as the registered owner of such Global Security.
Patterson expects that the Depository for any debt securities
represented by a Global Security, upon receipt of any payment of principal,
premium or interest in respect of such Global Security, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of such Depository. Patterson also expects that payments
by participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers registered in "street names," and will be the responsibility of such
participants. None of Patterson, the trustee or any agent of Patterson or the
trustee shall have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
If the Depository for any debt securities represented by a Global
Security is at any time unwilling or unable to continue as Depository or ceases
to be registered or in good standing under the Securities Exchange Act of 1934,
as amended, and a successor Depository is not appointed by Patterson, Patterson
will issue such debt securities in definitive certificated form in exchange for
such Global Security. In addition, Patterson may at any time and in its sole
discretion determine not to have any of the debt securities of a series
represented by one or more Global Securities and, in such event, will issue debt
securities of such series in definitive certificated form in exchange for all of
the Global Security or Securities representing such debt securities.
(Indentures, Section 2.7.)
DESCRIPTION OF PREFERRED STOCK
The following is a description of general terms and provisions of the
preferred stock. The particular terms of any series of preferred stock will be
described in the applicable prospectus supplement. If so indicated in a
prospectus supplement, the terms of any such series may differ from the terms
set forth below.
The summary of the terms of Patterson's preferred stock contained in this
Prospectus and in any prospectus supplement does not purport to be complete and
is subject to, and qualified in its entirety by, the provisions of Patterson's
Restated Certificate of Incorporation, as amended, and the certificate of
designations relating to that series of preferred stock (the "Certificate of
Designations"), which will be filed as an exhibit to or incorporated by
reference in this Prospectus at or prior to the time of issuance of any such
series of preferred stock.
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The Board of Directors of Patterson is authorized to approve the issuance
of one or more series of preferred stock without further authorization of the
stockholders and to fix the number of shares, the designations, rights,
privileges, restrictions and conditions of any such series.
The applicable prospectus supplement will set forth the number of shares,
particular designation, relative rights and preferences and the limitations of
any series of preferred stock in respect of which this Prospectus is delivered.
The particular terms of any such series will include the following:
- the maximum number of shares to constitute the series and the
designation thereof;
- the annual dividend rate, if any, on shares of the series,
whether such rate is fixed or variable or both, the date or
dates from which dividends will begin to accrue or accumulate,
whether dividends will be cumulative and whether such
dividends shall be paid in cash, common stock or otherwise;
- whether the shares of the series will be redeemable and, if
so, the price at and the terms and conditions on which the
shares of the series may be redeemed, including the time
during which shares of the series may be redeemed and any
accumulated dividends thereon that the holders of the shares
of the series shall be entitled to receive upon the redemption
thereof;
- the liquidation preference, if any, applicable to shares of
the series;
- whether the shares of the series will be subject to operation
of a retirement or sinking fund and, if so, the extent and
manner in which any such fund shall be applied to the purchase
or redemption of the shares of the series for retirement or
for other corporate purposes, and the terms and provisions
relating to the operation of such fund;
- the terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares
of any other class or classes of capital stock of Patterson or
any series of any other class or classes, or of any other
series of the same class, including the price or prices or the
rate or rates of conversion or exchange and the method, if
any, of adjusting the same;
- the voting rights, if any, of the shares of the series;
- the currency or units based on or relating to currencies in
which such series is denominated and/or in which payments will
or may be payable;
- the methods by which amounts payable in respect of such series
may be calculated and any commodities, currencies or indices,
or price, rate or value, relevant to such calculation;
- whether Patterson has elected to offer depositary shares; and
- any other preferences and relative, participating, optional or
other rights or qualifications, limitations or restrictions
thereof.
Patterson is a holding company and, therefore, its rights and the
rights of holders of its Securities, including the holders of preferred stock,
to participate in the distribution of assets of any subsidiary of
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Patterson upon the subsidiary's liquidation or recapitalization will be subject
to the prior claims of the subsidiary's creditors and preferred stockholders,
except to the extent that Patterson may itself be a creditor with recognized
claims against the subsidiary or a holder of preferred stock of the subsidiary.
The preferred stock will rank prior to the common stock with respect to
dividends rights and rights upon winding up and dissolution of Patterson.
The holders of preferred stock will have no preemptive rights.
Preferred stock will be fully paid and nonassessable when issued upon full
payment of the purchase price therefor. Unless otherwise specified in the
prospectus supplement relating to a particular series of preferred stock, each
series of preferred stock offered hereby will rank on a parity as to dividends
and liquidation rights in all respects with each other series of preferred
stock. The prospectus supplement will contain, if applicable, a description of
the material United States federal income tax consequences relating to the
purchase and ownership of shares of the series of preferred stock offered by the
prospectus supplement.
Transfer Agent and Registrar. The transfer agent, registrar and
dividend disbursement agent for the preferred stock will be designated in the
applicable prospectus supplement. The registrar for shares of preferred stock
will send to stockholders notices of any meeting at which holders of the
applicable series of preferred stock will have the right to elect directors of
Patterson or to vote on any other matter.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any prospectus supplement of
certain provisions of the deposit agreement (as further referenced below) and of
the depositary shares and depositary receipts does not purport to be complete
and is subject to and qualified in its entirety by reference to the forms of
deposit agreement and depositary receipts relating to each series of the
preferred stock which have been or will be filed with the SEC at or prior to the
time of the offering of such series of the preferred stock.
GENERAL
Patterson may, at its option, elect to offer fractional interests in
shares of preferred stock, rather than full shares of preferred stock. In the
event such option is exercised, Patterson will provide for the issuance by a
depositary to the public of receipts for depositary shares, each of which will
represent a fractional interest (to be set forth in the prospectus supplement
relating to a particular series of the preferred stock) in a share of a
particular series of preferred stock.
The shares of any series of the preferred stock underlying the
depositary shares will be deposited under a separate deposit agreement between
Patterson and a bank or trust company selected by Patterson having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000 (the "Depositary"). The prospectus supplement relating to a
series of depositary shares will set forth the name and address of the
Depositary. Subject to the terms of the deposit agreement, each owner of a
depositary share will be entitled, in proportion to the applicable fractional
interest in a share of preferred stock underlying such depositary shares, to all
the rights and preferences of the preferred stock underlying such depositary
share (including dividend, voting, redemption, conversion and liquidation
rights).
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement.
Upon surrender of depositary receipts at the office of the Depositary
and upon payment of the charges provided in the deposit agreement and subject to
the terms thereof, a holder of depositary shares
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is entitled to have the Depositary deliver to such holder the whole shares of
preferred stock and any money or other property represented by the surrendered
depositary receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the record holders
of depositary shares relating to such preferred stock in proportion to the
numbers of such depositary shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of depositary receipts a fraction
of one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of depositary receipts then outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of depositary shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
Patterson, sell such property and distribute the net proceeds from such sale to
such holders.
The deposit agreement will also contain provisions relating to the
manner in which any subscription or similar rights offered by Patterson to
holders of the preferred stock shall be made available to holders of depositary
receipts.
REDEMPTION OF DEPOSITARY SHARES
If a series of the preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the preferred stock held by the Depositary. The Depositary
will mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the depositary
receipts to be so redeemed at their respective addresses appearing in the
Depositary's books. The redemption price per depositary share will be equal to
the applicable fraction of the redemption price per share payable with respect
to such series of the preferred stock. Whenever Patterson redeems shares of
preferred stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of depositary shares relating to shares of
preferred stock so redeemed. If less than all of the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot on a pro
rata basis or such other equitable basis as may be determined by the Depositary
and Patterson.
After the date fixed for redemption, the depositary shares so called
for redemption will not longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such depositary shares were entitled upon such redemption upon
surrender to the Depositary of the depositary receipts evidencing such
depositary shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
preferred stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the depositary
shares relating to such preferred stock. Each record holder of such depositary
shares on the record date (which will be the same date as the record date for
the preferred stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of preferred
stock underlying such holder's depositary shares. The Depositary will endeavor,
insofar as
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practicable, to vote the number of shares of preferred stock underlying such
depositary shares in accordance with such instructions, and Patterson will agree
to take all action which may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting shares
of preferred stock to the extent it does not receive specific instructions from
the holders of depositary shares relating to such preferred stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and the
provisions of the deposit agreement may be amended at any time by agreement
between Patterson and the Depositary. However, any amendment which materially
and aversely alters the rights of the existing holders of depositary shares will
not affect outstanding depositary receipts until 90 days after notice of the
amendment has been mailed to the record holders of outstanding depositary
receipts. Every holder of depositary receipts at the time the amendment becomes
effective will be deemed to consent and agree to the amendment and to be bound
by the deposit agreement, as so amended. No amendment may impair the right of
any owner of depositary shares to receive shares of the preferred stock and any
money or other property represented thereby, subject to the conditions specified
in the deposit agreement, upon surrender of the depositary receipts evidencing
such depositary shares, except in order to comply with mandatory provisions of
applicable law.
Whenever so directed by the Patterson, the Depositary will terminate
the deposit agreement by mailing notice of termination to the record holders of
all depositary receipts then outstanding at least 30 days before the termination
date stated in the notice. The depositary may also terminate the deposit
agreement if 45 days have expired after the Depositary delivered to the
Patterson a written notice of its election to resign and a successor depositary
has not been appointed and accepted its appointment. If any depositary receipts
remain outstanding after the date of termination, the Depositary will
discontinue the transfer of depositary receipts, will suspend the distribution
of dividends to the holders of depositary receipts, and will not give any
further notices (other than notice of termination) or perform any further acts
under the deposit agreement, except that the Depositary will continue (1) to
collect dividends and any other distributions on the preferred stock and (2) to
deliver the preferred stock, together with the corresponding dividends and
distributions and the net proceeds of any sales of rights, preferences,
privileges or other property, without liability for interest thereon, in
exchange for depositary receipts surrendered. At any time after two years from
the date of termination, the Depositary may sell the preferred stock then held
by it at public or private sales, at such place or places and upon such terms as
it deems proper, and may hold the net proceeds of any sale, together with any
money and other property then held by it, without liability for interest
thereon, for the pro rata benefit of the holders of depositary receipts which
have not been surrendered.
CHARGES OF DEPOSITARY
Patterson will pay all charges arising solely from the existence of the
depositary arrangements. Patterson will pay charges of the Depositary in
connection with the initial deposit of the preferred stock and issuance of
depositary receipts, all withdrawals of shares of preferred stock by owners of
depositary shares, any redemption of the preferred stock and the distribution of
information to holders of the depositary receipts. Holders of depositary shares
will pay other transfer and other taxes and governmental charges and such other
charges as are expressly provided in the deposit agreement to be for their
accounts.
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MISCELLANEOUS
The Depositary will forward to the holders of depositary shares all
reports and communications from Patterson which are delivered to the Depositary
and that Patterson is required to furnish to the holders of the preferred stock.
Neither the Depositary nor Patterson will be liable if it is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the deposit agreement. The obligations of Patterson and the
Depositary under the deposit agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any depositary shares or preferred
stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
preferred stock for deposit, holders of depositary shares or other persons
believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Patterson notice
of its election to do so, and Patterson may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF WARRANTS
Patterson may issue warrants to purchase shares of common stock, shares
of preferred stock or debt securities. The preferred stock may be represented by
depositary shares. Warrants may be issued, subject to regulatory approvals,
independently or together with any common stock, preferred stock or debt
securities, as the case may be, and may be attached to or separate from such
common stock, preferred stock or debt securities. Each series of warrants will
be issued under a separate warrant agreement to be entered into between
Patterson and a warrant agent. The warrant agent will act solely as an agent of
Patterson in connection with the warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of warrants. The following sets forth certain general terms
and provisions of the warrants offered hereby. Further terms of the warrants and
the applicable warrant agreement will be set forth in the applicable prospectus
supplement.
The applicable prospectus supplement will describe the following terms
of any warrants in respect of which this Prospectus is delivered:
- the title of such warrants;
- a description of the securities (which may include shares of
common stock, shares of preferred stock or debt securities)
for which such warrants are exercisable;
- the price or prices at which such warrants will be issued;
- the periods during which the warrants are exercisable;
- the number of shares of common stock or preferred stock or the
amount of debt securities for which each warrant is
exercisable;
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- the exercise price for such warrants, including any changes to
or adjustments in the exercise price;
- the currency or currencies, including composite currencies, in
which the exercise price of such warrants may be payable;
- if applicable, the designation and terms of the shares of
preferred stock with which such warrants are issued;
- if applicable, the terms of the debt securities with which
such warrants are issued;
- if applicable, the number of warrants issued with each share
of common stock or preferred stock or debt security;
- if applicable, the date on and after which such warrants and
the related shares of common stock or preferred stock or debt
securities will be separately transferable;
- if applicable, a discussion of certain United States federal
income tax considerations;
- any listing of the warrants on a securities exchange; and
- any other terms of such warrants, including terms, procedures
and limitations relating to the exchange and exercise of such
warrants.
Prior to the exercise of their warrants, holders of warrants will not
have any of the rights of holders of the securities purchasable upon exercise,
and will not be entitled to:
- receive payments of principal of (or premium if any) or
interest, if any, on any debt securities purchasable upon
exercise;
- receive dividend payments, if any, with respect to any
underlying securities; or
- exercise the voting rights of any common stock or preferred
stock purchasable upon exercise.
EXERCISE OF WARRANTS
Unless otherwise indicated in the applicable prospectus supplement
relating thereto, the warrants will be issued in registered form. Each warrant
will entitle its holder to purchase for cash the principal amount or number of
securities of Patterson at the exercise price set forth in, or determinable
from, the applicable prospectus supplement relating to the warrants offered
thereby. Warrants may be exercised as set forth in the applicable prospectus
supplement relating to the warrants offered thereby at any time up to the close
of business on the expiration date set forth in the prospectus supplement. After
the close of business on the expiration date (or any later expiration date, as
extended by Patterson), unexercised warrants will become void.
Upon receipt of payment and of the certificate evidencing a warrant,
properly completed and duly executed, at the corporate trust office of the
warrant agent or any other office indicated in the applicable prospectus
supplement, Patterson will, as soon as practicable, forward the securities
purchasable upon
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such exercise. If less than all of the warrants represented by a surrendered
warrant certificate are exercised, a new warrant certificate will be issued for
the remaining warrants.
MODIFICATIONS
The warrant agreements and the terms of the warrants may be amended by
Patterson and the warrant agent, without the consent of the holders of warrants,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained therein, or in
any other manner which Patterson may deem necessary or desirable and which will
not materially and adversely affect the interests of holders of outstanding
warrants.
Patterson and the warrant agent also may modify or amend certain other
terms of the warrant agreements and the warrants with the consent of the holders
of not less than a majority in number of the then-outstanding unexercised
warrants affected. However, no such modification or amendment may be made
without the consent of the affected holders if the amendment would:
- shorten the period of time during which the warrants may be
exercised;
- otherwise materially and adversely affect the exercise rights
of the holders of the warrants; or
- reduce the number of outstanding warrants.
MERGER, CONSOLIDATION OR SALE OF ASSETS
If at any time there occurs a merger of, consolidation of, or sale of
substantially all of the assets of, Patterson, as a result of which securities
underlying warrants are converted into the right to receive stock, securities or
other property, then each outstanding warrant will thereafter only be
exercisable for the kind and amount of stock, securities or other property
receivable upon the consummation of that transaction by a holder of the number
of Securities underlying the warrant.
ENFORCEABILITY OF RIGHTS BY HOLDERS
The warrant agent will act solely as an agent of Patterson in
connection with the issuance and exercise of any warrants. The warrant agent
will have no duty or responsibility in case of any default by Patterson in the
performance of its obligations under the warrant agreements or the warrant
certificates. Each holder of warrants may, without the consent of the warrant
agent, enforce by appropriate legal action, on its own behalf, its right to
exercise its warrants.
DESCRIPTION OF CAPITAL STOCK
Patterson is authorized by its Certificate of Incorporation to issue 50
million shares of common stock and one million shares of preferred stock. As of
June 30, 1999, there were 32,517,028 shares of common stock issued and
outstanding and no issued and outstanding shares of the preferred stock.
COMMON STOCK
A summary of the terms and provisions of the common stock is set forth
below.
Dividends. The holders of common stock are entitled to receive
dividends when, as and if declared by the Board out of funds legally available
therefor, provided that if any shares of preferred
30
<PAGE> 33
stock, issued under this prospectus and any accompanying prospectus supplement,
or any other shares of preferred stock are at the time outstanding, the payment
of dividends on common stock or other distributions (including Patterson
repurchases of common stock) will be subject to the declaration and payment of
all cumulative dividends on outstanding shares of preferred stock, and any
preferred stock issued under this prospectus and any accompanying prospectus
supplement and any other shares of preferred stock which are then outstanding.
Liquidation. In the event of the dissolution, liquidation or winding up
of Patterson, holders of common stock are entitled to share ratably in any
assets remaining after the satisfaction in full of the prior rights of
creditors, including holders of Patterson's indebtedness, and the payment of the
aggregate liquidation preference of the preferred stock, and any preferred stock
issued under this Prospectus and any accompanying prospectus supplement and any
other shares of preferred stock then outstanding.
Voting. Patterson's stockholders are entitled to one vote for each
share on all matters voted on by stockholders, including election of directors.
Shares of common stock held by Patterson or any entity controlled by Patterson
do not have voting rights and are not counted in determining the presence of a
quorum. Directors are elected annually. Holders of common stock have no
cumulative voting rights.
No Other Rights. The holders of common stock do not have any
conversion, redemption or preemptive rights.
Transfer Agent. The transfer agent for the common stock is Continental
Stock Transfer & Trust Company, New York, New York.
Listing. Shares of Patterson's outstanding common stock are traded on
the Nasdaq National Market.
PREFERRED STOCK
Preferred stock may be issued in series from time to time with such
designations, relative rights, priorities, preferences, qualifications,
limitations and restrictions thereof, to the extent that such are not fixed in
Patterson's Restated Certificate of Incorporation, as amended, as the Board of
Directors determines. The rights, preferences, limitations and restrictions on
different series of preferred stock may differ with respect to dividend rates,
amounts payable on liquidation, voting rights, conversion rights, redemption
provisions, sinking fund provisions and other matters. The Board may authorize
the issuance of preferred stock which ranks senior to the common stock with
respect to the payment of dividends and the distribution of assets on
liquidation. In addition, the Board is authorized to fix the limitations and
restrictions, if any, upon the payment of dividends on common stock to be
effective while any shares of preferred stock are outstanding. The Board of
Directors, without stockholder approval, can issue preferred stock with voting,
conversion and other rights which could adversely affect the voting power of the
holders of common stock. The issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of Patterson. Patterson
has not issued any shares of preferred stock. However, as of June 30, 1999, an
aggregate of 325,170 shares of preferred stock had been reserved for issuance
upon exercise of the Rights described under "-- Stockholder Rights Plan."
STOCKHOLDER RIGHTS PLAN
In January 1997, the Board of Directors of Patterson adopted a
stockholder rights plan under which stockholders of record as of January 17,
1997, received a dividend in the form of preferred share purchase rights (the
"Rights"). The Rights permit the holder to purchase one one-hundredth of a share
(a
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<PAGE> 34
unit) of Series A preferred stock at an initial exercise price of $41.50 per
share under certain circumstances. The purchase price, the number of units of
preferred stock and the type of securities issuable upon exercise of the Rights
are subject to adjustment. The Rights expire on January 2, 2007 unless earlier
redeemed or exchanged. Until a Right is exercised, the holder thereof has no
rights as a stockholder of Patterson, including the right to vote or receive
dividends. The Rights become exercisable on the earlier to occur of (i) the
acquisition by a person or group of affiliated or associated persons of 15% or
more of the outstanding shares of common stock, or (ii) 10 days following the
commencement of or announcement of an intention to acquire 15% or more of the
outstanding shares of common stock through a tender offer or exchange offer.
OTHER PROVISIONS HAVING POSSIBLE ANTI-TAKEOVER EFFECT
Delaware, like many other states, permits a corporation to adopt a
number of measures through amendment of the corporate charter or bylaws or
otherwise, which, along with certain provisions of the Delaware General
Corporation Law (the "DGCL"), may have the effect of delaying or deterring any
unsolicited takeover attempts notwithstanding that a majority of the
stockholders might benefit from such a takeover or attempt. Section 203 of the
DGCL, which applies to Patterson since the common stock is traded on the Nasdaq
National Market, restricts certain "business combinations" with an "interested
stockholder" for three years following the date such person becomes an
interested stockholder, unless the Board of Directors approves the business
combination. "Business combinations" is defined to include mergers, sale of
assets and other similar transactions with an "interested stockholder." An
"interested stockholder" is defined as a person who, together with affiliates,
owns (or, within the prior three years, did own) 15% or more of the
corporation's voting stock. By delaying or deterring unsolicited takeover
attempts, these provisions could adversely affect prevailing market prices for
Patterson's common stock.
Patterson's Restated Certificate of Incorporation, as amended, and
Bylaws contain certain provisions that could discourage potential takeover
attempts and make more difficult attempts by stockholders to change management.
The following paragraphs set forth a summary of these provisions:
Special Meetings of Stockholders. The Restated Certificate of
Incorporation, as amended, provides that special meetings of stockholders may be
called only by the Board of Directors (or a majority of the members thereof),
the Chief Executive Officer, the President or the holders of a majority of the
outstanding stock entitled to vote at such special meeting. This provision will
make it more difficult for stockholders to call a special meeting.
No Stockholder Action by Written Consent. The Restated Certificate of
Incorporation, as amended, provides that stockholder action may be taken only at
annual or special meetings and not by written consent of the stockholders.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The Bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for election
as directors at an annual meeting of stockholders, must provide timely notice
thereof in writing. To be timely, a stockholder's notice must be delivered to,
or mailed and received at, the principal executive offices of Patterson not less
than 30 days nor more than 60 days prior to the meeting as originally scheduled;
provided that in the event less than 40 days written notice is given to
stockholders, notice by the stockholder to be made timely must be received not
later than the close of business on the tenth day following the day on which
such notice of the date of the annual meeting was mailed. The Bylaws also
specify certain requirements for a stockholders notice to be in proper written
form. These provisions may preclude some stockholders from bringing matters
before the stockholders at an annual meeting or from making nominations for
directors at an annual meeting.
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<PAGE> 35
Authorized Class of Preferred Stock. See "-- Preferred Stock" for
information concerning Patterson's preferred stock.
PLAN OF DISTRIBUTION
Patterson and the Selling Stockholders may offer Securities to or
through underwriters, through agents or directly to other purchasers.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices (which may be changed from
time to time), at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
prospectus supplement will describe the method of distribution of the Securities
offered therein.
Patterson and the Selling Stockholders may sell Securities directly,
through agents designated from time to time, through underwriting syndicates led
by one or more managing underwriters or through one or more underwriters acting
alone. Each prospectus supplement will set forth the terms of the Securities to
which such prospectus supplement relates, including the name or names of any
underwriters or agents with whom Patterson or the Selling Stockholders have
entered into arrangements with respect to the sale of such Securities, the
public offering or purchase price of such Securities and the net proceeds to
Patterson or the Selling Stockholders from such sale, any underwriting discounts
and other items constituting underwriters' compensation, any discounts and
commissions allowed or paid to dealers, if any, any commissions allowed or paid
to agents, and the securities exchange or exchanges, if any, on which such
Securities will be listed. Dealer trading may take place in certain of the
Securities, including Securities not listed on any securities exchange.
Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through one
or more underwriters acting alone. The underwriter or underwriters with respect
to each underwritten offering of Securities will be named in the prospectus
supplement relating to such offering and, if an underwriting syndicate is used,
the managing underwriter or underwriters will be set forth on the cover page of
such prospectus supplement. Unless otherwise set forth in the applicable
prospectus supplement, the obligations of the underwriters to purchase the
Securities will be subject to certain conditions precedent and each of the
underwriters with respect to a sale of Securities will be obligated to purchase
all of its Securities if any are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Securities may be offered and sold by Patterson and the Selling
Stockholders through agents designated by Patterson or the Selling Stockholders,
as the case may be, from time to time. Any agent involved in the offer and sale
of any Securities will be named, and any commissions payable by Patterson or the
Selling Stockholders, as the case may be, to such agent will be set forth, in
the prospectus supplement relating to such offering. Unless otherwise indicated
in such prospectus supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
Offers to purchase Securities may be solicited directly by Patterson or
the Selling Stockholders and sales thereof may be made by Patterson or the
Selling Stockholders, as the case may be, directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any resale thereof. The terms of any such sales will be
described in the prospectus supplement relating thereto.
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<PAGE> 36
Patterson and the Selling Stockholders may also issue contracts under
which the counterparty may be required to purchase Securities. Such contracts
would be issued for Securities in amounts, at prices and on terms to be set
forth in a prospectus supplement.
The anticipated place and time of delivery of Securities will be set
forth in the applicable prospectus supplement.
If so indicated in the applicable prospectus supplement, Patterson or
the Selling Stockholders will authorize underwriters or agents to solicit offers
by certain institutions to purchase Securities from Patterson or the Selling
Stockholders, as the case may be, pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
Patterson or the Selling Stockholders, as the case may be. Unless otherwise set
forth in the applicable prospectus supplement, the obligations of any purchaser
under any such contract will not be subject to any conditions except that:
- The purchase of the Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject; and
- If the Securities are also being sold to underwriters acting
as principals for their own account, the underwriters shall
have purchased such Securities not sold for delayed delivery.
The underwriters and such other persons will not have any
responsibility in respect of the validity or performance of
such contracts.
Any underwriter or agent participating in the distribution of the
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Securities so offered and sold and any discounts or
commissions received by them from Patterson or the Selling Stockholders, as the
case may be, and any profit realized by them on the sale or resale of the
Securities may be deemed to be underwriting discounts and commissions under the
Securities Act.
Underwriters and agents may be entitled, under agreements entered into
with Patterson or the Selling Stockholders, to indemnification by Patterson or
the Selling Stockholders, as the case may be, against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such underwriters or agents may be required to make in respect
thereof. Certain of such underwriters and agents, including their associates,
may be customers of, engage in transactions with and perform services for,
Patterson and its subsidiaries or the Selling Stockholders in the ordinary
course of business.
The Securities may or may not be listed on a national securities
exchange or a foreign securities exchange, other than the common stock, which is
traded on the Nasdaq National Market. Any common stock sold pursuant to a
prospectus supplement will be traded on the Nasdaq National Market, subject to
official notice of issuance. Any underwriters to whom Securities are sold by
Patterson for public offering and sale may make a market in those Securities,
but the underwriters will not be obligated to do so and may discontinue any
market making activities at any time without notice. No assurances can be given
that there will be an active trading market for the Securities.
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<PAGE> 37
LEGAL MATTERS
The validity of the Securities offered will be passed upon for Patterson by
Baker & Hostetler LLP, Denver, Colorado.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference from Patterson's Annual Report on Form 10-K for the year ended
December 31, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The estimated reserve evaluations and related calculations of Mr. Brian
Wallace, P.E., Dallas, Texas, an independent petroleum engineer, incorporated in
this Prospectus by reference from Patterson's Annual Report on Form 10-K for the
year ended December 31, 1998, have been so incorporated in reliance upon the
authority of Mr. Wallace as an expert in petroleum engineering.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC under the Securities Exchange Act of 1934. You
may read and copy this information at the following locations of the SEC:
Judiciary Plaza, Room 10024 Seven World Trade Center
450 Fifth Street, N.W. Suite 1300
Washington, D.C. 20549 New York, New York 10048
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661
You can also obtain copies of this information by mail from the Public
Reference Room of the SEC, 450 Fifth Street, N.W., Room 10024, Washington, D.C.
20549, at prescribed rates. You may obtain information on the operation of the
Public Reference Room by calling the SEC at (800) SEC-0330.
The SEC also maintains an internet world wide web site that contains
reports, proxy statements and other information about issuers, like Patterson,
that file electronically with the SEC. The address of that site is
http://www.sec.gov.
You can also inspect reports, proxy statements and other information
about us at the offices of the National Association of Securities Dealers, Inc.,
1735 K Street, N.W., Washington, D.C. 20006.
We have filed with the SEC a registration statement on Form S-3 that
registers the Securities we are offering. The registration statement, including
the attached exhibits and schedules, contains additional relevant information
about us and our Securities. The rules and regulations of the SEC allow us to
omit certain information included in the registration statement from this
prospectus.
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<PAGE> 38
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Capitalized terms used but not defined in Part II have the meanings
ascribed to them in the Prospectus included as part of this Registration
Statement.
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of the Securities registered
hereby, all of which expenses, except for the SEC registration fee and the NASD
filing fee, are estimates:
<TABLE>
<CAPTION>
Description Amount
----------- --------
<S> <C>
SEC registration fee........................................................................... $ 41,700
NASD filing fee................................................................................ 10,000
Nasdaq National Market listing fee............................................................. 20,000
Trustee's and warrant agent's fees............................................................. 25,000
Rating agency fees............................................................................. 50,000
Accounting fees and expenses................................................................... 75,000
Legal fees and expenses........................................................................ 150,000
Printing expenses.............................................................................. 125,000
Blue sky fees and expenses..................................................................... 20,000
Transfer agent fees and expenses............................................................... 10,000
Miscellaneous.................................................................................. 73,300
--------
Total................................................................................ $600,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The DGCL provides for indemnification by a corporation of costs
incurred by directors, employees and agents in connection with an action, suit
or proceeding brought by reason of their position as a director, employee or
agent. The person being indemnified must have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation. The DGCL provides that a corporation may advance payment of
expenses. The DGCL further provides that the indemnification and advancement of
expenses provisions of the DGCL will not be deemed exclusive of any other rights
to which these indemnifications or advancements of expenses may be entitled
under bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action under official capacity and as to action in another
capacity when holding such office.
In addition to the general indemnification section, Delaware law
provides further protection for directors under Section 102(b)(7) of the DGCL.
This section was enacted in June 1986 and allows a Delaware corporation to
include in its certificate of incorporation a provision that eliminates and
limits certain personal liability of a director for monetary damages for certain
breaches of the director's fiduciary duty of care, provided that any such
provision does not (in the words of the statute) do any of the following:
[E]liminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or
II-1
<PAGE> 39
which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of this Title (dealing with willful or
negligent violation of the statutory provision concerning dividends and
stock purchases and redemptions), or (iv) for any transaction from
which the director derived an improper personal benefit. No such
provision shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision becomes
effective....
The Board of Directors is empowered to make other indemnification as
authorized under any bylaw, agreement, the Certificate of Incorporation, Bylaws
or corporate resolution so long as the indemnification is consistent with the
DGCL.
Patterson's Restated Certificate of Incorporation, as amended, provides
that, to the fullest extent permitted by the DGCL, a director of Patterson will
not be liable to Patterson or its stockholders for monetary damages for breach
of fiduciary duty as a director. Patterson's Bylaws provide that to the extent
that a director or officer of Patterson is successful on the merits in the
defense of a suit or proceeding brought against him by reason of the fact that
he is a director or officer of Patterson, he will be indemnified against
expenses (including attorneys' fees) reasonably incurred in connection with such
action. In other circumstances, a director or officer of Patterson may be
indemnified against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in and not opposed to the best interests of
Patterson, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; however, in an action or
suit by or in the right of Patterson to procure a judgment in its favor, such
person will not be indemnified if he has been adjudged to be liable to Patterson
unless and only to the extent that the Delaware Court of Chancery or the court
in which such actin or suit was brought determines upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court deems proper. A
determination that indemnification of a director or officer is proper will be
made by a disinterested majority of Patterson's Board of Directors, by
independent legal counsel or by the stockholders of Patterson. Patterson's
Bylaws also provide that Patterson may advance the payment of expenses and that
the indemnification and advancement of expenses provisions of the Bylaws are
nonexclusive. Patterson maintains director and officer liability insurance
covering director and officer indemnification.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
Item 601
Exhibit Cross
Number Reference Document as Form S-3 Exhibit
------- --------- ----------------------------
<S> <C> <C>
1.1 1 Form of Underwriting Agreement - Equity*
1.2 1 Form of Underwriting Agreement - Debt*
2.1 2 Agreement and Plan of Merger, dated as of
April 12, 1996, among Patterson Energy,
Inc., Patterson Drilling Company and
Tucker Drilling Company, Inc. and
amendment thereto, dated May 16, 1996 (1)
4.1 4 Excerpt from Restated Certificate of
Incorporation , as amended, of Patterson
Energy, Inc. regarding authorized Common
Stock and Preferred Stock
</TABLE>
II-2
<PAGE> 40
<TABLE>
<CAPTION>
Item 601
Exhibit Cross
Number Reference Document as Form S-3 Exhibit
------- --------- ----------------------------
<S> <C> <C>
4.2 4 Form of Certificate of Designation of
Preferred Stock*
4.3 4 Form of Debt Security Indenture
4.4 4 Form of Debt Security (included in
Exhibit 4.3)
4.5 4 Form of Stock Warrant Agreement for
warrants attached to equity securities
4.6 4 Form of Stock Warrant Certificate
(included as Exhibit A in Exhibit 4.5)
4.7 4 Form of Debt Securities Warrant Agreement
for warrants attached to debt securities
4.8 4 Form of Debt Securities Warrant
Certificate (included as Exhibit A in
Exhibit 4.7)
4.9 4 Form of Warrant Agreement for warrants not
attached to equity or debt securities
4.10 4 Form of Warrant Certificate (included as
Exhibit A in Exhibit 4.9)
4.11 4 Form of Deposit Agreement, including form
of Depositary Receipt for Depositary
Shares
5.1 5 Opinion of Baker & Hostetler LLP regarding
the legality of the Securities to be
offered
12.1 12 Statement of Computation of Ratio of
Earnings to Fixed Charges
15.1 15 Letter of PricewaterhouseCoopers LLP
regarding unaudited interim financial
information
23.1 23 Consent of PricewaterhouseCoopers LLP
23.2 23 Consent of M. Brian Wallace, independent
petroleum engineer
23.3 23 Consent of Baker & Hostetler LLP (included
in Exhibit 5.1)
24.1 24 Power of Attorney (included on the
signature page hereto)
25.1 25 Statement of eligibility of trustee under
the Senior Debt Securities*
25.2 25 Statement of eligibility of trustee under
the Senior Subordinated Debt Securities*
25.3 25 Statement of eligibility of trustee under
the Subordinated Debt Securities*
</TABLE>
- ---------
* To be filed by amendment or to be incorporated by reference in connection with
the offering of the Securities.
(1) Incorporated by reference to Item 7, "Financial Statements and Exhibits" to
Form 8-K dated April 22, 1996, and filed on April 30, 1996.
II-3
<PAGE> 41
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, Patterson
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of Patterson in the successful
defense of any action, suit or proceedings) is asserted by such director,
officer or controlling person in connection with the Securities being
registered, Patterson will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(b) Patterson hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of Patterson's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
Securities offered therein, and the offering of such Securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Patterson hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be determined to be a new registration statement
relating to the Securities offered therein, and the offering of such
Securities at that time shall be deemed to be the initial bona fide
offering thereof.
(d) Patterson hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts of events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of Securities offered (if the total dollar
value of Securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume price represent no
more than a 20% change in the maximum aggregate offering
II-4
<PAGE> 42
price set forth in the "Calculation of Registration Fee" table
in the effective Registration Statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
Patterson pursuant to section 13 or section 15(d) of the Exchange Act
that are incorporated by reference in the Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the Securities
offered therein, and the offering of such Securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the Securities being registered which remain unsold at
the termination of the offering.
(e) Patterson hereby undertakes to file an application for the purpose
of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture
Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Patterson
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Snyder, State of Texas, on the 28th day of October,
1999.
PATTERSON ENERGY, INC.
By: /s/ A. GLENN PATTERSON
--------------------------
A. Glenn Patterson
President
II-5
<PAGE> 43
Each of the undersigned officers and directors of Patterson Energy,
Inc. hereby appoints Cloyce A. Talbott and A. Glenn Patterson as attorneys and
agents for the undersigned, with full power of substitution, for and in the
name, place and stead of the undersigned, to sign and file with the SEC under
the Securities Act of 1933 any and all amendments (including post-effective
amendments) and exhibits to this Registration Statement and any and all
applications, instruments or documents to be filed with the SEC pertaining to
the registration of the Securities covered hereby, with full power and authority
to do and perform any and all acts and things whatsoever requisite and necessary
or desirable.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed as of October 28, 1999, by the following
persons in the capacities indicated:
<TABLE>
<S> <C>
/s/ CLOYCE A. TALBOTT Chairman of the Board, Director and
- ------------------------------- Chief Executive Officer
Cloyce A. Talbott
Principal Executive Officer
/s/ A. GLENN PATTERSON President, Chief Operating Officer and
- ------------------------------- Director
A. Glenn Patterson
/s/ ROBERT C. GIST Director
- -------------------------------
Robert C. Gist
/s/ VINCENT A. ROSSI, JR. Director
- -------------------------------
Vincent A. Rossi, Jr.
/s/ SPENCER D. ARMOUR, III Director
- -------------------------------
Spencer D. Armour, III
/s/ JONATHAN D. NELSON Vice President--Finance, Secretary and
- ------------------------------- Treasurer and Chief Financial Officer
Jonathan D. Nelson
Principal Accounting Officer
</TABLE>
II-6
<PAGE> 44
EXHIBIT INDEX
<TABLE>
<CAPTION>
Item 601
Exhibit Cross
Number Reference Document as Form S-3 Exhibit
------- --------- ----------------------------
<S> <C> <C>
1.1 1 Form of Underwriting Agreement - Equity*
1.2 1 Form of Underwriting Agreement - Debt*
2.1 2 Agreement and Plan of Merger, dated as of
April 12, 1996, among Patterson Energy,
Inc., Patterson Drilling Company and
Tucker Drilling Company, Inc. and
amendment thereto, dated May 16, 1996 (1)
4.1 4 Excerpt from Restated Certificate of
Incorporation , as amended, of Patterson
Energy, Inc. regarding authorized Common
Stock and Preferred Stock
4.2 4 Form of Certificate of Designation of
Preferred Stock*
4.3 4 Form of Debt Security Indenture
4.4 4 Form of Debt Security (included in
Exhibit 4.3)
4.5 4 Form of Stock Warrant Agreement for
warrants attached to equity securities
4.6 4 Form of Stock Warrant Certificate
(included as Exhibit A in Exhibit 4.5)
4.7 4 Form of Debt Securities Warrant Agreement
for warrants attached to debt securities
4.8 4 Form of Debt Securities Warrant
Certificate (included as Exhibit A in
Exhibit 4.7)
4.9 4 Form of Warrant Agreement for warrants not
attached to equity or debt securities
4.10 4 Form of Warrant Certificate (included as
Exhibit A in Exhibit 4.9)
4.11 4 Form of Deposit Agreement, including form
of Depositary Receipt for Depositary
Shares
5.1 5 Opinion of Baker & Hostetler LLP regarding
the legality of the Securities to be
offered
12.1 12 Statement of Computation of Ratio of
Earnings to Fixed Charges
15.1 15 Letter of PricewaterhouseCoopers LLP
regarding unaudited interim financial
information
23.1 23 Consent of PricewaterhouseCoopers LLP
23.2 23 Consent of M. Brian Wallace, independent
petroleum engineer
23.3 23 Consent of Baker & Hostetler LLP (included
in Exhibit 5.1)
24.1 24 Power of Attorney (included on the
signature page hereto)
25.1 25 Statement of eligibility of trustee under
the Senior Debt Securities*
25.2 25 Statement of eligibility of trustee under
the Senior Subordinated Debt Securities*
25.3 25 Statement of eligibility of trustee under
the Subordinated Debt Securities*
</TABLE>
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* To be filed by amendment or to be incorporated by reference in connection with
the offering of the Securities.
(1) Incorporated by reference to Item 7, "Financial Statements and Exhibits" to
Form 8-K dated April 22, 1996, and filed on April 30, 1996.
<PAGE> 1
EXHIBIT 4.1
EXCERPT FROM RESTATED CERTIFICATE OF INCORPORATION,
AS AMENDED, OF PATTERSON ENERGY, INC. REGARDING
AUTHORIZED COMMON STOCK AND PREFERRED STOCK
Section 1. PREFERRED STOCK
1.1 Authority of the Board of Directors to Create Series. The Board of
Directors is hereby expressly granted authority, to the full extent now or
hereafter permitted herein and by the General Corporation Law of the State of
Delaware, at any time or from time to time, by resolution or resolutions, to
create one or more series of Preferred Stock, to fix the authorized number of
shares of any series (which number of shares may vary as between series and be
changed from time to time by like action), and to fix the terms of such series,
including, but not limited to, the following:
(a) the designation of such series, which may be by
distinguishing number, letter, or title;
(b) the rate or rates at which shares of such series shall be
entitled to receive dividends; the periods in respect of which dividends are
payable; the conditions upon, and times of payment of, such dividends; the
relationship and preference, if any, of such dividends to dividends payable on
any other class or classes or any other series of stock; whether such dividends
shall be cumulative and, if cumulative, the date or dates from which such
dividends shall accumulate; and the other terms and conditions applicable to
dividends upon shares of such series;
(c) the rights of the holders of the shares of such series in
case the Corporation be liquidated, dissolved or wound up (which may vary
depending upon the time, manner, or voluntary or involuntary nature or other
circumstances of such liquidation, dissolution, or winding up) and the
relationship and preference, if any, of such rights to rights of holders of
shares of stock of any other class or classes or any other series of stock;
(d) the right, if any, of the Corporation to redeem shares of
such series at its option, including any limitation of such right, and the
amount or amounts to be payable in respect of the shares of such series in case
of such redemption (which may vary depending on the time, manner, or other
circumstances of such redemption), and the manner, effect, and other terms and
conditions of any such redemption;
(e) the obligation, if any, of the Corporation to purchase,
redeem, or retire shares of such series and/or to maintain a fund for such
purpose, and the amount or amounts to be payable from time to time for such
purpose or into such fund, or the number of shares to be purchased, redeemed, or
retired, the per share purchase price or prices, and the other terms and
conditions of any such obligation or obligations;
(f) the voting rights, if any, which, if granted, may be full,
special, or limited, to be given the shares of such series, including, without
limiting the generality of the foregoing, the right, if any, as a series or in
conjunction with other series or classes, to elect one or more members of the
Board of Directors either generally or at certain times or under certain
circumstances, and restrictions, if any, on particular corporate acts without a
specified vote or consent of holders of such shares (such as, among others,
restrictions on modifying the terms of such series or of the Preferred Stock,
restricting the permissible terms of other series or the permissible variations
between series of the Preferred Stock,
1
<PAGE> 2
authorizing or issuing additional shares of the Preferred Stock, creating debt,
or creating any class of stock ranking prior to or on a parity with the
Preferred Stock or any series thereof as to dividends, or assets remaining for
distribution to the stockholders in the event of the liquidation, dissolution,
or winding up of the Corporation);
(g) the right, if any, to exchange or convert the shares into
shares of any other series of the Preferred Stock or into shares of any other
class of stock of the Corporation or the securities of any other corporation,
and the rate or basis, time, manner, terms, and conditions of exchange or
conversion or the method by which the same shall be determined; and
(h) the other special powers, preferences, or rights, if any,
and the qualifications, limitations, or restrictions thereof, of the shares of
such series.
The Board of Directors shall fix the terms of each such series by
resolution or resolutions adopted at any time prior to the issuance of the
shares thereof, and the terms of each such series may, subject only to
restrictions, if any, imposed by this Certificate of Incorporation or by
applicable law, vary from the terms of other series to the extent determined by
the Board of Directors from time to time and provided in the resolution or
resolutions fixing the terms of the respective series of the Preferred Stock.
1.2 Status of Certain Shares. Shares of any series of the Preferred
Stock, whether provided for herein or by resolution or resolutions of the Board
of Directors, which have been redeemed (whether through the operation of a
sinking fund or otherwise) or which, if convertible or exchangeable, have been
converted into or exchanged for shares of stock of any other class or classes,
or which have been purchased or otherwise acquired by the Corporation, shall
have the status of authorized and unissued shares of the Preferred Stock of the
same series and may be reissued as a part of the series of which they were
originally a part or may be reclassified and reissued as part of a new series of
the Preferred Stock to be created by resolution or resolutions of the Board of
Directors or as a part of any other series of the Preferred Stock, all subject
to the conditions or restrictions on issuance set forth herein or in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of any series of the Preferred Stock.
Section 2. COMMON STOCK
2.1 Issuance, Consideration, and Terms. Any unissued shares of the
Common Stock may be issued from time to time for such consideration, having a
value of not less than the par value thereof, as may be fixed from time to time
by the Board of Directors. Any treasury shares may be disposed of for such
consideration as may be determined from time to time by the Board of Directors.
The Common Stock shall be subject to the express terms of the Preferred Stock
and any series thereof. Each share of Common Stock shall be of equal rank and
shall be identical to every other share of Common Stock. Holders of Common Stock
shall have such rights as are provided herein and by law.
2.2 Voting Rights. Except as expressly required by law or as provided
in or fixed and determined pursuant to Section 1 of this Article FOURTH, the
entire voting power and all voting rights shall be vested exclusively in the
Common Stock. Each holder of shares of Common Stock shall be entitled to one (1)
vote for each share standing in such holder's name on the books of the
Corporation.
2.3 Dividends. Subject to Section 1 of this Article FOURTH, the holders
of Common Stock shall be entitled to receive, and shall share equally share for
share, when and as declared by the Board of Directors, out of the assets of the
Corporation which are by law available therefor, dividends or distributions
payable in cash, in property, or in securities of the Corporation.
2
<PAGE> 1
EXHIBIT 4.3
PATTERSON ENERGY, INC.
ISSUER
TO
-------------------------------------
TRUSTEE
INDENTURE
DATED AS OF _________________
DEBT SECURITIES
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.1 DEFINITIONS..................................................................1
1.2 COMPLIANCE CERTIFICATES AND OPINIONS.........................................8
1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.......................................8
1.4 ACTS OF HOLDERS; RECORD DATES................................................9
1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.......................................10
1.6 NOTICE TO HOLDERS: WAIVER...................................................10
1.7 CONFLICT WITH APPLICABLE LEGISLATION........................................11
1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS....................................11
1.9 SUCCESSORS AND ASSIGNS......................................................11
1.10 SEPARABILITY CLAUSE.........................................................11
1.11 BENEFITS OF INDENTURE.......................................................11
1.12 GOVERNING LAW...............................................................11
1.13 LEGAL HOLIDAYS..............................................................11
1.14 CORPORATE OBLIGATIONS.......................................................12
ARTICLE 2
SECURITY FORMS
2.1 FORMS GENERALLY.............................................................12
2.2 FORM OF FACE OF SECURITY....................................................12
2.3 FORM OF REVERSE OF SECURITY.................................................14
2.4 FORM OF LEGEND FOR GLOBAL SECURITIES........................................19
2.5 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.............................19
2.6 SECURITIES IN GLOBAL FORM...................................................19
2.7 BOOK-ENTRY SECURITIES.......................................................20
2.8 FORM OF CONVERSION NOTICE...................................................22
ARTICLE 3
THE SECURITIES
3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES........................................22
3.2 DENOMINATIONS...............................................................25
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING..............................26
3.4 TEMPORARY SECURITIES........................................................27
3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.........................27
3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES............................29
3.7 PAYMENT OF INTEREST: INTEREST RIGHTS PRESERVED..............................29
3.8 PERSONS DEEMED OWNERS.......................................................31
3.9 CANCELLATION................................................................31
3.10 COMPUTATION OF INTEREST.....................................................31
3.11 PAYMENT OF ADDITIONAL AMOUNTS...............................................31
[3.12 DESIGNATION AS SENIOR INDEBTEDNESS].........................................32
[3.12 DESIGNATION AS SENIOR SUBORDINATED INDEBTEDNESS]............................33
</TABLE>
ii
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<TABLE>
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ARTICLE 4
SATISFACTION AND DISCHARGE
4.1 SATISFACTION AND DISCHARGE OF INDENTURE.....................................33
4.2 APPLICATION OF TRUST MONEY..................................................34
ARTICLE 5
REMEDIES
5.1 EVENTS OF DEFAULT...........................................................34
5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT..........................36
5.3 SUITS FOR ENFORCEMENT BY TRUSTEE............................................37
5.4 TRUSTEE MAY FILE PROOFS OF CLAIM............................................37
5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.................38
5.6 APPLICATION OF MONEY COLLECTED..............................................38
5.7 LIMITATION ON SUITS.........................................................38
5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST................................................................39
5.9 RESTORATION OF RIGHTS AND REMEDIES..........................................39
5.10 RIGHTS AND REMEDIES CUMULATIVE..............................................39
5.11 DELAY OR OMISSION NOT WAIVER................................................39
5.12 CONTROL BY HOLDERS..........................................................40
5.13 WAIVER OF PAST DEFAULTS.....................................................40
5.14 UNDERTAKING FOR COSTS.......................................................40
5.15 WAIVER OF CERTAIN COVENANTS.................................................40
ARTICLE 6
THE TRUSTEE
6.1 CERTAIN DUTIES AND RESPONSIBILITIES.........................................41
6.2 NOTICE OF DEFAULTS..........................................................41
6.3 CERTAIN RIGHTS OF TRUSTEE...................................................41
6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES......................42
6.5 MAY HOLD SECURITIES.........................................................42
6.6 MONEY HELD IN TRUST.........................................................42
6.7 COMPENSATION AND REIMBURSEMENT..............................................42
6.8 DISQUALIFICATION; CONFLICTING INTERESTS.....................................43
6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.....................................43
6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...........................43
6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR......................................45
6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.................45
6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...........................46
6.14 APPOINTMENT OF AUTHENTICATING AGENT.........................................46
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS...................47
7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS......................48
7.3 REPORTS BY TRUSTEE..........................................................48
7.4 REPORTS BY COMPANY..........................................................48
</TABLE>
iii
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<TABLE>
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ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS........................48
8.2 SUCCESSOR SUBSTITUTED.......................................................49
ARTICLE 9
SUPPLEMENTAL INDENTURES
9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS..........................50
9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.............................51
9.3 EXECUTION OF SUPPLEMENTAL INDENTURES........................................52
9.4 EFFECT OF SUPPLEMENTAL INDENTURES...........................................52
9.5 REVOCATION AND EFFECT OF CONSENTS...........................................52
9.6 CONFORMITY WITH APPLICABLE LEGISLATION......................................52
9.7 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES..........................52
9.8 WAIVER OF COMPLIANCE BY HOLDERS.............................................53
9.9 NOTICE OF SUPPLEMENTAL INDENTURE............................................53
ARTICLE 10
COVENANTS
10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST..................................53
10.2 MAINTENANCE OF OFFICE OR AGENCY.............................................53
10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST...........................54
10.4 STATEMENT BY OFFICERS AS TO DEFAULT.........................................55
10.5 EXISTENCE...................................................................55
10.6 WAIVER OF CERTAIN COVENANTS.................................................55
10.7 LIMITATION ON SUBORDINATED INDEBTEDNESS.....................................55
ARTICLE 11
REDEMPTION OF SECURITIES
11.1 APPLICABILITY OF ARTICLE....................................................56
11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.......................................56
11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED...........................56
11.4 NOTICE OF REDEMPTION........................................................57
11.5 DEPOSIT OF REDEMPTION PRICE.................................................58
11.6 SECURITIES PAYABLE ON REDEMPTION DATE.......................................58
11.7 SECURITIES REDEEMED IN PART.................................................58
ARTICLE 12
SINKING FUNDS
12.1 APPLICABILITY OF ARTICLE....................................................58
12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.......................59
12.3 REDEMPTION OF SECURITIES FOR SINKING FUND...................................59
</TABLE>
iv
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<TABLE>
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ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
13.1 COMPANY'S OPTION TO EFFECT DEFEASANCE AND COVENANT DEFEASANCE...............59
13.2 DEFEASANCE AND DISCHARGE....................................................59
13.3 COVENANT DEFEASANCE.........................................................60
13.4 CONDITIONS TO DEFEASANCE AND COVENANT DEFEASANCE............................60
13.5 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS..............................................62
13.6 REINSTATEMENT...............................................................62
ARTICLE 14
CONVERSION OF SECURITIES
14.1 APPLICABILITY OF ARTICLE....................................................63
14.2 EXERCISE OF CONVERSION PRIVILEGE............................................63
14.3 NO FRACTIONAL SHARES........................................................64
14.4 ADJUSTMENT OF CONVERSION PRICE..............................................64
14.5 NOTICE OF CERTAIN CORPORATE ACT.............................................65
14.6 RESERVATION OF SHARES OF COMMON SHARES......................................65
14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION....................................65
14.8 NONASSESSABILITY............................................................66
14.9 EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE...................66
14.10 DUTIES OF TRUSTEE REGARDING CONVERSION......................................66
14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION..................................67
14.12 CANCELLATION OF CONVERTED SECURITIES........................................67
ARTICLE 15
SUBORDINATION
15.1 SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS...............................67
15.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC..............................68
15.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF SECURITIES........68
15.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT..............................69
15.5 PAYMENT PERMITTED IF NO DEFAULT.............................................70
15.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.....................70
15.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS AND SUBJECT TO
APPLICABLE LAWS.............................................................70
15.8 TRUSTEE TO EFFECTUATE SUBORDINATION.........................................71
15.9 NO WAIVER OF SUBORDINATION PROVISIONS.......................................71
15.10 NOTICE TO TRUSTEE...........................................................71
15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT..............72
15.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS....................72
15.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION
OF TRUSTEE'S RIGHTS.........................................................72
15.14 ARTICLE APPLICABLE TO PAYING AGENTS.........................................72
15.15 DEFEASANCE OF THIS ARTICLE 15...............................................72
15.16 SUBSIDIARIES................................................................73
15.17 RESCISSION..................................................................73
15.18 CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT.............................73
</TABLE>
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<TABLE>
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ARTICLE 16
MEETINGS OF HOLDERS OF SECURITIES
16.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED...................................73
16.2 CALL, NOTICE AND PLACE OF MEETINGS..........................................73
16.3 PERSONS ENTITLED TO VOTE AT MEETINGS........................................74
16.4 QUORUM; ACTION..............................................................74
16.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS.........75
16.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.............................75
</TABLE>
vi
<PAGE> 7
INDENTURE, dated as of _________________, between PATTERSON ENERGY,
INC, a corporation duly incorporated and existing under the laws of Delaware,
having its registered office at 4510 Lamesa Highway, Snyder, Texas 79549 (herein
called the "Company"), and ________________________________, a ________________
corporation, as Trustee hereunder (herein called the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of unsecured debentures,
notes or other evidences of indebtedness (herein called the "Securities") to be
issued by the Company, unlimited as to principal amount, to bear such rates of
interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of a series thereof,
as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.1 DEFINITIONS
For all purposes of this Indenture and of any indenture supplemental
hereto, except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the TRUST
INDENTURE ACT, either directly or by reference herein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
(d) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"ACT," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the
Ind-1
<PAGE> 8
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"APPLICABLE LEGISLATION" means, with respect to any series of
Securities which was required to be registered under the SECURITIES ACT, the
TRUST INDENTURE ACT.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"BOARD OF DIRECTORS" means, when used with reference to the Company,
the board of directors of the Company or any committee of the board of directors
of the Company empowered to act for the Company with respect to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means, when used with respect to any Place of Payment,
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close, except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture.
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, or, if at any time after the execution of this instrument
such Commission is not existing and performing the duties now assigned to it
under the TRUST INDENTURE ACT, then the body performing such duties at such
time.
"COMMON SHARES" or "COMMON SHARES OF THE COMPANY" means the Common
Shares of the Company and the shares of any other class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of 3.1(s) and Section 14.9, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Shares in
the articles of the Company at the date of this instrument or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; PROVIDED, HOWEVER, that if at any time there shall be more than one
such resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, President or a
Vice President, and by its Treasurer, Assistant Treasurer, Controller, Secretary
or Assistant Secretary, and delivered to the Trustee.
Ind-2
<PAGE> 9
"CONVERSION EVENT" has the meaning specified in Section 5.1.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in ,
at which at any particular time its corporate trust business shall be conducted.
"CORPORATION" means a corporation, association, company, joint-stock
company, business trust or similar organization.
"COVENANT DEFEASANCE" has the meaning specified in Section 13.3.
"DAYS" means calendar days.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
"DEFEASIBLE SERIES" has the meaning specified in Section 13.1.
"DEFEASANCE" has the meaning specified in Section 13.2.
"DEPOSITARY" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, a clearing
agency designated to act as Depositary for such Securities as contemplated by
Section 3.1, that is registered under the EXCHANGE ACT if the Securities of such
series were required to be registered under the EXCHANGE ACT, and that has been
designated as a recognized clearing agency under applicable Canadian securities
legislation if the Securities of such series were distributed by the Company
pursuant to a prospectus filed with Canadian securities regulatory authorities.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the United States SECURITIES EXCHANGE ACT of 1934,
as amended from time to time, and any statute successor thereto.
"EXCHANGE RATE" has the meaning specified in Section 5.1.
"FLOATING OR ADJUSTABLE RATE PROVISION" means a formula or provision,
specified in or pursuant to a Board Resolution or an indenture supplemental
hereto, providing for the determination, whether pursuant to objective factors
or pursuant to the sole discretion of any Person (including the Company), and
periodic adjustment of the interest rate borne by a Floating or Adjustable Rate
Security.
"FLOATING OR ADJUSTABLE RATE SECURITY" means any Security which
provides for interest thereon at a periodic rate that may vary from time to time
over the term thereof in accordance with a Floating or Adjustable Rate
Provision.
"GLOBAL SECURITY" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct full
faith and credit obligations of the government which issued the currency in
which the Securities of a particular series are denominated and in which payment
of principal and interest are to be made or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of such
government, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by such government, which, in
Ind-3
<PAGE> 10
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the United States SECURITIES ACT of 1933, as amended) as
custodian with respect to any such Government Obligation or a specific payment
of principal of or interest on account of the holder of such depository receipt
from any amount received by the custodian in respect of such Government
Obligation or the specific payment of principal of or interest on such
Government Obligation evidenced by such depository receipt.
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"INTERNAL REVENUE CODE" means the Internal Revenue Code as in force as
at the date as of which this instrument was executed; PROVIDED, HOWEVER, that in
the event the Internal Revenue Code is amended after such date, "INTERNAL
REVENUE CODE" means, to the extent required by such amendment, the Internal
Revenue Code, as so amended.
"INDENTURE" means this instrument as originally executed, as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the TRUST INDENTURE ACT that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of any
particular series of Securities established as contemplated by Section 3.1.
"INTEREST PAYMENT DATE" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.
"MATURITY" means, when used with respect to any Security, the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"NOTICE OF DEFAULT" means a written notice of the kind specified in
Section 5.1(d).
"OFFICERS' CERTIFICATE" means, when used with reference to the Company,
a certificate signed on behalf of the Company by any one of the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President of the
Company, and by any one of the Treasurer, the Assistant Treasurer, the
Controller, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee. One of the officers signing an Officers' Certificate
given pursuant to Section 10.4 shall be the principal executive, chief financial
or principal accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be
counsel for the Company and who may be an employee of the Company, except as
otherwise expressly provided in this Indenture) and who shall be acceptable to
the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"OUTSTANDING," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, EXCEPT:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
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(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; PROVIDED THAT, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(c) Securities as to which Defeasance has been effected pursuant to
Section 13.2; and
(d) Securities which have been replaced pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; PROVIDED, HOWEVER, that in
determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or are present at a meeting of Holders for
quorum purposes, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof (excluding premium or penalty, if any) that would be due and payable as
of the date of such determination upon acceleration of the Maturity thereof
pursuant to Section 5.2, (ii) the principal amount of a Security denominated in
one or more foreign currencies or currency units shall be the U.S. dollar
equivalent, determined in the manner provided as contemplated by Section 3.1 on
the date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar equivalent on
the date of original issuance of such Security of the amount determined as
provided in (i) above) of such Security, (iii) if the principal amount payable
at Stated Maturity of any Security is not determinable upon original issuance,
the principal amount of such Security that shall be deemed to be Outstanding
shall be the amount as specified or determined as contemplated by Section 3.1,
and (iv) Securities owned by the Company, or any other obligor upon the
Securities or any Affiliate of the Company, or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company, or any
other obligor upon the Securities or any Affiliate of the Company, or of such
other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, trust, association, company, joint-stock company,
business trust, unincorporated organization or government or any agency or
political subdivision thereof.
"PIK SECURITIES" means any series of Securities where interest is
payable, at the election of the Company or a holder of such Securities, in
additional Securities.
"PLACE OF PAYMENT" means, when used with respect to the Securities of
any series, the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.
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<PAGE> 12
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
[IF APPLICABLE, INSERT -- "PROCEEDING" has the meaning specified in
Section 15.2].
"REDEMPTION DATE" means, when used with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture;
"REDEMPTION PRICE" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, the
chairman, or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the chief executive officer, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"SECURITIES ACT" means the United States SECURITIES ACT of 1933 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
that in the event the United States Securities Act of 1933 is amended after such
date, "SECURITIES ACT" means, to the extent required by any such amendments, the
United States Securities Act of 1933, as so amended.
[IF APPLICABLE, INSERT -- "SECURITIES PAYMENT" has the meaning
specified in Section 15.2].
"SECURITY" or "SECURITIES" has the meaning stated in the first recital
of this Indenture and more particularly means any Security or Securities
authenticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 3.5.
[IF APPLICABLE, INSERT -- "SENIOR INDEBTEDNESS" means, unless otherwise
defined in the applicable indenture supplement, all amounts due on and
obligations in connection with any of the following, whether outstanding at the
date of execution of the Indenture, or thereafter incurred, assumed, guaranteed
or otherwise created (including, without limitation, interest accruing on or
after a bankruptcy or other similar event, whether or not an allowed claim
therein): (a) indebtedness, obligations and other liabilities (contingent or
otherwise) of the Company for money borrowed, or evidenced by bonds, debentures,
notes or similar instruments; (b) reimbursement obligations and other
liabilities (contingent or otherwise) of the Company with respect to letters of
credit or banker's acceptances issued for the account of the Company and
interest rate protection agreements and currency exchange or purchase
agreements; (c) obligations and liabilities (contingent or otherwise) related to
capitalized lease obligations; (d)
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indebtedness, obligations and other liabilities (contingent or otherwise) of the
Company related to agreements or arrangements designed to protect the Company or
any of its Subsidiaries against fluctuations in commodity prices, including,
without limitation, commodity futures contracts or similar hedging instruments;
(e) indebtedness of others of kinds described in the preceding clauses (a)
through (d) that the Company has assumed, guaranteed or otherwise assured the
payment of directly or indirectly; (f) any indebtedness of another Person of the
type described in the preceding clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance on property owned or held by the Company; and
(g) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability described in clauses (a) through (f) whether or not there is any
notice to or consent of the Holders of such series of Securities; unless, in any
case, in the instrument creating or evidencing such indebtedness, obligation,
liability, guaranty, assumption, deferral, renewal, extension or refunding, it
is expressly stated that such indebtedness, obligation, liability, guarantee,
assumption, deferral, renewal, extension or refunding is not senior in right of
payment to the Securities or that such indebtedness is PARI PASSU with or junior
to the Securities; [IF SUBORDINATED INDEBTEDNESS, INSERT -- PROVIDED, HOWEVER,
that any series of Securities designated as Senior Subordinated Indebtedness
shall constitute Senior Indebtedness to any series of Securities designated as
Subordinated Indebtedness].
[IF APPLICABLE, INSERT -- "SENIOR SUBORDINATED INDEBTEDNESS" means the
Securities and any other indebtedness, guarantee or obligation of the Company
that specifically provides that such indebtedness, guarantee or obligation is to
rank PARI PASSU with other Senior Subordinated Indebtedness of the Company and
is not subordinated by its terms to any indebtedness, guarantee or obligation of
the Company which is not Senior Indebtedness.]
[IF APPLICABLE, INSERT -- "SUBORDINATED INDEBTEDNESS" means the
Securities and any other indebtedness, guarantee or obligation of the Company
that specifically provides that such indebtedness, guarantee or obligation is to
rank PARI PASSU with other Subordinated Indebtedness of the Company and is not
subordinated by its terms to any indebtedness, guarantee or obligation of the
Company which is not Senior Indebtedness or Senior Subordinated Indebtedness].
"SIGNIFICANT SUBSIDIARY" shall mean any Subsidiary as shall be
designated a Significant Subsidiary pursuant to the provisions of Section
3.1(z).
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"STATED MATURITY" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"SUBSIDIARY" means any corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"TRUST INDENTURE ACT" means the United States TRUST INDENTURE ACT of
1939 as in force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after such
date, "TRUST INDENTURE ACT" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939, as so amended.
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<PAGE> 14
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"VICE PRESIDENT" means, when used with respect to the Company or the
Trustee, any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
1.2 COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and, where required or if requested, an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 10.4) shall include:
(a) a statement that each individual signing such certificate or
opinion has read and understood such covenant or condition and the definitions
herein related thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, 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
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
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<PAGE> 15
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters has been provided by the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
1.4 ACTS OF HOLDERS; RECORD DATES
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) The Company may, in the circumstances permitted by the Trust
Indenture Act, where the series of Securities was required to be registered
under the SECURITIES ACT, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be given
or taken by Holders of Securities of such series. If not set by the Company
prior to the first solicitation of a Holder of Securities of such series made by
any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 7.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date for action to be taken by the
Holders of one or more series of Securities, only the Holders of Securities of
such series on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action. With regard to any record date
set pursuant to this paragraph,
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<PAGE> 16
the Holders of Outstanding Securities of the relevant series on such record date
(or their duly appointed agents), and only such Persons, shall be entitled to
give or take the relevant action, whether or not such Holders remain Holders
after such record date. With regard to any action that may be given or taken
hereunder by Holders of a requisite principal amount of Outstanding Securities
of any series (or their duly appointed agents) and for which a record date is
set pursuant to this paragraph, the Company may, at its option, set an
expiration date after which no such action purported to be given or taken by any
Holder shall be effective hereunder unless given or taken on or prior to such
expiration date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this paragraph, the Company
may, on one or more occasions at its option, extend such date to any later date.
Nothing in this paragraph shall prevent any Holder (or any duly appointed agent
thereof) from giving or taking, after any expiration date, any action identical
to, or, at any time, contrary to or different from, any action given or taken,
or purported to have been given or taken, hereunder by a Holder on or prior to
such date, in which event the Company may set a record date in respect thereof
pursuant to this paragraph. Notwithstanding the foregoing or the Trust Indenture
Act, the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any action to be given or taken by
Holders pursuant to Sections 5.1, 5.2 or 5.12.
(f) Without limiting the foregoing, a Holder entitled hereunder to give
or take any action hereunder with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention:__________________; or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company, addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
1.6 NOTICE TO HOLDERS: WAIVER
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
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In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
1.7 CONFLICT WITH APPLICABLE LEGISLATION
If any provision hereof limits, qualifies or conflicts with a provision
of any Applicable Legislation that is required under such legislation to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of any Applicable
Legislation that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
1.9 SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
1.10 SEPARABILITY CLAUSE
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
1.11 BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent, Security Registrar and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
1.12 GOVERNING LAW
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of laws.
1.13 LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, PROVIDED THAT no
interest
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<PAGE> 18
shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
1.14 CORPORATE OBLIGATIONS
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Securities or the obligations of the Company or the Trustee under this Indenture
or any certificate or other writing delivered in connection herewith.
ARTICLE 2
SECURITY FORMS
2.1 FORMS GENERALLY
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to Board Resolutions of the Board of Directors of the Company or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If temporary Securities of
any series are issued in global form as permitted by Section 3.4, the form
thereof shall be established as provided in the preceding sentence. A copy of
the Board Resolutions establishing the form or forms of Securities of any series
(or any such temporary global security) shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities (or any temporary global
Security).
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
2.2 FORM OF FACE OF SECURITY
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]
PATTERSON ENERGY, INC.
- ----------------------------------
No. U.S. $
------- ------------
PATTERSON ENERGY, INC., a corporation duly incorporated and existing
under the laws of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ___________________, or registered assigns,
the principal sum of _____________________________________ [United States]
Dollars on ________________________ [IF APPLICABLE, INSERT one or more foreign
currencies, currency units or composite currencies] [IF THE SECURITY IS TO BEAR
INTEREST PRIOR TO
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<PAGE> 19
MATURITY, INSERT -- , and to pay interest thereon from _________________________
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, [semi-annually on ________________ and _______________ in
each year], [IF OTHER THAN SEMI-ANNUAL PAYMENTS, INSERT frequency of payments
and payment dates], commencing _________________, [IF THE SECURITY IS TO BEAR
INTEREST AT A FIXED RATE, INSERT -- at the rate of ____________% per annum], [IF
THE SECURITY IS A FLOATING OR ADJUSTABLE RATE SECURITY, insert -- a rate per
annum [computed - determined] in accordance with [INSERT defined name of
floating or adjustable rate provision set forth] [IF THE SECURITY IS TO BEAR
INTEREST AT A RATE DETERMINED WITH REFERENCE TO AN INDEX, REFER TO DESCRIPTION
OF INDEX BELOW] until the principal hereof is paid or made available for payment
[IF APPLICABLE, INSERT -- , and (to the extent that the payment of such interest
shall be legally enforceable) at the rate of _____% per annum on any overdue
principal and premium and on any overdue installment of interest], from the
dates such amounts are due until they are paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the _________ or __________ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
[IF THE SECURITIES ARE FLOATING OR ADJUSTABLE RATE SECURITIES WITH
RESPECT TO WHICH PRINCIPAL OF OR ANY PREMIUM OR INTEREST MAY BE DETERMINED WITH
REFERENCE TO AN INDEX, INSERT THE TEXT OF THE FLOATING OR ADJUSTABLE RATE
PROVISION.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of _________% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ___% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of principal of (and premium, if any) and [IF APPLICABLE,
INSERT -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ______________, in such
coin or currency of [IF APPLICABLE, INSERT -- the United States of America] [IF
APPLICABLE, INSERT ANOTHER CURRENCY, CURRENCY UNIT OR COMPOSITE CURRENCY] as at
the time of payment is legal tender for payment of public and private debts [IF
APPLICABLE, INSERT --]; PROVIDED, HOWEVER, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.]
Ind-13
<PAGE> 20
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereof has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
PATTERSON ENERGY, INC.
By:
---------------------------------
Attest:
2.3 FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________________ (herein called the
"Indenture"), among the Company and _____________, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [, limited in aggregate amount to U.S. $__________] [IF
APPLICABLE, INSERT RELEVANT AMOUNT IN APPLICABLE FOREIGN CURRENCY, CURRENCY UNIT
OR COMPOSITE CURRENCY].
[IF THE SECURITY IS CONVERTIBLE INTO COMMON STOCK OF THE COMPANY,
INSERT -- subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or before
the close of business on, or in case this Security or a portion hereof is called
for redemption, then in respect of this Security or such portion hereof until
and including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the 10th calendar day before the
Redemption Date, to convert this Security (or any portion of the principal
amount hereof which is U.S. $1,000 or an integral multiple thereof [IF
APPLICABLE, INSERT RELEVANT AMOUNT IN APPLICABLE FOREIGN CURRENCY, CURRENCY UNIT
OR COMPOSITE CURRENCY]), at the principal amount hereof, or of such portion,
into fully paid and non-assessable Common Shares (calculated as to each
conversion to the nearest 1/100 of a share) at an initial Conversion Price per
Common Share equal to U.S. $_________ per each Common Share [IF APPLICABLE,
INSERT RELEVANT AMOUNT IN APPLICABLE FOREIGN CURRENCY, CURRENCY UNIT OR
COMPOSITE CURRENCY] (or at the current adjusted Conversion Price if an
adjustment has been made as provided in the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank, to the Company
at its office or agency in _____________________, accompanied by written notice
to the Company that the Holder hereof elects to convert this Security, or if
less than the entire principal amount hereof is to be converted, the portion
hereof to be converted, and, in such case such surrender shall be made during
the period from the close of business on any Regular
Ind-14
<PAGE> 21
Record Date next preceding any Interest Payment Date (unless this Security or
the portion thereof being converted has been called for redemption on a
Redemption Date within such period), also accompanied by payment in New York
Clearing House or other funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted. Subject to the aforesaid requirement for
payment and, in the case of a conversion after the Regular Record Date next
preceding any Interest Payment Date and on or before such Interest Payment Date,
to the right of the Holder of this Security (or any Predecessor Security) of
record at such Regular Record Date to receive an installment of interest (with
certain exceptions provided in the Indenture), no payment or adjustment is to be
made on conversion for interest accrued hereon or for dividends on the Common
Shares issued on conversion. No fractions or shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional
interest the Company shall pay a cash adjustment as provided in the Indenture.
The Conversion Price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then outstanding, will
be convertible thereafter, during the period this Security shall be convertible
as specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder of
the number of Common Shares into which this Security might have been converted
immediately prior to such consolidation, merger or transfer (assuming such
holder of Common Shares failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares). Adjustments in the Conversion Price of less than one percent of such
price will not be required, but any adjustment that would otherwise be required
to be made will be carried forward and taken into account in the computation of
any subsequent adjustment.
[If the Security is convertible into other securities or property,
specify the conversion features and the form of conversion notice pursuant to
Section 2.8 hereof.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
[IF APPLICABLE, INSERT -- (1) on __________ in any year commencing with the year
_____ and ending with the year _____ through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [IF APPLICABLE, INSERT -- on or after ________________], as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): if redeemed [IF
APPLICABLE, INSERT -- on or before ________, __%, and if redeemed] during the 12
month period beginning _____ of the years indicated,
<TABLE>
<CAPTION>
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
(1) on _____ in any year commencing with the year _____ and ending with the year
_____ through operation of the sinking fund for this series at the
Ind-15
<PAGE> 22
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [IF APPLICABLE, INSERT - --on or after _____], as a whole or
in part, at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: if redeemed during the
12-month period beginning _____ of the years indicated,
<TABLE>
<CAPTION>
Redemption Price For Redemption Redemption Price For Redemption
Through Operation of the Sinking Otherwise Than Through Operation
Year Fund of the Sinking Fund
- ---- -------------------------------- --------------------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity in on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[IF APPLICABLE, INSERT -- The sinking fund for this series provides for
the redemption on _____ in each year beginning with the year _____ and ending
with the year _____ of [IF APPLICABLE, INSERT -- not less than U.S. $_____
("mandatory sinking fund") and not more than] U.S. $_____ aggregate principal
amount of Securities of this series. Securities of this series acquired or
redeemed by the Company otherwise than through [IF APPLICABLE, INSERT --
mandatory] sinking fund payments may be credited against subsequent [IF
APPLICABLE, INSERT -- mandatory] sinking fund payments otherwise required to be
made [IF APPLICABLE, INSERT -- in the inverse order in which they become due].]
[IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT -- In the
event of redemption or conversion of this Security in part only, a new Security
or Securities of this series and of like tenor for the unredeemed or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]
[IF SENIOR INDEBTEDNESS, INSERT -- The indebtedness evidenced by this
Security has been designated as Senior Indebtedness, and, to the extent provided
in the Indenture, is PARI PASSU with all other Senior Indebtedness].
[IF SENIOR SUBORDINATED INDEBTEDNESS, INSERT -- The indebtedness
evidenced by this Security is, to the extent provided in the Indenture, (i)
subordinate and subject in right of payment to the prior payment in full of all
Senior Indebtedness and (ii) PARI PASSU with all other Senior Subordinated
Indebtedness, and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take action as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.]
Ind-16
<PAGE> 23
[IF SUBORDINATED INDEBTEDNESS, INSERT -- The indebtedness evidenced by
this Security is, to the extent provided in the Indenture, (i) subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness and (ii) PARI PASSU with all other Subordinated Indebtedness, and
this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.]
[IF APPLICABLE, INSERT -- The Indenture contains provisions for
defeasance at any time of (i) the entire indebtedness of this Security or (ii)
certain restrictive covenants and Events of Default with respect to this
Security, in each case upon compliance with certain conditions set forth in the
Indenture.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also permits
certain amendments and modifications thereto from time to time by the Company
and the Trustee without the consent of the Holders of any series of the
Securities to be affected thereby for certain specified purposes, including
curing ambiguities, defects or inconsistencies and making any such change that
does not adversely affect the rights of any Holder of such series of the
Securities, as provided therein.
The Indenture contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of Securities of such series, to
waive compliance by the Company with certain past provisions of the Indenture
and certain defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders
Ind-17
<PAGE> 24
of this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
[IF THE SECURITY IS ISSUED ON A SUBORDINATED OR SENIOR SUBORDINATED
BASIS, INSERT -- Subject to the rights of holders of Senior Indebtedness, as set
forth in the Indenture, no other reference herein to the Indenture and no other
provision of this Security or of the Indenture shall alter or impair the
obligations of the Company, which are unconditional, to pay the principal of and
any premium and interest on this Security at the times, place and rate, and in
the coin and currency, herein prescribed or to convert this Security as so
provided in the Indenture.]
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of U.S. $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. Prior to
due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company, or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.
The terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Ind-18
<PAGE> 25
2.4 FORM OF LEGEND FOR GLOBAL SECURITIES
Unless otherwise specified as contemplated by Section 3.1 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
2.5 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
----------------------------------
As Trustee
By:
-------------------------------
Authorized Officer
2.6 SECURITIES IN GLOBAL FORM
If Securities of a series are issuable in global form, as contemplated
by Section 3.1, then, notwithstanding clause (k) of Section 3.1 and the
provisions of Section 3.2, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may from time to time be reduced to reflect
exchanges. Any endorsement of a Security in global form to reflect the amount,
or any increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Trustee in such manner and upon instructions given
by such Person or Persons as shall be specified in such Security or in a Company
Order to be delivered to the Trustee pursuant to Section 3.3 or Section 3.4.
Subject to the provisions of Section 3.3 and, if applicable, Section 3.4, the
Trustee shall deliver and redeliver any Security in permanent global form in the
manner and upon instructions given by the Person or Persons specified in such
Security or in the applicable Company Order. If a Company Order pursuant to
Section 3.3 or 3.4 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section 1.3
and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 1.3 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 3.3.
Ind-19
<PAGE> 26
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of (and
premium, if any) and interest on and any Additional Amounts with respect to any
Security in permanent global form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
or of the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a Global Security as shall be specified in
a written statement, if any, of the Holder of such Global Security, which is
produced to the Security Registrar by such Holder.
Global Securities may be issued in either temporary or permanent form.
Permanent Global Securities will be issued in definitive form.
2.7 BOOK-ENTRY SECURITIES
Notwithstanding any provision of this Indenture to the contrary:
(a) At the discretion of the Company, any Security may be issued from
time to time, in whole or in part, in permanent global form registered in the
name of a Depositary, or its nominee. Each such Security in permanent global
form is hereafter referred to as a "Book-Entry Security." Subject to Section
3.3, upon such election, the Company shall execute, and the Trustee or an
Authenticating Agent shall authenticate and deliver, one or more Book-Entry
Securities that (i) are denominated in an amount equal to the aggregate
principal amount of the Outstanding Securities of such series if elected in
whole or such lesser amount if elected in part, (ii) are registered in the name
of the Depositary or its nominee, (iii) are delivered by the Trustee or an
Authenticating Agent to the Depositary or pursuant to the Depositary's
instructions and (iv) bear a legend in substantially the following form (or such
other form as the Depositary and the Company may agree upon):
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF [THE DEPOSITARY], TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [NOMINEE
OF THE DEPOSITARY] OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF [THE DEPOSITARY] (AND ANY PAYMENT
IS MADE TO [NOMINEE OF THE DEPOSITARY] OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF [THE
DEPOSITARY]), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, [NOMINEE OF THE DEPOSITARY], HAS
AN INTEREST HEREIN.
(b) Any Book-Entry Security shall be initially executed and delivered
as provided in Section 3.3. Notwithstanding any other provision of this
Indenture, unless and until it is exchanged in whole or in part for Securities
not issued in global form, a Book-Entry Security may not be transferred except
as a whole by the Depositary to a nominee of such Depositary, by a nominee of
such Depositary to such Depositary or another nominee of such Depositary, or by
such Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.
Ind-20
<PAGE> 27
(c) If at any time the Depositary notifies the Company or the Trustee
that it is unwilling or unable to continue as Depositary for any Book-Entry
Securities, the Company shall appoint a successor Depositary, whereupon the
retiring Depositary shall surrender or cause the surrender of its Book-Entry
Security or Securities to the Trustee. The Trustee shall promptly notify the
Company upon receipt of such notice. If a successor Depositary has not been so
appointed by the effective date of the resignation of the Depositary, the
Book-Entry Securities will be issued as Securities not issued in global form, in
an aggregate principal amount equal to the principal amount of the Book-Entry
Security or Securities theretofore held by the Depositary.
The Company may at any time and in its sole discretion determine that
the Securities shall no longer be Book-Entry Securities represented by a global
certificate or certificates, and will so notify the Depositary. Upon receipt of
such notice, the Depositary shall promptly surrender or cause the surrender of
its Book-Entry Security or Securities to the Trustee. Concurrently therewith,
Securities not issued in global form will be issued in an aggregate principal
amount equal to the principal amount of the Book-Entry Security or Securities
theretofore held by the Depositary.
Upon any exchange of Book-Entry Securities for Securities not issued in
global form as set forth in this Section 2.7(c), such Book-Entry Securities
shall be cancelled by the Trustee, and Securities issued in exchange for such
Book-Entry Securities pursuant to this Section shall be registered in such names
and in such authorized denominations as the Depositary for such Book- Entry
Securities, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee or any Authenticating Agent
shall deliver such Securities to the persons in whose names such Securities are
so registered.
(d) The Company and the Trustee shall be entitled to treat the Person
in whose name any Book-Entry Security is registered as the Holder thereof for
all purposes of the Indenture and any applicable laws, notwithstanding any
notice to the contrary received by the Trustee or the Company; and the Trustee
and the Company shall have no responsibility for transmitting payments to,
communication with, notifying, or otherwise dealing with any beneficial owners
of any Book- Entry Security. Neither the Company nor the Trustee shall have any
responsibility or obligations, legal or otherwise, to the beneficial owners or
to any other party including the Depositary, except for the Holder of any Book-
Entry Security; provided however, notwithstanding anything herein to the
contrary, (i) for the purposes of determining whether the requisite principal
amount of Outstanding Securities have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver, instruction or other action
hereunder as of any date, the Trustee shall treat any Person specified in a
written statement of the Depositary with respect to any Book-Entry Securities as
the Holder of the principal amount of such Securities set forth therein and (ii)
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or Trustee, from giving effect to any written certification, proxy or
other authorization furnished by a Depositary with respect to any Book-Entry
Securities, or impair, as between a Depositary and holders of beneficial
interests in such Securities, the operation of customary practices governing the
exercise of the rights of the Depositary as Holder of such Securities.
(e) So long as any Book-Entry Security is registered in the name of a
Depositary or its nominee, all payments of the principal of (and premium, if
any) and interest on such Book-Entry Security and redemption thereof and all
notices with respect to such Book Entry Security shall be made and given,
respectively, in the manner provided in the arrangements of the Company with
such Depositary.
Ind-21
<PAGE> 28
2.8 FORM OF CONVERSION NOTICE
To: PATTERSON ENERGY, INC.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (which is U.S. $1,000 or
an integral multiple thereof) [IF APPLICABLE, INSERT RELEVANT AMOUNT IN
APPLICABLE FOREIGN CURRENCY, CURRENCY UNIT OR COMPOSITE CURRENCY] below
designated, into Common Shares of Patterson Energy, Inc., in accordance with the
terms of the Indenture referred to in this Security, and directs that the shares
issuable and deliverable upon the conversion, together with any check in payment
for fractional shares and any Securities, representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares are to be issued in the name
of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto. Any amount required to be paid by the
undersigned on account of interest accompanies this Security.
Dated:
Fill in for registration of Common Shares and Securities if to be issued
otherwise than to the registered holder.
Principal Amount to be converted (in an integral Name multiple of U.S. $1,000,
if less than all): U.S. $
Address (Please print name and address, including signature zip/postal code
number)
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFYING
[SIGNATURE GUARANTEED -- required only if Common NUMBER Shares and Securities
are to be issued and delivered to other than the registered holder]
ARTICLE 3
THE SECURITIES
3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series.
All Securities of each series under this Indenture shall in all respects be
equally and ratably entitled to the benefits hereof with respect to such series
without preference, priority or distinction on account of the actual time of the
authentication and delivery or Stated Maturity of the Securities of such series.
There shall be established in or pursuant to Board Resolutions of the Company
and, subject to Section 3.3, set forth, or determined in the manner provided, in
an Officers' Certificate of the Company, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series:
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(b) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered
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under this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
of the series pursuant to section 3.4, 3.5, 3.6, 9.7, 11.7 or 14.2 and except
for any Securities which, pursuant to section 3.3, are deemed never to have been
authenticated and delivered hereunder);
(c) if the Securities will be issuable at a premium over or discount
from their stated principal amount, specification of such premium or discount,
as applicable;
(d) whether any Securities of the series are to be listed for trading
on a securities exchange or otherwise;
(e) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(f) the date or dates on which the principal of the Securities of the
series is payable and on which the Securities will mature;
(g) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the Floating or
Adjustable Rate Provision pursuant to which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method of determination of such date or dates, the Interest Payment Dates on
which any such interest shall be payable on any Securities and the Regular
Record Date for any interest payable on any Interest Payment Date, and the basis
upon which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
(h) the place or places where the principal of and any premium and
interest on the Securities of the series shall be payable;
(i) the period or periods within which, the price or prices at which,
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other than
by a Board Resolution, the manner in which any election by the Company to redeem
the Securities shall be evidenced;
(j) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund, purchase fund or
analogous obligation or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in whole or
in part, pursuant to such obligation;
(k) if other than denominations of U.S. $1,000 and any integral
multiple thereof, the denominations in which Securities of the series shall be
issuable;
(l) the currency, currencies or currency unit or units in which the
Securities of such series shall be denominated and in which payment of the
principal of and any premium and interest on any Securities of such series shall
be payable if other than the currency of the United States of America and the
manner of determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding" in Section
1.1;
(m) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined by reference to an
index, formula or other method, including, without limitation, such method based
on (i) currency, currencies or currency units other than that in which the
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<PAGE> 30
Securities of such series are payable, (ii) changes in the price of one or more
other securities or groups or indices of securities, or (iii) changes in the
prices of one or more commodities or groups or indexes of commodities or any
combination of the foregoing, the manner in which such amounts shall be
determined and any commodities, currencies, currency units or indices, value,
rate or price relevant to such determination;
(n) if the principal of or any premium or interest on any Securities of
the series are to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or those in
which the Securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and interest
on Securities of such series as to which such election is made shall be payable,
and the period or periods within which, and the terms and conditions upon which,
such election is to be made and the amount so payable for the manner in which
such amount shall be determined;
(o) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2;
(p) if the principal amount payable at the Stated Maturity of any
Securities of the series is not determinable upon original issuance thereof, the
amount which shall be deemed to be the principal amount of such Securities for
any other purpose hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or which
shall be deemed to be Outstanding as of any date (or, in any such case, the
manner in which such principal amount shall be determined);
(q) if applicable, that the Securities of the series shall be subject
to Defeasance or Covenant Defeasance as provided in Article 13;
(r) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities and,
in such case, the respective Depositaries for such Global Securities, the form
of any legend or legends which shall be borne by any such Global Security in
addition to or in lieu of that set forth in Section 2.4 and any circumstances
other than those set forth in Section 3.5 in which any such Global Security may
be transferred to, and registered and exchanged for Securities registered in the
name of, a Person other than the Depositary for such Global Security or a
nominee thereof and in which any such transfer may be registered;
(s) if applicable, the terms and conditions pursuant to which the
Securities are convertible into or exchangeable at the option of the Holders
thereof or the Company, for or into new Securities of a different series, other
Securities of the same series of the same aggregate principal amount of a
different kind or different authorized denomination or denominations, or other
securities or other property, including shares in the capital of the Company or
any subsidiaries of the Company or securities directly or indirectly convertible
into or exchangeable for such shares;
(t) if applicable, any covenants in addition to those set forth in
Article 10 to which the Company may be subject with respect to Securities of
such series; or any other additions, deletions or changes to the provisions of
Article 10 or any definitions relating to such Article that shall be applicable
to the Securities of the series (including a provision making any Section of
such Article inapplicable to the Securities of such series);
(u) any Event of Default with respect to the Securities of such series,
if not set forth herein, and any additions, deletions or other changes to the
Events of Default set forth herein that shall be
Ind-24
<PAGE> 31
applicable to the Securities of such series (including a provision making any
Event of Default set forth herein inapplicable to the Securities of that
series);
(v) provisions, if any, regarding the appointment by the Trustee of an
Authenticating Agent in one or more places other than the location of the office
of the Trustee with power to act on behalf of the Trustee and subject to its
direction in the authentication and delivery of the Securities of any one or
more series in connection with such transactions as shall be specified in the
provisions of this Indenture or in or pursuant to the Board Resolution or other
supplemental indenture creating such series;
(w) the provisions for the payment of any additional amounts, to the
extent not set forth herein;
(x) whether the interest, if any, on the Securities is to be payable,
at the election of the Company or a holder thereof, in cash or in PIK Securities
and the period or periods within which, and the terms and conditions upon which,
such election may be made;
(y) designation of the series of Securities as Senior Indebtedness,
Senior Subordinated Indebtedness or Subordinated Indebtedness, and any
additions, deletions or changes to the provisions of Article 15 or any
definition relating to such Article that shall be applicable to the Securities
of the series defining the rights of holders of Senior Indebtedness in respect
of the Securities of such series;
(z) any addition to or deletion from the definition of Significant
Subsidiary;
(aa) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.1); and
(bb) whether any Securities of the series will be secured.
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolutions of the Company referred to above and (subject to
Section 3.3) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened for issuances of additional
Securities of such series.
If any of the terms of the series are established by action taken
pursuant to Board Resolutions of the Company, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificates setting forth the terms of the series.
3.2 DENOMINATIONS
The Securities of each series shall be issuable in registered form
without coupons in such denominations and in such currencies as shall be
specified as contemplated by Section 3.1. In the absence of any such provisions
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of U.S. $1,000 and any integral multiple
thereof.
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<PAGE> 32
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
The Securities shall be executed on behalf of the Company by its Chief
Executive Officer, its President, one of its Vice Presidents or its Treasurer,
under its corporate seal reproduced thereon attested by its Secretary. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order (which may provide that Securities that are the subject
thereof will be authenticated and delivered by the Trustee upon the telephonic
or written order of Persons designated in said Company Order and that such
Persons are authorized to determine such terms and conditions of said Securities
as are specified in the Company Order) shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions of the Company as
permitted by Sections 2.1 and 3.1, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) if the form of such Securities has been established by or pursuant
to Board Resolutions of the Company as permitted by Section 2.1, that such form
has been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolutions of the Company as permitted by Section 3.1, that
such terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles and to such other matters as counsel may
specify.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued and contemplate issuance of all Securities
of such series.
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<PAGE> 33
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
3.4 TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities, which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs). If
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company maintained pursuant to Section 10.2 in a Place of Payment for that
series for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor one or more definitive Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount and tenor. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
All outstanding temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of the same series and of like tenor authenticated and delivered
hereunder.
3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security or of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
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<PAGE> 34
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.7, 11.7 or 14.2 not involving any transfer.
The Company shall not be required to (a) issue or register the transfer
or exchange of Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (b) register the
transfer or exchange of any Security so selected for redemption in whole or in
part, except in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed.
Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(a) such Depositary (i) notifies the Company and the Trustee that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
ceases to be a clearing agency registered under the Exchange Act and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives the notice referred to in subclause (i) or becomes aware of the
condition specified in subclause (ii), (b) the Company executes and delivers to
the Trustee a Company Order that such Global Security shall be so transferable,
registrable and exchangeable, and such transfers shall be registrable, (c) there
shall have occurred and be continuing an Event of Default with respect to the
Securities evidenced by such Global Security or (d) there shall exist such other
circumstances, if any, as have been specified for this purpose as contemplated
by Section 3.1. Notwithstanding any other provision in this Indenture, a Global
Security to which the restriction set forth in the preceding sentence shall have
ceased to apply may be transferred only to, and may be registered and exchanged
for Securities registered only in the name or names of, such Person or Persons
as the Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section, Sections 3.4, 3.6, 9.7, 11.7 or 14.2 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security.
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<PAGE> 35
3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence
to their satisfaction of the destruction, loss or theft of any Security and (b)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion,
may, instead of issuing a new Security and subject to the above provisions
regarding security or indemnity, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
exchange for any mutilated Security or in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
3.7 PAYMENT OF INTEREST: INTEREST RIGHTS PRESERVED
Except as otherwise provided as contemplated by Section 3.1 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
In the case of Securities represented by a Global Security registered
in the name of or held by a Depositary or its nominee, unless otherwise
specified by Section 3.1, payment of principal, premium, if any, and interest,
if any, will be made to the Depositary or its nominee, as the case may be, as
the registered owner or Holder of such Global Security. None of the Company, the
Trustee, any Paying Agent, any Authenticating Agent nor the Security Registrar
for such Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interest in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, on
such
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<PAGE> 36
date, and such Defaulted Interest may be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of such series
at his address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice is
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.
At the option of the Company, interest on Securities of any series that
bear interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Subject to the provisions of 14.2, in the case of any security which is
converted after any Regular Record Date and on or prior to the next succeeding
Interest Payment Date (other than any Security the principal of (or premium, if
any, on) which shall become due and payable, whether at a Stated Maturity or by
declaration of acceleration, call for redemption, or otherwise, prior to such
Interest Payment Date), interest whose Stated Maturity Date is on such Interest
Payment Date shall be payable on such Interest Payment Date notwithstanding such
conversion and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Security (or any one or more
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security which is converted, interest whose Stated
Maturity is after the date of conversion of such Security shall not be payable.
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3.8 PERSONS DEEMED OWNERS
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (except as otherwise specified as contemplated by Section 3.1(e) and subject
to Section 3.7) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
In the case of a Global Security, so long as the Depositary for such
Global Security, or its nominee, is the registered owner of such Global
Security, such Depositary or such nominee, as the case may be, will be
considered the sole owner or Holder of the Securities represented by such Global
Security for all purposes under this Indenture. Except as provided in Section
3.5, owners of beneficial interests in a Global Security will not be entitled to
have Securities that are represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or Holders
thereof under this Indenture.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall (a) 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 a Depositary or (b) impair, as between a
Depositary and holders of beneficial interests in any Global Security, the
operation of customary practices governing the exercise of the rights of the
Depositary as Holder of such Global Security.
3.9 CANCELLATION
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
3.10 COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
3.11 PAYMENT OF ADDITIONAL AMOUNTS
All payments made by the Company under or with respect to the
Securities will be made free and clear of and without withholding or deduction
for or on account of any present or future tax, duty, levy, impost, assessment
or other governmental charge imposed or levied by or on behalf of the Government
of the United States, any state thereof or the District of Columbia, or by any
authority or agency therein or thereof having power to tax (hereinafter
"Taxes"), unless the Company is required to withhold or deduct Taxes by law or
by the interpretation or administration thereof. If the Company is so required
to withhold
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or deduct any amount for or on account of Taxes from any payment made under or
with respect to the Securities, the Company will pay such additional amounts
("Additional Amounts") as may be necessary so that the net amount received by
each Holder (including Additional Amounts) after such withholding or deduction
will not be less than the amount the Holder would have received if such Taxes
had not been withheld or deducted; PROVIDED THAT no Additional Amounts will be
payable with respect to a payment made to a Holder (an "Excluded Holder") (i)
with which the Company does not deal at arm's length (within the meaning of the
INTERNAL REVENUE CODE) at the time of making such payment or (ii) which is
subject to such Taxes by reason of its being connected with the United States,
any state thereof or the District of Columbia, otherwise than by the mere
holding of Securities or the receipt of payments thereunder. The Company will
also (i) make such withholding or deduction and (ii) remit the full amount
deducted or withheld to the relevant authority in accordance with applicable
law. The Company will furnish to the Holders of the Securities, within 30 days
after the date the payment of any Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the Company. The
Company will indemnify and hold harmless each Holder (other than an Excluded
Holder) and upon written request reimburse each such Holder for the amount of
(i) any Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to the Securities, (ii) any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, and (iii) any Taxes imposed with respect to any reimbursement under (i)
or (ii), but excluding any such Taxes on such Holders' net income.
At least 30 days prior to each date on which any payment under or with
respect to the Securities is due and payable, if the Company will be obligated
to pay Additional Amounts with respect to such payment, the Company will deliver
to the Trustee an Officers' Certificate stating the fact that such Additional
Amounts will be payable, stating the amounts so payable and setting forth such
other information as is necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date. Whenever in this Indenture there is
mentioned, in any context, the payment of principal (and premium, if any),
Redemption Price, interest or any other amount payable under or with respect to
any Security, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made (if applicable).
The obligations of the Company under this Section 3.11 survive the
termination of the Indenture and the payment of all amounts under or with
respect to the Securities.
[IF SENIOR INDEBTEDNESS, INSERT --
3.12 DESIGNATION AS SENIOR INDEBTEDNESS
The Company hereby confirms the designation of the Securities as
"Senior Indebtedness" for the purpose of any securities that may be issued
pursuant to the Senior Subordinated Indenture or the Subordinated Indenture.]
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[IF SENIOR SUBORDINATED INDEBTEDNESS, INSERT --
3.12 DESIGNATION AS SENIOR SUBORDINATED INDEBTEDNESS
The Company hereby confirms the designation of the Securities as
"Senior Subordinated Indebtedness" for the purpose of any securities that may be
issued pursuant to the Subordinated Indenture.]
ARTICLE 4
SATISFACTION AND DISCHARGE
4.1 SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights or registration of transfer or
exchange of Securities herein expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(a) either,
(i) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.6 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation, or
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their
Stated Maturity within one year, or
(C) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (A), (B) or (C) above, has deposited or caused
to be deposited with the Trustee, as trust funds in trust for the purpose, money
in the currency in which the Securities of such series are denominated or
Government Obligations of the government issuing the currency in which the
Securities of such series are denominated which through the payment of interest
and principal in respect thereof in accordance with their terms will provide
lawful money not later than one day before the due dates of principal (and
premium, if any) or interest, or any combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
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(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to the
Securities of all series to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, and the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
4.2 APPLICATION OF TRUST MONEY
Subject to the provisions of the penultimate paragraph of Section 10.3,
all money deposited with the Trustee pursuant to Section 4.1 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee. [IF
APPLICABLE, INSERT IN SUBORDINATED INDENTURE -- Money deposited pursuant to this
section shall not be subject to the claims of the holders of Senior Indebtedness
or Senior Subordinated Indebtedness...or in the Senior Subordinated Debenture...
Money deposited pursuant to this section shall not be subject to the claims of
Senior Indebtedness.]
ARTICLE 5
REMEDIES
5.1 EVENTS OF DEFAULT
"Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is either inapplicable to a particular series or it is
specifically deleted or modified in the Board Resolutions or supplemental
indenture creating such series of Securities or in the form of Security for such
series:
(a) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 30 days (whether or not such failure is a result of the subordination
provisions relating to such series); or
(b) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity (whether or not such failure is a
result of the subordination provisions relating to such series); or
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(c) default in the deposit of any mandatory sinking fund payment, when
and as due by the terms of a Security of that series and continuance of such
default for a period of 30 days; or
(d) default in the performance, or breach of any covenant or warranty
of the Company in this Indenture or of any other covenant to which the Company
is subject with respect to such series of Securities by virtue of Section 3.1(t)
(other than a covenant or warranty a default in whose performance or whose
breach is specifically dealt with elsewhere in this Section or which has
expressly been included in this Indenture or in the applicable Board Resolutions
or supplemental indenture with respect to such series of Securities solely for
the benefit of a series of Securities other than that series or which has been
included in this Indenture or in the applicable Board Resolutions or
supplemental indenture with respect to such series of Securities but not made
applicable to the Securities of such series) and continuance of such default or
breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding Securities
of that series, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) (i) an event of default, as defined in any indenture or instrument
evidencing or under which the Company or any Significant Subsidiary shall have
outstanding indebtedness for borrowed money in a principal amount in excess of
$15 million, shall happen and be continuing and such indebtedness shall have
been accelerated so that the same shall be or become due and payable prior to
the date on which the same would otherwise have become due and payable or (ii)
the Company or any Significant Subsidiary shall default in the payment at final
maturity of outstanding indebtedness for borrowed money in a principal amount of
$15 million, and such acceleration or default at maturity shall not be waived,
rescinded or annulled within 30 days after written notice thereof, stating that
such notice is a "Notice of Default" hereunder, shall have been given to the
Company by the Trustee (if such event be known to it), or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the Outstanding
Securities of that series; provided, however, that if such acceleration under
such indenture or instrument or default at maturity shall be remedied or cured
by the Company or Significant Subsidiary, or waived, rescinded or annulled by
the requisite holders of such indebtedness, then the Event of Default hereunder
by reason thereof shall be deemed likewise to have been thereupon remedied,
cured or waived without further action upon the part of either the Trustee or
any of the Holders; or
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under the any applicable Federal or State bankruptcy, insolvency,
reorganization or similar law, or (ii) a decree or order adjudging the Company
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its respective property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief specified in this clause (ii) unstayed and
in effect for a period of 90 consecutive days; or
(g) the commencement by the Company of a voluntary case or proceeding
under the any applicable Federal or State COMPANIES' CREDITORS bankruptcy,
insolvency, reorganization or similar law, or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or similar law, or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or the filing by
the Company of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignees, trustee, sequestrator or
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other similar official of the Company or of any substantial part of its
property, or the making by the Company of an assignment for the benefit of
creditors, or the admission by the Company in writing its inability to pay its
debts generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action; or
(h) any other Event of Default provided in the supplemental indenture
or Board Resolution of the Company under which such series of Securities is
issued or in the form of Security for such series.
Notwithstanding the foregoing provisions of this Section 5.1, if the
principal of (and premium, if any) or any interest on, or Additional Amounts
with respect to, any Security is payable in a currency or currencies (including
a composite currency) other than Dollars and such currency (or currencies) is
(or are) not available to the Company for making payment thereof due to the
imposition of exchange controls or other circumstances beyond the control of the
Company (a "Conversion Event"), the Company will be entitled to satisfy its
obligations to Holders of the Securities by making such payment in Dollars in an
amount equal to the Dollar equivalent of the amount payable in such other
currency, as determined by the Company by reference to the noon buying rate in
The City of New York for cable transfers for such currency ("Exchange Rate"), as
such Exchange Rate is certified for customs purposes by the Federal Reserve Bank
of New York on the date of such payment, or, if such rate is not then available,
on the basis of the most recently available Exchange Rate. Notwithstanding the
foregoing provisions of this Section 5.1, any payment made under such
circumstances in Dollars where the required payment is in a currency other than
Dollars will not constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event with respect to
Securities of any series, the Company shall give written notice thereof to the
Trustee; and the Trustee, promptly after receipt of such notice, shall give
notice thereof in the manner provided in Section 1.6 to the Holders of such
series. Promptly after the making of any payment in Dollars as a result of a
Conversion Event with respect to Securities of any series, the Company shall
give notice in the manner provided in Section 1.6 to the Holders of such series,
setting forth the applicable Exchange Rate and describing the calculation of
such payments.
5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
(a) If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then in every such case, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders) and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable, except that if the Event of
Default is an event described in clause 5.1(e) or 5.1(f) above, the principal
amount (or in the case of Original Issue Discount Securities, such portion
thereof) of all Securities shall become due and payable immediately, without
notice of further action of any kind whatsoever.
(b) At any time after such a declaration of acceleration with respect
to Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
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(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefore in such Securities,
to the extent that payment of such interest is lawful,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(ii) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
5.3 SUITS FOR ENFORCEMENT BY TRUSTEE
The Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of any sums due and unpaid as
a consequence of the action set froth in Section 5.2(a), and may prosecute such
proceedings to judgment or final decrees, and may enforce the same against the
Company or any other obligor upon the Securities of such series and collect the
money adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
5.4 TRUSTEE MAY FILE PROOFS OF CLAIM
In case of any judicial proceeding relative to the Company or any other
obligor upon the Securities, its property or its creditors, the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take
any and all actions authorized under Applicable Legislation in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7, except for such costs and expenses as
are a result of negligence or bad faith on the part of the Trustee.
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No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
5.6 APPLICATION OF MONEY COLLECTED
[IF APPLICABLE, INSERT -- Subject to Article 15,] Any money collected
by the Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or any premium or interest, upon presentation
of the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
(a) first, to the payment of all amounts due the Trustee under Section
6.7;
(b) second, to the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and any premium and interest, respectively; and
(c) third, the balance, if any, to the Company or any other Person or
Persons entitled thereto.
5.7 LIMITATION ON SUITS
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request;
(d) the Trustee for 60 days after receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
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(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (except as specified as
contemplated by Section 3.1(e) and subject to Section 3.7) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment and such rights shall not be impaired without
the consent of such Holder.
5.9 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
5.10 RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
5.11 DELAY OR OMISSION NOT WAIVER
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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5.12 CONTROL BY HOLDERS
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
to exercise any trust or power conferred on the Trustee, with respect to the
Securities of such series, PROVIDED THAT:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to Holders of Securities of that series, or any other
series not taking part in such direction; and
(c) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
5.13 WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(a) in the payment of the principal of or any premium or interest on
any Security of such series; or
(b) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
5.14 UNDERTAKING FOR COSTS
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; PROVIDED THAT
this Section shall not be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company,
or to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of any
series.
5.15 WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any
term, provision or condition to which the Company is subject with respect to the
Securities of any series by virtue of Section 3.1(t), or any covenant provided
pursuant to Section 9.1(b) for the benefit of Holders of such series, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such
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instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE 6
THE TRUSTEE
6.1 CERTAIN DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Trustee shall be as provided by
Applicable Legislation. Notwithstanding the foregoing (but subject to Section
1.7), no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
6.2 NOTICE OF DEFAULTS
If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by Applicable Legislation and in the
manner provided in Section 1.6. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
6.3 CERTAIN RIGHTS OF TRUSTEE
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (unless other
evidence in respect thereof be herein specifically prescribed) and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
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(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder
and, if the series of Securities was required to be registered under the
SECURITIES ACT, that the statements made by it in a Statement of Eligibility on
Form T-1 supplied to the Company are true and accurate, subject to the
qualifications set forth therein. The Trustee or any Authenticating Agent shall
not be accountable for the use or application by the Company of Securities or
the proceeds thereof.
6.5 MAY HOLD SECURITIES
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
6.6 MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company in writing.
6.7 COMPENSATION AND REIMBURSEMENT
The Company covenants and agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
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(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except to the extent any such expense,
disbursement or advance may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense, arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such expense, disbursement or advance may be attributable to its
negligence or bad faith.
"Trustee," for purposes of this Section 6.7, includes any predecessor
Trustee, PROVIDED THAT the negligence or bad faith of any Trustee shall not
affect the rights under this Section 6.7 of any other Trustee.
6.8 DISQUALIFICATION; CONFLICTING INTERESTS
If the Trustee has or shall acquire a conflicting interest within the
meaning of Applicable Legislation, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, Applicable Legislation and this Indenture, and the Company
shall take prompt action to have a successor Trustee appointed in the manner
provided herein. To the extent permitted by such legislation, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
[LIST ANY PRIOR INDENTURES BETWEEN THE COMPANY AND THE TRUSTEE THAT HAVE NOT
BEEN SATISFIED AND DISCHARGED AND THAT MAY BE EXCLUDED BY THE PROVISO TO SECTION
310(B)(1) OF THE TRUST INDENTURE ACT.]
6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY
There shall at all times be a Trustee hereunder with respect to the
Securities of each series and the Trustee shall be a Person that is eligible
pursuant to the TRUST INDENTURE ACT to act as such, has a combined capital and
surplus of at least U.S. $50,000,000 and is subject to supervision or
examination by United States Federal, Territorial, District of Columbia or State
authority. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then, for the purposes of this Section and to the extent permitted by
the TRUST INDENTURE ACT, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
The Indenture shall always have a Trustee who satisfies the
requirements of Section 3.10(a)(1) and 310(a)(5) of the Trust Indenture Act.
6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
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(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and the
Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months; or
(ii) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor by the Company
or by any such Holder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation of liquidation,
then, in any such case, (A) the Company by a Board Resolution, may remove the
Trustee with respect to all Securities, or (B) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the
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Securities of any series to all Holders of Securities of such series in the
manner provided in Section 1.6. Each notice shall include the name of the
successor Trustee with respect to the Securities of such series and the address
of its Corporate Trust Office.
6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the
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Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities. In the event any Securities shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities, in either its own name or that of its
predecessor Trustee, with the full force and effect which this Indenture
provides for the certificate of authentication of the Trustee.
6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
If and when the Trustee with respect to any series of Securities which
was required to be registered under the EXCHANGE ACT shall be or become a
creditor of the Company (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the TRUST INDENTURE ACT regarding the
collection of claims against the Company (or any such other obligor).
6.14 APPOINTMENT OF AUTHENTICATING AGENT
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and, if such Authenticating Agent is appointed with
respect to any series of Securities which was required to be registered under
the EXCHANGE ACT, shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than U.S. $50,000,000
and subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a
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notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
----------------------------------
As Trustee
By:
-------------------------------
As Authenticating Agent
By:
-------------------------------
Authorized Officer
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record Date
for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities as
of such Regular Record Date, or if there is no Regular Record Date for interest
for such series of Securities, semi-annually, upon such dates as are set forth
in the Board Resolution or indenture supplemental hereto authorizing such
series; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished; [provided, however, that so long as the Trustee is the Security
Registrar, the Company shall not be required to furnish or cause to be furnished
such a list to the Trustee. The Company shall otherwise comply with Section
310(a) of the Trust Indenture Act.]
PROVIDED, HOWEVER, that so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
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7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 7.1 and (ii) received by the Trustee for each series in the capacity as
Security Registrar if the Trustee is acting in such capacity. The Trustee may
destroy any list furnished to it as provided in Section 7.1 upon receipt of a
new list so furnished. The Trustee shall otherwise comply with Section 310(a) of
the Trust Indenture Act.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by
Applicable Legislation and any other relevant provisions of United States
securities laws.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
Applicable Legislation.
7.3 REPORTS BY TRUSTEE
(a) The Trustee shall transmit to Holders of Securities, as their names
and addresses appear in the Security Register, such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to
Applicable Legislation at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
7.4 REPORTS BY COMPANY
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the TRUST INDENTURE ACT at the
times and in the manner provided pursuant to such Act; PROVIDED THAT any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the EXCHANGE ACT shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission. The provisions of this section shall not require the Company to make
any filing with the Commission with respect to any series of Securities to which
the EXCHANGE ACT and the TRUST INDENTURE ACT are not applicable.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS
The Company shall not consolidate with or merge into any other
corporation (other than a wholly-owned Subsidiary of the Company) or convey,
transfer, sell or lease its properties and assets substantially as an entirety
(treating the Company and each Subsidiary of the Company as a single
consolidated entity and treating any sale by a Subsidiary or of a Subsidiary
(including by merger) as a sale by the Company for such purpose) to any
corporation (other than a wholly-owned Subsidiary of the Company), and the
Company shall not permit any corporation (other than a wholly owned Subsidiary
of
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the Company) to consolidate with or merge into the Company or convey, transfer
or lease its properties and assets substantially as an entirety to the Company,
unless:
(a) the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets substantially
as an entirety (treating the Company and each Subsidiary or of a Subsidiary
(including by merger)) of the Company as a single consolidated entity and
treating any sale by a Subsidiary or of a Subsidiary (including by merger) as a
sale by the Company for such purpose) to any corporation, where the corporation
formed by such consolidation or into which the Company is merged or the
corporation which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety (treating the
Company and each Subsidiary of the Company as a single consolidated entity and
treating any sale by a Subsidiary or of a Subsidiary (including by merger) as a
sale by the Company for such purpose), shall be organized and existing under the
laws of the United States of America or a state thereof or the District of
Columbia, and such corporation shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and any premium
and interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(b) the Trustee shall have received an Opinion of Counsel to the effect
that the transaction will not result in the successor being required to make any
deduction or withholding on account of any present or future tax, duty, levy,
impost, assessment or other governmental charge imposed or levied by or on
behalf of the Government of the United States, any state thereof or the District
of Columbia, or by any authority or agency therein or thereof having power to
tax from any payments in respect of the Securities, which deduction or
withholding is greater than any deduction or withholding to which the Company
was subject prior to the transaction;
(c) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company, or any Subsidiary,
as a result of such transaction as having been incurred by the Company, or such
Subsidiary, at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
8.2 SUCCESSOR SUBSTITUTED
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, and thereafter the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.
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ARTICLE 9
SUPPLEMENTAL INDENTURES
9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(a) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(b) to add to the covenants of the Company or to surrender any right or
power herein conferred upon the Company for the benefit of the Holders of all or
any series of Securities (and if such covenants or the surrender of such right
or power are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series); or
(c) to add any additional Events of Default with respect to the
Securities of any or all series (and if such additional Events of Default are to
be for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the benefit
of one or more specified series); or
(d) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons, or to permit or facilitate the issuance of Securities
in uncertificated form; or
(e) to add, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, PROVIDED THAT any such addition,
change or elimination (i) shall neither (A) apply to any Security of any series
created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (B) modify the rights of the Holder of any
such Security with respect to such provision or (ii) shall become effective only
when there is no such Security Outstanding of such series; or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(h) to evidence and provide for the acceptance of appointment hereunder
by another corporation as a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11(b); or
(i) to comply with the requirements of the Commission in connection
with the qualification of this Indenture under the TRUST INDENTURE ACT; or
(j) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or
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questions arising under this Indenture, PROVIDED THAT such action pursuant to
this clause 9.1(j) shall not adversely affect the interests of the Holders of
Outstanding Securities of any series; or
(k) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Article 14, including providing for the
conversion of the Securities into any security (other than the Common Stock of
the Company) or property of the Company; or
(l) to confirm to any mandatory provisions of law.
9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture or indentures, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of each such series under this Indenture; PROVIDED,
HOWEVER, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(a) change the Maturity or the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or
change the method of computing the amount of principal thereof or interest
thereon on any date, or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment on
or after the Maturity or the Stated Maturity, as the case may be, thereof (or,
in the case of redemption, on or after the Redemption Date); or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences, provided for in this Indenture; or
(c) if applicable, make any change that adversely affects the right to
convert any Security to which the provisions of Article 14 are applicable or,
except as provided in this Indenture, decrease the conversion rate or increase
the conversion price for any Security; or
(d) modify any of the provisions of this Section, Section 5.13 or
Section 5.16, except to increase any such percentage, or to designate, in any
supplemental indenture, additional provisions of this Indenture which, with
respect to such series, cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; PROVIDED, HOWEVER, that
this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in
this Section and Section 5.16, or the deletion of this proviso, in accordance
with the requirements of Section 6.11(b) and 9.1(h); or
(e) modify the provisions of Article 14 hereof relating to conversion
of Securities of a series in a manner adverse to the holders of Securities of
such series; or
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(f) [IF APPLICABLE, INSERT -- modify the provisions of Article 15
hereof as it relates to Outstanding Securities of a series in a manner adverse
to the Holders of Securities of such series;]
A supplemental indenture which changes or eliminates any covenants or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
9.3 EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
9.4 EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent provided therein.
9.5 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or supplement under this Article becomes effective,
a consent to it by a Holder of a Security is a continuing consent by the Holder
and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent is not made on any Security. However, any such Holder or subsequent
Holder may revoke the consent as to his Security or portion of a Security if the
Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.
9.6 CONFORMITY WITH APPLICABLE LEGISLATION
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of Applicable Legislation.
9.7 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Company and the Trustee, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
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9.8 WAIVER OF COMPLIANCE BY HOLDERS
Anything in this Indenture to the contrary notwithstanding, any of the
acts which the Company is required to do, or is prohibited from doing, by any of
the provisions of this Indenture may, to the extent that such provisions might
be changed or eliminated by a supplemental indenture pursuant to Section 9.2
upon consent of Holders of not less than a majority in aggregate principal
amount of the then Outstanding Securities of the series affected, be omitted or
done by the Company, if there is obtained the prior consent or waiver of the
Holders of at least a majority in aggregate principal amount of the then
Outstanding Securities of such series.
9.9 NOTICE OF SUPPLEMENTAL INDENTURE
Promptly after the execution by Company and the Trustees of any
supplemental indenture pursuant to the provisions of Section 9.2, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 1.6, setting forth in general terms the
substance of such supplemental indenture.
ARTICLE 10
COVENANTS
10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of such series in accordance with the terms of
the Securities and this Indenture and will duly comply with all the other terms,
agreements and conditions contained in, or made in this Indenture for the
benefit of, the Securities of such series.
10.2 MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of such series may be presented
or surrendered for payment, where Securities of such series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of such series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, Attention: Corporate Trust Department, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
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10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of, or any premium or interest on, any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of, or
any premium or interest on, any Securities of such series, deposit with any such
Paying Agent a sum sufficient to pay such principal, premium (if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium (if any) or interest thereon and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities,
other than the Trustee, to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will: (a) hold all sums held by it for
the payment of the principal of (and premium, if any) or interest on Securities
in trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided; (b) give
the Trustee notice of any default by the Company (or any other obligor upon the
Securities) in the making of any payment of principal (and premium, if any) or
interest on the Securities of such series; and (c) at any time during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent for
payment in respect of such series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or the Company may by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, or any premium or
interest on, any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request (including interest income accrued on
such funds, if any), or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once in the WALL STREET JOURNAL or other daily newspaper of national
circulation in the United States or mail to each Holder of the Securities for
which the money to be repaid is held in trust, as their names and addresses
appear in the Security Register, a notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication or mailing, any unclaimed balance of such money
then remaining will be repaid to the Company.
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The Company initially authorizes the Trustee to act as Paying Agent for
the Securities on its behalf. The Company may at any time and from time to time
authorize one or more Persons to act as Paying Agent in addition to or in place
of the Trustee with respect to any series of Securities issued under this
Indenture.
10.4 STATEMENT BY OFFICERS AS TO DEFAULT
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company, is in default in the performance and observance of any of the
terms, provisions and conditions of this Indenture (without regard to any period
of grace or requirement of notice provided hereunder) and, if the Company shall
so be in default, specifying all such defaults and the nature and status thereof
of which they may have knowledge. Such statement need not include reference to
any default which has been fully cured prior to the date as of which such
statement speaks.
10.5 EXISTENCE
Subject to Article 8, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
[IF, PURSUANT TO A BOARD RESOLUTION, THE SECURITIES ARE DESIGNATED AS
SENIOR SUBORDINATED INDEBTEDNESS, THE FOLLOWING COVENANT SHOULD BE INSERTED.]
10.6 WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 10.4, or any covenant added for the
benefit of any series of Securities as contemplated by Section 3.1 (unless
otherwise specified pursuant to Section 3.1) if before or after the time for
such compliance the Holders of a majority in principal amount of the Outstanding
Securities of all series affected by such omission (acting as one class) shall,
by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
10.7 LIMITATION ON SUBORDINATED INDEBTEDNESS
The Company shall not issue, assume, guarantee, incur or otherwise
become liable, directly or indirectly, for any indebtedness which is subordinate
or junior in right of payment to any Senior Indebtedness unless such
indebtedness constitutes Securities or is PARI PASSU or expressly subordinated
in right of payment to any Securities.
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ARTICLE 11
REDEMPTION OF SECURITIES
11.1 APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article.
11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
3.1 for such Securities. In case of any redemption at the election of the
Company of less than all the Securities of any series of the same tenor, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor of the Securities to
be redeemed, which notice shall be irrevocable. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series.
If any convertible or exchangeable Security selected for partial
redemption is converted in part before the termination of the conversion or
exchange right with respect to the portion of the Security so selected, the
converted or exchanged portion of such Security shall be deemed (so far as may
be) to be the portion selected for redemption.
Upon any redemption of fewer than all of the Securities of any given
series, the Company and the Trustee may treat as Outstanding any Securities
surrendered for conversion or exchange during the period of 15 days next
preceding the mailing of a notice of redemption, and need not treat as
Outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
11.4 NOTICE OF REDEMPTION
Notice of redemption shall be given by first-class mail, postage
prepared, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, unless a shorter period is specified in the Securities to be redeemed, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
Any notice that is mailed to the Holder of any Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if any, to
be paid;
(c) if less than all the Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be redeemed;
(d) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder of such Security will receive,
without charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(e) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
(f) in the case of any Securities that are convertible pursuant to
Article 14, the Conversion Price, the date on which the right to convert the
principal of the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) that the redemption is for a sinking or purchase fund or other
analogous obligation, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
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11.5 DEPOSIT OF REDEMPTION PRICE
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money in same day funds (or New York Clearing House funds if such deposit is
made prior to the applicable Redemption Date) sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date,
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.
11.6 SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant record dates according to their terms and the
provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security and each Security shall remain convertible into Common Shares until
the principal of such Security shall have been paid or fully provided for.
11.7 SECURITIES REDEEMED IN PART
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE 12
SINKING FUNDS
12.1 APPLICABILITY OF ARTICLE
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
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sinking fund payment." If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 12.2. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company (a) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (b) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Series; PROVIDED THAT such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
12.3 REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering the crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
13.1 COMPANY'S OPTION TO EFFECT DEFEASANCE AND COVENANT DEFEASANCE
The Company may elect, at its option by Board Resolution, at any time,
to have Section 13.2 or Section 13.3 applied to the Outstanding Securities of
any series designated pursuant to Section 3.1 as being defeasible pursuant to
this Article 13 (hereinafter called a "Defeasible Series"), upon compliance with
the conditions set forth below in this Article 13.
13.2 DEFEASANCE AND DISCHARGE
Upon the Company's exercise of the option provided in Section 13.1 to
have this Section 13.2 applied to the Outstanding Securities of any Defeasible
Series, the Company shall be deemed to have been discharged from its
obligations, with respect to the Outstanding Securities of such series as
provided in this Section on and after the date the conditions set forth in
Section 13.4 are satisfied (hereinafter called "Defeasance"). For this purpose,
such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Securities of
such series and to
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have satisfied all its other obligations under the Securities of such series and
this Indenture insofar as the Securities of such series are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (1) the rights of Holders of
Securities of such series to receive, solely from the trust fund described in
Section 13.4 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities of such series
when payments are due, (2) the Company's obligations with respect to the
Securities of such series under Sections 3.4, 3.5, 3.6, 10.2 and 10.3, (3) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, its rights under Section 6.7 and (4) this Article
13. Subject to compliance with this Article 13, the Company may exercise its
option provided in Section 13.1 to have this Section 13.2 applied to the
Outstanding Securities of any series notwithstanding the prior exercise of its
option provided in Section 13.1 to have Section 13.3 applied to the Outstanding
Securities of such series.
13.3 COVENANT DEFEASANCE
Upon the exercise by the Company of the option provided in Section 13.1
to have this Section 13.3 applied to the Outstanding Securities of any
Defeasible Series, (a) the Company shall be released from its obligations under
Section 10.5 [and 10.7], and under any other covenant to which the Company is
subject with respect to such series of Securities by virtue of Section 3.1(t)
and Article 8 and (b) the occurrence of any event specified in Sections 5.1(d)
(with respect to either of Section 10.5 [or 10.7] and any other covenant to
which the Company is subject with respect to such series of Securities by virtue
of Section 3.1(t) and Article 8), 5.1(e) and 5.1(h) shall be deemed not to be or
result in an Event of Default, in each case with respect to the Outstanding
Securities of such series as provided in this Section on and after the date the
conditions set forth in Section 13.4 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 5.1(d)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any other
document, but the remainder of this Indenture and the Securities of such series
shall be unaffected thereby. [IF APPLICABLE, INSERT --; provided, however, that
notwithstanding the provisions of Article 15, in the event that the Company
deposits money or government obligations in compliance with this Article 13, the
money or government obligations so deposited will not be subject to the
subordination provisions of Article 15 and the indebtedness evidenced by such
Outstanding Securities of any Defeasible Series will not be subordinated in
right of payment to the holders of applicable Senior Indebtedness to the extent
of the money or government obligations so deposited.]
13.4 CONDITIONS TO DEFEASANCE AND COVENANT DEFEASANCE
The following shall be the conditions to application of Section 13.2 or
13.3 to the Outstanding Securities of any Defeasible Series:
(a) The Company shall elect by Board Resolution to effect a Defeasance
pursuant to Section 13.2 or a Covenant Defeasance pursuant to Section 13.3 with
respect to the Outstanding Securities of any Defeasible Series.
(b) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the requirements
contemplated by Section 6.9 and agrees to comply with the provisions of this
Article 13 applicable to it) and conveyed all right, title and interest to the
Trustee for the benefit of the Holders of the Securities of such series, under
the terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee, as trust funds in trust for the purpose of
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making the following payments, specifically pledged to the Trustee as security
for, and dedicated solely to, the benefit of the Holders of Outstanding
Securities of such series, (i) an amount in the currency in which the Securities
of such series are denominated and in which payments of principal, premium (if
any) and interest are to be made, or (ii) the equivalent in Government
Obligations denominated in the currency in which the Securities of such series
are denominated and in which payments of principal, premium (if any), or
interest are to be made, issued by the government that issued such currency,
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms, not later than one day before the due date of any
payment, money in an amount, or (iii) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent public
accountants or chartered accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, without consideration of
the reinvestment of such interest and after payment of all federal, state,
provincial and local taxes or other charges and assessments in respect thereof
payable by the Trustee and which shall be applied by the Trustee (or any such
other qualifying trustee) to pay and discharge each installment of principal
(including mandatory sinking fund payments) of, and premium (not relating to
optional redemption), if any, and interest on, the Outstanding Securities of
such series on the dates such installments of principal of, and premium (not
relating to optional redemption), if any, or interest are due up to the Stated
Maturity Date, or the Redemption Date, as the case may be (PROVIDED THAT in the
case of redemption, before such deposit, the Company must give to the Trustee,
in accordance with Section 11.2 hereof, a notice of its election to redeem the
Outstanding Securities at a future date in accordance with Article 11 hereof,
which notice shall be irrevocable).
(c) In the case of an election under Section 13.2, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service,
a ruling or (ii) since the date hereof, there has been a change in the
applicable Federal income tax law, in case of either (i) or (ii) to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Securities will not recognize gain or loss for Federal income tax purposes as a
result of the deposit, Defeasance and discharge to be effected with respect to
the Securities of such series and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case if
such deposit, Defeasance and discharge were not to occur.
(d) In the case of an election under Section 13.3 with respect to any
series of Securities required to be registered under the SECURITIES ACT, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not recognize
income, gain or loss for United States Federal income tax purposes as a result
of the deposit and Covenant Defeasance to be effected with respect to the
Securities of such series and will be subject to United States Federal income
tax on the same amount, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.
(e) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities of such series, if then listed on
any securities exchange, will not be delisted as a result of such deposit.
(f) No Event of Default or event that (after notice of lapse of time or
both) would become an Event of Default shall have occurred and be continuing at
the time of such deposit or, with regard to any Event of Default or any such
event specified in Sections 5.1(f) and 5.1(g), at any time on or prior to the
123rd day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 123rd day).
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(g) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of Applicable Legislation
(assuming, in the case of the TRUST INDENTURE ACT, that all Securities are in
default within the meaning of such Act).
(h) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(i) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
(j) With respect to any series of Securities required to be registered
under the SECURITIES ACT, such Defeasance or Covenant Defeasance shall not
result in the trust arising from such deposit constituting an investment company
within the meaning of the United States INVESTMENT COMPANY ACT of 1940, as
amended, unless such trust shall be qualified under such Act or exempt from
regulation thereunder.
13.5 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS
Subject to the provisions of the last paragraph of Section 10.3, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 13.6, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 13.4 in respect of the
Securities of any Defeasible Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities of such series and
this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law [IF APPLICABLE, INSERT -- and shall not be subject to the
claims of the holders of Senior Indebtedness.]
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 13.4 or the principal and interest received in respect
thereof other than any such tax, fee or other charge that by law is for the
account of the Holders of Outstanding Securities.
Notwithstanding anything in this Article 13 to the contrary, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations held by it as provided in Section
13.4 with respect to Securities of any Defeasible Series that, in the opinion of
a nationally recognized firm of independent public accountants or chartered
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Covenant Defeasance with respect to the
Securities of such series.
13.6 REINSTATEMENT
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article 13 with respect to the Securities of any series by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
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Company's obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 13 with respect to Securities of such series until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust pursuant
to Section 13.5 with respect to Securities of such series in accordance with
this Article 13; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any Security of such series following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of Securities of such series to receive such payment from
the money so held in trust.
ARTICLE 14
CONVERSION OF SECURITIES
14.1 APPLICABILITY OF ARTICLE
The provisions of this Article shall be applicable to the Securities of
any series which are convertible into Common Shares, and the issuance of such
Common Shares upon the conversion of such Securities, except as otherwise
specified as contemplated by Section 3.1 for the Securities of such series.
14.2 EXERCISE OF CONVERSION PRIVILEGE
In order to exercise a conversion privilege, the Holder of a Security
of a series with such a privilege shall surrender such Security to the Company
at the office or agency maintained for that purpose pursuant to Section 10.2,
accompanied by written notice to the Company that the Holder elects to convert
such Security or a specified portion thereof. Such notice shall also state, if
different from the name and address of such Holder, the name or names (with
address) in which the certificate or certificates for Common Shares which shall
be issuable on such conversion shall be issued. Securities surrendered for
conversion shall (if so required by the Company or the Trustee) be duly endorsed
by or accompanied by instruments of transfer in forms satisfactory to the
Company and the Trustee duly executed by the registered Holder or its attorney
duly authorized in writing; and Securities so surrendered for conversion during
the period from the close of business on any Regular Record Date to the opening
of business on the next succeeding Interest Payment Date (excluding Securities
or portions thereof called for redemption during such period) shall also be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Security then being
converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Security, subject to the provisions of
Section 3.7 relating to the payment of Defaulted Interest by the Company. As
promptly as practicable after the receipt of such notice and of any payment
required pursuant to a Board Resolution and, subject to Section 3.3, set forth,
or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Security, and the surrender of such Security in
accordance with such reasonable procedures as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a certificate
or certificates for the number of full Common Shares issuable upon the
conversion of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate or supplemental
indenture, and cash as provided therein in respect of any fractional share of
such Common Shares otherwise issuable upon such conversion. Such conversion
shall be deemed to have been effected immediately prior to the close of business
on the date on which such notice and such payment, if required, shall have been
received in proper order for conversion by the Company and such Security shall
have been surrendered as aforesaid (unless such Holder shall have so surrendered
such Security and shall have instructed the Company to effect the conversion on
a particular date following such surrender and such Holder shall be entitled to
convert such Security on such date, in which case such conversion shall be
deemed to be effected immediately prior to the close of business on such date)
and at such time the rights
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of the Holder of such Security as such Security Holder shall cease and the
person or persons in whose name or names any certificate or certificates for
Common Shares shall be issuable upon such conversion shall be deemed to have
become the Holder or Holders of record of the shares represented thereby. Except
as set forth above and subject to the final paragraph of Section 3.7, no payment
or adjustment shall be made upon any conversion on account of any interest
accrued on the Securities surrendered for conversion or on account of any
dividends on the Common Shares issued upon such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense, a new
Security or Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unconverted portion of such Security.
14.3 NO FRACTIONAL SHARES
No fractional share of Common Shares shall be issued upon conversions
of Securities of any series. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. If, except for the provisions of this Section
14.3, any Holder of a Security or Securities would be entitled to a fractional
share of Common Shares upon the conversion of such Security or Securities, or
specified portions thereof, the Company shall pay to such Holder an amount in
cash equal to the current market value of such fractional share computed, (i) if
such Common Shares are listed or admitted to unlisted trading privileges on a
national securities exchange, on the basis of the last reported sale price
regular way on such exchange on the last trading day prior to the date of
conversion upon which such a sale shall have been effected, or (ii) if such
Common Shares are not at the time so listed or admitted to unlisted trading
privileges on a national securities exchange, on the basis of the average of the
bid and asked prices of such Common Shares in the over-the-counter market, on
the last trading day prior to the date of conversion, as reported by the
National Quotation Bureau, Incorporated or similar organization if the National
Quotation Bureau, Incorporated is no longer reporting such information, or if
not so available, the fair market price as determined by the Board of Directors.
For purposes of this Section, "trading day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday other than any day an which the Common Shares are
not traded on the New York Stock Exchange, or if the Common Shares are not
traded on the New York Stock Exchange, on the principal exchange or market on
which the Common Shares is traded or quoted.
14.4 ADJUSTMENT OF CONVERSION PRICE
The conversion price of Securities of any series that is convertible
into Common Shares shall be adjusted for any stock dividends, stock splits,
reclassification, combinations or similar transactions in accordance with the
term of the supplemental indenture or Board Resolutions setting forth the terms
of the Securities of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall forthwith
be filed at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 10.2 and, if different, with the Trustee. The
Company shall forthwith cause a notice setting forth the adjusted conversion
price to be mailed, first class postage prepaid, to each Holder of Securities of
such series at its address appearing on the Security Register and to any
conversion agent other than the Trustee.
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14.5 NOTICE OF CERTAIN CORPORATE ACTIONS
In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Shares payable otherwise than in cash out of its retained earnings
(other than a dividend for which approval of any stockholders of the Company is
required); or
(b) the Company shall authorize the granting to the holders of its
Common Shares of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights (other than any such
grant for which approval of any stockholders of the Company is required); or
(c) of any reclassification of the Common Shares (other than a
subdivision or combination of its outstanding shares of Common Shares , or of
any consolidation, merger or share exchange to which the Company is a party and
for which approval of any stockholders of the Company is required), or of the
sale of all or substantially all of the assets; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up;
then the Company shall cause to be filed with the Trustee, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Securities Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, or, if
a record is not to be taken, the date as of which the holders of Common Shares
of record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined, or (ii) the date on which such reclassification,
consolidation, merger, share exchange, sale, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is expected that
holders of Common Shares of record shall be entitled to exchange their Common
Shares for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up. If at any time the Trustee shall not be the
conversion agent, a copy of such notice shall also forthwith be filed by the
Company with the Trustee.
14.6 RESERVATION OF SHARES OF COMMON SHARES
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Shares, for the
purpose of effecting the conversion of Securities, the full number of Common
Shares then issuable upon the conversion of all outstanding Securities of any
series that has conversion rights.
14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of its Common Shares on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Shares in a name other than that of the
Holder of the Security or Securities to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction, that such tax has been paid.
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14.8 NONASSESSABILITY
The Company covenants that all Common Shares which may be issued upon
conversion of Securities will upon issue in accordance with the terms hereof be
duly and validly issued and fully paid and nonassessable.
14.9 EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE
In case of any consolidation of the Company with, or merger into or
with any other Person, or in case of any sale of all or substantially all of the
assets of the Company, the Company or the Person formed by such consolidation or
the Person into which the Company shall have been merged or the Person which
shall have acquired such assets, as the case may be, shall execute and deliver
to the Trustee a supplemental indenture in accordance with Section 8.1 providing
that the Holder of each Security then outstanding of any series that is
convertible into Common Shares shall have the right, which right shall be the
exclusive conversion right thereafter available to said Holder (until the
expiration of the conversion right of such Security), to convert such Security
into the kind and amount of shares of stock or other securities or property
(including cash) receivable upon such consolidation, merger or sale by a holder
of the number of Common Shares into which such Security might have been
converted immediately prior to such consolidation, merger or sale, subject to
compliance with the other provisions of this Indenture, such Security and such
supplemental indenture. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in such Security. The above provisions of this Section
shall similarly apply to successive consolidations, mergers or sales. It is
expressly agreed and understood that anything in this Indenture to the contrary
notwithstanding, if, pursuant to such merger, consolidation or sale, holders of
outstanding Common Shares do not receive Common Shares of the surviving
corporation but receive other securities, cash or other property or any
combination thereof, Holders of Securities shall not have the right to
thereafter convert their Securities into Common Shares of the surviving
corporation or the corporation which shall have acquired such assets, but
rather, shall have the right upon such conversion to receive the other
securities, cash or other property receivable by a holder of the number of
Common Shares into which the Securities held by such holder might have been
converted immediately prior to such consolidation, merger or sale, all as more
fully provided in the first sentence of this Section 14.9. Anything in this
Section 14.9 to the contrary notwithstanding, the provisions of this Section
14.9 shall not apply to a merger or consolidation of another corporation with or
into the Company pursuant to which both of the following conditions are
applicable: (i) the Company is the surviving corporation and (ii) the
outstanding Common Shares are not changed or converted into any other securities
or property (including cash) or changed in number or character or reclassified
pursuant to the terms of such merger or consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Securities may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and may accept the certificate or
opinion of an independent certified public accountant with respect thereto; and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely thereon, and shall not be responsible or accountable to any
Holder of Securities for any provision in conformity therewith or approved by
such independent certified accountant which may be contained in said
supplemental indenture.
14.10 DUTIES OF TRUSTEE REGARDING CONVERSION
Neither the Trustee nor any conversion agent shall at any time be under
any duty or responsibility to any Holder of Securities of any series that is
convertible into Common Shares to determine whether any facts exist which may
require any adjustment of the conversion price, or with respect to the nature or
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extent of any such adjustment when made, or with respect to the method employed,
whether herein or in any supplemental indenture, any resolutions of the Board of
Directors or written instrument executed by one or more officers of the Company
provided to be employed in making the same. Neither the Trustee nor any
conversion agent shall be accountable with respect to the validity or value (or
the kind or amount) of any Common Shares, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Securities and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Subject to the provisions of Section 6.1,
neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any of its Common Shares or
stock certificates or other securities or property upon the surrender of any
Security for the purpose of conversion or to comply with any of the covenants of
the Company contained in this Article 14 or in the applicable supplemental
indenture, resolutions of the Board of Directors or written instrument executed
by one or more duly authorized officers of the Company.
14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION
Any funds which at any time shall have been deposited by the Company or
on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Securities (including funds deposited for the sinking fund referred to in
Article 3 hereof) and which shall not be required for such purposes because of
the conversion of such Securities as provided in this Article 14 shall after
such conversion be repaid to the Company by the Trustee upon the Company's
written request by Company Request.
14.12 CANCELLATION OF CONVERTED SECURITIES
All securities surrendered for conversion pursuant to Section 14.2
shall be delivered to the Company and shall be cancelled concurrently with such
conversion.
ARTICLE 15
SUBORDINATION
[THIS ARTICLE SHALL BE RESERVED, UNLESS PURSUANT TO A BOARD RESOLUTION
WITH RESPECT TO THE SECURITIES OF ANY SERIES, THE SECURITIES OF SUCH SERIES ARE
DESIGNATED AS SENIOR SUBORDINATED INDEBTEDNESS OR SUBORDINATED INDEBTEDNESS, IN
WHICH CASE THE FOLLOWING PROVISIONS SHOULD BE INSERTED].
15.1 SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS
The Company covenants and agrees, and each Holder of Securities of each
series, by his acceptance thereof, likewise covenants and agrees, that the
indebtedness represented by the Securities of such series, including the
principal of (and premium, if any) and interest thereon, shall be subordinate
and subject in right of payment, to the extent and in the manner hereinafter set
forth, to the prior payment in full of all Senior Indebtedness of the Company
with respect thereto, whether outstanding on the date of original issuance of
Securities of such series or thereafter incurred; PROVIDED, HOWEVER, that each
series of Securities designated as Senior Indebtedness shall in all respects
rank PARI PASSU with all other series of Securities designated as Senior
Indebtedness; that each series of Securities designated as Senior Subordinated
Indebtedness shall in all respects rank PARI PASSU with all other series of
Securities designated as Senior Subordinated Indebtedness; and that each series
of Securities designated as Subordinated Indebtedness shall in all respects rank
PARI PASSU will all other series of Securities designated as Subordinated
Indebtedness.
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15.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its assets, or
(b) any liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshaling of
the assets and liabilities of the Company, then and in any such event specified
in (a), (b) or (c) above (each such event, if any, herein sometimes referred to
as a "Proceeding"), the holders of Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in respect of
all Senior Indebtedness, or provision shall be made in money or money's worth
before the Holders of the Securities are entitled to receive any payment or
distribution of assets of the Company, of any kind or character, whether in
cash, property or securities, on account of principal of (or premium, if any) or
interest on the Securities or on account of any purchase or other acquisition of
Securities by the Company or any Subsidiary of the Company (all such payments,
distributions, purchases and acquisitions by the Company herein referred to,
individually and collectively, as a "Securities Payment"), and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any Securities Payment which may be payable or deliverable
in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
Securities Payment before all Senior Indebtedness is paid in full or payment
thereof provided for, and if such fact shall, at or prior to the time of such
Securities Payment, have been made known to a Responsible Officer of the Trustee
or, as the case may be, such Holder, then and in such event such Securities
Payment shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company, for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares or other securities of the
Company provided for by a plan or reorganization or readjustment as reorganized
or readjusted, or securities of the Company or any other corporation which are
subordinated in right of payment to all then outstanding Senior Indebtedness to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance, transfer,
sale or lease of its properties and assets substantially as an entirety to
another corporation upon the terms and conditions set forth in Article 8 shall
not be deemed a Proceeding for the purposes of this Section if the corporation
formed by such consolidation or into which the Company is merged or the
corporation which acquires by conveyance, transfer, sale or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer, sale or lease,
comply with the conditions set forth in Article 8.
15.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF
SECURITIES
In the event that any Securities are declared due and payable before
their Stated Maturity (an "Acceleration of Securities"), the holders of the
Senior Indebtedness outstanding at the time of such Acceleration of Securities
shall be entitled to receive payment in full of all amounts due or which become
due as a result of such Acceleration of Securities on or in respect of all such
Senior Indebtedness, or
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provision shall be made for such payment in money or money's worth, before the
Holders of the Securities are entitled to receive any Securities Payment.
In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to a Responsible Officer
of the Trustee or such Holder, as the case may be, then and in such event such
Securities Payment shall be paid over and delivered forthwith to the Company,
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
The provisions of this Section shall not apply to any Securities
Payment with respect to which Section 15.2 would be applicable.
15.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on or other monetary
obligation with respect to any Senior Indebtedness beyond any applicable grace
period with respect thereto or, with respect to any series of Securities
designated as Subordinated Indebtedness, in the event that any event of default
with respect to any Senior Indebtedness shall have occurred and be continuing
permitting the holders of such Senior Indebtedness (or a trustee or other
representative on behalf of the holders thereof) to declare such Senior
Indebtedness due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and, if any such Senior
Indebtedness shall have been accelerated, such acceleration shall have been
rescinded or annulled, or in the event any judicial proceeding shall be pending
with respect to any such default, then no Securities Payment shall be made to
the Trustee or any Holder in respect of the Securities; provided, however, that
nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article 12 by delivering and crediting pursuant to
Section 12.2 Securities which have been acquired (upon redemption or otherwise)
prior to such default in payment or event of default or which have been
converted pursuant to Article 14.
(b) In addition and notwithstanding the foregoing, with respect to any
series of Securities designated as Senior Subordinated Indebtedness or
Subordinated Indebtedness, during the continuance of any event of default other
than the payment of principal of (or premium, if any) or interest on or other
monetary obligation with respect to any Senior Indebtedness, no payment may be
made by the Company upon or in respect of any series of Securities designated as
Senior Subordinated Indebtedness or Subordinated Indebtedness for a payment
blockage period ("Payment Blockage Period") commencing on the date the Company
shall have received a notice from a holder of Senior Indebtedness or a trustee
or other representative thereof and ending 179 days thereafter (unless such
event of default shall have been cured or waived or such Payment Blockage Period
shall have been terminated by written notice to the Company from such holder,
trustee or representative thereof). Notwithstanding anything to the contrary
herein, in no event shall any one Payment Blockage Period extend beyond 179
days. Notwithstanding anything to the contrary herein, Payment Blockage Periods
aggregating more than 179 days may not be commenced with respect to any series
of Securities designated as Senior Subordinated Indebtedness or Subordinated
Indebtedness during any period of 360 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to a Responsible Officer
of the Trustee or, as the case may be, such Holder then and in such event such
Securities Payment
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shall be paid over and delivered forthwith to the Company for application to the
payment of all Senior Indebtedness remaining unpaid, to the extent necessary to
pay all Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
(d) The provisions of this Section 15.4 shall not apply to any
Securities Payment with respect to which Section 15.2 would be applicable.
15.5 PAYMENT PERMITTED IF NO DEFAULT
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent (a) the Company at any time except during
the pendency of any Proceeding referred to in Section 15.2 or under the
conditions described in Section 15.3 or 15.4, from making at any time Securities
Payments, or (b) the application by the Trustee of any money deposited with it
hereunder to Securities Payments or the retention of such Securities Payment by
the Holders, if, at the time of such application by the Trustee, it did not have
actual knowledge that such Securities Payment would have been prohibited by the
provisions of this Article.
15.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holder of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, creditors other than holders of Senior Indebtedness
and the Holders of the Securities, be deemed to be a payment or distribution by
the Company to or on account of the Senior Indebtedness.
15.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS AND SUBJECT TO
APPLICABLE LAWS
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand and are
subject to all applicable laws, including, in the case of the bankruptcy or
insolvency of the Company, the potential application of Canadian legislation.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, the
creditors of the Company, other than holders of Senior Indebtedness and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of the Securities and creditors of the Company, other
than the holders of Senior Indebtedness; or (c) prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
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15.8 TRUSTEE TO EFFECTUATE SUBORDINATION
Each Holder of a Security, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
15.9 NO WAIVER OF SUBORDINATION PROVISIONS
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company,
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or the time of payment of, or renew or alter Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company or any other Person.
15.10 NOTICE TO TRUSTEE
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor or
representative thereof, and prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.1, shall be entitled in all
respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to the date such amounts may be payable.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice, and proof of ownership
acceptable to the Trustee, by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee therefor or representative thereof) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor or representative thereof). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable
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satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
15.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith and absent gross negligence or willful misconduct,
mistakenly pays over or distributes to Holders of Securities or to the Company
or to any other Person cash, property or securities to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
15.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS;
PRESERVATION OF TRUSTEE'S RIGHTS
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
15.14 ARTICLE APPLICABLE TO PAYING AGENTS
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; PROVIDED,
HOWEVER, that Sections 15.10 and 15.13 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
15.15 DEFEASANCE OF THIS ARTICLE 15
The subordination of the Securities provided by this Article 15 is
expressly made subject to the provisions for defeasance or covenant defeasance
in Article 13 and, anything herein to the contrary
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notwithstanding, upon the effectiveness of any such defeasance or covenant
defeasance, the Securities then outstanding shall thereupon cease to be
subordinated pursuant to this Article 15.
15.16 SUBSIDIARIES
No payment, distribution of assets or other action may be taken by any
Subsidiary of the Company with respect to the Securities if the Company would be
prohibited by this Article 15 from taking such action.
15.17 RESCISSION
The provisions of this Article 15 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment in respect of any of
the Senior Indebtedness is rescinded or must otherwise be returned by the holder
thereof upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
15.18 CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT
For purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities in accordance with
their terms shall not be deemed to constitute a Securities Payment, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute a Securities Payment. For the purposes of this Section, the term
"junior securities" means (i) shares of any class of the Company and (ii) other
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the right
which is absolute and unconditional, of the Holder of any Security to convert or
exchange such Security in accordance with its terms.
ARTICLE 16
MEETINGS OF HOLDERS OF SECURITIES
16.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED
A meeting of Holders of Securities of any or all series may be called
at any time and from time to time pursuant to this Article to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this indenture to be made, given or taken by Holders of
Securities of such series.
16.2 CALL, NOTICE AND PLACE OF MEETINGS
(a) The Trustee may at any time call a meeting of Holders of Securities
of any series for any purpose specified in Section 16.1, to be held at such time
and at such place in Houston, Texas, in New York, New York or in any other
location, as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner specified in Section 1.6, not less than 20 nor more than
180 days prior to the date fixed for the meeting.
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(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in aggregate principal amount of the Outstanding
Securities of any series, shall have requested the Trustee for any such series
to call a meeting of the Holders of Securities of such series for any purpose
specified in Section 16.1, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
made the first publication of the notice of such meeting within 30 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Securities of
such series in the amount above specified, as the case may be, may determine the
time and the place in Houston, Texas, or in New York, New York, for such meeting
and may call such meeting for such purposes by giving notice thereof as provided
in Subsection (a) of this Section.
16.3 PERSONS ENTITLED TO VOTE AT MEETINGS
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
16.4 QUORUM; ACTION
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting shall,
if convened at the request of Holders of Securities of such series, be
dissolved. In any other case, the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Subject to Section 16.5(d), notice of the
reconvening of any adjourned meeting shall be given as provided in Section
16.2(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly that Persons
entitled to vote a majority in principal amount of the Outstanding Securities of
such series shall constitute a quorum.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series; provided, however, that, except as limited by the proviso to Section
9.2, any resolution with respect to any request, demand, authorization,
direction, notice, consent or waiver which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage that is less
than a majority in aggregate principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in aggregate principal amount of the Outstanding
Securities of that series.
Except as limited by the proviso to Section 9.2, any resolution passed
or decision taken at any meeting of Holders of Securities of any series duly
held in accordance with this Section shall be binding on all the Holders of
Securities of such series, whether or not present or represented at the meeting.
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16.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS
(a) The holding of Securities shall be proved in the manner specified
in Section 1.3, and the appointment of any proxy shall be proved in the manner
specified in Section 1.3. Such regulations may provide that written instruments
appointing proxies, regular or on their face, may be presumed valid and genuine
without the proof specified in Section 1.3 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 16.2(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall appoint a temporary chairman. A permanent chairman and
a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series and each
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or as a proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 16.2 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in aggregate principal amount of
the Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
16.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at he meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting, and there shall be
attached to such record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that such notice was given as provided in Section 16.2 and, if
applicable, Section 16.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting., Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PATTERSON ENERGY, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ATTEST:
, as Trustee
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By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ATTEST:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT 4.5
PATTERSON ENERGY, INC.
Form of Warrant Agreement
[for warrants sold attached to equity securities](1)
THIS WARRANT AGREEMENT is dated as of _________________, between
Patterson Energy, Inc., a Delaware corporation (hereinafter called "Patterson",
which term includes any successor corporation), and ___________, as Warrant
Agent (herein called the "Warrant Agent").
WHEREAS, Patterson proposes to sell [title of Equity Securities being
offered] (the "Offered Securities") with warrant certificates evidencing one or
more warrants (the "Warrants" or, individually, a "Warrant") representing the
right to purchase [title of Equity Securities purchasable through exercise of
Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, Patterson desires the Warrant Agent to act on behalf of
Patterson in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution and
Delivery of Warrant Certificates
Section 1.1. Issuance of Warrants. Warrants shall be initially issued
in connection with the issuance of the Offered Securities [but shall be
separately transferable on and after __________ (the "Detachable Date")] [and
shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the provisions contained herein and therein, to purchase
Warrant Securities. Warrant Certificates shall be initially issued in units with
the Offering Securities and each Warrant Certificate included in such a unit
shall evidence _____ Warrants for Offered Securities included in such unit.
Section 1.2. Execution and Delivery of Warrant Certificates. Each
Warrant Certificate, whenever issued, shall be in registered(2) form
substantially in the form set forth in Exhibit A hereto, shall be dated the date
of its issuance and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of Patterson executing the same
may approve (execution thereof to be conclusive evidence of such approval) and
as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be signed on behalf of Patterson by its Chief Executive Officer, its President,
or one of its Vice Presidents,
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(1) Complete or modify the provisions of this Form as appropriate to reflect the
terms of the Warrants and Warrant Securities.
(2) If Warrants are issued in bearer form, appropriate revisions will be made to
this Agreement to facilitate such issuance.
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under its corporate seal and attested by its Secretary or one of its Assistant
Secretaries. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of Patterson may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by Patterson shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of Patterson who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of Patterson; and any Warrant
Certificate may be signed on behalf of Patterson by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of Patterson, although at the date of the execution of this Agreement
any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that
purpose. [If Offered Securities with Warrants which are not immediately
detachable - or upon the register of the Offered Securities prior to the
Detachable Date. Patterson will or will cause the registrar of the Offered
Securities to make available at all times to the Warrant Agent such information
as to holders of the Offered Securities with Warrants as may be necessary to
keep the Warrant Agent's records up to date.]
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates
evidencing the right to purchase Warrant Securities (except as provided in
Sections 2.3(c), 3.2 and 4.1) may be executed by Patterson and delivered to the
Warrant Agent upon the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly
executed on behalf of Patterson, countersign Warrant Certificates evidencing
Warrants representing the right to purchase up to ____________ Warrant
Securities and shall deliver such Warrant Certificates to or upon the order of
Patterson. Subsequent to such original issuance of the Warrant Certificates, the
Warrant Agent shall countersign a Warrant Certificate only if the Warrant
Certificate is issued in exchange or substitution for one or more previously
countersigned Warrant Certificates or in connection with their transfer, as
hereinafter provided or as provided in Section 2.3(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants
Section 2.1. Warrant Price. [On ___________, the] [The original]
exercise price of each Warrant is [$]____. [During the period from
_____________, through and including _____________, the exercise price of each
Warrant will be [$]___________. On _______________, the exercise price of each
Warrant will be [$]________.] [if applicable, insert relevant amounts in
applicable foreign currency, currency unit or composite currency] Such purchase
price of Warrant Securities is referred to in this Agreement as the "Warrant
Price." The Warrant Price and the number and kind of Warrant Securities for
which a Warrant may be exercised is subject to adjustment from time to time as
set forth in Article V hereof.
Section 2.2. Duration of Warrants. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[_____________] and at or before 5 p.m. New York time
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on ______________ (the "Expiration Date"). Each Warrant not exercised at or
before 5 p.m. New York time on the Expiration Date shall become void, and all
rights of the holder of the Warrant Certificate evidencing such Warrant under
this Agreement shall cease.
Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole number of
Warrants may be exercised by providing certain information set forth on
the reverse side of the Warrant Certificate and by paying in full, [in
lawful money of the United States of America] [if applicable -- insert
relevant foreign currency, currency unit or composite currency] [in cash
or by certified check or official bank check or by bank wire transfer,
in each case] [by bank wire transfer], in immediately available funds,
the Warrant Price for each Warrant exercised, to the Warrant Agent at
its corporate trust office [or at ________], provided that such exercise
is subject to receipt, within three business days of such [payment]
[wire transfer] by the Warrant Agent of the Warrant Certificate with the
form of election to purchase Warrant Securities set forth on the reverse
side of the Warrant Certificate properly completed and duly executed.
The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate
as aforesaid, be deemed to be the date on which the Warrant is
exercised. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of Patterson maintained with
it and shall advise Patterson by telephone at the end of each day on
which a [payment] [wire transfer] for the exercise of Warrants is
received of the amount so deposited to its account. The Warrant Agent
shall promptly confirm such telephone advice to Patterson in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise Patterson of (i) the number of Warrants exercised,
(ii) the instructions of each holder of the Warrant Certificates
evidencing such Warrants with respect to delivery of the Warrant
Securities to which such holder is entitled upon such exercise, (iii)
delivery of Warrant Certificates evidencing the balance, if any, of the
Warrants remaining after such exercise, and (iv) such other information
as Patterson shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant,
Patterson shall issue to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled in fully registered form, registered in such
name or names as may be directed by such holder. Such certificate or
certificates evidencing the Warrant Securities shall be deemed to have
been issued and any persons who are designated to be named therein shall
be deemed to have become the holder of record of such Warrant Securities
as of the close of business on the exercise date. No fractional Warrant
Securities will be issued upon exercise of any Warrant. For each
fractional Warrant Security that would otherwise be issued, Patterson
will pay by company check in an amount equal to such fraction multiplied
by the closing sales price of the Warrant Securities on the principal
national securities exchange on which they are listed (or if not so
listed, another equivalent means reasonably determined by Patterson) on
the business day immediately preceding the exercise date. If fewer than
all of the Warrants evidenced by such Warrant Certificate are exercised,
Patterson shall execute, and an authorized officer of the Warrant Agent
shall manually countersign and deliver, a new Warrant Certificate
evidencing the number of such Warrants remaining unexercised.
(d) Patterson shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any
transfer involved in the issue of the Warrant Securities; and in the
event that any such transfer is involved, Patterson shall not be
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required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to
Patterson's satisfaction that no such tax or other charge is due.
ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates
Section 3.1. No Rights as Stockholder Conferred by Warrants or Warrant
Certificates. No Warrant Certificate or Warrant evidenced thereby shall entitle
the holder thereof to any of the rights of a holder of Warrant Securities,
including, without limitation, the right to receive dividends, vote, receive
notice of any meeting of stockholders or otherwise have any right as a
stockholder of Patterson.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to Patterson or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, Patterson shall execute,
and an authorized officer of the Warrant Agent shall manually countersign and
deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated
Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing
a like number of Warrants. Upon the issuance of any new Warrant Certificate
under this Section, Patterson may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Warrant
Agent) in connection therewith. Every substitute Warrant Certificate executed
and delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of
Patterson, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement of mutilated, lost, stolen
or destroyed Warrant Certificates.
Section 3.3. Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against Patterson suitable to enforce or otherwise in
respect of, his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates
Section 4.1. Exchange and Transfer of Warrant Certificates. [If Offered
Securities with Warrants which are immediately detachable - Upon] [If Offered
Securities with Warrants which are not immediately detachable - Prior to the
Detachable Date, a Warrant Certificate may be exchanged or transferred only
together with the Offered Securities to which the Warrant Certificate was
initially attached and only for the purpose of effecting or in conjunction with
an exchange or transfer of such Offered Securities. Prior to the Detachable
Date, each transfer of the Offered Securities [on the register of the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the corporate trust office of the
Warrant Agent [or at ________], Warrant Certificates evidencing Warrants may be
exchanged for Warrant Certificates in other denominations
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evidencing such Warrants or the transfer thereof may be registered in whole or
in part; provided that such other Warrant Certificates evidence the same
aggregate number of Warrants as the Warrant Certificates so surrendered. The
Warrant Agent shall keep, at its corporate trust office [and at __________]
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant
Agent at its corporate trust office [or at ____________] for exchange or
registration of transfer, properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to Patterson and the Warrant Agent. No service charge
shall be made for any exchange or registration of transfer of Warrant
Certificates but Patterson may require payment of a sum sufficient to cover any
stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. Whenever any
Warrant Certificates are so surrendered for exchange or registration of transfer
an authorized officer of the Warrant Agent shall manually countersign and
deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by Patterson, as so requested.
The Warrant Agent shall not be required to effect any exchange or registration
of transfer which will result in the issuance of a Warrant Certificate
evidencing a fraction of a Warrant or a number of full Warrants and a fraction
of a Warrant. All Warrant Certificates issued upon any exchange or registration
of transfer of Warrant Certificates shall be the valid obligations of Patterson,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such exchange or
registration of transfer.
Section 4.2. Treatment of Holders of Warrant Certificates. [If Warrants
which are not immediately detachable - Every holder of a Warrant Certificate, by
accepting the same, consents and agrees with Patterson, the Warrant Agent and
with every subsequent holder of such Warrant Certificate that until the transfer
of the Warrant Certificate is registered on the books of the Warrant Agent [or
the registrar of the Offered Securities prior to the Detachable Date], Patterson
and the Warrant Agent [or the registrar of the Offered Securities prior to the
Detachable Date] may treat the registered holder as the absolute owner thereof
for any purpose and as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary notwithstanding.]
Section 4.3. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to Patterson, be delivered
to the Warrant Agent and all Warrant Certificates surrendered or so delivered to
the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not
be reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to Patterson from time to time or otherwise dispose
of cancelled Warrant Certificates in a manner satisfactory to Patterson.
ARTICLE V
Adjustments
Section 5.1. Adjustment of Warrant Price and Number of Warrant
Securities Purchasable.
(a) In case at any time Patterson shall issue and sell for cash any
Warrant Securities (excluding (i) Warrant Securities issued in any of
the transactions described in paragraphs (b), (c) or (d) below and (ii)
Warrant Securities issued upon exercise of Warrants) at a price per
Share lower than [___%] below the Market Price determined as of the date
immediately preceding the date of such sale and issuance, the Warrant
Price in effect at the close of business on the date immediately
preceding the date of such sale and issuance shall be reduced by
multiplying such Warrant Price by a fraction, (i) the numerator of which
shall be the sum of (x) the number of Warrant Securities outstanding at
the close of business on the date immediately preceding the
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date of such sale and issuance plus (y) the number of Warrant Securities
which the aggregate amount of cash received or receivable for such sale
and issuance would purchase at such current Market Price per Warrant
Security, and (ii) the denominator of which shall be the total number of
Warrant Securities outstanding immediately after such sale and issuance.
Such adjustment shall be made successively whenever such an issuance is
made.
(b) In case Patterson shall pay or make a dividend or other
distribution on any class of stock of Patterson in Warrant Securities or
securities convertible into or exchangeable for Warrant Securities (such
convertible or exchangeable stock or securities being hereinafter called
"Convertible Securities"), other than Convertible Securities which
require payments of cash to be made by the holder thereof in connection
with any conversion into or exchange for Warrant Securities, the Warrant
Price in effect at the close of business on the day fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such Warrant Price by a
fraction of which the numerator shall be the number of Warrant
Securities outstanding at the close of business on the date immediately
preceding the date fixed for such determination and the denominator
shall be the sum of such number of Warrant Securities and the total
number of Warrant Securities constituting such dividend or other
distribution or the maximum number of Warrant Securities issuable upon
conversion or exchange of all Convertible Securities constituting such
dividend or other distribution.
(c) In case at any time Patterson shall grant (whether directly or
otherwise) any rights (other than the Warrants and "poison pill" rights
distributed pursuant to a stockholders' rights plan) to subscribe for or
to purchase, or any options for the purchase of, Warrant Securities or
Convertible Securities, whether or not such rights or options or the
right to convert or exchange any such Convertible Securities are
immediately exercisable, and the price per Warrant Security for which
Warrant Securities are issuable upon the exercise of such rights or
options or upon conversion or exchange of such Convertible Securities
(determined by dividing (x) the total amount, if any, received or
receivable by Patterson as consideration for the granting of such rights
or options, plus the minimum aggregate amount of additional
consideration payable to Patterson upon the exercise of all such rights
or options, or, in the case of such rights or options which relate to
Convertible Securities, the total amount, if any, received or receivable
by Patterson as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional consideration,
if any, payable upon the issuance or sale of such Convertible Securities
and upon the conversion or exchange thereof, by (y) the total maximum
number of Warrant Securities issuable upon the exercise of such rights
or options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such rights or options) shall
be less than the Market Price, determined as of the date immediately
preceding the date of granting such rights or options, the Warrant Price
in effect at the close of business on the date immediately preceding the
date of granting such rights or options shall be adjusted by multiplying
such Warrant Price by a fraction, (i) the numerator of which shall be
the sum of (x) the number of Warrant Securities outstanding at the close
of business on the date immediately preceding the date of granting such
rights or options plus (y) the quotient obtained by dividing the product
of the price per Warrant Security, determined as set forth above, and
the maximum number of Warrant Securities issuable upon the exercise of
such rights or options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights or
options by the Market Price and (ii) the denominator of which shall be
the sum of the number of Warrant Securities outstanding at the close of
business on the date immediately preceding the date of granting such
rights or options and the maximum number of Warrant Securities issuable
upon the exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise
of such rights or options. Except as provided in this
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subparagraph (c), no further adjustments of the Warrant Price shall be
made upon the issuance of such Warrant Securities or of such Convertible
Securities upon exercise of such rights or options or upon the actual
issuance of such Warrant Securities upon conversion or exchange of such
Convertible Securities.
(d) In case Patterson shall issue (whether directly or by assumption
in a merger or otherwise) or sell any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately
exercisable, and the price per Warrant Security for which Warrant
Securities are issuable upon such conversion or exchange (determined by
dividing (x) the total amount received or receivable by Patterson as
consideration for the issue or sale of such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any,
payable to Patterson upon the conversion or exchange thereof, by (y) the
total maximum number of Warrant Securities issuable upon the conversion
or exchange of all such Convertible Securities) shall be less than the
Market Price, determined as of the date immediately preceding the date
of such issuance or sale of such Convertible Securities, then the
Warrant Price in effect at the close of business on the date immediately
preceding the date of issuance or sale of such Convertible Securities
shall be adjusted by multiplying such Warrant Price by a fraction, (i)
the numerator of which shall be the sum of (x) the number of Warrant
Securities outstanding at the close of business on the date immediately
preceding the date of issuance or sale of such Convertible Securities
plus (y) the quotient obtained by dividing the product of the price per
Warrant Security, determined as set forth above, and the maximum number
of Warrant Securities issuable upon conversion or exchange of all such
Convertible Securities by the Market Price and (ii) the denominator of
which shall be the sum of the number of Warrant Securities outstanding
at the close of business on the date immediately preceding the date of
issuance or sale of such Convertible Securities and such maximum number
of Warrant Securities issuable upon conversion or exchange, provided
that (1) except as provided in subparagraph (e), no further adjustments
of the Warrant Price shall be made upon the actual issuance of such
Warrant Securities upon conversion or exchange of such Convertible
Securities, and (2) if any such issuance or sale of such Convertible
Securities is made upon exercise of any rights to subscribe for or to
purchase or any option to purchase any such Convertible Securities for
which adjustments of the Warrant Price have been or are to be made
pursuant to subparagraph (c) or the other provisions of this
subparagraph (d), no further adjustments of the Warrant Price shall be
made by reason of such issuance or sale.
(e) If (x) the purchase price provided for in any rights or options
referred to in subparagraph (c), or (y) the additional consideration, if
any, payable upon the conversion or exchange of any Convertible
Securities referred to in subparagraphs (c) and/or (d), or (z) the rate
at which any Convertible Securities referred to in subparagraphs (c)
and/or (d) are convertible into or exchangeable for Warrant Securities
shall change (other than under or by reason of provisions contained in
the instruments governing such rights, options or Convertible Securities
that are designed to protect against dilution), the Warrant Price in
effect at the close of business on the date of such event shall
forthwith be adjusted to the Warrant Price which would have been in
effect at such time had such rights, options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold. On the expiration of any such option
or right or the termination of any such right to convert or exchange
such Convertible Securities, the Warrant Price in effect at the close of
business on the date of expiration or termination shall be readjusted to
the Warrant Price which would have been in effect at such time had such
right, option or Convertible Securities, to the extent outstanding
immediately prior to the date of such expiration or termination, never
been granted, issued or sold.
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(f) In case Patterson shall, by dividend or otherwise, declare a
dividend or other distribution on its Warrant Securities payable in
evidences of its indebtedness or assets (including securities, but
excluding (i) any rights or options referred to in subparagraph (c) of
this Section, (ii) any dividend or distribution paid in cash out of
consolidated retained earnings or consolidated earned surplus,
determined in accordance with generally accepted accounting principles,
including the making of appropriate deductions for minority interests,
if any, in subsidiaries, and (iii) any dividend or distribution
otherwise paid in Warrant Securities or Convertible Securities), the
Warrant Price in effect at the close of business on the date fixed for
the determination of shareholders entitled to receive such dividend or
other distribution shall be adjusted so that the same shall equal the
price determined by multiplying the Warrant Price in effect at the close
of business on the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution by a fraction of
which the numerator shall be the current Market Price per Warrant
Security on the date fixed for such determination less the then fair
market value (as determined by the board of directors, whose
determination shall be conclusive and described in a Board Resolution
filed with the Warrant Agent) of the portion of the assets or evidences
of indebtedness so distributed applicable to one share and of which the
denominator shall be such current Market Price per share.
(g) In case Patterson shall at any time subdivide its outstanding
Warrant Securities into a greater number of Warrant Securities, the
Warrant Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding Warrant
Securities shall be combined into a smaller number of Warrant
Securities, the Warrant Price in effect immediately prior to such
combination shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately upon the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(h) In case of any consolidation of Patterson with, or merger of
Patterson into, any other corporation or other entity, or in case of any
merger of another corporation or other entity into Patterson (other than
a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding Warrant Securities), or in case
of any sale or transfer of all or substantially all of the assets of
Patterson, or in the case of a capital reorganization or
recapitalization of the capital stock of Patterson in such a way that
holders of Warrant Securities shall be able to receive securities, cash
or assets with respect to or in exchange for such Warrant Securities
from the corporation or other entity formed by such consolidation or
resulting from such merger or which acquires such assets, as the case
may be, or from Patterson, in the case of a capital reorganization or
recapitalization not involving a consolidation, merger or sale or
transfer of all or substantially all of the assets of Patterson, such
corporation or other entity or Patterson, as the case may be, and the
Warrant Agent shall execute and deliver an amendment to this Agreement
providing that the holder of each Warrant then outstanding shall have
the right thereafter, during the period such Warrant shall be
exercisable, to exercise such Warrant only for the kind and amount of
securities, cash and other property receivable upon such consolidation,
merger, sale, transfer, capital reorganization or recapitalization by a
holder of the number of Warrant Securities for which such Warrant might
have been exercised on the date immediately prior to such consolidation,
merger, sale, transfer, capital reorganization or recapitalization,
assuming such holder of Warrant Securities failed to exercise his rights
of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale,
transfer, capital reorganization or recapitalization (provided that if
the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, sale, transfer, capital reorganization
or recapitalization is not the same for each Warrant Security in respect
of which such rights of election shall not have been exercised (the
"Non-electing Warrant Securities"), then, for the purpose of this
subparagraph (h), the kind and amount of securities,
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cash and other property receivable upon such consolidation, merger,
sale, transfer, capital reorganization or recapitalization by each Non-
electing Warrant Security shall be deemed to be the kind and amount so
receivable per Warrant Security by a plurality of the Non-electing
Warrant Securities).
Such amendment shall provide for adjustments which, for events
subsequent to the effective date of such amendment, shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Article V. The above provisions of this paragraph shall similarly
apply to successive consolidations, mergers, sales, transfers, capital
reorganizations or recapitalization.
Patterson shall not effect any such consolidation, merger,
sale or transfer, unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than
Patterson) resulting from such consolidation or merger or the
corporation purchasing or otherwise acquiring such assets or other
appropriate corporation or entity shall assume, by written instrument
executed and delivered to the Warrant Agent, the obligation to deliver
to the holder of each Warrant such shares of stock, securities, cash or
assets as, in accordance with the foregoing provisions, such holders
may be entitled to receive and the other obligations under this
Agreement.
(i) In case an adjustment in the Warrant Price shall be required by
Section 5.1 (a), (b), (c), (d) and/or (f) above, the required adjustment
shall become effective at the opening of business on (i) the Business
Day immediately following the date fixed for the determination of
shareholders of Patterson entitled to receive such dividend or
distribution, in the case of any adjustment pursuant to Section 12(b) or
(f), or (ii) the Business Day immediately following the date of such
sale and issuance or the date of such grating of such rights or options,
as the case may be, in the case of an adjustment pursuant to section 5.1
(a), (c) or (d).
(j) For the purposes of this Article V the number of Warrant
Securities outstanding at any given time shall not include Warrant
Securities owned or held by or for the account of Patterson or of any of
its wholly or majority owned subsidiaries.
(k) Upon each adjustment of the Warrant Price pursuant to this
Section 5.1, each Warrant outstanding at the time of and immediately
prior to such adjustment shall give the holder thereof the right to
purchase, at the Warrant Price resulting from such adjustment, the
number of Warrant Securities obtained by multiplying the Warrant Price
in effect immediately prior to such adjustment by the number of Warrant
Securities issuable upon exercise of such Warrant immediately prior to
such adjustment and dividing the product thereof by the Warrant Price
resulting from such adjustment.
(l) No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least one percent
in such Warrant Price; provided, however, that any one or more such
adjustments which, by reason of this subparagraph (l) is not required to
be made shall be carried forward on a cumulative basis and fully taken
into account in any subsequent adjustment. All calculations under this
Section 5.1 shall be made to the nearest cent or to the nearest 1/100 of
a Warranty Security, as the case may be. The provisions of this Section
12(l) shall also apply to readjustments provided for in subparagraph
(e).
(m) Patterson shall be obligated to issue any additional Warrant
Securities which become issuable upon exercise of Warrants as a result
of any event described in this Section 5.1
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which requires an adjustment in the Warrant Price and the number of
Warrant Securities issuable upon exercise of the Warrants.
(n) For purposes of this Section 5.1, "Market Price" means the
average of the closing prices per Warrant Security on the American Stock
Exchange or the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"), as the case may be (or, if there
is no such closing price, the mean between the bid and asked prices
reported on NASDAQ, or on any other national securities exchange or
over-the-counter market on which such quotations are regularly
available, as the case may be), on each of the ten trading days
immediately preceding the date as of which the determination of Market
Price is to be made. If at any time the Warrant Securities are not
listed on any national securities exchange or quoted in the
over-the-counter market, the Market Price shall be deemed to be the fair
value thereof determined in good faith by an independent brokerage firm
or Standard & Poor's Corp. as of a date which is within 15 days of the
date as of which the determination of Market Price is to be made.
(o) If Patterson shall take any action affecting the Warrant
Securities, other than action described in this Section 5.1, which in
the opinion of the Board of Directors of Patterson would materially
adversely affect the exercise rights of the holders of the Warrants, the
Warrant Price for the Warrants may be adjusted, to the extent permitted
by law, in such manner, if any, and at such time, as such Board of
Directors may determine in good faith to be equitable in the
circumstances. Failure of the Board of Directors of Patterson to provide
for any such adjustment prior to the effective date of any such action
by Patterson affecting the Warrant Securities shall be evidence that the
Board of Directors of Patterson has determined that it is equitable to
make no adjustments in the circumstances.
Section 5.2. Voluntary Adjustment by Patterson. Patterson may at its
option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount deemed appropriate by the Board of Directors of
Patterson; provided, that, if Patterson elects so to reduce the then current
Warrant Price, such reduction shall remain in effect for at least 20 Business
Days, after which time Patterson may, at its option, reinstate the Warrant Price
in effect prior to such reduction.
Section 5.3. Notice of Adjustment. Whenever the Warrant Price is
adjusted as herein provided, the Chief Financial Officer of Patterson shall
compute the adjusted Warrant Price in accordance with the foregoing provisions
and shall prepare a certificate setting forth such adjusted Warrant Price and
showing in reasonable detail the facts upon which such adjustment is based. A
copy of such certificate shall be filed promptly with the Warrant Agent.
Promptly after delivery of such certificate, Patterson shall prepare a notice of
such adjustment of the Warrant Price setting forth the adjusted Warrant Price
and the date on which such adjustment becomes effective and shall mail, or cause
the Warrant Agent to mail at Patterson's expense, such notice of such adjustment
of the Warrant Price to each holder of a Warrant at his last address as shown on
the Warrant Register.
Section 5.4. No Adjustment for Dividends. Except as provided in Section
5.1 hereof, no adjustment in respect of any dividends or other payments or
distributions made to holders of securities issuable upon exercise of Warrants
shall be made during the term of a Warrant or upon the exercise of a Warrant.
Section 5.5. Statement on Warrants Certificate. Irrespective of any
adjustments in the number or kind of securities purchasable upon the exercise of
the Warrants or the Warrant Securities, any Warrant Certificate theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrant Certificate initially issuable pursuant to
this Agreement.
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Section 5.6. Warrant Agent's Adjustment Disclaimer. The Warrant Agent
has no duty to determine when an adjustment under this Article V should be made,
how it should be made or what it should be. The Warrant Agent shall not be
accountable for and makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for Patterson's failure to comply with this Article V.
ARTICLE VI
Concerning the Warrant Agent
Section 6.1. Warrant Agent. Patterson hereby appoints __________, as
Warrant Agent of Patterson in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth; and
_________ hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of Patterson as Patterson may hereafter grant to or confer upon it. All of the
terms and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
Section 6.2. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which Patterson agrees and to all of
which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Patterson agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with Patterson for all services rendered
by the Warrant Agent and to reimburse the Warrant Agent for reasonable
out-of-pocket expenses (including counsel fees) incurred by the Warrant
Agent in connection with the services rendered hereunder by the Warrant
Agent. Patterson also agrees to indemnify the Warrant Agent for, and to
hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent,
arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any
claim of such liability.
(b) In acting under this Warrant Agreement and in connection with
the Warrant Certificates, the Warrant Agent is acting solely as agent of
Patterson and does not assume any obligation or relationship of agency
or trust for or with any of the holders of Warrant Certificates or
beneficial owners of Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to it,
and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the advice of such
counsel.
(d) The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) The Warrant Agent, and its officers, directors and employees,
may become the owner of, or acquire any interest in, Warrants, with the
same rights that it or they would have if it were not the Warrant Agent
hereunder, and, to the extent permitted by applicable law, it or they
may engage or be interested in any financial or other transaction with
Patterson and may act on,
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<PAGE> 12
or as depositary, trustee or agent for, any committee or body of holders
of Warrant Securities or other obligations of Patterson as freely as if
it were not the Warrant Agent hereunder.
(f) The Warrant Agent shall have no liability for interest on any
monies at any time received by it pursuant to any of the provisions of
this Agreement or of the Warrant Certificates.
(g) The Warrant Agent shall have no liability with respect to any
invalidity of this Agreement or any of the Warrant Certificates.
(h) The Warrant Agent shall not be responsible for any of the
recitals or representations herein or in the Warrant Certificates
(except as to the Warrant Agent's countersignature thereon), all of
which are made solely by Patterson.
(i) The Warrant Agent shall be obligated to perform only such duties
as are herein and in the Warrant Certificates specifically set forth and
no implied duties or obligations shall be read into this Agreement or
the Warrant Certificates against the Warrant Agent. The Warrant Agent
shall not be under any obligation to take any action hereunder which may
tend to involve it in any expense or liability, the payment of which
within a reasonable time is not, in its reasonable opinion, assured to
it. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by Patterson of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to
Patterson pursuant to this Agreement or for the application by Patterson
of the proceeds of the Warrant Certificates. The Warrant Agent shall
have no duty or responsibility in case of any default by Patterson in
the performance of its covenants or agreements contained herein or in
the Warrant Certificates or in the case of the receipt of any written
demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing,
any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 6.2,
to make any demand upon Patterson.
(j) The Warrant Agent is hereby authorized to obtain from time to
time from the present transfer agent for the Warrant Securities (the
"Transfer Agent"), and any successor Transfer Agent, stock certificates
required to honor outstanding Warrants. Patterson hereby authorizes its
present and any successor Transfer Agent to comply with all such
requests. Patterson will supply such Transfer Agent with duly executed
stock certificates for such purpose and will provide or otherwise make
available any cash which may be payable as provided in Section 2.3
hereof, and the Warrant Agent shall not be responsible for any delay or
failure by such Transfer Agent in supplying such stock certificates.
Section 6.3. Resignation and Appointment of Successor.
(a) Patterson agrees, for the benefit of the holders of the Warrant
Certificates, that there shall at all times be a Warrant Agent hereunder
until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to Patterson of such intention on its part, specifying
the date on which its desired resignation shall become effective;
provided that such date shall not be less than three months after the
date on which such notice is given unless Patterson otherwise agrees.
The Warrant Agent hereunder may be removed at any time by the filing
with it of an instrument in writing signed by or on behalf of Patterson
and specifying such removal and the date when it shall
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become effective. Such resignation or removal shall take effect upon the
appointment by Patterson, as hereinafter provided, of a successor
Warrant Agent (which shall be a bank or trust company authorized under
the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor
Warrant Agent. The obligation of Patterson under Section 6.3(a) shall
continue to the extent set forth therein notwithstanding the resignation
or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or shall be
removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall file a petition seeking relief under the
Federal Bankruptcy Code, as now constituted or hereafter amended, or
under any other applicable Federal or State bankruptcy law or similar
law or make an assignment for the benefit of its creditors or consent to
the appointment of a receiver or custodian of all or any substantial
part of its property, or shall admit in writing its inability to pay or
meet its debts as they mature, or if a receiver or custodian of it or of
all or any substantial part of its property shall be appointed, or if an
order of any court shall be entered for relief against it under the
provisions of the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or State
bankruptcy or similar law, or if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs,
for the purpose of rehabilitation, conservation or liquidation, a
successor Warrant Agent, qualified as aforesaid, shall be appointed by
Patterson, by an instrument in writing, filed with the successor Warrant
Agent. Upon the appointment as aforesaid of a successor Warrant Agent
and acceptance by the successor Warrant Agent of such appointment, the
Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to Patterson an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance,
shall become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like effect
as if originally named as Warrant Agent hereunder, and such predecessor,
upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such
successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such
predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may
be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party,
or any corporation to which the Warrant Agent shall sell or otherwise
transfer all or substantially all the assets and business of the Warrant
Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
hereto.
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<PAGE> 14
ARTICLE VII
Miscellaneous
Section 7.1. Amendment. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
Patterson and the Warrant Agent may deem necessary or desirable; provided, that
such action shall not materially and adversely affect the interests of the
holders of the Warrant Certificates and, provided further, that Patterson and
the Warrant Agent may amend this Agreement in any manner prior to the issuance
of any Warrants hereunder. With the consent of the holders of not less than a
majority in number of the then outstanding unexercised Warrants affected,
Patterson and the Warrant Agent may modify or amend any other term of this
Agreement; provided, however, that no such modification or amendment may be made
without the consent of the holders affected thereby if such proposed amendment
would (i) shorten the period of time during which the Warrants may be exercised;
(ii) otherwise materially and adversely affect the exercise rights of the
holders of the Warrants; or (iii) reduce the number of outstanding Warrants.
Section 7.2. Notices and Demands to Patterson and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to Patterson by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
Patterson.
Section 7.3. Addresses. Any communication from Patterson to the Warrant
Agent with respect to this Agreement shall be addressed to ____________, and any
communication from the Warrant Agent to Patterson with respect to this Agreement
shall be addressed to Patterson Energy, Inc., Patterson Energy, Inc., 4510
Lamesa Highway, P.O. Box 1416, Snyder, Texas 79550, Attention: _______________
(or such other address as shall be specified in writing by the Warrant Agent or
by Patterson).
Section 7.4. Applicable Law. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by and
construed in accordance with, the laws of the State of [New York], without
giving effect to the conflict of laws principles thereof.
Section 7.5. Delivery of Prospectus. Patterson will furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with, the delivery of the Warrant Securities issued
upon such exercise, a Prospectus.
Section 7.6. Obtaining of Governmental Approvals. Patterson will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and State
laws (including, without limitation, a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be or become requisite in connection with the issuance, sale,
transfer, and delivery of the Warrant Certificates, the exercise of the
Warrants, the issuance, sale, transfer, and delivery of the Warrant Securities
issued upon exercise of the Warrants or upon the expiration of the period during
which the Warrants are exercisable.
Section 7.7. Persons Having Rights under Warrant Agreement. Nothing in
this Agreement shall give to any person other than Patterson, the Warrant Agent
and the holders of the Warrant Certificates any right, remedy or claim under or
by reason of this Agreement.
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<PAGE> 15
Section 7.8. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 7.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 7.10. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereunto, and
the same to be attested, all as of the day and year first above written.
PATTERSON ENERGY, INC.
By
---------------------------
Attest:
- ------------------------------
[NAME OF WARRANT AGENT],
as Warrant Agent
By
---------------------------
Attest:
- ------------------------------
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<PAGE> 16
Exhibit A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
[Form of Legend of Warrants which are not immediately detachable: Prior to
______, this Warrant Certificate cannot be transferred or exchanged unless
attached to [Title of Offered Securities].] Exercisable Only if Countersigned by
the Warrant Agent as Provided Herein
PATTERSON ENERGY, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on
[No.] Warrants
This certifies that ____________ or registered assigns is the
registered owner of the above indicated number of Warrants, each Warrant
entitling such owner to purchase, at any time [after 5 p.m. New York time on
_________, and] on or before 5 p.m. New York time on _________, [Title of
Warrant Securities] (the "Warrant Securities"), of Patterson Energy, Inc.
("Patterson"), on the following basis: [on _________, the exercise price of each
Warrant is [$]; during the period from _____________, through and including
_______________, the exercise price of each Warrant will be [$] ________]. The
holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full, [in lawful money
of the United States of America] [if applicable, express Warrant exercise price
in applicable foreign currency, currency unit or composite currency] [in cash or
by certified check or official bank check or by bank wire transfer, in each
case] [by bank wire transfer], in immediately available funds, the Warrant Price
for each Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back hereof
duly executed, at the corporate trust office of [name of Warrant Agent], or its
successors as warrant agent (the "Warrant Agent"), [or ______________] currently
at the address specified on the reverse hereof, and upon compliance with and
subject to the conditions set forth herein and in the Warrant Agreement (as
hereinafter defined).
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised. Patterson
will not be required to issue fractional shares of Warrant Securities upon
exercise of the Warrants or distribute stock certificates that evidence
fractional shares of Warrant Securities. In lieu of fractional Warrant
Securities, there shall be paid by Patterson to the registered holder of this
Warrant Certificate at the time such Warrant Certificate is exercised an amount
in cash payable by company check equal to the closing sales price of the Warrant
Securities on the American Stock Exchange (or if not so listed, another
equivalent means reasonably determined by Patterson) on the business day
immediately preceding the exercise date, multiplied by such fraction.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ___________, (the "Warrant Agreement") between
Patterson and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of the
Warrant Agreement and the form of Warrant Securities are on file at the
above-mentioned office of the Warrant Agent [and at ].
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<PAGE> 17
[If Offered Securities with Warrants which are not immediately
detachable - Prior to ___________ this Warrant Certificate may be exchanged or
transferred only together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially attached, and only
for the purpose of effecting, or in conjunction with, an exchange or transfer of
such Offered Securities. After such date, this [If Offered Securities with
Warrants which are immediately detachable - Transfer of this] Warrant
Certificate may be transferred when this Warrant Certificate is surrendered at
the corporate trust office of the Warrant Agent [or _____] by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the terms provided in the Warrant Agreement.]
[If Offered Securities with Warrants which are not immediately
detachable - Except as provided in the immediately preceding paragraph, after]
[If Offered Securities with Warrants which are immediately detachable - After]
countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of Warrant Securities, including, without limitation, the
right to receive dividends, vote, receive notice of any meeting of stockholders
or otherwise have any right as a stockholder of Patterson.
This Warrant Certificate shall not be valid for any purpose until
countersigned by the Warrant Agent.
Dated as of
--------------------- PATTERSON ENERGY, INC.
By
-------------------------------
Cloyce A. Talbott
Chief Executive Officer
Attest:
- --------------------------------
Countersigned
----------------------------------
As Warrant Agent
By
-------------------------------
Authorized Signature
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<PAGE> 18
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash
or by certified check or official bank check or by bank wire transfer] [by bank
wire transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn: [or ], which [payment] [wire transfer]
must specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below and
present this Warrant Certificate in person or by mail (registered mail is
recommended) to the Warrant Agent at the addresses set forth below. This Warrant
Certificate, completed and duly executed, must be received by the Warrant Agent
within five business days of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants evidenced by this
Warrant Certificate, to purchase _______________ [Title of Warrant Securities]
(the "Warrant Securities") of Patterson Energy, Inc. and represents that he has
tendered payment for such Warrant Securities [in cash or by certified check or
official bank check or by bank wire transfer, in each case] [by bank wire
transfer], in immediately available funds, to the order of Patterson Energy,
Inc., c/o [insert name and address of Warrant Agent], in the amount of
[$]______________ [if applicable -- insert relevant amounts in applicable
foreign currency, currency unit or composite currency] in accordance with the
terms hereof]. The undersigned requests that said principal amount of Warrant
Securities be in fully registered form and in the authorized denominations,
registered in such names and delivered, all as specified in accordance with the
instructions set forth below. If the number of Warrants exercised is less than
all of the Warrants evidenced hereby, the undersigned requests that a new
Warrant Certificate representing the remaining Warrants evidenced hereby be
issued and delivered to the undersigned unless otherwise specified in the
instructions below.
Dated Name
------------------------------------- ------------------------
(Please Print)
- -------------------------------------------
Address
- -------------------------------------------
Social Security Number of Holder
- -------------------------------------------
Signature
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at
--------------------------------------------
--------------------------------------------
By mail at
--------------------------------------------
--------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants--complete as
appropriate.]
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<PAGE> 19
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received ____________________________ hereby sells, assigns
and transfers unto ____________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print name and address, including zip code of assignee, and Social
Security Number or other identifying number)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated
-------------------------------- ------------------------------
Signature
(Signature must conform in all
respect to name of holder as
specified on the face of this
Warrant Certificate and must
bear a signature guarantee of a
commercial bank, trust company,
or member broker of the New
York, American, Midwest
or Pacific Stock Exchange.)
Signature Guaranteed:
- --------------------------------------
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<PAGE> 1
EXHIBIT 4.7
PATTERSON ENERGY, INC.
Form of Warrant Agreement
[for warrants sold attached to debt securities]*
THIS WARRANT AGREEMENT is dated as of ________________, between
Patterson Energy, Inc., a Delaware corporation (hereinafter called "Patterson",
which term includes any successor corporation under the Indenture hereinafter
referred to), and _________________, as Warrant Agent (herein called the
"Warrant Agent").
WHEREAS, Patterson has entered into an Indenture dated as of
_____________, (the "Indenture"), with ____________, as trustee (the "Trustee"),
providing for the issuance from time to time of its unsecured [senior]
[subordinated] debentures, notes or other evidences of indebtedness (the "Debt
Securities"), to be issued in one or more series, as provided in the Indenture;
and
WHEREAS, Patterson proposes to sell [title of Debt Securities being
offered] (the "Offered Securities") with warrant certificates evidencing one or
more warrants (the "Warrants" or, individually a "Warrant") representing the
right to purchase [title of Debt Securities purchasable through exercise of
Warrants] (the "Warrant Securities"), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the
"Warrant Certificates"; and
WHEREAS, Patterson desires the Warrant Agent to act on behalf of
Patterson in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Issuance of Warrants and Execution and
Delivery of Warrant Certificates
Section 1.1. Issuance of Warrants. Warrants shall be initially issued
in connection with the issuance of the Offered Securities [but shall be
separately transferable on and after _________, ____ (the "Detachable Date")]
[and shall not be separately transferable] and each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the provisions contained herein and therein, to purchase a
Warrant Security in the principal amount of [$]_______. Warrant Certificates
shall be initially issued in units with the Offered Securities and each Warrant
Certificate included in such a unit shall evidence ___ Warrants for each [$]____
principal amount of Offered Securities included in such unit.
Section 1.2. Execution and Delivery of Warrant Certificates. Each
Warrant Certificate, whenever issued, shall be in registered* form substantially
in the form set forth in Exhibit A hereto, shall be dated the date of its
issuance and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of Patterson executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with
- ----------------
* Complete or modify the provisions of this Form as appropriate to reflect the
terms of the Warrants and Warrant Securities.
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<PAGE> 2
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Warrants may be listed, or to
conform to usage. The Warrant Certificates shall be signed on behalf of
Patterson by its Chief Executive Officer, its President, one of its Vice
Presidents, its Treasurer or one of its Assistant Treasurers under its corporate
seal and attested by its Secretary or one of its Assistant Secretaries. Such
signatures may be manual or facsimile signatures of such authorized officers and
may be imprinted or otherwise reproduced on the Warrant Certificates. The seal
of Patterson may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by Patterson shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of Patterson who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of Patterson; and any Warrant
Certificate may be signed on behalf of Patterson by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of Patterson, although at the date of the execution of this Agreement
any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that
purpose. [If Offered Securities with Warrants which are not immediately
detachable - or upon the register of the Offered Securities prior to the
Detachable Date. Patterson will or will cause the registrar of the Offered
Securities to make available at all times to the Warrant Agent such information
as to holders of the Offered Securities with Warrants as may be necessary to
keep the Warrant Agent's records up to date.]
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates
evidencing the right to purchase an aggregate principal amount not exceeding
[$]______ of Warrant Securities (except as provided in Sections 2.3(c), 3.2 and
4.1) may be executed by Patterson and delivered to the Warrant Agent upon the
execution of this Warrant Agreement or from time to time thereafter. The Warrant
Agent shall, upon receipt of Warrant Certificates duly executed on behalf of
Patterson, countersign Warrant Certificates evidencing Warrants representing the
right to purchase up to [$]______ aggregate principal amount of Warrant
Securities and shall deliver such Warrant Certificates to or upon the order of
Patterson. Subsequent to such original issuance of the Warrant Certificates, the
Warrant Agent shall countersign a Warrant Certificate only if the Warrant
Certificate is issued in exchange or substitution for one or more previously
countersigned Warrant Certificates or in connection with their transfer, as
hereinafter provided or as provided in Section 2.3(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants
Section 2.1. Warrant Price. [On _______, _____, the] [The Warrant]
exercise price of each Warrant is [$] ______. [During the period from _________,
____, through and including _________, ____, the exercise price of each Warrant
will be [$]___________], plus [accrued amortization of the original issue
discount] [accrued interest] from _________, ____. [On ___________, ____, the
exercise price of each Warrant will be [$]________. [if applicable -- insert
relevant amounts in applicable foreign currency, currency unit or composite
currency] During the period from _________, ____, through and
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<PAGE> 3
including _________, ____, the exercise price of each Warrant will be
[$]___________, plus [accrued amortization of the original issue discount]
[accrued interest] from _________, ____.] [In each case, the original issue
discount will be amortized at a ___% annual rate, computed on an annual basis
using a 360-day year consisting of twelve 30-day months]. Such purchase price of
Warrant Securities is referred to in this Agreement as the "Warrant Price." [The
original issue discount for each $1,000 principal amount of Warrant Securities
is [$]_____.]
Section 2.2. Duration of Warrants. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[_________, ____,] and at or before 5 p.m. New York time on __________________
(the "Expiration Date"). Each Warrant not exercised at or before 5 p.m. New York
time on the Expiration Date shall become void, and all rights of the holder of
the Warrant Certificate evidencing such Warrant under this Agreement shall
cease.
Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole
number of Warrants may be exercised by providing certain information
set forth on the reverse side of the Warrant Certificate and by paying
in full, [in lawful money of the United States of America] [if
applicable -- insert relevant amounts in applicable foreign currency,
currency unit or composite currency] [in cash or by certified check or
official bank check or by bank wire transfer, in each case] [by bank
wire transfer], in immediately available funds, the Warrant Price for
each Warrant exercised, to the Warrant Agent at its corporate trust
office [or at ________], provided that such exercise is subject to
receipt, within five business days of such [payment] [wire transfer] by
the Warrant Agent of the Warrant Certificate with the form of election
to purchase Warrant Securities set forth on the reverse side of the
Warrant Certificate properly completed and duly executed. The date on
which payment in full of the Warrant Price is received by the Warrant
Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised.
The Warrant Agent shall deposit all funds received by it in payment of
the Warrant Price in an account of Patterson maintained with it and
shall advise Patterson by telephone at the end of each day on which a
[payment] [wire transfer] for the exercise of Warrants is received of
the amount so deposited to its account. The Warrant Agent shall
promptly confirm such telephone advice to Patterson in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise Patterson and the Trustee under the Indenture (if
such Trustee is not the Warrant Agent) of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of the
Warrant Securities to which such holder is entitled upon such exercise,
(iii) delivery of Warrant Certificates evidencing the balance, if any,
of the Warrants remaining after such exercise, and (iv) such other
information as Patterson shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant,
Patterson shall issue, pursuant to the Indenture, in authorized
denominations to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled in fully registered form, registered in such
name or names as may be directed by such holder.** If fewer than all of
the Warrants evidenced by such Warrant Certificate are exercised,
Patterson shall execute, and an authorized officer of the Warrant Agent
shall manually countersign and deliver, a new Warrant Certificate
evidencing the number of such Warrants remaining unexercised.
- ---------------------
** Subject to change in accordance with changes in tax laws and regulations.
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(d) Patterson shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities; and in
the event that any such transfer is involved, Patterson shall not be
required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to
Patterson's satisfaction that no such tax or other charge is due.
ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates
Section 3.1. No Rights as Warrant Securityholder Conferred by Warrants
or Warrant Certificates. No Warrant Certificate or Warrant evidenced thereby
shall entitle the holder thereof to any of the rights of a holder of Warrant
Securities, including, without limitation, the right to receive the payment of
principal of, premium, if any, or interest on Warrant Securities or to enforce
any of the covenants in the Indenture.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to Patterson or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, Patterson shall execute,
and an authorized officer of the Warrant Agent shall manually countersign and
deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated
Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing
a like number of Warrants. Upon the issuance of any new Warrant Certificate
under this Section, Patterson may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Warrant
Agent) in connection therewith. Every substitute Warrant Certificate executed
and delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of
Patterson, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement of mutilated, lost, stolen
or destroyed Warrant Certificates.
Section 3.3. Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against Patterson suitable to enforce or otherwise in
respect of, his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates
Section 4.1. Exchange and Transfer of Warrant Certificates. [If Offered
Securities with Warrants which are immediately detachable - Upon] [If Offered
Securities with Warrants which are not immediately detachable -Prior to the
Detachable Date, a Warrant Certificate may be exchanged or transferred only
together with the Offered Securities to which the Warrant Certificate was
initially
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attached and only for the purpose of effecting or in conjunction with an
exchange or transfer of such Offered Securities. Prior to the Detachable Date,
each transfer of the Offered Securities [on the register of the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date upon] surrender at the corporate trust office of the
Warrant Agent [or ________], Warrant Certificates evidencing Warrants may be
exchanged for Warrant Certificates in other denominations evidencing such
Warrants or the transfer thereof may be registered in whole or in part; provided
that such other Warrant Certificates evidence the same aggregate number of
Warrants as the Warrant Certificates so surrendered. The Warrant Agent shall
keep, at its corporate trust office [and at _______ __] books in which, subject
to such reasonable regulations as it may prescribe, it shall register Warrant
Certificates and exchanges and transfers of outstanding Warrant Certificates,
upon surrender of the Warrant Certificates to the Warrant Agent at its corporate
trust office [or ____________] for exchange or registration of transfer,
properly endorsed or accompanied by appropriate instruments of registration of
transfer and written instructions for transfer, all in form satisfactory to
Patterson and the Warrant Agent. No service charge shall be made for any
exchange [or registration of transfer] of Warrant Certificates but Patterson may
require payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange or
registration of transfer. Whenever any Warrant Certificates are so surrendered
for exchange or registration of transfer an authorized officer of the Warrant
Agent shall manually countersign and deliver to the person or persons entitled
thereto a Warrant Certificate or Warrant Certificates duly authorized and
executed by Patterson, as so requested. The Warrant Agent shall not be required
to effect any exchange or registration of transfer which will result in the
issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number
of full Warrants and a fraction of a Warrant. All Warrant Certificates issued
upon any exchange [or registration of transfer] of Warrant Certificates shall be
the valid obligations of Patterson, evidencing the same obligations, and
entitled to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange or registration of transfer.
Section 4.2. Treatment of Holders of Warrant Certificates. [If Warrants
which are not immediately detachable - Every holder of a Warrant Certificate, by
accepting the same, consents and agrees with Patterson, the Warrant Agent and
with every subsequent holder of such Warrant Certificate that until the transfer
of the Warrant Certificate is registered on the books of the Warrant Agent [or
the registrar of the Offered Securities prior to the Detachable Date], Patterson
and the Warrant Agent [or the registrar of the Offered Securities prior to the
Detachable Date] may treat the registered holder as the absolute owner thereof
for any purpose and as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary notwithstanding.]
Section 4.3. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange, registration of transfer or exercise of
the Warrants evidenced thereby shall, if surrendered to Patterson, be delivered
to the Warrant Agent and all Warrant Certificates surrendered or so delivered to
the Warrant Agent shall be promptly cancelled by the Warrant Agent and shall not
be reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to Patterson from time to time or otherwise dispose
of cancelled Warrant Certificates in a manner satisfactory to Patterson.
ARTICLE V
Concerning the Warrant Agent
Section 5.1. Warrant Agent. Patterson hereby appoints __________, as
Warrant Agent of Patterson in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth; and
__________ hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of Patterson as Patterson may hereafter grant to or
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confer upon it. All of the terms and provisions with respect to such powers and
authority contained in the Warrant Certificates are subject to and governed by
the terms and provisions hereof.
Section 5.2. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which Patterson agrees and to all of
which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Compensation and Indemnification. Patterson agrees
promptly to pay the Warrant Agent the compensation to be agreed upon
with Patterson for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for reasonable out-of-pocket expenses
(including counsel fees) incurred by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. Patterson
also agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Warrant Agent, arising out of or in
connection with its acting as Warrant Agent hereunder, as well as the
costs and expenses of defending against any claim of such liability.
(b) Agent for Patterson. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant
Agent is acting solely as agent of Patterson and does not assume any
obligation or relationship of agency or trust for or with any of the
holders of Warrant Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with counsel
satisfactory to it, and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any Warrant Certificate, notice,
direction, consent, certificate, affidavit, statement or other paper or
document reasonably believed by it to be genuine and to have been
presented or signed by the proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any
interest in, Warrants, with the same rights that it or they would have
if it were not the Warrant Agent hereunder, and, to the extent
permitted by applicable law, it or they may engage or be interested in
any financial or other transaction with Patterson and may act on, or as
depositary, trustee or agent for, any committee or body of holders of
Warrant Securities or other obligations of Patterson as freely as if it
were not the Warrant Agent hereunder. Nothing in this Warrant Agreement
shall be deemed to prevent the Warrant Agent from acting as trustee for
any series of Debt Securities under the Indenture.
(f) No Liability for Interest. The Warrant Agent shall have no
liability for interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates.
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations
herein or in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by Patterson.
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<PAGE> 7
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or
obligations shall be read into this Agreement or the Warrant
Certificates against the Warrant Agent. The Warrant Agent shall not be
under any obligation to take any action hereunder which may tend to
involve it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it. The
Warrant Agent shall not be accountable or under any duty or
responsibility for the use by Patterson of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to
Patterson pursuant to this Agreement or for the application by
Patterson of the proceeds of the Warrant Certificates. The Warrant
Agent shall have no duty or responsibility in case of any default by
Patterson in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of
any written demand from a holder of a Warrant Certificate with respect
to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided in
Section 6.2, to make any demand upon Patterson.
Section 5.3. Resignation and Appointment of Successor.
(a) Patterson agrees, for the benefit of the holders of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to Patterson of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three months
after the date on which such notice is given unless Patterson otherwise
agrees. The Warrant Agent hereunder may be removed at any time by the
filing with it of an instrument in writing signed by or on behalf of
Patterson and specifying such removal and the date when it shall become
effective. Such resignation or removal shall take effect upon the
appointment by Patterson, as hereinafter provided, of a successor
Warrant Agent (which shall be a bank or trust company authorized under
the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor
Warrant Agent. The obligation of Patterson under Section 5.2(a) shall
continue to the extent set forth therein notwithstanding the
resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or shall file a petition seeking
relief under the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or State
bankruptcy law or similar law or make an assignment for the benefit of
its creditors or consent to the appointment of a receiver or custodian
of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its
property shall be appointed, or if an order of any court shall be
entered for relief against it under the provisions of the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under any
other applicable Federal or State bankruptcy or similar law, or if any
public officer shall have taken charge or control of the Warrant Agent
or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as
aforesaid, shall be appointed by Patterson by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as
aforesaid of a successor Warrant Agent and acceptance by the
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<PAGE> 8
successor Warrant Agent of such appointment, the Warrant Agent shall
cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to Patterson an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance,
shall become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like effect
as if originally named as Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such
predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent
may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business of
the Warrant Agent, provided that it shall be qualified as aforesaid,
shall be the successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto.
ARTICLE VI
Miscellaneous
Section 6.1. Amendment. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
Patterson and the Warrant Agent may deem necessary or desirable; provided, that
such action shall not materially and adversely affect the interests of the
holders of the Warrant Certificates and, provided further, that Patterson and
the Warrant Agent may amend this Agreement in any manner prior to the issuance
of any Warrants hereunder. With the consent of the holders of not less than a
majority in number of the then outstanding unexercised Warrants affected,
Patterson and the Warrant Agent may modify or amend any other term of this
Agreement; provided, however, that no such modification or amendment may be made
without the consent of the holders affected thereby if such proposed amendment
would (i) shorten the period of time during which the Warrants may be exercised;
(ii) otherwise materially and adversely affect the exercise rights of the
holders of the Warrants; or (iii) reduce the number of outstanding Warrants.
Section 6.2. Notices and Demands to Patterson and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to Patterson by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
Patterson.
Section 6.3. Addresses. Any communication from Patterson to the Warrant
Agent with respect to this Agreement shall be addressed to ____________________,
and any communication from the Warrant Agent to Patterson with respect to this
Agreement shall be addressed to Patterson Energy, Inc., 4510 Lamesa Highway,
Snyder, Texas 79549, Attention: _______________ (or such other address as shall
be specified in writing by the Warrant Agent or by Patterson).
Section 6.4. Applicable Law. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be
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governed by and construed in accordance with, the laws of the State of [New
York], without giving effect to the conflict of laws principles thereof.
Section 6.5. Delivery of Prospectus. Patterson will furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with, the delivery of the Warrant Securities issued
upon such exercise, a Prospectus.
Section 6.6. Obtaining of Governmental Approvals. Patterson will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and State
laws (including, without limitation, a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be or become requisite in connection with the issuance, sale,
transfer, and delivery of the Warrant Certificates, the exercise of the
Warrants, the issuance, sale, transfer, and delivery of the Warrant Securities
issued upon exercise of the Warrants or upon the expiration of the period during
which the Warrants are exercisable.
Section 6.7. Persons Having Rights under Warrant Agreement. Nothing in
this Agreement shall give to any person other than Patterson, the Warrant Agent
and the holders of the Warrant Certificates any right, remedy or claim under or
by reason of this Agreement.
Section 6.8. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 6.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 6.10. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereunto, and
the same to be attested, all as of the day and year first above written.
PATTERSON ENERGY, INC.
Attest:
By
---------------------------------
- ----------------------------
[NAME OF WARRANT AGENT],
as Warrant Agent
Attest:
By
---------------------------------
- ----------------------------
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EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
[Face of Warrant Certificate]
[Form of Legend of Warrants which are not immediately detachable: Prior to
___________, this Warrant Certificate cannot be transferred or exchanged unless
attached to a [Title of Offered Securities].] Exercisable Only if Countersigned
by the Warrant Agent as Provided Herein
PATTERSON ENERGY, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on ___________
[No.] Warrants
This certifies that ________ or registered assigns is the registered
owner of the above indicated number of Warrants, each Warrant entitling such
owner to purchase, at any time [after 5 p.m. New York time on , [date], and] on
or before 5 p.m. New York time on [date] [$] _____________ principal amount of
[Title of Warrant Securities] (the "Warrant Securities"), of Patterson Energy,
Inc. ("Patterson") issued and to be issued under the Indenture (as hereinafter
defined), on the following basis: [on [date] the exercise price of each Warrant
is [$] ; during the period from , [date] through and including [date], the
exercise price of each Warrant will be [$] , plus [accrued amortization of the
original issue discount] [accrued interest] from [date]; on [date] the exercise
price of each Warrant will be [$] ; during the period from [date] through and
including [date] , the exercise price of each Warrant will be [$] , plus
[accrued amortization of the original issue discount] [accrued interest] from
[date]; [in each case, the original issue discount will be amortized at __%
annual rate, computed on an annual basis using a 360-day year consisting of
twelve 30-day months] (the "Warrant Price"). [The original issue discount for
each $1,000 principal amount [if applicable, insert relevant amount of foreign
currency, currency units or composite currency] of Warrant Securities is
$____________.] The holder may exercise the Warrants evidenced hereby by
providing certain information set forth on the back hereof and by paying in
full, [in lawful money of the United States of America] [if applicable, express
Warrant exercise price in applicable foreign currency, currency unit or
composite currency] [in cash or by certified check or official bank check or by
bank wire transfer, in each case] [by bank wire transfer], in immediately
available funds, the Warrant Price for each Warrant exercised to the Warrant
Agent (as hereinafter defined) and by surrendering this Warrant Certificate,
with the purchase form on the back hereof duly executed, at the corporate trust
office of [name of Warrant Agent], or its successors as warrant agent (the
"Warrant Agent"), [or ________________] currently at the address specified on
the reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form in denominations
of $______________ and any integral multiples thereof. Upon any exercise of
fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ___________, ____, (the "Warrant Agreement")
between Patterson and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
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<PAGE> 11
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the above-mentioned office of the
Warrant Agent [and at ______________].
The Warrant Securities to be issued and delivered upon the exercise of
the Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an Indenture dated as of ___________, ____, (the "Indenture")
between Patterson and ________________, as trustee, and will be subject to the
terms and provisions contained in the Indenture. Copies of the Indenture and the
form of Warrant Securities are on file at the corporate trust office of the
trustee [and at ________________].
[If Offered Securities with Warrants which are not immediately
detachable - Prior to , 199__, this Warrant Certificate may be exchanged or
transferred only together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially attached, and only
for the purpose of effecting, or in conjunction with, an exchange or transfer of
such Offered Securities. After such date, this [If Offered Securities with
Warrants which are immediately detachable - Transfer of this] Warrant
Certificate may be registered when this Warrant Certificate is surrendered at
the corporate trust office of the Warrant Agent [or _____] by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the limitations provided in the Warrant Agreement.]
[If Offered Securities with Warrants which are not immediately
detachable - Except as provided in the immediately preceding paragraph, after]
[If Offered Securities with Warrants which are immediately detachable - After]
countersignature by the Warrant Agent and prior to the expiration of this
Warrant Certificate, this Warrant Certificate may be exchanged at the corporate
trust office of the Warrant Agent for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of Warrant Securities, including, without limitation, the
right to receive payments of principal of, premium, if any, or interest, if any,
on the Warrant Securities or to enforce any of the covenants of the Indenture.
This Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of
----------------------- PATTERSON ENERGY, INC.
By
-----------------------------------
Cloyce A. Talbott
Chief Executive Officer
Attest:
- ----------------------------------
Countersigned
-------------------------------------
As Warrant Agent
By
-----------------------------------
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<PAGE> 12
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash
or by certified check or official bank check or by bank wire transfer] [by bank
wire transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn: [or ], which [payment] [wire transfer]
must specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below and
present this Warrant Certificate in person or by mail (registered mail is
recommended) to the Warrant Agent at the addresses set forth below. This Warrant
Certificate, completed and duly executed, must be received by the Warrant Agent
within five business days of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants
evidenced by this Warrant Certificate, to purchase [$]_____________ principal
amount of the [Title of Warrant Securities] (the "Warrant Securities") of
Patterson Energy, Inc. and represents that he has tendered payment for such
Warrant Securities [in cash or by certified check or official bank check or by
bank wire transfer, in each case] [by bank wire transfer], in immediately
available funds, to the order of Patterson Energy, Inc., c/o [insert name and
address of Warrant Agent], in the amount of [$]_____________ in accordance with
the terms hereof. The undersigned requests that said principal amount of Warrant
Securities be in fully registered form and in the authorized denominations,
registered in such names and delivered, all as specified in accordance with the
instructions set forth below. If the number of Warrants exercised is less than
all of the Warrants evidenced hereby, the undersigned requests that a new
Warrant Certificate representing he remaining Warrants evidenced hereby be
issued and delivered to the undersigned unless otherwise specified in the
instructions below.
Dated Name
------------------ -------------------------------
(Please Print)
- ---------------------------------------
Address
- ---------------------------------------
Social Security Number of Holder
- ---------------------------------------
Signature
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at
------------------------------------------------
------------------------------------------------
By mail at
------------------------------------------------
------------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants--complete as
appropriate.]
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<PAGE> 13
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received _______________________ hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address, including zip code of assignee, and Social
Security Number or other identifying number)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated
------------------------ --------------------------------
Signature
(Signature must conform in all
respect to name of holder as
specified on the face of this
Warrant Certificate and must
bear a signature guarantee of a
commercial bank, trust company,
or member broker of the New
York, American, Midwest or
Pacific Stock Exchange.)
Signature Guaranteed:
- ---------------------------------------
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<PAGE> 1
EXHIBIT 4.9
PATTERSON ENERGY, INC.
Form of Warrant Agreement
[for warrants sold alone](1)
THIS WARRANT AGREEMENT is dated as of ___________, between Patterson
Energy, Inc., a Delaware corporation (hereinafter called "Patterson", which term
includes any successor corporation), and ________________________________, as
Warrant Agent (herein called the "Warrant Agent").
WHEREAS, Patterson proposes to sell warrant certificates evidencing one
or more warrants (the "Warrants" or, individually, a "Warrant") representing the
right to purchase [title of Debt or Equity Securities purchasable through
exercise of Warrants] (the "Warrant Securities"), such warrant certificates and
other warrant certificates issued pursuant to this Agreement being herein called
the "Warrant Certificates"; and
WHEREAS, Patterson desires the Warrant Agent to act on behalf of
Patterson in connection with the issuance, exchange, exercise and replacement of
the Warrant Certificates, and in this Agreement wishes to set forth, among other
things, the form and provisions of the Warrant Certificates and the terms and
conditions on which they may be issued, exchanged, exercised and replaced;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
Issuance of Warrants and Execution and
Delivery of Warrant Certificates.
Section 1.1. Issuance of Warrants. Each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the provisions contained herein and therein, to purchase
Warrant Securities.
Section 1.2. Execution and Delivery of Warrant Certificates. Each
Warrant Certificate, whenever issued, shall be in registered(2) form
substantially in the form set forth in Exhibit A hereto, shall be dated the date
of its issuance and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of Patterson executing the same
may approve (execution thereof to be conclusive evidence of such approval) and
as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be signed on behalf of Patterson by its Chief Executive Officer, its President,
one of its Vice Presidents, its Treasurer or one of its Assistant Treasurers
under its corporate seal and attested by its Secretary or one of its Assistant
Secretaries. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of Patterson
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(1) Complete or modify the provisions of this Form as appropriate to reflect the
terms of the Warrants and Warrant Securities.
(2) If Warrants are issued in bearer form, appropriate revisions will be made to
this Agreement to facilitate such issuance.
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may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by Patterson shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
issued hereunder.
In case any officer of Patterson who shall have signed any of the
Warrant Certificates either manually or by facsimile signature shall cease to be
such officer before the Warrant Certificates so signed shall have been
countersigned and delivered by the Warrant Agent, such Warrant Certificates may
be countersigned and delivered notwithstanding that the person who signed such
Warrant Certificates ceased to be such officer of Patterson; and any Warrant
Certificate may be signed on behalf of Patterson by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of Patterson, although at the date of the execution of this Agreement
any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used herein
shall mean any person in whose name at the time any Warrant Certificate shall be
registered upon the books to be maintained by the Warrant Agent for that
purpose.
Section 1.3. Issuance of Warrant Certificates. Warrant Certificates
evidencing the right to purchase Warrant Securities (except as provided in
Sections 2.3(c), 3.2 and 4.1) may be executed by Patterson and delivered to the
Warrant Agent upon the execution of this Warrant Agreement or from time to time
thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly
executed on behalf of Patterson, countersign Warrant Certificates evidencing
Warrants representing the right to purchase up to ____________ Warrant
Securities and shall deliver such Warrant Certificates to or upon the order of
Patterson. Subsequent to such original issuance of the Warrant Certificates, the
Warrant Agent shall countersign a Warrant Certificate only if the Warrant
Certificate is issued in exchange or substitution for one or more previously
countersigned Warrant Certificates or in connection with their transfer, as
hereinafter provided or as provided in Section 2.3(c).
ARTICLE II
Warrant Price, Duration and Exercise of Warrants
Section 2.1. Warrant Price. [On ________, _____, the] [The original]
exercise price of each Warrant is [$]_______. [During the period from _________,
____, through and including _________, ____, the exercise price of each Warrant
will be [$]___________. On ___________, ____, the exercise price of each Warrant
will be [$]________.] [if applicable, insert relevant amounts in applicable
foreign currency, currency unit or composite currency] Such purchase price of
Warrant Securities is referred to in this Agreement as the "Warrant Price." The
Warrant Price and the number and kind of Warrant Securities for which a Warrant
may be exercised is subject to adjustment from time to time as set forth in
Article V hereof.
Section 2.2. Duration of Warrants. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[_________, ____,] and at or before 5 p.m. New York time on ______________ (the
"Expiration Date"). Each Warrant not exercised at or before 5 p.m. New York time
on the Expiration Date shall become void, and all rights of the holder of the
Warrant Certificate evidencing such Warrant under this Agreement shall cease.
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Section 2.3. Exercise of Warrants.
(a) During the period specified in Section 2.2, any whole
number of Warrants may be exercised by providing certain information
set forth on the reverse side of the Warrant Certificate and by paying
in full, [in lawful money of the United States of America] [if
applicable, express Warrant exercise price in applicable foreign
currency, currency unit or composite currency] [in cash or by certified
check or official bank check or by bank wire transfer, in each case]
[by bank wire transfer], in immediately available funds, the Warrant
Price for each Warrant exercised, to the Warrant Agent at its corporate
trust office [or at ________], provided that such exercise is subject
to receipt, within three business days of such [payment] [wire
transfer] by the Warrant Agent of the Warrant Certificate with the form
of election to purchase Warrant Securities set forth on the reverse
side of the Warrant Certificate properly completed and duly executed.
The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate
as aforesaid, be deemed to be the date on which the Warrant is
exercised. The Warrant Agent shall deposit all funds received by it in
payment of the Warrant Price in an account of Patterson maintained with
it and shall advise Patterson by telephone at the end of each day on
which a [payment] [wire transfer] for the exercise of Warrants is
received of the amount so deposited to its account. The Warrant Agent
shall promptly confirm such telephone advice to Patterson in writing.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise Patterson of (i) the number of Warrants exercised,
(ii) the instructions of each holder of the Warrant Certificates
evidencing such Warrants with respect to delivery of the Warrant
Securities to which such holder is entitled upon such exercise, (iii)
delivery of Warrant Certificates evidencing the balance, if any, of the
Warrants remaining after such exercise, and (iv) such other information
as Patterson shall reasonably require.
(c) As soon as practicable after the exercise of any Warrant,
Patterson shall issue to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled in fully registered form, registered in such
name or names as may be directed by such holder. Such certificate or
certificates evidencing the Warrant Securities shall be deemed to have
been issued and any persons who are designated to be named therein
shall be deemed to have become the holder of record of such Warrant
Securities as of the close of business on the exercise date. No
fractional Warrant Securities will be issued upon exercise of any
Warrant. For each fractional Warrant Security that would otherwise be
issued, Patterson will pay by company check in an amount equal to such
fraction multiplied by the closing sales price of the Warrant
Securities on the principal national securities exchange on which they
are listed (or if not so listed, another equivalent means reasonably
determined by Patterson) on the business day immediately preceding the
exercise date. If fewer than all of the Warrants evidenced by such
Warrant Certificate are exercised, Patterson shall execute, and an
authorized officer of the Warrant Agent shall manually countersign and
deliver, a new Warrant Certificate evidencing the number of such
Warrants remaining unexercised.
(d) Patterson shall not be required to pay any stamp or other
tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities; and in
the event that any such transfer is involved, Patterson shall not be
required to issue or deliver any Warrant Security until such tax or
other charge shall have been paid or it has been established to
Patterson's satisfaction that no such tax or other charge is due.
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ARTICLE III
Other Provisions Relating to Rights of
Holders of Warrant Certificates
Section 3.1. No Rights as Stockholder or Debtholder Conferred by
Warrants or Warrant Certificates. No Warrant Certificate or Warrant evidenced
thereby shall entitle the holder thereof to any of the rights of a holder of
Warrant Securities, including, without limitation, the right to receive
dividends, vote, receive notice of any meeting of stockholders or otherwise have
any right as a stockholder of Patterson, or the right to receive the payment of
principal of, premium, if any, or interest on Warrant Securities or to enforce
any of the covenants in the Indenture.
Section 3.2. Lost, Stolen, Mutilated or Destroyed Warrant Certificates.
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it, and, in the case of
mutilation, upon surrender thereof to the Warrant Agent for cancellation, then,
in the absence of notice to Patterson or the Warrant Agent that such Warrant
Certificate has been acquired by a bona fide purchaser, Patterson shall execute,
and an authorized officer of the Warrant Agent shall manually countersign and
deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated
Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing
a like number of Warrants. Upon the issuance of any new Warrant Certificate
under this Section, Patterson may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Warrant
Agent) in connection therewith. Every substitute Warrant Certificate executed
and delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of
Patterson, whether or not the lost, stolen or destroyed Warrant Certificate
shall be at any time enforceable by anyone, and shall be entitled to the
benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement of mutilated, lost, stolen
or destroyed Warrant Certificates.
Section 3.3. Holder of Warrant Certificate May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any holder of a Warrant
Certificate, without the consent of the Warrant Agent, the holder of any Warrant
Securities or the holder of any other Warrant Certificate, may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against Patterson suitable to enforce or otherwise in
respect of, his right to exercise the Warrants evidenced by his Warrant
Certificate in the manner provided in his Warrant Certificate and in this
Agreement.
ARTICLE IV
Exchange and Transfer of Warrant Certificates
Section 4.1. Exchange and Transfer of Warrant Certificates. Upon
surrender at the corporate trust office of the Warrant Agent [or at ________],
Warrant Certificates evidencing Warrants may be exchanged for Warrant
Certificates in other denominations evidencing such Warrants or the transfer
thereof may be registered in whole or in part; provided that such other Warrant
Certificates evidence the same aggregate number of Warrants as the Warrant
Certificates so surrendered. The Warrant Agent shall keep, at its corporate
trust office [and at __________] books in which, subject to such reasonable
regulations as it may prescribe, it shall register Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates, upon surrender of
the Warrant Certificates to the Warrant Agent at its corporate trust office [or
at ____________] for exchange or registration of transfer, properly endorsed or
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accompanied by appropriate instruments of registration of transfer and written
instructions for transfer, all in form satisfactory to Patterson and the Warrant
Agent. No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates but Patterson may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that may
be imposed in connection with any such exchange or registration of transfer.
Whenever any Warrant Certificates are so surrendered for exchange or
registration of transfer an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by
Patterson, as so requested. The Warrant Agent shall not be required to effect
any exchange or registration of transfer which will result in the issuance of a
Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange or registration of transfer of Warrant Certificates shall be the valid
obligations of Patterson, evidencing the same obligations, and entitled to the
same benefits under this Agreement, as the Warrant Certificates surrendered for
such exchange or registration of transfer.
Section 4.2. Treatment of Holders of Warrant Certificates. Patterson
and the Warrant Agent may treat the registered holder as the absolute owner
thereof for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, any notice to the contrary
notwithstanding.
Section 4.3. Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for exchange registration of transfer or exercise of the
Warrants evidenced thereby shall, if surrendered to Patterson, be delivered to
the Warrant Agent and all Warrant Certificates surrendered or so delivered to
the Warrant Agent shall be promptly canceled by the Warrant Agent and shall not
be reissued and, except as expressly permitted by this Agreement, no Warrant
Certificate shall be issued hereunder in exchange or in lieu thereof. The
Warrant Agent shall deliver to Patterson from time to time or otherwise dispose
of canceled Warrant Certificates in a manner satisfactory to Patterson.
ARTICLE V
Adjustments
Section 5.1. Adjustment of Warrant Price and Number of Warrant
Securities Purchasable.
(a) In case at any time Patterson shall issue and sell for
cash any Warrant Securities (excluding (i) Warrant Securities issued in
any of the transactions described in paragraphs (b), (c) or (d) below
and (ii) Warrant Securities issued upon exercise of Warrants) at a
price per Share lower than ___% below the Market Price determined as of
the date immediately preceding the date of such sale and issuance, the
Warrant Price in effect at the close of business on the date
immediately preceding the date of such sale and issuance shall be
reduced by multiplying such Warrant Price by a fraction, (i) the
numerator of which shall be the sum of (x) the number of Warrant
Securities outstanding at the close of business on the date immediately
preceding the date of such sale and issuance plus (y) the number of
Warrant Securities, which the aggregate amount of cash received or
receivable for such sale, and issuance would purchase at such current
Market Price per Warrant Security and (ii) the denominator of which
shall be the total number of Warrant Securities outstanding immediately
after such sale and issuance. Such adjustment shall be made
successively whenever such an issuance is made.
(b) In case Patterson shall pay or make a dividend or other
distribution on any class of stock of Patterson in Warrant Securities
or securities convertible into or exchangeable for Warrant Securities
(such convertible or exchangeable stock or securities being hereinafter
called "Convertible Securities"), other than Convertible Securities
which require payments of cash to be
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made by the holder thereof in connection with any conversion into or
exchange for Warrant Securities, the Warrant Price in effect at the
close of business on the day fixed for the determination of
shareholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such Warrant Price by a fraction of
which the numerator shall be the number of Warrant Securities
outstanding at the close of business on the date immediately preceding
the date fixed for such determination and the denominator shall be the
sum of such number of Warrant Securities and the total number of
Warrant Securities constituting such dividend or other distribution or
the maximum number of Warrant Securities issuable upon conversion or
exchange of all Convertible Securities constituting such dividend or
other distribution.
(c) In case at any time Patterson shall grant (whether
directly or otherwise) any rights (other than the Warrants and "poison
pill" rights distributed pursuant to a stockholders' rights plan) to
subscribe for or to purchase, or any options for the purchase of,
Warrant Securities or Convertible Securities, whether or not such
rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per
Warrant Security for which Warrant Securities are issuable upon the
exercise of such rights or options or upon conversion or exchange of
such Convertible Securities (determined by dividing (x) the total
amount, if any, received or receivable by Patterson as consideration
for the granting of such rights or options, plus the minimum aggregate
amount of additional consideration payable to Patterson upon the
exercise of all such rights or options, or, in the case of such rights
or options which relate to Convertible Securities, the total amount, if
any, received or receivable by Patterson as consideration for the
granting of such rights or options, plus the minimum aggregate amount
of additional consideration, if any, payable upon the issuance or sale
of such Convertible Securities and upon the conversion or exchange
thereof, by (y) the total maximum number of Warrant Securities issuable
upon the exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise
of such rights or options) shall be less than the Market Price,
determined as of the date immediately preceding the date of granting
such rights or options, the Warrant Price in effect at the close of
business on the date immediately preceding the date of granting such
rights or options shall be adjusted by multiplying such Warrant Price
by a fraction, (i) the numerator of which shall be the sum of (x) the
number of Warrant Securities outstanding at the close of business on
the date immediately preceding the date of granting such rights or
options plus (y) the quotient obtained by dividing the product of the
price per Warrant Security, determined as set forth above, and the
maximum number of Warrant Securities issuable upon the exercise of such
rights or options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights or
options by the Market Price and (ii) the denominator of which shall be
the sum of the number of Warrant Securities outstanding at the close of
business on the date immediately preceding the date of granting such
rights or options and the maximum number of Warrant Securities issuable
upon the exercise of such rights or options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise
of such rights or options. Except as provided in this subparagraph (c),
no further adjustments of the Warrant Price shall be made upon the
issuance of such Warrant Securities or of such Convertible Securities
upon exercise of such rights or options or upon the actual issuance of
such Warrant Securities upon conversion or exchange of such Convertible
Securities.
(d) In case Patterson shall issue (whether directly or by
assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder
are immediately exercisable, and the price per Warrant Security for
which Warrant Securities are issuable upon such conversion or exchange
(determined by dividing (x) the total amount received or receivable by
Patterson as consideration for the issue or sale of such
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Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to Patterson upon the conversion or
exchange thereof, by (y) the total maximum number of Warrant Securities
issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than the Market Price, determined as of the
date immediately preceding the date of such issuance or sale of such
Convertible Securities, then the Warrant Price in effect at the close
of business on the date immediately preceding the date of issuance or
sale of such Convertible Securities shall be adjusted by multiplying
such Warrant Price by a fraction, (i) the numerator of which shall be
the sum of (x) the number of Warrant Securities outstanding at the
close of business on the date immediately preceding the date of
issuance or sale of such Convertible Securities plus (y) the quotient
obtained by dividing the product of the price per Warrant Security,
determined as set forth above, and the maximum number of Warrant
Securities issuable upon conversion or exchange of all such Convertible
Securities by the Market Price and (ii) the denominator of which shall
be the sum of the number of Warrant Securities outstanding at the close
of business on the date immediately preceding the date of issuance or
sale of such Convertible Securities and such maximum number of Warrant
Securities issuable upon conversion or exchange, provided that (1)
except as provided in subparagraph (e), no further adjustments of the
Warrant Price shall be made upon the actual issuance of such Warrant
Securities upon conversion or exchange of such Convertible Securities,
and (2) if any such issuance or sale of such Convertible Securities is
made upon exercise of any rights to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which
adjustments of the Warrant Price have been or are to be made pursuant
to subparagraph (c) or the other provisions of this subparagraph (d),
no further adjustments of the Warrant Price shall be made by reason of
such issuance or sale.
(e) If (x) the purchase price provided for in any rights or
options referred to in subparagraph (c), or (y) the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subparagraphs (c) and/or (d), or
(z) the rate at which any Convertible Securities referred to in
subparagraphs (c) and/or (d) are convertible into or exchangeable for
Warrant Securities shall change (other than under or by reason of
provisions contained in the instruments governing such rights, options
or Convertible Securities that are designed to protect against
dilution), the Warrant Price in effect at the close of business on the
date of such event shall forthwith be adjusted to the Warrant Price
which would have been in effect at such time had such rights, options
or Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the
case may be, at the time initially granted, issued or sold. On the
expiration of any such option or right or the termination of any such
right to convert or exchange such Convertible Securities, the Warrant
Price in effect at the close of business on the date of expiration or
termination shall be readjusted to the Warrant Price which would have
been in effect at such time had such right, option or Convertible
Securities, to the extent outstanding immediately prior to the date of
such expiration or termination, never been granted, issued or sold.
(f) In case Patterson shall, by dividend or otherwise, declare
a dividend or other distribution on its Warrant Securities payable in
evidences of its indebtedness or assets (including securities, but
excluding (i) any rights or options referred to in subparagraph (c) of
this Section, (ii) any dividend or distribution paid in cash out of
consolidated retained earnings or consolidated earned surplus,
determined in accordance with generally accepted accounting principles,
including the making of appropriate deductions for minority interests,
if any, in subsidiaries, and (iii) any dividend or distribution
otherwise paid in Warrant Securities or Convertible Securities), the
Warrant Price in effect at the close of
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business on the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be
adjusted so that the same shall equal the price determined by
multiplying the Warrant Price in effect at the close of business on the
date fixed for the determination of shareholders entitled to receive
such dividend or other distribution by a fraction of which the
numerator shall be the current Market Price per Warrant Security on the
date fixed for such determination less the then fair market value (as
determined by the board of directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Warrant
Agent) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share and of which the denominator shall
be such current Market Price per share.
(g) In case Patterson shall at any time subdivide its
outstanding Warrant Securities into a greater number of Warrant
Securities, the Warrant Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case
the outstanding Warrant Securities shall be combined into a smaller
number of Warrant Securities, the Warrant Price in effect immediately
prior to such combination shall be proportionately increased, such
reduction or increase, as the case may be, to become effective
immediately upon the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(h) In case of any consolidation of Patterson with, or merger
of Patterson into, any other corporation or other entity, or in case of
any merger of another corporation or other entity into Patterson (other
than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding Warrant
Securities), or in case of any sale or transfer of all or substantially
all of the assets of Patterson, or in the case of a capital
reorganization or recapitalization of the capital stock of Patterson in
such a way that holders of Warrant Securities shall be able to receive
securities, cash or assets with respect to or in exchange for such
Warrant Securities from the corporation or other entity formed by such
consolidation or resulting from such merger or which acquires such
assets, as the case may be, or from Patterson, in the case of a capital
reorganization or recapitalization not involving a consolidation,
merger or sale or transfer of all or substantially all of the assets of
Patterson, such corporation or other entity or Patterson, as the case
may be, and the Warrant Agent shall execute and deliver an amendment to
this Agreement providing that the holder of each Warrant then
outstanding shall have the right thereafter, during the period such
Warrant shall be exercisable, to exercise such Warrant only for the
kind and amount of securities, cash and other property receivable upon
such consolidation, merger, sale, transfer, capital reorganization or
recapitalization by a holder of the number of Warrant Securities for
which such Warrant might have been exercised on the date immediately
prior to such consolidation, merger, sale, transfer, capital
reorganization or recapitalization, assuming such holder of Warrant
Securities failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon
such consolidation, merger, sale, transfer, capital reorganization or
recapitalization (provided that if the kind or amount of securities,
cash and other property receivable upon such consolidation, merger,
sale, transfer, capital reorganization or recapitalization is not the
same for each Warrant Security in respect of which such rights of
election shall not have been exercised (the "Non-electing Warrant
Securities"), then, for the purpose of this subparagraph (h), the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale, transfer, capital reorganization or
recapitalization by each Non-electing Warrant Security shall be deemed
to be the kind and amount so receivable per Warrant Security by a
plurality of the Non-electing Warrant Securities). Such amendment shall
provide for adjustments which, for events subsequent to the effective
date of such amendment, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article V. The
above provisions of this paragraph shall similarly apply to successive
consolidations, mergers, sales, transfers, capital reorganizations or
recapitalization. Patterson shall not effect any such consolidation,
merger, sale or transfer, unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than
Patterson) resulting from such consolidation or merger or the
corporation purchasing or otherwise
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acquiring such assets or other appropriate corporation or entity shall
assume, by written instrument executed and delivered to the Warrant
Agent, the obligation to deliver to the holder of each Warrant such
shares of stock, securities, cash or assets as, in accordance with the
foregoing provisions, such holders may be entitled to receive and the
other obligations under this Agreement.
(i) In case an adjustment in the Warrant Price shall be
required by Section 5.1 (a), (b), (c), (d) and/or (f) above, the
required adjustment shall become effective at the opening of business
on (i) the Business Day immediately following the date fixed for the
determination of shareholders of Patterson entitled to receive such
dividend or distribution, in the case of any adjustment pursuant to
Section 12(b) or (f), or (ii) the Business Day immediately following
the date of such sale and issuance or the date of such grating of such
rights or options, as the case may be, in the case of an adjustment
pursuant to section 5.1 (a), (c) or (d).
(j) For the purposes of this Article V the number of Warrant
Securities outstanding at any given time shall not include Warrant
Securities owned or held by or for the account of Patterson or of any
of its wholly or majority owned subsidiaries.
(k) Upon each adjustment of the Warrant Price pursuant to this
Section 5.1, each Warrant outstanding at the time of and immediately
prior to such adjustment shall give the holder thereof the right to
purchase, at the Warrant Price resulting from such adjustment, the
number of Warrant Securities obtained by multiplying the Warrant Price
in effect immediately prior to such adjustment by the number of Warrant
Securities issuable upon exercise of such Warrant immediately prior to
such adjustment and dividing the product thereof by the Warrant Price
resulting from such adjustment.
(l) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease of at
least one percent in such Warrant Price; provided, however, that any
one or more such adjustments which, by reason of this subparagraph (l)
is not required to be made shall be carried forward on a cumulative
basis and fully taken into account in any subsequent adjustment. All
calculations under this Section 5.1 shall be made to the nearest cent
or to the nearest 1/100 of a Warranty Security, as the case may be. The
provisions of this Section 12(l) shall also apply to readjustments
provided for in subparagraph (e).
(m) Patterson shall be obligated to issue any additional
Warrant Securities which become issuable upon exercise of Warrants as a
result of any event described in this Section 5.1 which requires an
adjustment in the Warrant Price and the number of Warrant Securities
issuable upon exercise of the Warrants.
(n) For purposes of this Section 5.1, "Market Price" means the
average of the closing prices per Warrant Security on the American
Stock Exchange or the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"), as the case may be (or, if there
is no such closing price, the mean between the bid and asked prices
reported on American Stock Exchange or NASDAQ, or on any other national
securities exchange or over-the-counter market on which such quotations
are regularly available, as the case may be), on each of the ten
trading days immediately preceding the date as of which the
determination of Market Price is to be made. If at any time the Warrant
Securities are not listed on any national securities exchange or quoted
in the over-the-counter market, the Market Price shall be deemed to be
the fair value thereof determined in good faith by an independent
brokerage firm or Standard & Poor's Corp. as
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<PAGE> 10
of a date which is within 15 days of the date as of which the
determination of Market Price is to be made.
(o) If Patterson shall take any action affecting the Warrant
Securities, other than action described in this Section 5.1, which in
the opinion of the Board of Directors of Patterson would materially
adversely affect the exercise rights of the holders of the Warrants,
the Warrant Price for the Warrants may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time, as such
Board of Directors may determine in good faith to be equitable in the
circumstances. Failure of the Board of Directors of Patterson to
provide for any such adjustment prior to the effective date of any such
action by Patterson affecting the Warrant Securities shall be evidence
that the Board of Directors of Patterson has determined that it is
equitable to make no adjustments in the circumstances.
Section 5.2. Voluntary Adjustment by Patterson. Patterson may at its
option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount deemed appropriate by the Board of Directors of
Patterson; provided, that, if Patterson elects so to reduce the then current
Warrant Price, such reduction shall remain in effect for at least 20 Business
Days, after which time Patterson may, at its option, reinstate the Warrant Price
in effect prior to such reduction.
Section 5.3. Notice of Adjustment. Whenever the Warrant Price is
adjusted as herein provided, the Chief Financial Officer of Patterson shall
compute the adjusted Warrant Price in accordance with the foregoing provisions
and shall prepare a certificate setting forth such adjusted Warrant Price and
showing in reasonable detail the facts upon which such adjustment is based. A
copy of such certificate shall be filed promptly with the Warrant Agent.
Promptly after delivery of such certificate, Patterson shall prepare a notice of
such adjustment of the Warrant Price setting forth the adjusted Warrant Price
and the date on which such adjustment becomes effective and shall mail, or cause
the Warrant Agent to mail at Patterson's expense, such notice of such adjustment
of the Warrant Price to each holder of a Warrant at his last address as shown on
the Warrant Register.
Section 5.4. No Adjustment for Dividends. Except as provided in Section
5.1 hereof, no adjustment in respect of any dividends or other payments or
distributions made to holders of securities issuable upon exercise of Warrants
shall be made during the term of a Warrant or upon the exercise of a Warrant.
Section 5.5. Statement on Warrants Certificate. Irrespective of any
adjustments in the number or kind of securities purchasable upon the exercise of
the Warrants or the Warrant Securities, any Warrant Certificate theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrant Certificate initially issuable pursuant to
this Agreement.
Section 5.6. Warrant Agent's Adjustment Disclaimer. The Warrant Agent
has no duty to determine when an adjustment under this Article V should be made,
how it should be made or what it should be. The Warrant Agent shall not be
accountable for and makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for Patterson's failure to comply with this Article V.
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ARTICLE VI
Concerning the Warrant Agent
Section 6.1. Warrant Agent. Patterson hereby appoints __________, as
Warrant Agent of Patterson in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth; and
___________ hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it in the Warrant
Certificates and hereby and such further powers and authority to act on behalf
of Patterson as Patterson may hereafter grant to or confer upon it. All of the
terms and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
Section 6.2. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which Patterson agrees and to all of
which the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject:
(a) Patterson agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with Patterson for all services rendered
by the Warrant Agent and to reimburse the Warrant Agent for reasonable
out-of-pocket expenses (including counsel fees) incurred by the Warrant
Agent in connection with the services rendered hereunder by the Warrant
Agent. Patterson also agrees to indemnify the Warrant Agent for, and to
hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Warrant Agent,
arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any
claim of such liability.
(b) In acting under this Warrant Agreement and in connection
with the Warrant Certificates, the Warrant Agent is acting solely as
agent of Patterson and does not assume any obligation or relationship
of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to
it, and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by it
in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) The Warrant Agent, and its officers, directors and
employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were
not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial
or other transaction with Patterson and may act on, or as depositary,
trustee or agent for, any committee or body of holders of Warrant
Securities or other obligations of Patterson as freely as if it were
not the Warrant Agent hereunder.
(f) The Warrant Agent shall have no liability for interest on
any monies at any time received by it pursuant to any of the provisions
of this Agreement or of the Warrant Certificates.
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<PAGE> 12
(g) The Warrant Agent shall have no liability with respect to
any invalidity of this Agreement or any of the Warrant Certificates.
(h) The Warrant Agent shall not be responsible for any of the
recitals or representations herein or in the Warrant Certificates
(except as to the Warrant Agent's countersignature thereon), all of
which are made solely by Patterson.
(i) The Warrant Agent shall be obligated to perform only such
duties as are herein and in the Warrant Certificates specifically set
forth and no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The
Warrant Agent shall not be under any obligation to take any action
hereunder which may tend to involve it in any expense or liability, the
payment of which within a reasonable time is not, in its reasonable
opinion, assured to it. The Warrant Agent shall not be accountable or
under any duty or responsibility for the use by Patterson of any of the
Warrant Certificates authenticated by the Warrant Agent and delivered
by it to Patterson pursuant to this Agreement or for the application by
Patterson of the proceeds of the Warrant Certificates. The Warrant
Agent shall have no duty or responsibility in case of any default by
Patterson in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of
any written demand from a holder of a Warrant Certificate with respect
to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to
initiate any proceedings at law or otherwise or, except as provided in
Section 6.2, to make any demand upon Patterson.
(j) The Warrant Agent is hereby authorized to obtain from time
to time from the present transfer agent for the Warrant Securities (the
"Transfer Agent"), and any successor Transfer Agent, stock certificates
required to honor outstanding Warrants. Patterson hereby authorizes its
present and any successor Transfer Agent to comply with all such
requests. Patterson will supply such Transfer Agent with duly executed
stock certificates for such purpose and will provide or otherwise make
available any cash which may be payable as provided in Section 2.3
hereof, and the Warrant Agent shall not be responsible for any delay or
failure by such Transfer Agent in supplying such stock certificates.
Section 6.3. Resignation and Appointment of Successor.
(a) Patterson agrees, for the benefit of the holders of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to Patterson of such intention on its part,
specifying the date on which its desired resignation shall become
effective; provided that such date shall not be less than three months
after the date on which such notice is given unless Patterson otherwise
agrees. The Warrant Agent hereunder may be removed at any time by the
filing with it of an instrument in writing signed by or on behalf of
Patterson and specifying such removal and the date when it shall become
effective. Such resignation or removal shall take effect upon the
appointment by Patterson, as hereinafter provided, of a successor
Warrant Agent (which shall be a bank or trust company authorized under
the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor
Warrant Agent. The obligation of Patterson under Section 6.3(a) shall
continue to the extent set forth therein notwithstanding the
resignation or removal of the Warrant Agent.
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(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or shall file a petition seeking
relief under the Federal Bankruptcy Code, as now constituted or
hereafter amended, or under any other applicable Federal or State
bankruptcy law or similar law or make an assignment for the benefit of
its creditors or consent to the appointment of a receiver or custodian
of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its
property shall be appointed, or if an order of any court shall be
entered for relief against it under the provisions of the Federal
Bankruptcy Code, as now constituted or hereafter amended, or under any
other applicable Federal or State bankruptcy or similar law, or if any
public officer shall have taken charge or control of the Warrant Agent
or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as
aforesaid, shall be appointed by Patterson, by an instrument in
writing, filed with the successor Warrant Agent. Upon the appointment
as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall
cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to Patterson an
instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance,
shall become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like effect
as if originally named as Warrant Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such
predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may
be merged or converted or any corporation with which the Warrant Agent
may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or
otherwise transfer all or substantially all the assets and business of
the Warrant Agent, provided that it shall be qualified as aforesaid,
shall be the successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto.
ARTICLE VII
Miscellaneous
Section 7.1. Amendment. This Agreement may be amended by the parties
hereto, without the consent of the holder of any Warrant Certificate, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
Patterson and the Warrant Agent may deem necessary or desirable; provided, that
such action shall not materially and adversely affect the interests of the
holders of the Warrant Certificates and, provided, further, that Patterson and
the Warrant Agent may amend this Agreement in any manner prior to the issuance
of any Warrants hereunder. With the consent of the holders of not less than a
majority in number of the then outstanding unexercised Warrants affected,
Patterson and the Warrant Agent may modify or amend any other term of this
Agreement; provided, however, that no such modification or amendment may be made
without the consent of the holders affected thereby if such proposed amendment
would (i) shorten the period of time during which the Warrants may be exercised;
(ii) otherwise materially and adversely affect the exercise rights of the
holders of the Warrants; or (iii) reduce the number of outstanding Warrants.
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Section 7.2. Notices and Demands to Patterson and Warrant Agent. If the
Warrant Agent shall receive any notice or demand addressed to Patterson by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
Patterson.
Section 7.3. Addresses. Any communication from Patterson to the Warrant
Agent with respect to this Agreement shall be addressed to ____________, and any
communication from the Warrant Agent to Patterson with respect to this Agreement
shall be addressed to Patterson Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
79549, Attention: _______________ (or such other address as shall be specified
in writing by the Warrant Agent or by Patterson).
Section 7.4. Applicable Law. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by and
construed in accordance with, the laws of the State of [New York], without
giving effect to the conflict of laws principles thereof.
Section 7.5. Delivery of Prospectus. Patterson will furnish to the
Warrant Agent sufficient copies of a prospectus relating to the Warrant
Securities deliverable upon exercise of Warrants (the "Prospectus"), and the
Warrant Agent agrees that upon the exercise of any Warrant, the Warrant Agent
will deliver to the holder of the Warrant Certificate evidencing such Warrant,
prior to or concurrently with, the delivery of the Warrant Securities issued
upon such exercise, a Prospectus.
Section 7.6. Obtaining of Governmental Approvals. Patterson will from
time to time take all action which may be necessary to obtain and keep effective
any and all permits, consents and approvals of governmental agencies and
authorities and securities acts filings under United States Federal and State
laws (including, without limitation, a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be or become requisite in connection with the issuance, sale,
transfer, and delivery of the Warrant Certificates, the exercise of the
Warrants, the issuance, sale, transfer, and delivery of the Warrant Securities
issued upon exercise of the Warrants or upon the expiration of the period during
which the Warrants are exercisable.
Section 7.7. Persons Having Rights under Warrant Agreement. Nothing in
this Agreement shall give to any person other than Patterson, the Warrant Agent
and the holders of the Warrant Certificates any right, remedy or claim under or
by reason of this Agreement.
Section 7.8. Headings. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 7.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which as so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Section 7.10. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office of
the Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificates for
inspection by it.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereunto, and
the same to be attested, all as of the day and year first above written.
PATTERSON ENERGY, INC.
By
Attest: ----------------------------------
- ---------------------------
[NAME OF WARRANT AGENT],
as Warrant Agent
By
Attest: ----------------------------------
- ---------------------------
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<PAGE> 16
EXHIBIT A
(FORM OF WARRANT CERTIFICATE)
Exercisable Only if Countersigned
by the Warrant Agent as Provided Herein
PATTERSON ENERGY, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
Void After 5:00 P.M. New York Time on
[No.] Warrants
This certifies that _______________ or registered assigns is the
registered owner of the above indicated number of Warrants, each Warrant
entitling such owner to purchase, at any time [after 5 p.m. New York time on
________, ________, and] on or before 5 p.m. New York time on _______, ____,
[Title of Warrant Securities] (the "Warrant Securities"), of Patterson Energy,
Inc., (the "Patterson"), issued and to be issued on the following basis: [on
_________, ____, the exercise price of each Warrant will be [$]____________;
during the period from ____________, ____, through and including ________,
________, the exercise price of each Warrant will be [$]______. The holder may
exercise the Warrants evidenced hereby by providing certain information set
forth on the back hereof and by paying in full, [in lawful money of the United
States of America] [if applicable, express Warrant exercise price in applicable
foreign currency, currency unit or composite currency] [in cash or by certified
check or official bank check or by bank wire transfer, in each case] [by bank
wire transfer], in immediately available funds, the Warrant Price for each
Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back hereof
duly executed, at the corporate trust office of [name of Warrant Agent], or its
successors as warrant agent (the "Warrant Agent"), [or ______________] currently
at the address specified on the reverse hereof, and upon compliance with and
subject to the conditions set forth herein and in the Warrant Agreement (as
hereinafter defined).
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
Patterson will not be required to issue fractional shares of Warrant
Securities upon exercise of the Warrants or distribute stock certificates that
evidence fractional shares of Warrant Securities. In lieu of fractional Warrant
Securities, there shall be paid by Patterson to the registered holder of this
Warrant Certificate at the time such Warrant Certificate is exercised an amount
in cash payable by company check equal to the closing sales price of the Warrant
Securities on the American Stock Exchange (or if not so listed, another
equivalent means reasonably determined by Patterson) on the business day
immediately preceding the exercise date, multiplied by such fraction.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ___________, ____, (the "Warrant Agreement")
between Patterson and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant
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<PAGE> 17
Agreement and the form of Warrant Securities are on file at the above-mentioned
office of the Warrant Agent [and at _________ ].
This Warrant Certificate may be transferred when surrendered at the
corporate trust office of the Warrant Agent [or ____________] by the registered
owner or his assigns, in person or by an attorney duly authorized in writing, in
the manner and subject to the terms provided in the Warrant Agreement.
After countersignature by the Warrant Agent and prior to the expiration
of this Warrant Certificate, this Warrant Certificate may be exchanged at the
corporate trust office of the Warrant Agent for Warrant Certificates
representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of Warrant Securities, including, without limitation, the
right to receive dividends, vote, receive notice of any meeting of stockholders
or otherwise have any right as a stockholder of Patterson, or the right to
receive the payment of principal of, premium, if any, or interest on Warrant
Securities or to enforce any of the covenants in the Indenture.
This Warrant Certificate shall not be valid for any purpose until
countersigned by the Warrant Agent.
Dated as of
--------------------- PATTERSON ENERGY, INC.
By
----------------------------------
Cloyce A. Talbott
Chief Executive Officer
Attest:
- -------------------------------------
Countersigned
------------------------------------
As Warrant Agent
By
----------------------------------
Authorized Signature
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<PAGE> 18
[Reverse of Warrant Certificate]
Instructions for Exercise of Warrant
To exercise the Warrants evidenced hereby, the holder must pay [in cash
or by certified check or official bank check or by bank wire transfer] [by bank
wire transfer], in immediately available funds, the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent] Corporate Trust Department
[insert address of Warrant Agent], Attn: [or ], which [payment] [wire transfer]
must specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below and
present this Warrant Certificate in person or by mail (registered mail is
recommended) to the Warrant Agent at the addresses set forth below. This Warrant
Certificate, completed and duly executed, must be received by the Warrant Agent
within five business days of the [payment] [wire transfer].
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise Warrants
evidenced by this Warrant Certificate, to purchase ______________ [Title of
Warrant Securities] (the "Warrant Securities") of Patterson Energy, Inc. and
represents that he has tendered payment for such Warrant Securities [in cash or
by certified check or official bank check or by bank wire transfer, in each
case] [by bank wire transfer], in immediately available funds, to the order of
Patterson Energy, Inc., c/o [insert name and address of Warrant Agent], in the
amount of [$]______________ [if applicable, express Warrant exercise price in
applicable foreign currency, currency unit or composite currency] in accordance
with the terms hereof. The undersigned requests that said principal amount of
Warrant Securities be in fully registered form and in the authorized
denominations, registered in such names and delivered, all as specified in
accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below.
Dated Name
------------------ -------------------------------
(Please Print)
- ---------------------------------------
Address
- ---------------------------------------
Social Security Number of Holder
- ---------------------------------------
Signature
The Warrants evidenced hereby may be exercised at the following addresses:
By hand at
------------------------------------------------
------------------------------------------------
By mail at
------------------------------------------------
------------------------------------------------
[Instructions as to form and delivery of Warrant Securities and, if
applicable, Warrant Certificates evidencing unexercised Warrants--complete as
appropriate.]
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<PAGE> 19
Assignment
(Form of Assignment to be Executed if Holder Desires
to Transfer Warrants Evidenced Hereby)
For value received _______________________ hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address, including zip code of assignee, and Social
Security Number or other identifying number)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint Attorney, to transfer said Warrant
Certificate on the books of the Warrant Agent with full power of substitution in
the premises.
Dated
------------------------ --------------------------------
Signature
(Signature must conform in all
respect to name of holder as
specified on the face of this
Warrant Certificate and must
bear a signature guarantee of a
commercial bank, trust company,
or member broker of the New
York, American, Midwest or
Pacific Stock Exchange.)
Signature Guaranteed:
- ---------------------------------------
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<PAGE> 1
EXHIBIT 4.11
PATTERSON ENERGY, INC.
and
[------------------------------],
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
--------------
FORM OF DEPOSIT AGREEMENT*
--------------
Dated as of [__________]
- --------------------------
*Complete or modify the provisions of this Form as appropriate to reflect the
terms of the Depositary Shares and Depositary Receipts.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
DEFINITIONS
Certificate of Incorporation...................................................................................1
Certificate of Designation.....................................................................................1
Common Stock...................................................................................................1
Corporate Office...............................................................................................1
Deposit Agreement..............................................................................................1
Depositary.....................................................................................................1
Depositary Share...............................................................................................1
Depositary's Agent.............................................................................................2
New York Office................................................................................................2
Receipt........................................................................................................2
Record holder..................................................................................................2
Registrar......................................................................................................2
Securities Act.................................................................................................2
Stock..........................................................................................................2
ARTICLE 2
FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY,
TRANSFER, SURRENDER, REDEMPTION AND CONVERSION OF RECEIPTS
SECTION 2.1 Form and Transfer of Receipts................................................................2
SECTION 2.2 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof......................3
SECTION 2.3 Redemption and Conversion of Stock...........................................................3
SECTION 2.4 Register of Transfer of Receipts.............................................................5
SECTION 2.5 Combination and Split-ups of Receipts........................................................6
SECTION 2.6 Surrender of Receipts and Withdrawal of Stock................................................6
SECTION 2.7 Limitations on Execution and Delivery, Transfer, Split-up, Combination,
Surrender and Exchange of Receipts and Withdrawal or Deposit of Stock........................6
SECTION 2.8 Lost Receipts, etc...........................................................................7
SECTION 2.9 Cancellation and Destruction of Surrendered Receipts.........................................7
ARTICLE 3
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND PATTERSON
SECTION 3.1 Filing Proofs, Certificates and Other Information............................................7
SECTION 3.2 Payment of Taxes or Other Governmental Charges...............................................7
SECTION 3.3 Withholding..................................................................................8
SECTION 3.4 Representations and Warranties as to Stock...................................................8
ARTICLE 4
THE STOCK, NOTICES
SECTION 4.1 Cash Distributions...........................................................................8
SECTION 4.2 Distributions Other Than Cash................................................................8
SECTION 4.3 Subscription Rights, Preferences or Privileges...............................................9
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.4 Notice of Dividends, Fixing of Record Date for Holders of Receipts...........................9
SECTION 4.5 Voting Rights................................................................................9
SECTION 4.6 Changes Affecting Stock and Reclassifications, Recapitalizations, etc.......................10
SECTION 4.7 Reports.....................................................................................10
SECTION 4.8 Lists of Receipt Holders....................................................................10
ARTICLE 5
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.1 Maintenance of Offices, Agencies, Transfer Books by the Depositary;
the Registrar...............................................................................10
SECTION 5.2 Prevention or Delay in Performance by the Depositary, the Depositary's Agents,
the Registrar or Patterson..................................................................11
SECTION 5.3 Obligations of the Depositary, the Depositary's Agents, the Registrar
and Patterson...............................................................................11
SECTION 5.4 Resignation and Removal of the Depositary, Appointment of Successor
Depositary..................................................................................12
SECTION 5.5 Corporate Notices and Reports...............................................................13
SECTION 5.6 Deposit of Stock by Patterson...............................................................13
SECTION 5.7 Indemnification by Patterson................................................................13
SECTION 5.8 Fees, Charges and Expenses..................................................................13
ARTICLE 6
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment...................................................................................13
SECTION 6.2 Termination.................................................................................14
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 Counterparts................................................................................14
SECTION 7.2 Exclusive Benefits of Parties...............................................................14
SECTION 7.3 Invalidity of Provisions....................................................................14
SECTION 7.4 Notices.....................................................................................15
SECTION 7.5 Depositary's Agents.........................................................................15
SECTION 7.6 Holders of Receipts Are Parties.............................................................15
SECTION 7.7 Law.........................................................................................15
SECTION 7.8 Headings....................................................................................15
</TABLE>
iii
<PAGE> 4
DEPOSIT AGREEMENT
THIS DEPOSIT AGREEMENT, dated as of [________], among Patterson Energy,
Inc., a Delaware corporation ("Patterson"), [_________________________________],
a [________] banking corporation, as Depositary, and all holders from time to
time of Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, Patterson desires to provide as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of Stock with the Depositary, as
agent for the beneficial owners of the Stock, for the purposes set forth in this
Deposit Agreement and for the issuance hereunder of the Receipts evidencing
Depositary Shares representing an interest in the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form annexed as
Exhibit A to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises contained herein, it
is agreed by and among the parties hereto as follows:
ARTICLE 1
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
"Certificate of Incorporation" shall mean the Restated Certificate of
Incorporation, as amended and restated from time to time, of Patterson.
"Certificate of Designation" shall mean the Certificate of Designations
establishing and setting forth the rights, preferences, privileges and
limitations of the Stock.
"Common Stock" shall mean Patterson's Common Stock, par value $.01 per
share.
"Corporate Office" shall mean the office of the Depositary in
[__________], [______________] at which at any particular time its business in
respect of matters governed by this Deposit Agreement shall be administered,
which at the date of this Deposit Agreement is located at
[______________________].
"Deposit Agreement" shall mean this agreement, as the same may be
amended, modified or supplemented from time to time.
"Depositary" shall mean [_____________________], as Depositary
hereunder, and any successor as Depositary hereunder.
"Depositary Share" shall mean the rights evidenced by the Receipts
executed and delivered hereunder, including the interests in Stock granted to
holders of Receipts pursuant to the terms and conditions of the Deposit
Agreement. Each Depositary Share shall represent an interest in [fraction] of a
share of Stock deposited with the Depositary hereunder and the same
proportionate interest in any and all other property received by the Depositary
in respect of such share of Stock and held under this Deposit Agreement. Subject
to the terms of this Deposit Agreement, each record holder of a Receipt
evidencing a Depositary Share or Shares is entitled, proportionately, to all the
rights, preferences and privileges of the
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<PAGE> 5
Stock represented by such Depositary Share or Shares, including the dividend,
voting and liquidation rights contained in the Certificate of Designation, and
to the benefits of all obligations and duties of Patterson in respect of the
Stock under the Certificate of Designation and the Certificate of Incorporation.
"Depositary's Agent" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.5.
["New York Office" shall mean the facility maintained by the Depositary
in the Borough of Manhattan, The City of New York for accepting, executing and
delivering Receipts and other instruments prior to processing such instruments
at the Corporate Office, which facility at the date of this Deposit Agreement is
located at [____________.]
"Receipt" shall mean a Depositary Receipt executed and delivered
hereunder, in substantially the form of Exhibit A hereto, evidencing a
Depositary Share or Shares, as the same may be amended from time to time in
accordance with the provisions hereof.
"Record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books maintained by or on
behalf of the Depositary for such purpose.
"Registrar" shall mean any bank or trust company appointed to register
ownership and transfers of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of Patterson's [name of series] Preferred
Stock, $.01 par value per share.
ARTICLE 2
FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION
AND DELIVERY, TRANSFER, SURRENDER,
REDEMPTION AND CONVERSION OF RECEIPTS
SECTION 2.1 Form and Transfer of Receipts. Receipts shall be
engraved or printed or lithographed and shall be substantially in the form set
forth in Exhibit A annexed to this Deposit Agreement, with appropriate
insertions, modifications and omissions, as hereinafter provided. Receipts shall
be executed by the Depositary by the manual signature of a duly authorized
signatory of the Depositary; provided, however, that such signature may be a
facsimile if a Registrar (other than the Depositary) shall have countersigned
the Receipts by manual signature of a duly authorized signatory of the
Registrar. No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose unless it shall have been
executed as provided in the preceding sentence. The Depositary shall record on
its books each Receipt executed as provided above and delivered as hereinafter
provided. Receipts bearing the facsimile signature of anyone who was at any time
a duly authorized officer of the Depositary shall bind the Depositary,
notwithstanding that such officer has ceased to hold such office prior to the
delivery of such Receipts.
Receipts may be issued in denominations of any number of whole
Depositary Shares. All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations
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of any securities exchange upon which the Stock or the Depositary Shares may be
listed or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Receipts are subject
by reason of the date of issuance of the Stock or otherwise.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect as
in the case of a negotiable instrument; provided, however, that the Depositary
may, notwithstanding any notice to the contrary, treat the record holder thereof
at such time as the absolute owner thereof for the purpose of determining the
person entitled to distributions of dividends or other distributions or to any
notice provided for in this Deposit Agreement and for all other purposes.
SECTION 2.2 Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
Patterson or any holder of Stock may deposit such Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a properly executed instrument of transfer in form satisfactory
to the Depositary, together with (i) all such certifications as may be required
by the Depositary in accordance with the provisions of this Deposit Agreement
and (ii) a written order of Patterson or such holder, as the case may be,
directing the Depositary to execute and deliver to or upon the written order of
the person or persons stated in such order a Receipt or Receipts for the number
of Depositary Shares representing such deposited Stock.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary shall, as soon as transfer and registration can be
accomplished, present such certificate or certificates to the registrar and
transfer agent of the Stock for transfer and registration in the name of the
Depositary or its nominee of the Stock being deposited.
Deposited Stock shall be held by the Depositary in an account to be
established by the Depositary at the Corporate Office.
Upon receipt by the Depositary of a certificate or certificates for
Stock to be deposited hereunder, together with the other documents specified
above, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section 2.2, a Receipt or Receipts for the number of
whole Depositary Shares representing the Stock so deposited and registered in
such name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipt or Receipts at the New York Office,
except that, at the request, risk and expense of any person requesting such
delivery and for the account of such person, such delivery may be made at such
other place as may be designated by such person. In each case, delivery will be
made only upon payment by such person to the Depositary of all taxes and other
governmental charges and any fees payable in connection with such deposit and
the transfer of the deposited Stock.
Patterson shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
SECTION 2.3 Redemption and Conversion of Stock.* Whenever
Patterson shall elect to redeem or be required to convert shares of Stock into
shares of Common Stock or other securities in accordance with the Certificate of
Designation, it shall (unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary not less than five business
days' prior notice of the proposed
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*This section to be modified to discuss specific redemption or conversion terms
of the Stock, if any.
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date of the mailing of a notice of redemption or conversion of Stock and the
simultaneous redemption or conversion of the Depositary Shares representing the
Stock to be redeemed or converted and of the number of such shares of Stock held
by the Depositary to be redeemed or converted. The Depositary shall, as directed
by Patterson in writing, mail, first class postage prepaid, notice of the
redemption or conversion of Stock and the proposed simultaneous redemption or
conversion of the Depositary Shares representing the Stock to be redeemed or
converted, not less than 30 and not more than 60 days prior to the date fixed
for redemption or conversion of such Stock and Depositary Shares, to the record
holders of the Receipts evidencing the Depositary Shares to be so redeemed or
converted, at the addresses of such holders as the same appear on the records of
the Depositary; provided, that if the effectiveness of a Merger or Consolidation
(as defined in the Certificate of Designation) makes it impracticable to provide
at least 30 days' notice, the Depositary shall provide such notice as soon as
practicable prior to such effectiveness. Any such notice shall also be published
in the same manner as notices of redemption or conversion of Stock are required
to be published pursuant to Section [ ] of the Certificate of Designation.
Notwithstanding the foregoing, neither failure to mail or publish any such
notice to one or more such holders nor any defect in any notice shall affect the
sufficiency of the proceedings for redemption or conversion. Patterson shall
provide the Depositary with such notice, and each such notice shall state: the
redemption or conversion date; the number of Depositary Shares to be redeemed or
converted; if fewer than all the Depositary Shares held by any holder are to be
redeemed, the number of such Depositary Shares held by such holder to be so
redeemed; in the case of a call for redemption, the call price payable upon
redemption and the Current Market Price (as defined in the Certificate of
Designation) to be used to calculate the number of shares of Common Stock or
other securities deliverable upon redemption; whether Patterson is exercising
any option to deliver shares of Common Stock or other securities in lieu of any
cash consideration pursuant to Section [ ] of the Certificate of Designation and
the Current Market Price to be used to calculate the number of such shares or
other securities; the place or places where Receipts evidencing Depositary
Shares to be redeemed or converted are to be surrendered for redemption or
conversion; whether Patterson is depositing with a bank or trust company on or
before the redemption or conversion date, the shares of Common Stock or other
securities and cash, if any, payable by Patterson and the proposed date of such
deposit; the amount of accrued and unpaid dividends payable per share of Stock
to be redeemed or converted to and including such redemption or conversion date,
as the case may be, and that dividends in respect of the Stock represented by
the Depositary Shares to be redeemed or converted will cease to accrue on such
redemption or conversion date (unless Patterson shall default in delivering
shares of Common Stock or other securities and cash, if any, at the time and
place specified in such notice). On the date of any such redemption or
conversion, the Depositary shall surrender the certificate or certificates held
by the Depositary evidencing the number of shares of Stock to be redeemed or
converted in the manner specified in the notice of redemption or conversion of
Stock provided by Patterson pursuant to Section [ ] of the Certificate of
Designation. The Depositary shall, thereafter, redeem or convert the number of
Depositary Shares representing such redeemed or converted Stock upon the
surrender of Receipts evidencing such Depositary Shares in the manner provided
in the notice sent to record holders of Receipts; provided, that the Depositary
shall have received, upon surrendering such certificate or certificates as
aforesaid, a sufficient number of shares of Common Stock or other securities to
convert or redeem such number of Depositary Shares (including, in the event that
Patterson elects pursuant to Section [ ] of the Certificate of Designation to
exercise any option to deliver shares of Common Stock or other securities in
lieu of any cash consideration payable on the Effective Date (as defined in the
Certificate of Designation) of any Merger or Consolidation, a number of shares
of Common Stock equal to such cash consideration (as determined in the manner
set forth in the Certificate of Designation)), plus any accrued and unpaid
dividends payable with respect thereto to and including the date of any such
redemption or conversion and any other cash consideration payable on the
Effective Date of a Merger or Consolidation (other than any dividends or other
cash consideration payable on the Effective Date of a Merger or Consolidation
that Patterson has elected to pay in shares of Common Stock pursuant to Section
[ ] of the Certificate of Designation) as instructed and calculated by
Patterson. In case fewer than all the outstanding Depositary Shares are to be
redeemed, the Depositary Shares to be
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<PAGE> 8
redeemed shall be selected by the Depositary by lot, on a pro rata basis or such
other equitable method as shall be approved by Patterson and the Depositary.
Notice having been mailed by the Depositary as aforesaid, from and
after the redemption or conversion date (unless Patterson shall have failed to
redeem or convert the shares of Stock to be redeemed or converted by it upon the
surrender of the certificate or certificates therefor by the Depositary as
described in the preceding paragraph), the Depositary Shares called for
redemption or subject to conversion shall be deemed no longer to be outstanding
and all rights of the holders of Receipts evidencing such Depositary Shares
(except the right to receive the shares of Common Stock or other securities and
cash, if any, payable upon redemption or conversion upon surrender of such
Receipts) shall, to the extent of such Depositary Shares, cease and terminate.
Upon surrender in accordance with said notice of the Receipts evidencing such
Depositary Shares (properly endorsed or assigned for transfer, if the Depositary
shall so require), such Depositary Shares shall be converted into or redeemed
for shares of Common Stock or other securities at a rate equal to [ ] of the
number of shares of Common Stock or other securities delivered, and the holders
thereof shall be entitled to [ ] of the cash, if any, payable, in respect of the
shares of Stock pursuant to the Certificate of Designation. The foregoing shall
be subject further to the terms and conditions of the Certificate of
Designation.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the shares of Common Stock
or other securities and all accrued and unpaid dividends to and including the
date fixed for redemption payable in respect of the Depositary Shares called for
redemption, a new Receipt evidencing the Depositary Shares evidenced by such
prior Receipt and not called for redemption.
To the extent that Depositary Shares are converted into or redeemed for
shares of Common Stock or other securities and all of such shares of Common
Stock or other securities cannot be distributed to the record holders of
Receipts converted or called for redemption without creating fractional
interests in such shares, the Depositary may, with the consent of Patterson,
adopt such method as it deems equitable and practicable for the purpose of
effecting such distribution, including the sale (at public or private sale) of
such shares of Common Stock or other securities at such place or places and upon
such terms as it may deem proper, and the net proceeds of any such sale shall,
subject to Section 3.2, be distributed or made available for distribution to
such record holders that would otherwise receive fractional interests in such
shares of Common Stock or other securities.
The Depositary shall not be required (a) to issue, transfer or exchange
any Receipts for a period beginning at the opening of business 15 days next
preceding any selection of Depositary Shares and Stock to be redeemed and ending
at the close of business on the day of the mailing of notice of redemption of
Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt
evidencing Depositary Shares called or being called for redemption, in whole or
in part, or subject to conversion except as provided in the second preceding
paragraph of this Section 2.3.
SECTION 2.4 Register of Transfer of Receipts. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register on
its books from time to time transfers of Receipts upon any surrender thereof at
the Corporate Office, the New York Office or such other office as the Depositary
may designate for such purpose, by the record holder in person or by a duly
authorized attorney, properly endorsed or accompanied by a properly executed
instrument of transfer, together with evidence of the payment of any transfer
taxes as may be required by law. Upon such surrender, the Depositary shall
execute a new Receipt or Receipts and deliver the same to or upon the order of
the person entitled thereto evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered.
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SECTION 2.5 Combination and Split-ups of Receipts. Upon surrender
of a Receipt or Receipts at the Corporate Office, the New York Office or such
other office as the Depositary may designate for the purpose of effecting a
split-up or combination of Receipts, subject to the terms and conditions of this
Deposit Agreement, the Depositary shall execute and deliver a new Receipt or
Receipts in the authorized denominations requested evidencing the same aggregate
number of Depositary Shares evidenced by the Receipt or Receipts surrendered;
provided, however, that the Depositary shall not issue any Receipt evidencing a
fractional Depositary Share.
SECTION 2.6 Surrender of Receipts and Withdrawal of Stock.* Any
holder of a Receipt or Receipts may withdraw any or all of the Stock (but only
in whole shares of Stock) represented by the Depositary Shares evidenced by such
Receipts and all money and other property, if any, represented by such
Depositary Shares by surrendering such Receipt or Receipts at the Corporate
Office, the New York Office or at such other office as the Depositary may
designate for such withdrawals. After such surrender, without unreasonable
delay, the Depositary shall deliver to such holder, or to the person or persons
designated by such holder as hereinafter provided, the whole number of shares of
Stock and all such money and other property, if any, represented by the
Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal, but holders of such whole shares of Preferred Stock will not
thereafter be entitled to deposit such Preferred Stock hereunder or to receive
Depositary Shares thereafter. If the Receipt or Receipts delivered by the holder
to the Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of whole Depositary Shares
representing the whole number of shares of Stock to be withdrawn, the Depositary
shall at the same time, in addition to such whole number of shares of Stock and
such money and other property, if any, to be withdrawn, deliver to such holder,
or (subject to Section 2.4) upon his order, a new Receipt or Receipts evidencing
such excess number of whole Depositary Shares. Delivery of the Stock and such
money and other property being withdrawn may be made by the delivery of such
certificates, documents of title and other instruments as the Depositary may
deem appropriate, which, if required by the Depositary, shall be properly
endorsed or accompanied by proper instruments of transfer. If the Stock and the
money and other property being withdrawn are to be delivered to a person or
persons other than the record holder of the Receipt or Receipts being
surrendered for withdrawal of Stock, such holder shall execute and deliver to
the Depositary a written order so directing the Depositary and the Depositary
may require that the Receipt or Receipts surrendered by such holder for
withdrawal of such shares of Stock be properly endorsed in blank or accompanied
by a properly executed instrument of transfer in blank and that the signature on
such instrument of transfer be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. The Depositary
shall deliver the Stock and the money and other property, if any, represented by
the Depositary Shares evidenced by Receipts surrendered for withdrawal, without
unreasonable delay, at the office at which such Receipts were surrendered,
except that, at the request, risk and expense of the holder surrendering such
Receipt or Receipts and for the account of the holder thereof, such delivery may
be made, without unreasonable delay, at such other place as may be designated by
such holder.
SECTION 2.7 Limitations on Execution and Delivery, Transfer,
Split-up, Combination, Surrender and Exchange of Receipts and Withdrawal or
Deposit of Stock. As a condition precedent to the execution and delivery,
registration of transfer, split-up, combination, surrender or exchange of any
Receipt, the delivery of any distribution thereon or the withdrawal or deposit
of Stock, the Depositary, any of the Depositary's Agents or Patterson may
require any or all of the following: (i) payment to it of a sum sufficient for
the payment (or, in the event that the Depositary or Patterson shall have made
such payment, the reimbursement to it) of any tax or other governmental charge
with respect thereto (including any such tax or charge with respect to the Stock
being deposited or withdrawn or with respect to the
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*This section to be modified to reflect any restrictions on withdrawal of
underlying securities
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Common Stock or other securities or property of Patterson being issued upon
conversion or redemption); (ii) production of proof satisfactory to it as to the
identity and genuineness of any signature; and (iii) compliance with such
reasonable regulations, if any, as the Depositary or Patterson may establish not
inconsistent with the provisions of this Deposit Agreement. The deposit of Stock
may be refused, the delivery of Receipts against Stock or the registration of
transfer, split-up, combination, surrender or exchange of outstanding Receipts
and the withdrawal of deposited Stock may be suspended (i) during any period
when the register of stockholders of Patterson is closed, (ii) if any such
action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or Patterson at any time or from time to time because of any
requirement of law or of any government or governmental body or commission, or
under any provision of this Deposit Agreement, or (iii) with the approval of
Patterson, for any other reason. Without limitation of the foregoing, the
Depositary shall not knowingly accept for deposit under this Deposit Agreement
any shares of Stock that are required to be registered under the Securities Act
unless a registration statement under the Securities Act is in effect as to such
shares of Stock.
SECTION 2.8 Lost Receipts, etc. In case any Receipt shall be
mutilated or destroyed or lost or stolen, the Depositary shall execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such destroyed, lost or
stolen Receipt unless the Depositary has notice that such Receipt has been
acquired by a bona fide purchaser; provided, however, that the holder thereof
provides the Depositary with (i) evidence satisfactory to the Depositary of such
destruction, loss or theft of such Receipt, of the authenticity thereof and of
his ownership thereof, (ii) reasonable indemnification satisfactory to the
Depositary or the payment of any charges incurred by the Depositary in obtaining
insurance in lieu of such indemnification, and (iii) payment of any expense
(including fees, charges and expenses of the Depositary) in connection with such
execution and delivery.
SECTION 2.9 Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.
ARTICLE 3
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND PATTERSON
SECTION 3.1 Filing Proofs, Certificates and Other Information.
Any person presenting Stock for deposit or any holder of a Receipt may be
required from time to time to file such proof of residence or other information,
to execute such certificates and to make such representations and warranties as
the Depositary or Patterson may reasonably deem necessary or proper. The
Depositary or Patterson may withhold or delay the delivery of any Receipt, the
registration of transfer, redemption, conversion or exchange of any Receipt, the
withdrawal of the Stock represented by the Depositary Shares evidenced by any
Receipt or the distribution of any dividend or other distribution until such
proof or other information is filed, such certificates are executed or such
representations and warranties are made.
SECTION 3.2 Payment of Taxes or Other Governmental Charges. If
any tax or other governmental charge shall become payable by or on behalf of the
Depositary with respect to (i) any Receipt, (ii) the Depositary Shares evidenced
by such Receipt, (iii) the Stock (or fractional interest therein) or other
property represented by such Depositary Shares, or (iv) any transaction referred
to in Section 4.6, such tax (including transfer, issuance or acquisition taxes,
if any) or governmental charge shall be payable by the holder of such Receipt,
who shall pay the amount thereof to the Depositary. Until such payment is made,
registration of transfer of any Receipt or any split-up or combination thereof
or any withdrawal of the Stock or money or other property, if any, represented
by the Depositary Shares evidenced by such Receipt may be refused, any dividend
or other distribution may be withheld and any part or all of the Stock or other
property (including Common Stock or other securities received in
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connection with a conversion or redemption of Stock) represented by the
Depositary Shares evidenced by such Receipt may be sold for the account of the
holder thereof (after attempting by reasonable means to notify such holder prior
to such sale). Any dividend or other distribution so withheld and the proceeds
of any such sale may be applied to any payment of such tax or other governmental
charge, the holder of such Receipt remaining liable for any deficiency.
SECTION 3.3 Withholding. The Depositary shall act as the tax
withholding agent for any payments, distributions and exchanges made with
respect to the Depositary Shares and Receipts, and the Stock, Common Stock or
other securities or assets represented thereby (collectively, the "Securities").
The Depositary shall be responsible with respect to the Securities for the
timely (i) collection and deposit of any required withholding or backup
withholding tax, and (ii) filing of any information returns or other documents
with federal (and other applicable) taxing authorities.
SECTION 3.4 Representations and Warranties as to Stock. In the
case of the initial deposit of the Stock, Patterson and, in the case of
subsequent deposits thereof, each person so depositing Stock under this Deposit
Agreement shall be deemed thereby to represent and warrant that such Stock and
each certificate therefor are valid and that the person making such deposit is
duly authorized to do so. Such representations and warranties shall survive the
deposit of the Stock and the issuance of Receipts therefor.
ARTICLE 4
THE STOCK, NOTICES
SECTION 4.1 Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to Section 3.2, distribute to record holders of
Receipts on the record date fixed pursuant to Section 4.4 such amounts of such
sum as are, as nearly as practicable, in proportion to the respective numbers of
Depositary Shares evidenced by the Receipts held by such holders; provided,
however, that in case Patterson or the Depositary shall be required by law to
withhold and does withhold from any cash dividend or other cash distribution in
respect of the Stock an amount on account of taxes, the amount made available
for distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for distribution,
as the case may be, only such amount, however, as can be distributed without
attributing to any owner of Depositary Shares a fraction of one cent and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and be treated as part of the next
sum received by the Depositary for distribution to record holders of Receipts
then outstanding.
SECTION 4.2 Distributions Other Than Cash. Whenever the
Depositary shall receive any distribution other than cash, rights, preferences
or privileges upon the Stock, the Depositary shall, subject to Section 3.2,
distribute to record holders of Receipts on the record date fixed pursuant to
Section 4.4 such amounts of the securities or property received by it as are, as
nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders, in any manner that the
Depositary and Patterson may deem equitable and practicable for accomplishing
such distribution. If, in the opinion of Patterson after consultation with the
Depositary, such distribution cannot be made proportionately among such record
holders, or if for any other reason (including any tax withholding or securities
law requirement), the Depositary deems, after consultation with Patterson, such
distribution not to be feasible, the Depositary may, with the approval of
Patterson which approval shall not be unreasonably withheld, adopt such method
as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Section 3.2, be distributed or made available for distribution, as
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the case may be, by the Depositary to record holders of Receipts as provided by
Section 4.1 in the case of a distribution received in cash.
SECTION 4.3 Subscription Rights, Preferences or Privileges. If
Patterson shall at any time offer or cause to be offered to the persons in whose
names Stock is registered on the books of Patterson any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as Patterson shall instruct
(including by the issue to such record holders of warrants representing such
rights, preferences or privileges); provided, however, that (a) if at the time
of issue or offer of any such rights, preferences or privileges Patterson
determines and instructs the Depositary that it is not lawful or feasible to
make such rights, preferences or privileges available to some or all holders of
Receipts (by the issue of warrants or otherwise) or (b) if and to the extent
instructed by holders of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, in each case, and if
applicable laws or the terms of such rights, preferences or privileges so
permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.1 in the
case of a distribution received in cash. If registration under the Securities
Act of the securities to which any rights, preferences or privileges relate is
required in order for holders of Receipts to be offered or sold such securities,
Patterson shall promptly file a registration statement pursuant to the
Securities Act with respect to such rights, preferences or privileges and
securities and use its best efforts and take all steps available to it to cause
such registration statement to become effective sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges. In no event shall the
Depositary make available to the holders of Receipts any right, preference or
privilege to subscribe for or to purchase any securities unless and until such
registration statement shall have become effective or unless the offering and
sale of such securities to such holders are exempt from registration under the
provisions of the Securities Act. If any other action under the law of any
jurisdiction or any governmental or administrative authorization, consent or
permit is required in order for such rights, preferences or privileges to be
made available to holders of Receipts, Patterson agrees with the Depositary that
Patterson will use its reasonable best efforts to take such action or obtain
such authorization, consent or permit sufficiently in advance of the expiration
of such rights, preferences or privileges to enable such holders to exercise
such rights, preferences or privileges.
SECTION 4.4 Notice of Dividends, Fixing of Record Date for
Holders of Receipts. Whenever (i) any cash dividend or other cash distribution
shall become payable, or any distribution other than cash shall be made, or any
rights, preferences or privileges shall at any time be offered, with respect to
the Stock, or (ii) the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice or of the mandatory conversion of, or any election on the part of
Patterson to call for the redemption of, any shares of Stock, the Depositary
shall in each such instance fix a record date (which shall be the same date as
the record date fixed by Patterson with respect to the Stock) for the
determination of the holders of Receipts (x) who shall be entitled to receive
such dividend, distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or (y) who shall be entitled to give instructions
for the exercise of voting rights at any such meeting or to receive notice of
such meeting or of such conversion or redemption.
SECTION 4.5 Voting Rights. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice,
which shall be provided by Patterson and which shall contain (i) such
information as is contained in such notice of meeting, (ii) a statement that the
holders of Receipts at the close of business on a specified record date fixed
pursuant to Section 4.4 will be entitled, subject to any applicable
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<PAGE> 13
provision of law, the Certificate of Incorporation or the Certificate of
Designation, to instruct the Depositary as to the exercise of the voting rights
pertaining to the Stock represented by their respective Depositary Shares and
(iii) a brief statement as to the manner in which such instructions may be
given. Upon the written request of a holder of a Receipt on such record date,
the Depositary shall endeavor insofar as practicable to vote or cause to be
voted the Stock represented by the Depositary Shares evidenced by such Receipt
in accordance with the instructions set forth in such request. Patterson hereby
agrees to take all reasonable action that may be deemed necessary by the
Depositary in order to enable the Depositary to vote such Stock or cause such
Stock to be voted. In the absence of specific instructions from the holder of a
Receipt, the Depositary will abstain from voting to the extent of the Stock
represented by the Depositary Shares evidenced by such Receipt.
SECTION 4.6 Changes Affecting Stock and Reclassifications,
Recapitalizations, etc. Upon any split-up, consolidation or any other
reclassification of Stock, or upon any recapitalization, reorganization, merger,
amalgamation or consolidation affecting Patterson or to which it is a party
(other than a Merger or Consolidation) or sale of all or substantially all of
Patterson's assets, the Depositary shall treat any shares of stock or other
securities or property (including cash) that shall be received by the Depositary
in exchange for or upon conversion of or in respect of the Stock as new
deposited property under this Deposit Agreement, and Receipts then outstanding
shall thenceforth represent the proportionate interests of holders thereof in
the new deposited property so received in exchange for or upon conversion or in
respect of such Stock. In any such case the Depositary may, in its discretion,
with the approval of Patterson, execute and deliver additional Receipts, or may
call for the surrender of all outstanding Receipts to be exchanged for new
Receipts specifically describing such new deposited property.
SECTION 4.7 Reports. The Depositary shall make available for
inspection by holders of Receipts at the Corporate Office, the New York Office
and at such other places as it may from time to time deem advisable during
normal business hours any reports and communications received from Patterson
that are received by the Depositary as the holder of Stock.
SECTION 4.8 Lists of Receipt Holders. Promptly upon request from
time to time by Patterson, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
At the expense of Patterson, Patterson shall have the right to inspect transfer
and registration records of the Depositary, any Depositary's Agent or the
Registrar, take copies thereof and require the Depositary, any Depositary's
Agent or the Registrar to supply copies of such portions of such records as
Patterson may request.
ARTICLE 5
THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR AND PATTERSON
SECTION 5.1 Maintenance of Offices, Agencies, Transfer Books by
the Depositary; the Registrar. Upon execution of this Deposit Agreement in
accordance with its terms, the Depositary shall maintain (i) at the New York
Office facilities for the execution and delivery, registration, registration of
transfer, surrender and exchange, split-up, combination, redemption and
conversion of Receipts and deposit and withdrawal of Stock and (ii) at the
Corporate Office and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration, registration of transfer, surrender
and exchange, split-up, combination, conversion and redemption of Receipts and
deposit and withdrawal of Stock, all in accordance with the provisions of this
Deposit Agreement. The Depositary shall keep books at the Corporate Office for
the registration and transfer of Receipts, which books at all reasonable times
shall be open for inspection by the record holders of Receipts; provided that
any such holder requesting to exercise such right shall certify to the
Depositary that such inspection shall be for a proper purpose reasonably related
to such person's interest as an owner of Depositary Shares. The Depositary shall
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<PAGE> 14
consult with Patterson upon receipt of any request for inspection. The
Depositary may close such books, at any time or from time to time, when deemed
expedient by it in connection with the performance of its duties hereunder. If
the Receipts or the Depositary Shares evidenced thereby or the Stock represented
by such Depositary Shares shall be listed on one or more stock exchanges, the
Depositary shall, with the approval of Patterson, appoint a Registrar for
registry of such Receipts or Depositary Shares in accordance with the
requirements of such exchange or exchanges. Such Registrar (which may be the
Depositary if so permitted by the requirements of such exchange or exchanges)
may be removed and a substitute registrar appointed by the Depositary upon the
request or with the approval of Patterson. In addition, if the Receipts, such
Depositary Shares or such Stock are listed on one or more stock exchanges, the
Depositary will, at the request of Patterson, arrange such facilities for the
delivery, registration, registration of transfer, surrender and exchange,
split-up, combination, redemption or conversion of such Receipts, such
Depositary Shares or such Stock as may be required by law or applicable stock
exchange regulations.
SECTION 5.2 Prevention or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar or Patterson. Neither the Depositary nor
any Depositary's Agent nor the Registrar nor Patterson shall incur any liability
to any holder of any Receipt, if by reason of any provision of any present or
future law or regulation thereunder of the United States of America or of any
other governmental authority or, in the case of the Depositary, the Registrar or
any Depositary's Agent, by reason of any provision, present or future, of the
Certificate of Incorporation or the Certificate of Designation or, in the case
of Patterson, the Depositary, the Registrar or any Depositary's Agent, by reason
of any act of God or war or other circumstances beyond the control of the
relevant party, the Depositary, any Depositary's Agent, the Registrar or
Patterson shall be prevented or forbidden from doing or performing any act or
thing that the terms of this Deposit Agreement provide shall be done or
performed; nor shall the Depositary, any Depositary's Agent, the Registrar or
Patterson incur any liability to any holder of a Receipt (i) by reason of any
nonperformance or delay, caused as aforesaid, in the performance of any act or
thing that the terms of this Deposit Agreement provide shall or may be done or
performed, or (ii) by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement except, in the case of the
Depositary, any Depositary's Agent or the Registrar, if any such exercise or
failure to exercise discretion is caused by its negligence or bad faith.
SECTION 5.3 Obligations of the Depositary, the Depositary's Agents,
the Registrar and Patterson. Patterson assumes no obligation and shall be
subject to no liability under this Deposit Agreement or the Receipts to holders
or other persons, except to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform in this Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability under this Deposit
Agreement or the Receipts to holders or other persons, except to perform such
obligations as are specifically set forth and undertaken by it to perform in
this Deposit Agreement without negligence or bad faith. Neither the Depositary
nor any Depositary's Agent nor the Registrar nor Patterson shall be under any
obligation to appear in, prosecute or defend any action, suit or other
proceeding with respect to Stock, Depositary Shares, Receipts or Common Stock
that in its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often as
may be required. Neither the Depositary nor any Depositary's Agent nor the
Registrar nor Patterson shall be liable for any action or any failure to act by
it in reliance upon the advice of or information from legal counsel,
accountants, any person presenting Stock for deposit, any holder of a Receipt or
any other person believed by it in good faith to be competent to give such
advice or information. The Depositary, any Depositary's Agent, the Registrar and
Patterson may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties. The Depositary,
the Registrar and any Depositary's Agent may own and deal in any class of
securities of Patterson and its affiliates and in Receipts or Depositary Shares.
The Depositary may also act as transfer agent or registrar
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of any of the securities of Patterson and its affiliates. It is intended that
neither the Depositary nor any Depositary's Agent shall be deemed to be an
"issuer" of the Stock, the Depositary Shares, the Receipts or the Common Stock
issued upon conversion or redemption of the Stock under the federal securities
laws or applicable state securities laws, it being expressly understood and
agreed that the Depositary and any Depositary's Agent are acting only in a
ministerial capacity as Depositary for the Stock; provided, however, that the
Depositary agrees to comply with all information reporting and withholding
requirements applicable to it under law or this Deposit Agreement in its
capacity as Depositary. Neither the Depositary (or its officers, directors,
employees or agents) nor any Depositary's Agent makes any representation or has
any responsibility as to the validity of the Registration Statement pursuant to
which the Depositary Shares are registered under the Securities Act, the Stock,
the Depositary Shares or any instruments referred to therein or herein, or as to
the correctness of any statement made therein or herein; provided, however, that
the Depositary is responsible for its representations in this Deposit Agreement.
The Depositary assumes no responsibility for the correctness of the description
that appears in the Receipts, which can be taken as a statement of Patterson
summarizing certain provisions of this Deposit Agreement. Notwithstanding any
other provision herein or in the Receipts, the Depositary makes no warranties or
representations as to the validity, genuineness or sufficiency of any Stock at
any time deposited with the Depositary hereunder or of the Depositary Shares, as
to the validity or sufficiency of this Deposit Agreement, as to the value of the
Depositary Shares or as to any right, title or interest of the record holders of
Receipts in and to the Depositary Shares except that the Depositary hereby
represents and warrants as follows: (i) the Depositary has been duly organized
and is validly existing and in good standing under the laws of the State of
[____________], with full power, authority and legal right under such law to
execute, deliver and carry out the terms of this Deposit Agreement; (ii) this
Deposit Agreement has been duly authorized, executed and delivered by the
Depositary; and (iii) this Deposit Agreement constitutes a valid and binding
obligation of the Depositary, enforceable against the Depositary in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law). The Depositary shall not be accountable for
the use or application by Patterson of the Depositary Shares or the Receipts or
the proceeds thereof.
SECTION 5.4 Resignation and Removal of the Depositary, Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice via registered mail of its election to do so
delivered to Patterson, such resignation to take effect upon the appointment of
a successor depositary and its acceptance of such appointment as hereinafter
provided. The Depositary may at any time be removed by Patterson by written
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided. In case at any time the Depositary acting
hereunder shall resign or be removed, Patterson shall, within 45 days after the
delivery of the notice of resignation or removal, as the case may be, appoint a
successor depositary, which shall be a bank or trust company, or an affiliate of
a bank or trust company, having its principal office in the United States of
America and having a combined capital and surplus of at least $50,000,000. If a
successor depositary shall not have been appointed in 45 days, the resigning or
removed Depositary may petition a court of competent jurisdiction to appoint a
successor depositary. Every successor depositary shall execute and deliver to
its predecessor and to Patterson an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of Patterson, shall promptly execute
and deliver an instrument transferring to such successor all rights and powers
of such predecessor hereunder, shall duly assign, transfer and deliver all
rights, title and interest in the Stock and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
record holders of all outstanding Receipts. Any successor depositary shall
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promptly mail notice of its appointment to the record holders of Receipts. Any
corporation into or with which the Depositary may be merged, consolidated or
converted shall be the successor of such Depositary without the execution or
filing of any document or any further act. Such successor depositary may execute
the Receipts either in the name of the predecessor depositary or in the name of
the successor depositary.
SECTION 5.5 Corporate Notices and Reports. Patterson agrees that
it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof, transmit to the record holders of Receipts, in each case at the
address recorded in the Depositary's books, copies of all notices and reports
(including financial statements) required by law, by the rules of any national
securities exchange upon which the Stock, the Depositary Shares or the Receipts
are listed or by the Certificate of Incorporation and the Certificate of
Designation to be furnished by Patterson to holders of Stock. Such transmission
will be at Patterson's expense and Patterson will provide the Depositary with
such number of copies of such documents as the Depositary may reasonably
request. In addition, the Depositary will transmit to the record holders of
Receipts at Patterson's expense such other documents as may be requested by
Patterson.
SECTION 5.6 Deposit of Stock by Patterson. Patterson agrees with
the Depositary that neither Patterson nor any company controlled by Patterson
will at any time deposit any Stock if such Stock is required to be registered
under the provisions of the Securities Act and no registration statement is at
such time in effect as to such Stock.
SECTION 5.7 Indemnification by Patterson. Patterson agrees to
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any liability, costs and expenses (including
reasonable fees and expenses of counsel) that may arise out of or in connection
with its acting as Depositary, Depositary's Agent or Registrar, respectively,
under this Deposit Agreement and the Receipts, except for any liability arising
out of negligence, bad faith or willful misconduct on the part of any such
person or persons.
SECTION 5.8 Fees, Charges and Expenses. No fees, charges and
expenses of the Depositary or any Depositary's Agent hereunder or of any
Registrar shall be payable by any person other than Patterson, except for any
taxes and other governmental charges and except as provided in this Deposit
Agreement. If, at the request of a holder of a Receipt, the Depositary incurs
fees, charges or expenses for which it is not otherwise liable hereunder, such
holder or other person will be liable for such fees, charges and expenses. All
other fees, charges and expenses of the Depositary and any Depositary's Agent
hereunder and of any Registrar (including, in each case, reasonable fees and
expenses of counsel) incident to the performance of their respective obligations
hereunder will be paid from time to time upon consultation and agreement between
the Depositary and Patterson as to the amount and nature of such fees, charges
and expenses.
ARTICLE 6
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment. The form of the Receipts and any provision
of this Deposit Agreement may at any time and from time to time be amended by
agreement between Patterson and the Depositary in any respect that they may deem
necessary or desirable. Any amendment that shall impose or increase any fees,
taxes or charges payable by holders of Receipts (other than taxes and other
governmental charges, fees and other expenses payable by holders pursuant to the
terms hereof or of the Receipts), or that shall otherwise prejudice any
substantial existing right of holders of Receipts, shall not become effective as
to outstanding Receipts until the expiration of 90 days after notice of such
amendment shall have been given to the record holders of outstanding Receipts.
Every holder of an outstanding Receipt at the time any such amendment becomes
effective shall be deemed, by continuing to
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hold such Receipt, to consent and agree to such amendment and to be bound by
this Deposit Agreement as amended thereby. In no event shall any amendment
impair the right, subject to the provisions of Sections 2.3, 2.6 and 2.7 and
Article 3, of any owner of any Depositary Shares to surrender the Receipt
evidencing such Depositary Shares with instructions to the Depositary to deliver
to the holder the Stock and all money and other property, if any, represented
thereby, except in order to comply with mandatory provisions of applicable law.
SECTION 6.2 Termination. Whenever so directed by Patterson, the
Depositary will terminate this Deposit Agreement by mailing notice of such
termination to the record holders of all Receipts then outstanding at least 30
days prior to the date fixed in such notice for such termination. The Depositary
may likewise terminate this Deposit Agreement if at any time 45 days shall have
expired after the Depositary shall have delivered to Patterson a written notice
of its election to resign and a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.4. If any
Receipts shall remain outstanding after the date of termination of this Deposit
Agreement, the Depositary thereafter shall discontinue the transfer of Receipts,
shall suspend the distribution of dividends to the holders thereof and shall not
give any further notices (other than notice of such termination) or perform any
further acts under this Deposit Agreement, except as provided below and that the
Depositary shall continue to collect dividends and other distributions
pertaining to Stock, shall sell rights, preferences or privileges as provided in
this Deposit Agreement and shall continue to deliver the Stock and any money and
other property represented by Receipts, without liability for interest thereon,
upon surrender thereof by the holders thereof. At any time after the expiration
of two years from the date of termination, the Depositary may sell Stock then
held hereunder at public or private sale, at such places and upon such terms as
it deems proper and may thereafter hold in a segregated account the net proceeds
of any such sale, together with any money and other property held by it
hereunder, without liability for interest, for the benefit, pro rata in
accordance with their holdings, of the holders of Receipts that have not
heretofore been surrendered. After making such sale, the Depositary shall be
discharged from all obligations under this Deposit Agreement except to account
for such net proceeds and money and other property. Upon the termination of this
Deposit Agreement, Patterson shall be discharged from all obligations under this
Deposit Agreement except for its obligations to the Depositary, any Depositary's
Agent and any Registrar under Sections 5.7 and 5.8. In the event this Deposit
Agreement is terminated, Patterson hereby agrees to use its best efforts to list
the underlying Stock on the Nasdaq National Market.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 Counterparts. This Deposit Agreement may be executed
by Patterson and the Depositary in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Deposit Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Deposit Agreement. Copies of this Deposit Agreement
shall be filed with the Depositary and the Depositary's Agents and shall be open
to inspection during business hours at the Corporate Office and the New York
Office and the respective offices of the Depositary's Agents, if any, by any
holder of a Receipt.
SECTION 7.2 Exclusive Benefits of Parties. This Deposit Agreement
is for the exclusive benefit of the parties hereto, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
SECTION 7.3 Invalidity of Provisions. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any
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respect, the validity, legality and enforceability of the remaining provisions
contained herein or therein shall in no way be affected, prejudiced or disturbed
thereby.
SECTION 7.4 Notices. Any notices to be given to Patterson
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail, or by telegram or telex
or telecopier confirmed by letter, addressed to Patterson at 4510 Lamesa
Highway, P.O. Box 1416, Snyder, Texas 79550, Attention: Chief Executive Officer,
or at any other place to which Patterson may have transferred its principal
executive office. Any notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to the Depositary at the Corporate Office. Any
notices given to any record holder of a Receipt hereunder or under the Receipts
shall be in writing and shall be deemed to have been duly given if personally
delivered or sent by mail, or by telegram or telex or telecopier confirmed by
letter, addressed to such record holder at the address of such record holder as
it appears on the books of the Depositary or, if such holder shall have filed
with the Depositary a written request that notices intended for such holder be
mailed to some other address, at the address designated in such request.
Delivery of a notice sent by mail, or by telegram or telex or telecopier shall
be deemed to be effected at the time when a duly addressed letter containing the
same (or a duly addressed letter confirming an earlier notice in the case of a
telegram or telex or telecopier message) is deposited, postage prepaid, in a
post office letter box. The Depositary or Patterson may, however, act upon any
telegram or telex or telecopier message received by it from the other or from
any holder of a Receipt, notwithstanding that such telegram or telex or
telecopier message shall not subsequently be confirmed by letter as aforesaid.
SECTION 7.5 Depositary's Agents. The Depositary may, with the
approval of Patterson which approval shall not be unreasonably withheld, from
time to time appoint one or more Depositary's Agents to act in any respect for
the Depositary for the purposes of this Deposit Agreement and may vary or
terminate the appointment of such Depositary's Agents.
SECTION 7.6 Holders of Receipts Are Parties. Notwithstanding that
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions, and be entitled to all of the benefits, hereof and of the
Receipts by acceptance of delivery of Receipts.
SECTION 7.7 Law. This Deposit Agreement and the Receipts and all
rights hereunder and thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the law of the State of New York
without giving effect to principles of conflict of laws.
SECTION 7.8 Headings. The headings of articles and sections in
this Deposit Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as a
part of this Deposit Agreement or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
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<PAGE> 19
IN WITNESS WHEREOF, Patterson Energy and [_______________________] have
duly executed this Deposit Agreement as of the day and year first above set
forth and all holders of Receipts shall become parties hereto by and upon
acceptance by them of delivery of Receipts issued in accordance with the terms
hereof.
PATTERSON ENERGY, INC.
Attest:
By
----------------------------------
- ---------------------------------- Cloyce A. Talbott,
Chief Executive Officer
[ ]
-----------------------------------
Attest: By
----------------------------------
Authorized Signatory
- ----------------------------------
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<PAGE> 20
EXHIBIT A
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING [ ] OF A SHARE OF
[ ]
----------------------------------------------
PREFERRED STOCK
OF
PATTERSON ENERGY, INC.
(Incorporated under the Laws of the State of Delaware)
No.
[_________________________________] (the "Depositary") hereby certifies
that ____________ is the registered owner of ___________ Depositary Shares (the
"Depositary Shares"), each Depositary Share representing [ ] of a share of
[____________________________] Preferred Stock, $.01 par value (the "Stock"), of
Patterson Energy, Inc., a corporation duly organized and existing under the laws
of the State of Delaware ("Patterson"), and the same proportionate interest in
any and all other property received by the Depositary in respect of such shares
of Stock and held by the Depositary under the Deposit Agreement (as defined
below). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges of the Stock represented thereby, including the dividend, voting,
liquidation and other rights contained in the Certificate of Designation
establishing the rights, preferences, privileges and limitations of the Stock
(the "Certificate of Designation"), copies of which are on file at the office of
the Depositary at which at any particular time its business in respect of
matters governed by the Deposit Agreement shall be administered, which at the
time of the execution of the Deposit Agreement is located at [________________]
(the "Corporate Office").
This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been executed manually or, if a Registrar for the
Receipts (other than the Depositary) shall have been appointed, by facsimile by
the Depositary by the signature of a duly authorized signatory and, if executed
by facsimile signature of the Depositary, shall have been countersigned manually
by such Registrar by the signature of a duly authorized signatory.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK. THE
DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION SET
FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF PATTERSON
SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET
FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT
ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE
DEPOSITARY SHARES, AS TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT,
AS TO THE VALUE OF THE DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST
OF THE RECORD HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY
SHARES.
Patterson will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences and limitations of the shares of each
authorized class, and of each class of preferred stock authorized to be issued,
so far as the
D-17
<PAGE> 21
same may have been fixed, and a statement of the authority of the Board of
Directors of Patterson to designate and fix the relative rights, preferences and
limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.
Dated: [ ]
-------------------------------------------
as Depositary and Registrar
By
-----------------------------------------
Authorized Signatory
D-18
<PAGE> 22
[FORM OF REVERSE OF DEPOSITARY RECEIPT]
(1) The Deposit Agreement. Depositary Receipts (the "Receipts"), of
which this Receipt is one, are made available upon the terms and conditions set
forth in the Deposit Agreement, dated as of [_________] (the "Deposit
Agreement"), among Patterson, the Depositary and all holders from time to time
of Receipts. The Deposit Agreement (copies of which are on file at the Corporate
Office, the office maintained by the Depositary in the Borough of Manhattan, the
City of New York which at the time of the execution of the Deposit Agreement is
located at [________________________] (the "New York Office") and at the office
of any agent of the Depositary) sets forth the rights of holders of Receipts and
the rights and duties of the Depositary. The statements made on the face and the
reverse of this Receipt are summaries of certain provisions of the Deposit
Agreement and are subject to the detailed provisions thereof, to which reference
is hereby made. In the event of any conflict between the provisions of this
Receipt and the provisions of the Deposit Agreement, the provisions of the
Deposit Agreement will govern.
(2) Definitions. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
(3) Redemption and Conversion of Stock.* Whenever Patterson shall elect
to redeem or be required to convert shares of Stock into shares of Common Stock
in accordance with the Certificate of Designation, it shall (unless otherwise
agreed in writing with the Depositary) give the Depositary in its capacity as
Depositary not less than 5 business days' prior notice of the proposed date of
the mailing of a notice of redemption or conversion of Stock and the
simultaneous redemption or conversion of the Depositary Shares representing the
Stock to be redeemed or converted and of the number of such shares of Stock held
by the Depositary to be redeemed or converted. The Depositary shall, as directed
by Patterson in writing, mail, first class postage prepaid, notice of the
redemption or conversion of Stock and the proposed simultaneous redemption or
conversion of Depositary Shares representing the Stock to be redeemed or
converted, not less than 30 and not more than 60 days prior to the date fixed
for redemption or conversion of such Stock and Depositary Shares, to the record
holders of the Receipts evidencing the Depositary Shares to be so redeemed or
converted, at the addresses of such holders as the same appear on the records of
the Depositary; provided, that if the effectiveness of a Merger or Consolidation
(as defined in the Certificate of Designation) makes it impracticable to provide
at least 30 days' notice, the Depositary shall provide such notice as soon as
practicable prior to such effectiveness. Any such notice shall also be published
in the same manner as notices of redemption or conversion of the Stock are
required to be published pursuant to Section [ ] of the Certificate of
Designation. On the date of any such redemption or conversion, the Depositary
shall surrender the certificate or certificates held by the Depositary
evidencing the number of shares of Stock to be redeemed or converted in the
manner specified in the notice of redemption or conversion of Stock provided by
Patterson pursuant to Section [ ] of the Certificate of Designation. The
Depositary shall, thereafter, redeem or convert the number of Depositary Shares
representing such redeemed or converted Stock upon the surrender of Receipts
evidencing such Depositary Shares in the manner provided in the notice sent to
record holders of Receipts; provided, that the Depositary shall have received,
upon surrendering such certificate or certificates as aforesaid, a sufficient
number of shares of Common Stock or other securities to convert or redeem such
number of Depositary Shares (including, in the event that Patterson elects
pursuant to Section [ ] of the Certificate of Designation to exercise any option
to deliver shares of Common Stock or other securities in lieu of any cash
consideration payable on the Effective Date (as defined in the Certificate of
Designation) of any Merger or Consolidation, a number of shares of Common Stock
or other securities equal to such cash consideration (as determined in the
manner set forth in the Certificate of Designation)), plus any accrued and
unpaid dividends payable with respect thereto to and including the date of any
such redemption or
- ---------------------------------
*This section to be modified to discuss specific redemption or conversion terms
of the Stock, if any.
D-19
<PAGE> 23
conversion and any other cash consideration payable on the Effective Date of a
Merger or Consolidation (other than any dividends or other cash consideration
payable on the Effective Date of a Merger or Consolidation that Patterson has
elected to pay in shares of Common Stock or other securities pursuant to Section
[ ] of the Certificate of Designation). In case fewer than all the outstanding
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed shall
be selected by the Depositary by lot or on a pro rata basis. Notice having been
mailed and published as aforesaid, from and after the redemption or conversion
date (unless Patterson shall have failed to redeem or convert the shares of
Stock to be redeemed or converted by it upon the surrender of the certificate or
certificates therefor by the Depositary as described above), the Depositary
Shares called for redemption or subject to conversion shall be deemed no longer
to be outstanding and all rights of the holders of Receipts evidencing such
Depositary Shares (except the right to receive the shares of Common Stock or
other securities and cash, if any, payable upon redemption or conversion upon
surrender of such Receipts) shall, to the extent of such Depositary Shares,
cease and terminate. Upon surrender in accordance with said notice of the
Receipts evidencing such Depositary Shares (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Depositary Shares shall be
converted into or redeemed for shares of Common Stock or other securities at a
rate equal to [ ] of the number of shares of Common Stock or other securities
delivered, and the holders thereof shall be entitled to [________] of the cash,
if any, payable, in respect of the shares of Stock pursuant to the Certificate
of Designation. The foregoing is subject further to the terms and conditions of
the Certificate of Designation. If fewer than all of the Depositary Shares
evidenced by this Receipt are called for redemption, the Depositary will deliver
to the holder of this Receipt upon its surrender to the Depositary, together
with shares of Common Stock or other securities and all accrued and unpaid
dividends to and including the date fixed for redemption payable in respect of
the Depositary Shares called for redemption, a new Receipt evidencing the
Depositary Shares evidenced by such prior Receipt and not called for redemption.
(4) Surrender of Receipts and Withdrawal of Stock. Upon surrender of
this Receipt to the Depositary at the Corporate Office, the New York Office or
at such other offices as the Depositary may designate, and subject to the
provisions of the Deposit Agreement, the holder hereof is entitled to withdraw,
and to obtain delivery, without unreasonable delay, to or upon the order of such
holder, any or all of the Stock (but only in whole shares of Stock) and all
money and other property, if any, at the time represented by the Depositary
Shares evidenced by this Receipt; provided, however, that, in the event this
Receipt shall evidence a number of Depositary Shares in excess of the number of
Depositary Shares representing the whole number of shares of Stock to be
withdrawn, the Depositary shall, in addition to such whole number of shares of
Stock and such money and other property, if any, to be withdrawn, deliver, to or
upon the order of such holder, a new Receipt or Receipts evidencing such excess
number of whole Depositary Shares.
(5) Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7 and
8 below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or the New
York Office, or at such other offices as the Depositary may designate, properly
endorsed or accompanied by a properly executed instrument of transfer, and upon
such transfer the Depositary shall sign and deliver a Receipt or Receipts to or
upon the order of the person entitled thereto, all as provided in and subject to
the Deposit Agreement. This Receipt may be split into other Receipts or combined
with other Receipts into one Receipt evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not issue any Receipt evidencing a fractional
Depositary Share.
(6) Conditions to Signing and Delivery, Transfer, etc., of Receipts.
Prior to the execution and delivery, registration of transfer, split-up,
combination, surrender or exchange of this Receipt, the delivery of any
distribution hereon or the withdrawal or deposit of Stock, the Depositary, any
of the Depositary's Agents or Patterson may require any or all of the following:
(i) payment to it of a sum sufficient for the
D-20
<PAGE> 24
payment (or, in the event that the Depositary or Patterson shall have made such
payment, the reimbursement to it) of any tax or other governmental charge with
respect thereto (including any such tax or charge with respect to Stock being
deposited or withdrawn or with respect to Common Stock or other securities or
property of Patterson being issued upon conversion or redemption); (ii)
production of proof satisfactory to it as to the identity and genuineness of any
signature; and (iii) compliance with such reasonable regulations, if any, as the
Depositary or Patterson may establish not inconsistent with the Deposit
Agreement. Any person presenting Stock for deposit, or any holder of this
Receipt, may be required to file such proof of information, to execute such
certificates and to make such representations and warranties as the Depositary
or Patterson may reasonably deem necessary or proper. The Depositary or
Patterson may withhold or delay the delivery of this Receipt, the registration
of transfer, redemption, conversion or exchange of this Receipt, the withdrawal
of the Stock represented by the Depositary Shares evidenced by this Receipt or
the distribution of any dividend or other distribution until such proof or other
information is filed, such certificates are executed or such representations and
warranties are made.
(7) Suspension of Delivery, Transfer, etc. The deposit of Stock may be
refused and the delivery of this Receipt against Stock or the registration of
transfer, split-up, combination, surrender or exchange of this Receipt and the
withdrawal of deposited Stock may be suspended (i) during any period when the
register of stockholders of Patterson is closed, (ii) if any such action is
deemed necessary or advisable by the Depositary, any of the Depositary's Agents
or Patterson at any time or from time to time because of any requirement of law
or of any government or governmental body or commission, or under any provision
of the Deposit Agreement, or (iii) with the approval of Patterson, for any other
reason. The Depositary shall not be required (a) to issue, transfer or exchange
any Receipts for a period beginning at the opening of business 15 days next
preceding any selection of Depositary Shares and Stock to be redeemed and ending
at the close of business on the day of the mailing of notice of redemption of
Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt
evidencing Depositary Shares called or being called for redemption, in whole or
in part, or subject to conversion except as provided in the last sentence of
Paragraph 3.
(8) Payment of Taxes or Other Governmental Charges. If any tax or other
governmental charge shall become payable by or on behalf of the Depositary with
respect to (i) this Receipt, (ii) the Depositary Shares evidenced by this
Receipt, (iii) the Stock (or fractional interest therein) or other property
represented by such Depositary Shares, or (iv) any transaction referred to in
Section 4.6 of the Deposit Agreement, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the holder
of this Receipt, who shall pay the amount thereof to the Depositary. Until such
payment is made, registration of transfer of this Receipt or any split-up or
combination hereof or any withdrawal of the Stock or money or other property, if
any, represented by the Depositary Shares evidenced by this Receipt may be
refused, any dividend or other distribution may be withheld and any part or all
of the Stock or other property (including Common Stock or other securities
received in connection with a conversion or redemption of Stock) represented by
the Depositary Shares evidenced by this Receipt may be sold for the account of
the holder hereof (after attempting by reasonable means to notify such holder
prior to such sale). Any dividend or other distribution so withheld and the
proceeds of any such sale may be applied to any payment of such tax or other
governmental charge, the holder of this Receipt remaining liable for any
deficiency.
(9) Amendment. The form of the Receipts and any provision of the
Deposit Agreement may at any time and from time to time be amended by agreement
between Patterson and the Depositary in any respect that they may deem necessary
or desirable. Any amendment that shall impose or increase any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses payable by holders as provided herein or in the
Deposit Agreement), or that shall otherwise prejudice any substantial existing
right of holders of Receipts, shall not become effective as to outstanding
Receipts until the expiration of 90 days after notice of such amendment shall
have been given
D-21
<PAGE> 25
to the record holders of outstanding Receipts. The holder of this Receipt at the
time any such amendment becomes effective shall be deemed, by continuing to hold
this Receipt, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair the
right, subject to the provisions of Paragraphs 3, 4, 6, 7 and 8 hereof and of
Sections 2.3, 2.6 and 2.7 and Article 3 of the Deposit Agreement, of the owner
of the Depositary Shares evidenced by this Receipt to surrender this Receipt
with instructions to the Depositary to deliver to the holder the Stock and all
money and other property, if any, represented thereby, except in order to comply
with mandatory provisions of applicable law.
(10) Fees, Charges and Expenses. Patterson will pay all fees, charges
and expenses of the Depositary, except for taxes (including transfer taxes, if
any) and other governmental charges and such charges as are expressly provided
in the Deposit Agreement to be at the expense of persons depositing Stock,
holders of Receipts or other persons.
(11) Title to Receipts. It is a condition of this Receipt, and every
successive holder hereof by accepting or holding the same consents and agrees,
that title to this Receipt (and to the Depositary Shares evidenced hereby), when
properly endorsed or accompanied by a properly executed instrument of transfer,
is transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that the Depositary may, notwithstanding any
notice to the contrary, treat the record holder hereof at such time as the
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and for all other purposes.
(12) Dividends and Distributions. Whenever the Depositary shall receive
any cash dividend or other cash distribution on the Stock, the Depositary shall,
subject to the provisions of the Deposit Agreement, distribute to record holders
of Receipts such amounts of such sums as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders; provided, however, that in case Patterson or the
Depositary shall be required by law to withhold and does withhold from any cash
dividend or other cash distribution in respect of the Stock an amount on account
of taxes, the amount made available for distribution or distributed in respect
of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Depositary Shares a fraction of one cent and any balance not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to record holders of Receipts then outstanding.
(13) Subscription Rights, Preferences or Privileges. If Patterson shall
at any time offer or cause to be offered to the persons in whose name Stock is
registered on the books of Patterson any rights, preferences or privileges to
subscribe for or to purchase any securities or any rights, preferences or
privileges of any other nature, such rights, preferences or privileges shall in
each such instance, subject to the provisions of the Deposit Agreement, be made
available by the Depositary to the record holders of Receipts in such manner as
Patterson shall instruct.
(14) Notice of Dividends, Fixing of Record Date. Whenever (i) any cash
dividend or other cash distribution shall become payable, or any distribution
other than cash shall be made, or any rights, preferences or privileges shall at
any time be offered, with respect to the Stock, or (ii) the Depositary shall
receive notice of any meeting at which holders of Stock are entitled to vote or
of which holders of Stock are entitled to notice or of the mandatory conversion
of, or any election on the part of Patterson to call for redemption of, any
shares of Stock, the Depositary shall in each such instance fix a record date
(which shall be the same date as the record date fixed by Patterson with respect
to the Stock) for the determination of the holders of Receipts (x) who shall be
entitled to receive such dividend, distribution,
D-22
<PAGE> 26
rights, preferences or privileges or the net proceeds of the sale thereof, or
(y) who shall be entitled to give instructions for the exercise of voting rights
at any such meeting or of such meeting or to receive notice of such conversion
or redemption.
(15) Voting Rights. Upon receipt of notice of any meeting at which the
holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice, which
shall contain (i) such information as is contained in such notice of meeting,
(ii) a statement that the holders of Receipts at the close of business on a
specified record date determined as provided in Paragraph 14 will be entitled,
subject to any applicable provision of law, the Certificate of Incorporation or
the Certificate of Designation, to instruct the Depositary as to the exercise of
the voting rights pertaining to the Stock represented by their respective
Depositary Shares, and (iii) a brief statement as to the manner in which such
instructions may be given. Upon the written request of a holder of this Receipt
on such record date the Depositary shall endeavor insofar as practicable to vote
or cause to be voted the Stock represented by the Depositary Shares evidenced by
this Receipt in accordance with the instructions set forth in such request.
Patterson hereby agrees to take all reasonable action that may be deemed
necessary by the Depositary in order to enable the Depositary to vote such Stock
or cause such Stock to be voted. In the absence of specific instructions from
the holder of this Receipt, the Depositary will abstain from voting to the
extent of the Stock represented by the Depositary Shares evidenced by this
Receipt.
(16) Reports, Inspection of Transfer Books. The Depositary shall make
available for inspection by holders of Receipts at the Corporate Office, the New
York Office and at such other places as it may from time to time deem advisable
during normal business hours any reports and communications received from
Patterson that are received by the Depositary as the holder of Stock. The
Depositary shall keep books at the Corporate Office for the registration and
transfer of Receipts, which books at all reasonable times will be open for
inspection by the record holders of Receipts; provided that any such holder
requesting to exercise such right shall certify to the Depositary that such
inspection shall be for a proper purpose reasonably related to such person's
interest as an owner of Depositary Shares.
(17) Liability of the Depositary, the Depositary's Agents, the
Registrar and Patterson. Neither the Depositary nor any Depositary's Agent nor
the Registrar nor Patterson shall incur any liability to any holder of this
Receipt, if by reason of any provision of any present or future law or
regulation thereunder of any governmental authority or, in the case of the
Depositary, the Registrar or any Depositary's Agent, by reason of any provision
present or future, of the Certificate of Incorporation or the Certificate of
Designation or, in the case of Patterson, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or other circumstances
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or Patterson shall be prevented or forbidden from doing or
performing any act or thing that the terms of the Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
the Registrar or Patterson incur any liability to any holder of this Receipt (i)
by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of the Deposit Agreement provide
shall or may be done or performed, or (ii) by reason of any exercise of, or
failure to exercise, any discretion provided for in the Deposit Agreement
except, in the case of the Depositary, any Depositary's Agent or the Registrar,
if such exercise or failure to exercise discretion is caused by its negligence
or bad faith.
(18) Obligations of the Depositary, the Depositary's Agents, the
Registrar and Patterson. Patterson assumes no obligation and shall be subject to
no liability under the Deposit Agreement or this Receipt to the holder hereof or
other persons, except to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform in the Deposit Agreement.
Each of the Depositary, the Depositary's Agents and the Registrar assumes no
obligation and shall be subject to no liability under the Deposit Agreement or
this Receipt to the holder hereof or other persons, except to perform such
D-23
<PAGE> 27
obligations as are specifically set forth and undertaken by it to perform in the
Deposit Agreement without negligence or bad faith. Neither the Depositary nor
any Depositary's Agent nor the Registrar nor Patterson shall be under any
obligation to appear in, prosecute or defend any action, suit or other
proceeding with respect to Stock, Depositary Shares or Receipts or Common Stock
that in its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often as
may be required. Neither the Depositary nor any Depositary's Agent nor the
Registrar nor Patterson will be liable for any action or failure to act by it in
reliance upon the advice of or information from legal counsel, accountants, any
person presenting Stock for deposit, any holder of this Receipt or any other
person believed by it in good faith to be competent to give such advice or
information.
(19) Termination of Deposit Agreement. Whenever so directed by
Patterson, the Depositary will terminate the Deposit Agreement by mailing notice
of such termination to the record holders of all Receipts then outstanding at
least 30 days prior to the date fixed in such notice for such termination. The
Depositary may likewise terminate the Deposit Agreement if at any time 45 days
shall have expired after the Depositary shall have delivered to Patterson a
written notice of its election to resign and a successor depositary shall not
have been appointed and accepted its appointment as provided in Section 5.4 of
the Deposit Agreement. Upon the termination of the Deposit Agreement, Patterson
shall be discharged from all obligations thereunder except for its obligations
to the Depositary, any Depositary's Agent and any Registrar under Sections 5.7
and 5.8 of the Deposit Agreement. If any Receipts remain outstanding after the
date of termination of the Deposit Agreement, the Depositary thereafter shall
discontinue all functions and be discharged from all obligations as provided in
the Deposit Agreement, except as specifically provided therein.
(20) Governing Law. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof shall be
governed by, and construed in accordance with, the law of the State of New York
without giving effect to principles of conflict of laws.
D-24
<PAGE> 28
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________ the within Receipt and all rights and interests
represented by the Depositary Shares evidenced thereby, and hereby irrevocably
constitutes and appoints his attorney, to transfer the same on the books of the
within-named Depositary, with full power of substitution in the premises.
Dated:
Signature:
-----------------------------------
NOTE: The signature to this
assignment must correspond with the
name as written upon the face of the
Receipt in every particular, without
alteration or enlargement, or any
change whatever.
D-25
<PAGE> 1
EXHIBIT 5.1
[B&H letterhead]
October 28, 1999
Patterson Energy, Inc.
4510 Lamesa Highway
P.O. Box 1416
Snyder, Texas 79550
RE: Registration Statement on Form S-3 relating to $150,000,000
Aggregate Principal Amount of Debt and Equity Securities
Gentlemen:
We have acted as counsel for Patterson Energy, Inc., a Delaware
corporation ("Patterson"), in connection with the preparation of a Registration
Statement on Form S-3 (the "Registration Statement") filed by Patterson with
the Securities and Exchange Commission. The Registration Statement relates to
the registration under the Securities Act of 1933, as amended (the "1933 Act"),
of an aggregate of $150,000,000 principal amount of senior debt securities,
senior subordinated debt securities and subordinated debt securities which may
be issued by Patterson (collectively, the "Debt Securities") and equity
securities which may be issued by Patterson or offered for the account of
certain selling shareholders (the "Selling Shareholders") of Patterson (the
"Equity Securities") (together, the "Securities").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the 1933 Act.
We have examined the form of the Indentures filed by Patterson as an
exhibit to the Registration Statement (the "Indentures"). In addition, we have
examined and relied on originals or copies certified or otherwise identified to
our satisfaction of such documents, corporate records and other instruments,
have made such inquiries as to questions of fact of officers and
representatives of Patterson and have made such examinations of law as we have
deemed necessary or appropriate for purposes of giving the opinion expressed
below. In such examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity with the originals of all documents submitted to us as copies.
We have assumed for purposes of this opinion (i) that all necessary
filings with the Secretary of State of the State of Delaware with respect to
the Equity Securities have been made, (ii) that the Board of Directors of
Patterson has authorized the issuance and sale of the particular security to be
sold, (iii) the corporate power, authority and legal right of the trustee under
the respective Indentures to execute, deliver and perform its obligations
thereunder, that the performance of such obligations by the trustee will not
violate its charter or by-laws and that the trustee has the legal ability to
exercise its trust powers in the State of Texas, and (iv) that the applicable
Indenture will have been duly authorized, executed and delivered by the trustee
at the time of issuance of the Debt Securities.
The following opinions are limited solely to the applicable federal
law of the United States of America, the law of the State of Texas and the
General Corporation Law of the State of Delaware. While we are not licensed to
practice in the State of Delaware, we have reviewed applicable provisions of
the General Corporation Law of Delaware as we have deemed appropriate in
connection with the opinions
<PAGE> 2
expressed herein. Except as described, we have neither examined nor do we
express any opinion with respect to Delaware law.
Based upon and subject to the foregoing, we are of the opinion that:
1. The issuance and sale by Patterson of up to $150,000,000 of
Securities, as provided in the Registration Statement, have been duly and
validly authorized by all necessary corporate action of Patterson.
2. With respect to the Equity Securities offered by Patterson, when
such Equity Securities are issued and sold in conformity with the resolutions
of the Board of Directors of Patterson and as provided in the Registration
Statement, the prospectus contained therein (the "Prospectus") and in the
applicable supplement to the Prospectus, they will be legally issued, fully
paid and non-assessable shares of the capital stock of Patterson.
3. With respect to the Equity Securities offered by the Selling
Shareholders, such Equity Securities, when sold, will be legally issued, fully
paid and non-assessable shares of the capital stock of Patterson.
4. When (i) the Registration Statement has become effective under the
1933 Act; (ii) the applicable Indentures have been qualified under the Trust
Indenture Act of 1939 and have been duly executed and delivered by the parties
thereto; (iii) the definitive terms of any Debt Securities and of their issue
and sale have been duly established in conformity with the resolutions of the
Board of Directors of Patterson and the Indentures so as not to violate any
applicable law or agreement or instrument then binding on Patterson; (iv) such
Debt Securities have been duly executed and authenticated in accordance with
the Indentures; and (v) such Debt Securities have been issued and sold as
contemplated in the Registration Statement, the Prospectus and in the
applicable supplement to the Prospectus, such Debt Securities will constitute
valid and legally binding obligations of Patterson entitled to the benefits
provided by the Indentures, except (A) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and (B) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
this firm under the heading "Legal Matters" in the Prospectus included in the
Registration Statement as the counsel who will pass upon the validity of the
Securities. In giving this consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules of the Securities and Exchange Commission thereunder.
Very truly yours,
BAKER & HOSTETLER LLP
<PAGE> 1
EXHIBIT 12.1
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six months December 31,
June 30, -----------------------------------------------------------------
1999 1998 1997 1996 1995 1994
------------ -------- -------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes... $ (10,431) $ (232) $ 35,108 $ 2,017 $ 2,414 $ 4,813
Fixed charges:
Interest expense.................. 2,026 4,471 1,045 1,612 1,065 366
Rents under leases(1)
representative of an
interest factor................. 317 1,419 1,650 594 344 262
-------- -------- -------- -------- -------- --------
Total fixed charges................. $ 2,343 $ 5,890 $ 2,695 $ 2,206 $ 1,409 $ 628
======== ======== ======== ======== ======== ========
Income (loss) before income taxes
plus fixed charges................ $ (8,088) $ 5,658 $ 37,803 $ 4,223 $ 3,823 $ 5,441
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed
charges ......................... (2) .96:1 14.03:1 1.91:1 2.71:1 8.66:1
======== ======== ======== ======== ======== ========
</TABLE>
- ---------
(1) Management of Patterson Energy, Inc. believes approximately one-third of
rental and lease expense is representative of the interest component of rent
expense.
(2) There was a deficiency of $10.4 million in the ratio of earnings to fixed
charges for the six months ended June 30, 1999.
<PAGE> 1
EXHIBIT 15.1
October 28, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We are aware that (i) our report dated April 30, 1999 on our review of interim
financial information of Patterson Energy, Inc. and Subsidiaries for the period
ended March 31, 1999 and (ii) our report dated June 29, 1999 on our review of
interim financial information of Patterson Energy, Inc. and Subsidiaries for the
period ended June 30, 1999 are incorporated by reference in this registration
statement.
Yours very truly,
PRICEWATERHOUSECOOPERS LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 1, 1999 relating to the
financial statements which appear in Patterson Energy, Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1998. We also consent to the
reference to us under the heading "Experts" in such Registration Statement.
PRICEWATERHOUSECOOPERS LLP
Dallas, Texas
October 28, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
I hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 (the "Registration
Statement") of information contained in my summary reserve reports appearing in
the Patterson Energy, Inc. Annual Report on Form 10-K for the year ended
December 31, 1998 relating to the oil and gas reserves and revenues, as of
December 31, 1996, 1997 and 1998, of certain properties owned by Patterson
Energy, Inc. and the references to me under the headings "Experts" in such
Prospectus, and further consent to me being named as an expert therein.
M. BRIAN WALLACE, P.E.
Dallas, Texas
October 28, 1999
