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DI INDUSTRIES, INC.
AND
GUARANTORS
$150,000,000
______% Senior Notes due 2007
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INDENTURE
Dated as of June ____, 1997
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TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Trustee
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CROSS-REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act, as amended,
and the Indenture dated as of _________, 1997.
TIA Indenture
Section Section
------- -------
310(a)(1) ......................................... 7.10
(a)(2) ......................................... 7.10
(a)(3) ......................................... N.A.
(a)(4) ......................................... N.A.
(a)(5) ......................................... 7.10
(b) ......................................... 7.08; 7.10
(c) ......................................... N.A.
311(a) ......................................... 7.11
(b) ......................................... 7.11
(c) ......................................... N.A.
312(a) ......................................... 2.07
(b) ......................................... 12.06
(c) ......................................... 12.06
313(a) ......................................... 7.06
(b)(1) ......................................... N.A.
(b)(2) ......................................... 7.06
(c) ......................................... 7.06, 12.05
(d) ......................................... 7.06
314(a) ......................................... 4.02; 4.20
(b) ......................................... N.A.
(c)(1) ......................................... 12.01, 12.02
(c)(2) ........................................ 12.01; 12.02
(c)(3) ......................................... N.A.
(d) ......................................... N.A.
(e) ......................................... 12.01
(f) ......................................... N.A.
315(a) ......................................... 7.01
(b) ......................................... 7.05
(c) ......................................... 7.01
(d) ......................................... 7.01
(e) ......................................... 6.11
316(a)(last sentence) ......................................... 2.09
(a)(1)(A) ......................................... 6.05
(a)(1)(B) ......................................... 6.04
(a)(2) ......................................... N.A.
(b) ......................................... 6.07
(c) ......................................... 10.05
317(a)(1) ......................................... 6.03; 6.08
(a)(2) ......................................... 6.09
(b) ......................................... 2.04
318(a) ......................................... 12.04
N.A. Means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
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TABLE OF CONTENTS
Page
ARTICLE 1 Definitions and Incorporation by Reference..................................................1
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.....................................19
SECTION 1.03. Rules of Construction.................................................................19
ARTICLE 2 The Securities.............................................................................20
SECTION 2.01. Form and Dating.......................................................................20
SECTION 2.02. Execution and Authentication..........................................................20
SECTION 2.03. Registrar and Paying Agent............................................................21
SECTION 2.04. Paying Agent To Hold Money in Trust...................................................22
SECTION 2.05. Global Securities.....................................................................22
SECTION 2.06. Transfer and Exchange.................................................................23
SECTION 2.07. Holder Lists..........................................................................24
SECTION 2.08. Replacement Securities................................................................24
SECTION 2.09. Outstanding Securities................................................................24
SECTION 2.10. Temporary Securities..................................................................25
SECTION 2.11. Cancellation..........................................................................25
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SECTION 2.12. Payment of Interest: Interest Rights Preserved.......................................25
SECTION 2.13. Authorized Denominations..............................................................26
SECTION 2.14. CUSIP Numbers.........................................................................26
ARTICLE 3 Redemption.................................................................................26
SECTION 3.01. Notices to Trustee....................................................................26
SECTION 3.02. Selection of Securities To Be Redeemed................................................26
SECTION 3.03. Notice of Redemption..................................................................27
SECTION 3.04. Effect of Notice of Redemption........................................................28
SECTION 3.05. Deposit of Redemption Price...........................................................28
SECTION 3.06. Securities Redeemed in Part...........................................................28
SECTION 3.07. Optional Redemption...................................................................28
ARTICLE 4 Covenants..................................................................................29
SECTION 4.01. Payment of Securities.................................................................29
SECTION 4.02. Commission Reports....................................................................29
SECTION 4.03. Limitation on Indebtedness............................................................29
SECTION 4.04. Limitation on Subsidiary Indebtedness and Preferred Stock.............................30
SECTION 4.05. Limitation on Restricted Payments.....................................................30
SECTION 4.06. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries..............................................................32
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SECTION 4.07. Limitation on Asset Sales.............................................................33
SECTION 4.08. Limitation on Transactions with Affiliates............................................36
SECTION 4.09. Change of Control.....................................................................36
SECTION 4.10. Limitation on Liens...................................................................38
SECTION 4.11. Limitation on Guarantees by Guarantors................................................38
SECTION 4.12. Unrestricted Subsidiaries.............................................................38
SECTION 4.13. Limitation on Sale and Lease-Back Transactions........................................39
SECTION 4.14. Limitation on Line of Business........................................................39
SECTION 4.15. Maintenance of Office or Agency.......................................................39
SECTION 4.16. Money for the Security Payments to be Held in Trust...................................39
SECTION 4.17. Corporate Existence...................................................................40
SECTION 4.18. Maintenance of Property...............................................................40
SECTION 4.19. Payment of Taxes and Other Claims.....................................................40
SECTION 4.20. Compliance Certificate; Notice of Default or Event of Default.........................40
SECTION 4.21. Further Instruments and Acts..........................................................41
SECTION 4.22. Prohibition on Company and Guarantors Becoming Investment Companies...................41
SECTION 4.23. Stay, Extension and Usury Laws........................................................41
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ARTICLE 5 Consolidation, Merger, Conveyance, Lease or Transfer.......................................41
SECTION 5.01. Consolidation, Merger, Conveyance, Lease or Transfer..................................41
SECTION 5.02. Officers' Certificate and Opinion of Counsel..........................................42
SECTION 5.03. Substitution of Surviving Entity......................................................42
ARTICLE 6 Defaults and Remedies......................................................................43
SECTION 6.01. Events of Default.....................................................................43
SECTION 6.02. Acceleration..........................................................................44
SECTION 6.03. Other Remedies........................................................................45
SECTION 6.04. Waiver of Past Defaults...............................................................46
SECTION 6.05. Control by Majority...................................................................46
SECTION 6.06. Limitation on Suits...................................................................46
SECTION 6.07. Rights of Holders to Receive Payment..................................................46
SECTION 6.08. Collection Suit by Trustee............................................................46
SECTION 6.09. Trustee May File Proofs of Claim......................................................47
SECTION 6.10. Priorities............................................................................47
SECTION 6.11. Undertaking for Costs.................................................................48
SECTION 6.12. Restoration of Rights and Remedies....................................................48
SECTION 6.13. Rights and Remedies Cumulative........................................................48
SECTION 6.14. Delay or Omission Not Waiver..........................................................48
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ARTICLE 7 Trustee....................................................................................48
SECTION 7.01. Duties of Trustee.....................................................................48
SECTION 7.02. Rights of Trustee.....................................................................49
SECTION 7.03. Individual Rights of Trustee..........................................................50
SECTION 7.04. Trustee's Disclaimer..................................................................50
SECTION 7.05. Notice of Defaults....................................................................51
SECTION 7.06. Reports by Trustee to Holders.........................................................51
SECTION 7.07. Compensation and Indemnity............................................................51
SECTION 7.08. Replacement of Trustee................................................................51
SECTION 7.09. Successor Trustee by Merger...........................................................53
SECTION 7.10. Eligibility; Disqualification.........................................................53
SECTION 7.11. Preferential Collection of Claims Against Company.....................................53
ARTICLE 8 Satisfaction and Discharge.................................................................53
SECTION 8.01. Satisfaction and Discharge............................................................53
SECTION 8.02. Application of Trust Money............................................................54
SECTION 8.03. Repayment to the Company..............................................................54
SECTION 8.04. Reinstatement.........................................................................55
ARTICLE 9 Defeasance.................................................................................55
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SECTION 9.01. Company's Option to Effect Defeasance or Covenant Defeasance.........................55
SECTION 9.02. Defeasance and Discharge.............................................................55
SECTION 9.03. Covenant Defeasance..................................................................56
SECTION 9.04. Conditions to Defeasance or Covenant Defeasance......................................56
SECTION 9.05. Deposited Money and U.S. Government Obligations to be Held in Trust;
Miscellaneous Provisions...........................................................57
SECTION 9.06. Repayment to Company.................................................................57
SECTION 9.07. Reinstatement........................................................................58
ARTICLE 10 Amendments................................................................................58
SECTION 10.01. Without Consent of Holders...........................................................58
SECTION 10.02. With Consent of Holders..............................................................59
SECTION 10.03. Effect of Supplemental Indentures....................................................59
SECTION 10.04. Compliance with Trust Indenture Act..................................................60
SECTION 10.05. Revocation and Effect of Consents and Waivers........................................60
SECTION 10.06. Notation on or Exchange of Securities................................................60
SECTION 10.07. Trustee To Execute Supplemental Indentures...........................................60
SECTION 10.08. Payment for Consent..................................................................61
ARTICLE 11 Guarantees................................................................................61
SECTION 11.01. Guarantees...........................................................................61
SECTION 11.02. Limitation on Liability..............................................................63
SECTION 11.03. Execution and Delivery of Guarantees.................................................63
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SECTION 11.04. When a Guarantor May Merge, etc. ....................................................64
SECTION 11.05. No Waiver............................................................................64
SECTION 11.06. Modification.........................................................................64
SECTION 11.07. Release of Guarantor.................................................................64
SECTION 11.08. Execution of Supplemental Indentures for Future Guarantors...........................64
ARTICLE 12 Miscellaneous.............................................................................65
SECTION 12.01. Compliance Certificates and Opinions.................................................65
SECTION 12.02. Form of Documents Delivered to Trustee...............................................65
SECTION 12.03. Acts of Holders......................................................................66
SECTION 12.04. Trust Indenture Act Controls.........................................................67
SECTION 12.05. Notices..............................................................................67
SECTION 12.06. Communication by Holders with Other Holders..........................................68
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar.........................................68
SECTION 12.08. Payments on Business Days............................................................68
SECTION 12.09. GOVERNING LAW........................................................................68
SECTION 12.10. No Recourse Against Others...........................................................68
SECTION 12.11. Submission to Jurisdiction; Appointment of Agent for Service of Process; Waiver
of Immunities......................................................................68
SECTION 12.12. Successors...........................................................................69
SECTION 12.13. Multiple Originals...................................................................69
SECTION 12.14. Table of Contents; Headings..........................................................69
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EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Form of Supplemental Indenture
Schedule 1.01(a) Indebtedness Existing on the Issue Date
Schedule 1.01(b) Investments Existing on the Issue Date
Schedule 1.01(c) Liens Existing on the Issue Date
Schedule 4.04(b) Subsidiary Indebtedness and Preferred Stock Existing on the
Issue Date
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INDENTURE dated as of June ___, 1997, among DI Industries, Inc., a
Texas corporation (the "Company"), certain of the Company's subsidiaries
signatory hereto (each, a "Guarantor", collectively, the "Guarantors") and
Texas Commerce Bank National Association, a national banking association, as
trustee (the "Trustee").
The Company, each Guarantor, jointly and severally, and the Trustee
agree as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of the Company's _____% Senior Notes Due 2007
(the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a subsidiary
of such specified Person.
"Act", when used with respect to any Holder, has the meaning set forth
in Section 12.03.
"Adjusted Net Assets" of a Guarantor at any date means the amount by
which the fair value of the assets and Property of such Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under its
Guarantee, of such Guarantor at such date.
"Affiliate" of any specified Person means another Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the Voting Stock of a Person shall
be deemed to be control.
"Agent Member" has the meaning specified in Section 2.05(a).
"Asset Sale" means any direct or indirect sale, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction) by the Company
or any Subsidiary to any Person other than the Company, a Guarantor or a Wholly
Owned Subsidiary, in one transaction, or a series of related transactions, of
(i) any Capital Stock of any Subsidiary (except for directors' qualifying
shares or certain minority interests sold to other Persons solely due to local
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law requirements that there be more than one stockholder, but which are not in
excess of what is required for such purpose), or (ii) any other Property or
assets of the Company or any Subsidiary, other than (A) sales of drill-string
components and obsolete or worn out equipment in the ordinary course of
business or other assets that, in the Company's reasonable judgment, are no
longer used or useful in the conduct of the business of the Company and its
Subsidiaries), (B) any drilling contract, charter or other lease of Property or
other assets entered into by the Company or any Subsidiary in the ordinary
course of business, other than any Bargain Purchase Contract, (C) a Restricted
Payment or Restricted Investment permitted under the provisions of Section 4.05
of this Indenture, (D) a Change of Control, (E) a consolidation, merger,
continuance or the disposition of all or substantially all of the assets of the
Company and the Subsidiaries, taken as a whole, in compliance with the
provisions of Section 5.01 of this Indenture, (F) any trade or exchange by the
Company or any Subsidiary of one or more drilling rigs for one or more other
drilling rigs of like kind owned or held by another Person, provided that (x)
the Fair Value of the rig or rigs traded or exchanged by the Company or such
Subsidiary (including cash or cash equivalents to be delivered by the Company
or such Subsidiary) is reasonably equivalent to the Fair Value of the drilling
rig or rigs (together with cash or cash equivalents to be received by the
Company or such Subsidiary) or other assets as determined by written appraisal
by a nationally (or industry) recognized investment banking firm or appraisal
firm and (y) such exchange is approved by a majority of the disinterested
directors of the Company. An Asset Sale shall include the requisition of title
to, seizure of or forfeiture of any Property or assets, or any actual or
constructive total loss or an agreed or compromised total loss of any Property
or assets.
"Asset Sale Offer" has the meaning specified in Section 4.07(b).
"Asset Sale Offer Price" has the meaning specified in Section 4.07(b).
"Asset Sale Offer Purchase Date" has the meaning specified in
Section 4.07(c).
"Asset Sale Offer Purchase Price" has the meaning specified in
Section 4.07(b).
"Attributable Indebtedness" in respect of a Sale and Lease-Back
Transaction means, at any date of determination, the present value (discounted
at the interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease (or to the first date on which the lessee is permitted to terminate such
lease without the payment of a penalty) included in such Sale and Lease-Back
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of any date, with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (x)
the number of years from such date to the date of each scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied in each case by (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facility" means the $50,000,000 Amended and Restated
Senior Secured Revolving Credit Agreement dated December 31, 1996, as amended
and restated as of April 30, 1997, among the Company
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and Drillers, Inc., as co-borrowers, DI International, Inc., as guarantor, the
lending institutions party thereto, Bankers Trust Company, as agent and
administrative agent, and ING (US) Capital Corporation, as co-agent and
documentation agent, as from time to time amended.
"Bargain Purchase Contract" means a drilling contract, charter or
lease that provides for acquisition of Property by the other party to such
agreement during or at the end of the term thereof for less than Fair Market
Value thereof at the time such right to acquire such Property is granted.
"Board of Directors" means the Board of Directors of the Company or
any Subsidiary, as applicable, or any committee thereof duly authorized to act
on behalf of such Board.
"Board Resolutions" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Subsidiary, as
applicable, 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 each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions are authorized or
obligated by law or executive order or regulation to close in The City of New
York and Houston, Texas and, with respect to any payment of cash or delivery of
securities, the place of such payment or delivery.
"Capital Lease Obligation" means, at any time as to any Person with
respect to any Property leased by such Person as lessee, the amount of the
liability with respect to such lease that would be required at such time to be
capitalized and accounted for as a capital lease on the balance sheet of such
Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents in the equity
interest (however designated) in such Person and any rights (other than debt
securities convertible into an equity interest), warrants or options to acquire
any equity interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any Person,
the aggregate consideration received for such Asset Sale by such Person in the
form of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof), including payments in respect of
deferred payment obligations when received in the form of cash or cash
equivalents (except to the extent that such obligations are financed or sold
with recourse to such Person or any subsidiary thereof).
"Certificated Security" has the meaning specified in Section 2.01(b).
"Change of Control" means (i) a determination by the Company that any
Person or group (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange
Act) has become the direct or beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of more than 50% of the Voting Stock of the Company other
than
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Permitted Holders; (ii) the Company is merged with or into or consolidated
with another corporation and, immediately after giving effect to the merger or
consolidation, less than 50% of the outstanding voting securities entitled to
vote generally in the election of directors or persons who serve similar
functions of the surviving or resulting entity are then beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by (x)
the stockholders of the Company immediately prior to such merger or
consolidation, or (y) if the record date has been set to determine the
stockholders of the Company entitled to vote on such merger or consolidation,
the stockholders of the Company as of such a record date; (iii) the Company,
either individually or in conjunction with one or more Subsidiaries, sells,
conveys, transfers or leases, or the Subsidiaries sell, convey, transfer or
lease, all or substantially all of the assets of the Company or the Company and
the Subsidiaries, taken as a whole (either in one transaction or a series of
related transactions), including Capital Stock of the Subsidiaries, to any
Person (other than a Wholly Owned Subsidiary); (iv) the liquidation or
dissolution of the Company; or (v) the first day on which a majority of the
individuals who constitute the Board of Directors of the Company are not
Continuing Directors.
"Change of Control Offer" has the meaning specified in Section 4.09(a).
"Change of Control Payment Date" has the meaning specified in
Section 4.09(b)(ii).
"Change of Control Purchase Price" has the meaning specified in
Section 4.09(a).
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or if at any time after the execution of this instrument, such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Consolidated Interest Coverage Ratio" means as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company and its consolidated Subsidiaries for the four fiscal
quarters for which financial information in respect thereof is available
immediately prior to the applicable Transaction Date (the "Determination
Period") to (ii) the aggregate Consolidated Interest Expense of the Company and
its consolidated Subsidiaries that is anticipated to accrue during a period
consisting of the fiscal quarter in which the Transaction Date occurs and the
three fiscal quarters immediately subsequent thereto (based upon the pro forma
amount and maturity of, and interest payments in respect of, Indebtedness of
the Company and its consolidated Subsidiaries expected by the Company to be
outstanding on the Transaction Date), assuming for the purposes of this
measurement the continuation of market interest rates prevailing on the
Transaction Date and base interest rates in respect of floating interest rate
obligations equal to the base interest rates on such obligations in effect as
of the Transaction Date, provided that if the Company or any of its
consolidated Subsidiaries is a party to any Interest Swap Obligation that would
have the effect of changing the interest rate on any Indebtedness of the
Company or any of its consolidated Subsidiaries for such four-quarter period
(or a portion thereof), the resulting rate shall be used for such four-quarter
period or portion thereof; provided, further, that any Consolidated Interest
Expense of the Company with respect
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to Indebtedness incurred or retired by the Company or any of its Subsidiaries
during the fiscal quarter in which the Transaction Date occurs shall be
calculated as if such debt was incurred or retired on the first day of the
fiscal quarter in which the Transaction Date occurs; provided, further, that if
the transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio would have the effect of increasing or decreasing EBITDA in the
future and if such increase or decrease is readily quantifiable and is
attributable to such transaction, EBITDA shall be calculated on a pro forma
basis as if such transaction had occurred on the first day of the four fiscal
quarters referred to in clause (i) of this definition, and if, during the same
four fiscal quarters, (x) the Company or any of its consolidated Subsidiaries
shall have engaged in any Asset Sale, EBITDA for such period shall be reduced
by an amount equal to the EBITDA (if positive), or increased by an amount equal
to the EBITDA (if negative), directly attributable to the assets which are the
subject of such Asset Sale for such period calculated on a pro forma basis as
if such Asset Sale and any related retirement of Indebtedness had occurred on
the first day of such period or (y) after the Issue Date, the Company or any of
its consolidated Subsidiaries shall have acquired any material assets other
than in the ordinary course of business, EBITDA and Consolidated Interest
Expense shall be calculated on a pro forma basis as if such acquisition had
occurred on the first day of such period.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication (A) the sum of (i) the aggregate amount of cash
and noncash interest expense (including capitalized interest) of such Person
and its subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP in respect of Indebtedness (including, without limitation,
(v) any amortization of debt discount, (w) net costs associated with Interest
Swap Obligations (including any amortization of discounts), (x) the interest
portion of any deferred payment obligation calculated in accordance with the
effective interest method, (y) all accrued interest and (z) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bankers acceptances or similar facilities) paid or accrued, or scheduled to be
paid or accrued, during such period; (ii) dividends on Preferred Stock or
Redeemable Stock of such Person (and Preferred Stock or Redeemable Stock of
its subsidiaries if paid to a Person other than such Person or its
subsidiaries) declared and payable in cash; (iii) the portion of any rental
obligation of such Person or its subsidiaries in respect of any Capital Lease
Obligation allocable to interest expense in accordance with GAAP; (iv) the
portion of any rental obligation of such Person or its subsidiaries in respect
of any Sale and Lease-Back Transaction allocable to interest expense
(determined as if such were treated as a Capital Lease Obligation); and (v) to
the extent any debt of any other Person is guaranteed by such Person or any of
its subsidiaries, the aggregate amount of interest paid, accrued or scheduled
to be paid or accrued, by such other Person during such period attributable to
any such debt, less (B) to the extent included in (A) above, amortization or
write-off of deferred financing costs of such Person and its subsidiaries
during such period and any charge related or any premium or penalty paid in
connection with redeeming or retiring any Indebtedness of such Person and its
subsidiaries prior to its stated maturity; in the case of both (A) and (B)
above, after elimination of intercompany accounts among such Person and its
subsidiaries and as determined in accordance with GAAP. For purposes of clause
(ii) above, dividend requirements attributable to any Preferred Stock or
Redeemable Stock shall be deemed to be an amount equal to the amount of
dividend requirements on such Preferred Stock or Redeemable Stock times a
fraction, the numerator of which is the amount of such dividend requirements,
and the denominator of which is one minus the applicable combined federal,
state, local and foreign income tax rate of the Company and its Subsidiaries
(expressed as a decimal), on a consolidated basis, for the fiscal year
immediately preceding the date of the transaction giving rise to the need to
calculate Consolidated Interest Expense.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, provided that there shall be excluded therefrom, without
duplication, (i) any net income of any Unrestricted Subsidiary, except that the
Company's or any Subsidiary's interest in the net
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income of such Unrestricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash or cash
equivalents actually distributed by such Unrestricted Subsidiary during such
period to the Company or a Subsidiary as a dividend or other distribution, (ii)
gains and losses, net of taxes, from Asset Sales or reserves relating thereto,
(iii) the net income of any Person that is not a subsidiary or that is
accounted for by the equity method of accounting which shall be included only
to the extent of the amount of dividends or distributions paid to such Person
or its subsidiaries, (iv) items (but not loss items) classified as
extraordinary, unusual or nonrecurring (other than the tax benefit, if any, of
the utilization of net operating loss carryforwards or alternative minimum tax
credits), (v) the net income (but not net loss) of any Person acquired by such
specified Person or any of its subsidiaries in a pooling-of-interests
transaction for any period prior to the date of such acquisition, (vi) any gain
or loss, net of taxes, realized on the termination of any employee pension
benefit plan, (vii) the net income (but not net loss) of any subsidiary of such
specified Person to the extent that the transfer to that Person of that income
is not at the time permitted, directly or indirectly, by any means (including
by dividend, distribution, advance or loan or otherwise), by operation of the
terms of its charter or any agreement with a Person other than with such
specified Person, instrument held by a Person other than by such specified
Person, judgment, decree, order, statute, law, rule or governmental regulations
applicable to such subsidiary or its stockholders, except for any dividends or
distributions actually paid by such subsidiary to such Person, and (viii) with
regard to a non-Wholly Owned Subsidiary, any aggregate net income (or loss) in
excess of such Person's or such subsidiary's pro rata share of such non-Wholly
Owned Subsidiary's net income (or loss).
"Consolidated Net Worth" of any Person means, as of any date, the sum
of the Capital Stock and additional paid-in capital plus retained earnings (or
minus accumulated deficit) of such Person and its subsidiaries on a
consolidated basis at such date, each item determined in accordance with GAAP,
less amounts attributable to Redeemable Stock of such Person or any of its
subsidiaries.
"Continuing Director" means an individual who (i) is a member of the
Board of Directors of the Company and (ii) either (A) was a member of the Board
of Directors of the Company on the Issue Date or (B) whose nomination for
election or election to the Board of Directors of the Company was approved by
vote of at least a majority of the directors then still in office who were
either directors on the Issue Date or whose election or nomination for election
was previously so approved.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at 600 Travis Street, Suite 1150, Houston, Texas 77002.
"Covenant Defeasance" has the meaning specified in Section 9.03.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to
protect against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition the occurrence of which
is, or after notice or the passage time or both would be, an Event of Default.
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"Defaulted Interest" has the meaning specified in Section 2.12.
"Defeasance" has the meaning specified in Section 9.02.
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Determination Period" has the meaning specified under clause (i)
of the definition of "Consolidated Interest Coverage Ratio."
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense, (v) any charge related to any premium or penalty paid in
connection with redeeming or retiring any Indebtedness prior to its Stated
Maturity, (vi) any other non-cash charges and (vii) to the extent not otherwise
covered by the adjustments contained in the proviso to this definition,
non-recurring charges of approximately $6.1 million incurred during 1996 in
employment severance costs, exit costs attributable to its exiting Argentina
and Mexico and other non-recurring charges, all as described in the Company's
Form 10-K for the year ended December 31, 1996 and minus, to the extent
reflected in such income statement, any noncash credits that had the effect of
increasing Consolidated Net Income of such Person for such period; provided
that for purposes of determining EBITDA with respect to the Company,
Consolidated Net Income shall exclude any net income or loss for the year ended
December 31, 1996 associated with the Company's Argentine and Mexican
divisions.
"Event of Default" has the meaning specified in Section 6.01.
"Excess Proceeds" has the meaning specified in Section 4.07(a).
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Fair Market Value" means, with respect to consideration received or
to be received pursuant to any transaction by any Person, the fair market value
of such consideration as determined in good faith by the Board of Directors of
the Company.
"Fair Value" means, with respect to any asset or Property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
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"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants ("AICPA") and statements of the Financial Accounting Standards
Board, or in such other statements by such other entity as may be designated by
the AICPA, that are applicable to the circumstances as of the date of
determination; provided, however, that all calculations made for purposes of
determining compliance with the provisions set forth in the Indenture shall
utilize GAAP in effect at the Issue Date.
"Global Security" has the meaning specified in Section 2.01(b).
"Grey Wolf" means Grey Wolf Drilling Company, a _______ corporation.
"Grey Wolf Acquisition" means the agreement to merge Grey Wolf
into Drillers, Inc. pursuant to an Agreement and Plan of Merger dated March 7,
1997, by and among the Company, Drillers, Inc. and Grey Wolf, as such may be
amended to the Issue Date.
"Guarantee" means an unconditional guaranty of the Securities given by
any Subsidiary pursuant to the provisions of Article 11 of this Indenture.
"Guarantor" means Drillers, Inc., DI International Inc. and DI Energy
Inc., each a Texas corporation and a Subsidiary, and each other Subsidiary of
the Company that is required to guarantee the Company's Obligations under the
Securities and this Indenture pursuant to the provisions of Article 11 of this
Indenture and any other Subsidiary of the Company that executes a supplemental
indenture in which such Subsidiary agrees to guarantee the Company's
Obligations under the Securities and this Indenture.
"Holder" means the Person in whose name a Security is registered on the
Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, suffer to exist, incur (by conversion, exchange
or otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "incurrence," "incurred," "incurrable" and "incurring" shall
have meanings correlative to the foregoing); provided that a change in GAAP
that results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed an incurrence of such Indebtedness.
Indebtedness otherwise incurred by a Person before it becomes a Subsidiary
shall be deemed to have been incurred at the time at which it becomes a
Subsidiary.
"Indebtedness" as applied to any Person means, at any time, without
duplication, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including, without limitation,
any such obligations incurred in connection with acquisition of Property,
assets or businesses, excluding accounts payable made in the ordinary course of
business which are not more than 90 days overdue or which are being contested
in good faith and by appropriate proceedings; (iii) any obligation of such
Person for all or any part of the purchase price of Property or for
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the cost of Property constructed or of improvements thereto (including any
obligation under or in connection with any letter of credit related thereto),
other than accounts payable incurred in respect of Property and services
purchased in the ordinary course of business which are no more than 90 days
overdue or which are being contested in good faith and by appropriate
proceedings; (iv) any obligation of such Person upon which interest charges are
customarily paid (other than accounts payable incurred in the ordinary course
of business); (v) any obligation of such Person under conditional sale or other
title retention agreements relating to purchased Property; (vi) any obligation
of such Person issued or assumed as the deferred purchase price of Property
(other than accounts payable incurred in the ordinary course of business which
are no more than 90 days overdue or which are being contested in good faith and
by appropriate proceedings); (vii) any Capital Lease Obligation or Attributable
Indebtedness pursuant to any Sale and Lease-Back Transaction of such Person;
(viii) any obligation of any other Person secured by (or for which the obligee
thereof has an existing right, contingent or otherwise, to be secured by) any
Lien on Property owned or acquired, whether or not any obligation secured
thereby has been assumed, by such Person; (ix) any obligation of such Person in
respect of any letter of credit supporting any obligation of any other Person;
(x) the maximum fixed repurchase price of any Redeemable Stock of such Person
(or if such Person is a subsidiary, any Preferred Stock of such Person); (xi)
the notional amount of any Interest Swap Obligation or Currency Hedge
Obligation of such Person at the time of determination; and (xii) any
obligation which is in economic effect a guarantee, regardless of its
characterization (other than an endorsement in the ordinary course of
business), with respect to any Indebtedness of another Person, to the extent
guaranteed. For purposes of the preceding sentence, the maximum fixed
repurchase price of any Redeemable Stock or subsidiary Preferred Stock that
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Redeemable Stock or subsidiary Preferred Stock as if such
Redeemable Stock or subsidiary Preferred Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to the Indenture
Supplement; provided, however, that if such Redeemable Stock or subsidiary
Preferred Stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Redeemable Stock or subsidiary Preferred Stock.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and
the maximum liability of any guarantees at such date; provided that for
purposes of calculating the amount of any non-interest bearing or other
discount security, such Indebtedness shall be deemed to be the principal amount
thereof that would be shown on the balance sheet of the issuer dated such date
prepared in accordance with GAAP but that such security shall be deemed to have
been incurred only on the date of the original issuance thereof.
"Indenture" means this Indenture as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this Indenture and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Indenture, and any such supplemental indenture,
respectively.
"Indrillers" means INDRILLERS, L.L.C., a Michigan limited liability
company of which the Company is a member.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities, which date shall be ____________ and ___________ of
each year.
"Interest Swap Obligation" means, with respect to any Person, the
obligation of such Person pursuant to any interest rate swap agreement,
interest rate cap, collar or floor agreement or other similar agreement or
arrangement designed to protect against or manage such Person's or any of its
subsidiaries' exposure to fluctuations in interest rates.
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"Investment" means, with respect to any Person, any direct, indirect
or contingent investment in another Person, whether by means of a share
purchase, capital contribution, loan, advance (other than advances to employees
for moving and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or similar credit extension constituting
Indebtedness of such other Person, and any guarantee of Indebtedness of any
other Person; provided that the term "Investment" shall not include any
transaction involving the purchase or other acquisition (including by way of
merger) of Property (including Capital Stock) by the Company or any Subsidiary
in exchange for Capital Stock (other than Redeemable Stock) of the Company. The
amount of any Person's Investment shall be the original cost of such Investment
to such Person, plus the cost of all additions thereto paid by such Person, and
minus the amount of any portion of such Investment repaid to such Person in
cash as a repayment of principal or a return of capital, as the case may be,
but without any other adjustments for increases or decreases in value, or
write-ups, writedowns, or write-offs with respect to such Investment. In
determining the amount of any Investment involving a transfer of any Property
or assets other than cash, such Property or assets shall be valued at its Fair
Value at the time of such transfer as determined in good faith by the board of
directors (or comparable body) of the Person making such transfer. The Company
shall be deemed to make an "Investment" in the amount of the Fair Value of the
Assets of a Subsidiary at the time such Subsidiary is designated an
Unrestricted Subsidiary.
"Issue Date" means the date on which the Securities are first
authenticated and delivered under this Indenture.
"Joint Venture" means any Person (other than a Guarantor) designated
as such by a resolution of the Board of Directors of the Company and as to
which (i) the Company, any Guarantor or any Joint Venture owns less than 50% of
the Capital Stock of such Person; (ii) no more than 10 unaffiliated Persons own
of record any Capital Stock of such Person; (iii) at all times, each such
Person owns the same proportion of each class of Capital Stock of such Person
outstanding at such time; (iv) no Indebtedness of such Person is or becomes
outstanding other than Non-Recourse Indebtedness; (v) there exist no consensual
encumbrances or restrictions on the ability of such Person to (x) pay, directly
or indirectly, dividends or make any other distributions in respect of its
Capital Stock to the holders of its Capital Stock or (y) pay any Indebtedness
or other obligation owed to the holders of its Capital Stock or (z) make any
Investment in the holders of its Capital Stock, in each case other than the
types of consensual encumbrances or restrictions that would be permitted under
the provisions of Section 4.06 of this Indenture if such Person were a
Subsidiary; and (vi) the business engaged in by such Person is a Related
Business.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
any agreement to give or grant a Lien or any lease, conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Maturity" means the date on which the principal of a Security becomes
due and payable as provided therein or in this Indenture, whether at the Stated
Maturity or the Change of Control Payment Date or purchase date established
pursuant to the terms of this Indenture for an Asset Sale Offer or by
declaration of acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investor Service, Inc., or, if Moody's
Investors Service, Inc. shall cease rating the specified debt securities and
such ratings business with respect thereto shall have been transferred to a
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successor Person, such successor person.
"Net Available Proceeds" means, (a) as to any Asset Sale (other than a
Bargain Purchase Contract), the Cash Proceeds therefrom, net of all legal and
title expenses, commissions and other fees and expenses incurred, and all
Federal, state, foreign, recording and local taxes payable as a consequence of
such Asset Sale, net of all payments made to any Person other than the Company
or a Subsidiary on any Indebtedness which is secured by such assets, in
accordance with the terms of any Lien upon or with respect to such assets, or
which must by its terms, or in order to obtain a necessary consent to such
Asset Sale, or by applicable law, be repaid out of the proceeds from such Asset
Sale and, as for any Asset Sale by a Subsidiary, net of the equity interest in
such Cash Proceeds of any holder of Capital Stock of such Subsidiary (other
than the Company, any other Subsidiary or any Affiliate of the Company or any
such other Subsidiary) and (b) as to any Bargain Purchase Contract, an amount
equal to (i) that portion of the rental or other payment stream arising under a
Bargain Purchase Contract that represents an amount in excess of the Fair
Market Value of the rental or other payments with respect to the pertinent
Property or other asset and (ii) the Cash Proceeds from the sale of such
Property or other asset, net of the amount set forth in clause (a) above, in
each case as and when received.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of an Unrestricted Subsidiary or a foreign Subsidiary not
constituting a Guarantor as to which (a) neither the Company nor any other
Subsidiary (other than an Unrestricted Subsidiary or a Subsidiary of such
foreign Subsidiary) (i) provides credit support including any undertaking,
agreement or instrument which would constitute Indebtedness or (ii) is directly
or indirectly liable for such Indebtedness and (b) no default with respect to
such Indebtedness (including any rights which the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary or such foreign
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or its other Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Obligations" means, with respect to any Indebtedness, any obligation
thereunder, including, without limitation, principal, premium and interest
(including post petition interest thereon), penalties, fees, costs, expenses,
indemnifications, reimbursements, damages and other liabilities.
"Obligors" means the Company and the Guarantors, collectively;
"Obligor" means the Company or any Guarantor.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President, the Chief Executive
Officer, the Chief Operating Officer or a Vice President, and by the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company or a
Subsidiary and delivered to the Trustee, which shall comply with this
Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company, a Guarantor or the Trustee.
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"Order" means a written order signed in the name of the Company by an
officer and delivered to the Trustee.
"Paying Agent" has the meaning specified in Section 2.03.
"Permitted Holders" means Norex Industries, Inc., Somerset Capital
Partners, Mike L. Mullen and Roy T. Oliver, Jr. and their respective Affiliates.
"Permitted Indebtedness" means (a) Indebtedness of the Company under
the Securities; (b) Indebtedness (and any guarantee thereof) under one or more
credit or revolving credit facilities with a bank or syndicate of banks or
financial institutions or other Lenders, including, without limitation, the Bank
Credit Facility, as such may be amended, modified, revised, extended, replaced,
or refunded from time to time, in an aggregate principal amount at any one time
outstanding not to exceed $100,000,000, less any amounts derived from Asset
Sales and applied to the required permanent reduction of Senior Debt (and a
permanent reduction of the related commitment to lend or amount available to be
reborrowed in the case of a revolving credit facility) under such credit
facilities as contemplated by the provisions of Section 4.07 of this Indenture;
(c) Indebtedness of the Company or any Subsidiary under Interest Swap
Obligations, provided that (i) such Interest Swap Obligations are related to
payment obligations on Indebtedness otherwise permitted under the provisions of
Section 4.03 of this Indenture and (ii) the notional principal amount of such
Interest Swap Obligations does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligations relate; (d) Indebtedness of
the Company or any Subsidiary under Currency Hedge Obligations, provided that
(i) such Currency Hedge Obligations are related to payment obligations on
Indebtedness otherwise permitted under the provisions of Section 4.03 of this
Indenture or to the foreign currency cash flows reasonably expected to be
generated by the Company and the Subsidiaries and (ii) the notional principal
amount of such Currency Hedge Obligations does not exceed the principal amount
of the Indebtedness and the amount of the foreign currency cash flows to which
such Currency Hedge Obligations relate; (e) Indebtedness of the Company or any
Subsidiary outstanding on the Issue Date [and listed on Schedule 1.01(a)
attached hereto]; (f) the Guarantees of the Securities (and any assumption of
the Obligations guaranteed thereby); (g) Indebtedness of the Company or any
Subsidiary in respect of bid performance bonds, surety bonds, appeal bonds and
letters of credit or similar arrangements issued for the account of the Company
or any Subsidiary, in each case in the ordinary course of business and other
than for an obligation for money borrowed; (h) Indebtedness of the Company to a
Guarantor or other Wholly Owned Subsidiary and Indebtedness of a Guarantor or
other Wholly Owned Subsidiary to the Company or another Guarantor or other
Wholly Owned Subsidiary; provided that upon any subsequent issuance or transfer
of any Capital Stock or any other event which results in any such Guarantor
ceasing to be a Guarantor or such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary, as the case may be, or any other subsequent transfer of any
such Indebtedness (except to the Company or a Guarantor or other Wholly Owned
Subsidiary), such Indebtedness shall be deemed, in each case, to be incurred and
shall be treated as an incurrence for purposes of Section 4.03 of this Indenture
at the time the Guarantor in question ceased to be a Guarantor or the Wholly
Owned Subsidiary in question ceased to be a Wholly Owned Subsidiary; (i)
Subordinated Indebtedness of the Company to an Unrestricted Subsidiary for money
borrowed; (j) Indebtedness of the Company in connection with a purchase of the
Securities pursuant to a Change of Control Offer, provided that the aggregate
principal amount of such Indebtedness does not exceed 101% of the aggregate
principal amount at Stated Maturity of the Securities purchased pursuant to such
Change of Control Offer; provided, further, that such Indebtedness (A) has an
Average Life equal to or greater than the
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remaining Average Life of the Securities and (B) does not mature prior
to one year following the Stated Maturity of the Securities; (k) Permitted
Refinancing Indebtedness; (l) Permitted Subsidiary Refinancing Indebtedness;
and (m) additional Indebtedness in an aggregate principal amount not in excess
of $2,500,000 at any one time outstanding. So as to avoid duplication in
determining the amount of Permitted Indebtedness under any clause of this
definition, guarantees permitted to be incurred pursuant to this Indenture of,
or Obligations permitted to be incurred pursuant to this Indenture in respect
of letters of credit supporting, Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks organized in the United States
with final maturities of one year or less issued by commercial banks organized
in the United States having capital and surplus in excess of $300,000,000; (b)
commercial paper issued by any corporation, if such commercial paper has credit
ratings of at least "A-1" or its equivalent by S&P and at least "P-I" or its
equivalent by Moody's ; (c) U.S. Government Obligations with a maturity of four
years or less; (d) repurchase obligations for instruments of the type described
in clause (c) with any bank meeting the qualifications specified in clause (a)
above; (e) shares of money market mutual or similar funds having assets in
excess of $100 million; (f) payroll advances in the ordinary course of business;
(g) other advances and loans to officers and employees of the Company or any
Subsidiary, so long as the aggregate principal amount of such advances and loans
does not exceed $500,000 at any one time outstanding; (h) Investments
represented by that portion of the proceeds from Asset Sales that is not
required to be Cash Proceeds by the covenant described in "- Certain Covenants -
Limitations on Asset Sales"; (i) Investments made by the Company in Guarantors
or in its other Wholly Owned Subsidiaries (or any Person that will be a Wholly
Owned Subsidiary as a result of such Investment) or by a Subsidiary in the
Company or in one or more Guarantors or other Wholly Owned Subsidiaries (or any
Person that will be a Wholly Owned Subsidiary as a result of such Investment);
(j) Investments in stock, obligations or securities received in settlement of
debts owing to the Company or any Subsidiary as a result of bankruptcy or
insolvency proceedings or upon the foreclosure, perfection or enforcement of any
Lien in favor of the Company or any Subsidiary, in each case as to debt owing to
the Company or any Subsidiary that arose in the ordinary course of business of
the Company or any such Subsidiary; (k) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks organized in the United States
with final maturities of one year or less and in an aggregate amount not to
exceed $5,000,000 at any one time outstanding with a commercial bank organized
in the United States having capital and surplus in excess of $75,000,000; (l)
Venezuelan and other foreign bank deposits and cash equivalents in jurisdictions
in which the Company or a Subsidiary is then actively conducting business; (m)
Investments in Grey Wolf pursuant to the Grey Wolf Acquisition agreement; (n)
Interest Swap Obligations with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding; (o) Currency Hedge
Obligations, provided that such Currency Hedge Obligations constitute Permitted
Indebtedness permitted by clause (d) of the definition thereof; (p) Investments
in prepaid expenses, negotiable instruments held for collection and lease,
utility, worker's compensation and performance and other similar deposits in the
ordinary course of business; and (q) Investments pursuant to any agreement or
obligation of the Company or any Subsidiary in effect on the Issue Date and
listed on a Schedule 1.01(b) attached hereto.
"Permitted Liens" means (a) Liens in existence on the Issue Date [and
listed on Schedule 1.01(c) attached hereto]; (b) Liens created for the benefit
of the Securities and/or the Guarantees; (c) Liens on Property of a Person
existing at the time such Person is merged or consolidated with or into the
Company or a Subsidiary (and not incurred as a result of, or in anticipation
of, such transaction), provided that any such Lien relates solely to such
Property; (d) Liens on Property existing at the time of the acquisition thereof
(and not incurred as a result of, or in anticipation of such transaction),
provided that any such Lien relates solely to such
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Property; (e) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security
benefits, statutory obligations, bid, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business; (f) Liens, imposed by law or arising by operation of law, including
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors Liens and Liens for master's and crew's
wages and other similar maritime Liens, and incurred in the ordinary course of
business for sums not delinquent or being contested in good faith, if such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made with respect thereof; (g) zoning restrictions, easements,
licenses, covenants, reservations, restrictions on the use of real property and
defects, irregularities and deficiencies in title to real property that do not,
individually or in the aggregate, materially affect the ability of the Company
or any Subsidiary to conduct its business presently conducted; (h) Liens for
taxes or assessments or other governmental charges or levies not yet due and
payable, or the validity of which is being contested by the Company or a
Subsidiary in good faith and by appropriate proceedings upon stay of execution
or the enforcement thereof and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made; (i) Liens to secure
Indebtedness incurred for the purpose of financing all or a part of the purchase
price or construction cost of Property acquired or constructed after the Issue
Date, provided that (l) the principal amount of Indebtedness secured by such
Liens shall not exceed 100% of the lesser of cost or Fair Market Value of the
Property so acquired, upgraded or constructed plus transaction costs related
thereto, (2) such Liens shall not encumber any other assets or Property of the
Company or any Subsidiary (other than the proceeds thereof and accessions and
upgrades thereto) and (3) such Liens shall attach to such Property within 120
days of the date of the completion of the construction or acquisition of such
Property; (j) Liens securing Capital Lease Obligations, provided, further, that
such Liens secure Capital Lease Obligations which, when combined with (l) the
outstanding secured Indebtedness of the Company and its Subsidiaries (other than
Indebtedness secured by Liens described under clauses (b) and (i) hereof) and
(2) the aggregate principal amount of all other Capital Lease Obligations of the
Company and Subsidiaries, does not exceed $5,000,000 at any one time
outstanding; (k) Liens to secure any extension, renewal, refinancing or
refunding (or successive extensions, renewals, refinancings or refundings), in
whole or in part, of any Indebtedness secured by Liens referred to in the
foregoing clauses (a), (c) and (d), provided, further, that such Lien does not
extend to any other Property of the Company or any Subsidiary and the principal
amount of the Indebtedness secured by such Lien is not increased; (l) any
charter or lease; (m) leases or subleases of real property to other Persons; (n)
Liens securing Permitted Indebtedness described in clause (b) of the definition
thereof; (o) judgment liens not giving rise to an Event of Default so long as
any appropriate legal proceedings which may have been initiated for the review
of such judgment shall not have been finally terminated or the period within
which such proceeding may be initiated shall not have expired; (p) rights of
off-set of banks and other Persons; and (q) liens in favor of the Company.
"Permitted Refinancing Indebtedness" means Indebtedness of the
Company, incurred in exchange for, or the net proceeds of which are used to
renew, extend, refinance, refund or repurchase, outstanding Indebtedness of the
Company which outstanding Indebtedness was incurred in accordance with, or is
otherwise permitted by, the terms of clauses (a) and (e) of the definition of
"Permitted Indebtedness," provided that (i) if the Indebtedness being renewed,
extended, refinanced, refunded or repurchased is pari passu with or
subordinated in right of payment (without regard to its being secured) to the
Securities, then such new Indebtedness is pari passu with or subordinated in
right of payment (without regard to its being secured) to, as the case may be,
the Securities at least to the same extent as the Indebtedness being renewed,
extended, refinanced, refunded or repurchased, (ii) such new Indebtedness is
scheduled to mature later than the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, (iii) such new Indebtedness has an Average
Life at the time such Indebtedness is incurred that is greater than the Average
Life of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, and (iv) such new Indebtedness is in aggregate principal amount
(or, if such Indebtedness is issued at a price less than the
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principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or
if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP) plus the amount of reasonable fees, expenses and premium,
if any, incurred by the Company or such Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of
any Subsidiary, incurred in exchange for, or the net proceeds of which are used
to renew, extend, refinance, refund or repurchase, outstanding Indebtedness of
such Subsidiary which outstanding Indebtedness was incurred in accordance with,
or is otherwise permitted by, the terms of clauses (e) and (f) of the
definition of "Permitted Indebtedness," provided that (i) if the Indebtedness
being renewed, extended, refinanced, refunded or repurchased is pari passu with
or subordinated in right of payment (without regard to its being secured) to
the Guarantee of such Subsidiary, then such new Indebtedness is pari passu with
or subordinated in right of payment (without regard to its being secured) to,
as the case may be, the Guarantee of such Subsidiary at least to the same
extent as the Indebtedness being renewed, extended, refinanced refunded or
repurchased, (ii) such new Indebtedness is scheduled to mature later than the
Indebtedness being renewed, extended, refinanced, refunded or repurchased,
(iii) such new Indebtedness has an Average Life at the time such Indebtedness
is incurred that is greater than the Average Life of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased, and (iv) such new
Indebtedness is in an aggregate principal amount (or, if such Indebtedness is
issued at a price less than the principal amount thereof, the aggregate amount
of gross proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP) plus the amount of
reasonable fees, expenses and premium, if any, incurred by the Company or such
Subsidiary in connection therewith.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment
of dividends and/or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of at least one other class of such Person.
"Proceeding" has the meaning specified in Section 12.11(a).
"Process Agent" has the meaning specified in Section 12.11(a).
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, excluding Capital Stock in any other Person.
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"Qualified Equity Offering" means an offering of Capital Stock (other
than Redeemable Stock) of the Company for cash, whether pursuant to an
effective registration statement under the Securities Act or pursuant to an
available exemption from registration under the Securities Act.
"Record Date" means, for the interest payable on any Interest Payment
Date, the date specified in Section 2.12.
"Redeemable Stock" means, with respect to any Person, any equity
security that by its terms or otherwise is required to be redeemed, or is
redeemable at the option of the holder thereof, at any time prior to one year
following the Stated Maturity of the Securities or is exchangeable into
Indebtedness of such Person or any of its subsidiaries.
"Redemption Date" means, when used with respect to any Security or
part thereof to be redeemed hereunder, the date fixed for redemption of such
Securities pursuant to the terms of the Securities and this Indenture.
"Redemption Price" means, when used with respect to any Security or
part thereof to be redeemed hereunder, the price fixed for redemption of such
Security pursuant to the terms of the Securities and this Indenture, plus
accrued and unpaid interest thereon, if any to the Redemption Date.
"Registrar" has the meaning specified in Section 2.03.
"Related Business" means the land drilling business and activities
incidental thereto and any business related or ancillary thereto.
"Replacement Asset" means a Property or asset that, as determined by
the Board of Directors of the Company as evidenced by a Board Resolution, is
used or is useful in a Related Business.
"Responsible Officer" means, when used with respect to the Trustee,
any officer assigned to the Corporate Trust Office, including any vice
president, assistant vice president, assistant secretary or any other officer
of the Trustee to whom any corporate trust matter is referred because of his or
her knowledge of and familiarity with the particular subject.
"Restricted Investment" means any Investment in any Person, including
an Unrestricted Subsidiary or the designation of a Subsidiary as an
Unrestricted Subsidiary, other than a Permitted Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or
make any distribution in respect of, or purchase, redeem, retire or otherwise
acquire for value, any Capital Stock of the Company or any Affiliate of the
Company, or warrants, rights or options to acquire such Capital Stock, other
than (x) dividends payable solely in the Capital Stock (other than Redeemable
Stock) of the Company or such Affiliate, as the case may be, or in warrants,
rights or options to acquire such Capital Stock and (y) dividends or
distributions by a Subsidiary to the Company or to a Wholly Owned Subsidiary;
(ii) make any principal
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payment on, or redeem, repurchase, defease (including an in-substance or legal
defeasance) or otherwise acquire or retire for value (including pursuant to
mandatory repurchase covenants), prior to any scheduled principal payment,
scheduled sinking fund payment or other stated maturity, Indebtedness of the
Company or any Subsidiary which is subordinated (whether pursuant to its terms
or by operation of law) in right of payment to the Securities or the
Guarantees, as applicable; or (iii) make any Restricted Investment in any
"Retired Indebtedness or Stock" has the meaning specified in Section
4.04.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc., or if Standard & Poor's Ratings Group shall cease rating the specified
debt securities and such ratings ceases with respect thereto shall have been
transferred to a successor Person, such successor Person.
"Sale and Lease-Back Transaction" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its subsidiaries.
"Security" has the meaning stated in the first paragraph of this
Indenture and more particularly means any Security authenticated and delivered
under this Indenture.
"Security Register" has the meaning specified in Section 2.03.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means any Indebtedness incurred by the Company, unless
the instrument under which such Indebtedness is incurred expressly provides
that it is subordinated in right of payment to the Securities, provided that
Senior Debt will not include (a) any liability for federal, state, local or
other taxes owed or owing, (b) any Indebtedness owing to any Subsidiaries of
the Company, (c) any trade payables or (d) any Indebtedness that is incurred in
violation of this Indenture.
"Significant Subsidiary" means a Subsidiary that is a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the Securities
Act and the Exchange Act.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.12 for the payment of Defaulted Interest.
"Stated Maturity" when used with respect to a Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
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"Subordinated Indebtedness" means any Indebtedness of the Company or
any Guarantor that is subordinated in right of payment to the Securities or the
Guarantees, as the case may be, and does not mature prior to one year following
the Stated Maturity of the Securities.
"subsidiary" means, with respect to any Person, (i) any corporation
more than 50% of the outstanding Voting Stock of which is owned, directly or
indirectly, by such Person, or by one or more other subsidiaries of such
Person, or by such Person and one or more other subsidiaries of such Person,
(ii) any general partnership, joint venture or similar entity, more than 50% of
the outstanding partnership or similar interest of which is owned, directly or
indirectly, by such Person, or by one or more other subsidiaries of such
Person, or by such Person and one or more other subsidiaries of such Person and
(iii) any limited partnership of which such Person or any subsidiary of such
Person is a general partner.
"Subsidiary" means a subsidiary of the Company other than an
Unrestricted Subsidiary; provided that Indrillers shall not be considered a
Subsidiary for purposes of the Indenture.
"Surviving Entity" has the meaning specified in Section 5.01.
"Transaction Date" has the meaning specified within the definition of
"Consolidated Interest Coverage Ratio."
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force at the date as of which this Indenture was executed.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provision of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) above, are not callable or redeemable at the option
of the issuers thereof; or (iii) depository receipts issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligations or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a Depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
Depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation evidenced by such Depository receipt.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
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"Unrestricted Subsidiary" means any subsidiary of the Company that the
Company has classified as an Unrestricted Subsidiary and that has not been
reclassified as a Subsidiary pursuant to the terms of this Indenture.
"Voting Stock" means with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holder thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such
Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all
of the Capital Stock or other ownership interests in such Subsidiary, other
than any directors' qualifying shares mandated by applicable law, is owned
directly or indirectly by the Company or (ii) such Subsidiary is organized in a
foreign jurisdiction and is required by the applicable laws and regulations of
such foreign jurisdiction to be partially owned by the government of such
foreign jurisdiction or individual or corporate citizens of such foreign
jurisdiction in order for such Subsidiary to transact business in such foreign
jurisdiction, provided that the Company, directly or indirectly, owns the
remaining Capital Stock or ownership interest in such Subsidiary and, by
contract or otherwise, controls the management and business of such Subsidiary
and derives the economic benefits of ownership of such Subsidiary to
substantially the same extent as if such Subsidiary were a wholly owned
Subsidiary.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
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(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) 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;
(7) provisions apply to successive events and transactions;
(8) references to agreements and other instruments include
subsequent amendments and waivers but only to the extent not prohibited by this
Indenture; and
(9) unless otherwise expressly provided herein, the principal
amount of any Preferred Stock shall be the greater of (i) the maximum
liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred Stock.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating.
(a) The Securities, with the notation of the Guarantees endorsed
thereon and the Trustee's certificate of authentication thereon, shall be
substantially in the form of Exhibit A and Exhibit B, each which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have such notations, legends or endorsements stamped, printed, lithographed or
engraved thereon as required by law, stock exchange rule, agreements to which
the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture.
(b) The Securities shall be issued initially in the form of one or
more permanent global notes in definitive, fully registered form, without
coupons, substantially in the form set forth in Exhibit A hereto (each a
"Global Security"), each such Security containing the legend relating to Global
Securities set forth on the face of the Security as set forth on Exhibit A
hereto. Upon issuance, each such Global Security shall be duly executed by the
Company, with the endorsement of Guarantees therein executed by the Guarantors,
and authenticated by the Trustee as hereinafter provided and deposited with the
Trustee as custodian for the Depositary. Any Certificated Security that may be
issued pursuant to Section 2.06(a) shall be issued in the form of a note in
definitive, fully registered form, without coupons, substantially in the form
set forth in Exhibit B hereto (each a "Certificated Security"). Upon issuance,
any such Certificated Security shall be duly executed by the Company, with the
endorsement of Guarantees thereon executed by the Guarantors, and authenticated
by the Trustee as hereinafter provided.
SECTION 2.02. Execution and Authentication. The aggregate principal
amount at Stated Maturity of Securities outstanding at any time shall not
exceed $125,000,000 except as provided in Section 2.08 hereof. Two executive
officers of the Company shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Securities and may be in facsimile form. The Securities
shall have the notation relating to the Guarantees executed by each
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Guarantor in the manner provided for in Section 11.03 hereof and endorsed
thereon.
If an executive officer of the Company whose signature is on a
Security no longer holds that office at the time the Trustee authenticates the
Security, the Security shall be valid nevertheless.
Notwithstanding any other provision hereof, the Trustee shall
authenticate and deliver Notes only upon receipt by the Trustee of an Officers'
Certificate and Opinion of Counsel complying with Sections 12.01 and 12.02
hereof with respect to satisfaction of all conditions precedent contained in
this Indenture to authentication and delivery of such Notes.
Upon compliance by the Company with the provisions of the previous
paragraph, the Trustee shall, upon receipt of an Order requesting such action,
authenticate Securities for original issuance in an aggregate principal amount
at Stated Maturity not to exceed $125,000,000 in the form of the Global
Security. Such Order shall specify in the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated and
shall further provide instructions concerning registration, amounts for each
Holder and delivery.
Upon the occurrence of any event specified in Section 2.6(a) hereof and
compliance by the Company with the provisions of the paragraph preceding the
immediately preceding paragraph, the Company shall execute and the Trustee
shall authenticate and deliver to each beneficial owner identified by the
Depositary, in exchange for such beneficial owner's interest in the Global
Security, Certificated Securities representing Securities theretofore
represented by the Global Security.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence, and the only evidence, that the
Security has been authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities (the "Security Register") and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents; provided, however, that so long as Texas Commerce
Bank National Association shall be the Trustee, without the consent of the
Trustee, there shall be no more than one Registrar or Paying Agent. The term
"Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities. The Company may, upon written notice
to the Trustee, change the designation of the Trustee
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as Registrar or Paying Agent and appoint another Person to act as Registrar for
purposes of this Indenture except that, for the purposes of Article 3, Article
12 and Sections 4.07 and 4.09, none of the Company, any Guarantor, any
Restricted Subsidiary or any Affiliate of the Company or of any Guarantor shall
act as Paying Agent. If any Person other than the Trustee acts as Registrar,
the Trustee shall have the right at any time, upon reasonable notice, to
inspect or examine the Security Register and to make such inquiries of the
Registrar as the Trustee shall in its discretion deem necessary or desirable in
performing its duties hereunder.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated for such purpose, 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 any
authorized denomination or denominations, of like tenor and aggregate principal
amount, all as requested by the transferor.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee or the
(Registrar) be duly endorsed, or be accompanied by a duly executed instrument
of transfer in form satisfactory to the Company, the Trustee and the Registrar,
by the Holder thereof or such Holder's attorney duly authorized in writing.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal, premium, if any, and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal, premium, if any, and interest when so becoming due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders or the
Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, of or interest on the Securities and shall notify the Trustee
of any default by the Company in making any such payment. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by the Paying Agent. Upon complying with this
Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
SECTION 2.05. Global Securities.
(a) So long as a Global Security is registered in the name of the
Depositary or its nominee, beneficial owners, members of, or participants in,
the Depositary ("Agent Members") shall have no rights under this Indenture with
respect to the Global Note held on their behalf by the Depositary or the
Trustee as its custodian, and the Depositary may be treated by the Company, the
Guarantors, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Guarantors, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or (ii) impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of
Securities.
(b) The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in such Global Securities through Agent Members, to take any action
which a Holder of Notes is entitled to take under this Indenture or the Notes.
(c) Whenever, as a result of an optional redemption of Securities by
the Company, a Change of Control Offer, an Asset Sale Offer, or an exchange
pursuant to the second sentence of Section 2.06(a) hereof, a Global Security is
redeemed, repurchased or exchanged in part, such Global Security shall be
surrendered
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by the Holder thereof to the Trustee who shall cause an adjustment to be made
to a Schedule A attached thereto so that the principal amount at Stated
Maturity of such Global Security will be equal to the portion of such Global
Security not redeemed, repurchased or exchanged and shall thereafter return
such Global Security to such Holder, provided that each such Global Security
shall be in a principal amount at Stated Maturity of $1,000 or an integral
multiple thereof.
SECTION 2.06. Transfer and Exchange
(a) Any Global Security shall be exchanged by the Company for one or
more Certificated Securities, if (x) the Depositary (i) has notified the
Company that it is unwilling or unable to continue as, or ceases to be, a
"Clearing Agency" registered under Section 17A of the Exchange Act and (ii) a
successor to the Depositary registered as a "Clearing Agency" under Section 17A
of the Exchange Act is not able to be appointed by the Company within 90 days
or (y) the Depositary is at any time unwilling or unable to continue as
Depositary and a successor to the Depositary is not able to be appointed by the
Company within 90 days. If an Event of Default occurs and is continuing, the
Company shall, at the request of the Holder thereof, exchange all or part of
any Global Security, for one or more Certificated Notes, as the case may be;
provided that the principal amount at Stated Maturity of each such Certificated
Security shall be $1,000 or an integral multiple thereof. Whenever a Global
Security is exchanged as a whole for one or more Certificated Securities, it
shall be surrendered by the Holder thereof to the Trustee for cancellation.
Whenever a Global Security is exchanged in part for one or more Certificated
Securities it shall be surrendered by the Holder thereof to the Trustee and the
Trustee shall make the appropriate notations to Schedule A thereof pursuant to
Section 2.05(c) hereof. All Certificated Securities issued in exchange for a
Global Security or any portion thereof shall be registered in such names, and
delivered, as the Depositary shall instruct the Trustee.
(b) A Holder may transfer a Security only upon the surrender of such
Security for registration of transfer. No such transfer shall be effected
until, and the transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer in the Security Register by
the Registrar. When Securities are presented to the Registrar with a request to
register the transfer of, or to exchange, such Securities, the Registrar shall
register the transfer or make such exchange as requested if its requirements
for such transactions and any applicable requirements hereunder are satisfied.
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Certificated Securities at the Registrar's
request.
(c) The Company shall not be required to make and the Registrar need
not register transfers or exchanges of (a) Certificated Securities selected for
redemption (except, in the case of Certificated Securities to be redeemed in
part, the portion thereof not to be redeemed), or (b) any Certificated Security
for a period of 15 days before a selection of Certificated Securities to be
redeemed or the mailing of a notice of a Change of Control Offer pursuant to
Section 4.09 hereof or an Asset Sale Offer pursuant to Section 4.07 hereof and
ending on the close of business on the day of such mailing.
(d) 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 of Securities (other than in
respect of exchanges or transfers pursuant to Sections 2.09, 3.06, 4.07, 4.09
and 10.06).
(e) All Securities issued upon any registration of transfer, exchange
or substitution pursuant to the terms of this Indenture will evidence the same
debt and will be entitled to the same benefits under this Indenture as the
Securities surrendered for such registration of transfer, exchange or
substitution.
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(f) Any Holder of a Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book entry system maintained by the
Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in the Securities represented hereby shall be required to
be reflected in book entry form. Transfers of a Global Security shall be
limited to transfers in whole and not in part, to the Depositary, its
successors, and their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary (or its successors).
SECTION 2.07. Holder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each Interest Payment Date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.
SECTION 2.08. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Company, in its discretion may, instead of issuing a new
Security, pay such Security.
Upon the issuance of any new Security under this Section 2.08, the
Company may require the payment by the Holder 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 issued pursuant to this Section 2.08 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section 2.08 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.09. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.08, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser, in which
event the replacement Security shall cease to be outstanding, subject to the
provisions of Section 8-405 of the Uniform Commercial Code. A mutilated
Security ceases to be outstanding upon surrender of such Security and
replacement thereof pursuant to Section 2.08.
If the Paying Agent (other than the Company, a Guarantor or
an Affiliate of the Company or a Guarantor) segregates and holds in trust, in
accordance with this Indenture, on a Redemption Date or Maturity date money
sufficient to pay all principal, premium, if any, interest and any other
amounts payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, then on and after that
date such Securities (or such portions thereof) shall cease to be outstanding
and interest on them shall cease to accrue.
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In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent or any amendment,
modification or other change to this Indenture, Securities held or beneficially
owned by the Company or Guarantor or an Affiliate of the Company or a Guarantor
of the Company or by agents of any of the foregoing shall be disregarded,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent or any
amendments, modification or other change to this Indenture, only Securities
which a Responsible Officer knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee such
pledgee's right so to act with respect to the Securities and that the pledgee
is not the Company, a Guarantor or an Affiliate of the Company or of a
Guarantor or any of their agents.
SECTION 2.10. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.11. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such destruction
to the Company. The Company may not issue new Securities to replace Securities
it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.12. Payment of Interest: Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date, shall be paid to the Person in
whose name such Security is registered at the close of business on the Record
Date for such interest payment, which shall be the _______ or ________ (whether
or not a Business Day) immediately preceding such Interest Payment Date.
Any interest on any Security 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
registered Holder on the relevant Record Date, and, except as hereinafter
provided, such Defaulted Interest and any interest payable on such Defaulted
Interest may be paid by the Company, at its election, as provided in clause (a)
or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, to the Persons in whose
names the 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 the Securities 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 provided in this clause (a).
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Default 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
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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 sent, first class mail, postage prepaid, to each
Holder at such Holder's 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 mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
in whose names the 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, and any
interest payable on such Defaulted Interest, on the Securities in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, or in substitution for, any other Security, shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by
such other Security.
SECTION 2.13. Authorized Denominations. The Securities shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 2.14. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Securities
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Securities, and any
such redemption shall not be affected by any defect in or omission of such
numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to Section 3.07 and paragraph 4 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the principal amount of
Securities to be redeemed, the Redemption Price and the Section of this
Indenture and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the Redemption Date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein and in the Securities.
SECTION 3.02. Selection of Securities To Be Redeemed. If less than all
the Securities are to be redeemed at any time, the Trustee shall select the
Securities to be redeemed on a pro rata basis, or by any other method which the
Trustee shall determine to be fair and appropriate and which complies with any
securities exchange and other applicable requirements, provided that the
Trustee may select for redemption in part only Securities in denominations
larger than $1,000. In selecting Securities to be redeemed pursuant to this
Section 3.02, the Trustee shall make such adjustments, reallocations and
eliminations as it shall deem proper so that the principal amount at Stated
Maturity of each Security to be redeemed shall be $1,000 or an integral
multiple thereof, by increasing, decreasing or eliminating any amount less than
$1,000 which
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would be allocable to any Holder. If the Notes to be redeemed are Certificated
Securities, the Certificated Securities to be redeemed shall be selected by the
Trustee by prorating, as nearly as may be, or by any other method which the
Trustee shall determine to be fair and appropriate and which complies with any
securities exchange and other applicable requirements, the principal amount of
Certificated Securities to be redeemed among the Holders of Certificated
Securities registered in their respective names. The Trustee in its discretion
may determine the particular Securities (if there are more than one) registered
in the name of any Holder which are to be redeemed, in whole or in part.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. The Trustee shall
notify the Company promptly of the Securities or portions of Securities to be
redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if any Global Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that, after the
Redemption Date, the Global Security, with a notation on Schedule A thereof
adjusting the principal amount thereof to be equal to the unredeemed portion,
will be returned to the Holder thereof;
(6) if any Certificated Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and that, after
the Redemption Date, a new Certificated Security or Certificated Securities in
principal amount equal to the unredeemed portion will be issued;
(7) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular Securities
to be redeemed;
(8) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant to
the terms of this Indenture, interest on Securities (or portion thereof) called
for redemption ceases to accrue on and after the redemption date;
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Securities;
(10) the paragraph of the Securities and the Section of the
Indenture pursuant to which the Securities are being called for redemption; and
(11) any other information necessary to enable Holders to comply
with the notice of redemption.
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At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section at least 45 days (or such shorter time that is acceptable to the
Trustee) before the redemption date.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the Redemption Date and at the Redemption Price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice, plus accrued interest to the redemption date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the Redemption
Date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the Redemption Price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to
the Trustee for cancellation.
So long as the Company complies with the preceding paragraph and the
other provisions of this Article 3, interest on the Securities to be redeemed
on the applicable Redemption Date shall cease to accrue from and after such
date and such Securities or portions thereof shall be deemed not to be entitled
to any benefit under this Indenture except to receive payment of the Redemption
Price on the Redemption Date. If any Security called for redemption shall not
be so paid upon surrender for redemption, then, from Redemption Date until such
principal is paid, interest shall be paid on the unpaid principal and, to the
extent permitted by law, on any accrued but unpaid interest thereon, in each
case at the rate prescribed therefor by this Indenture and such Securities.
SECTION 3.06. Securities Redeemed in Part. Upon surrender
and cancellation of a Certificated Security that is redeemed in part, the
Company shall issue and the Trustee shall authenticate and deliver to the
surrendering Holder (at the Company's expense) a new Certificated Security
equal in principal amount to the unredeemed portion of the Certificated
Security surrendered and canceled, provided that each such Certificated
Security shall be in a principal amount at Stated Maturity of $1,000 or an
integral multiple thereof.
Upon surrender of a Global Security that is redeemed in part, the
Paying Agent shall forward such Global Security to the Trustee who shall make a
notation on Schedule A thereof to reduce the principal amount of such Global
Security to an amount equal to the unredeemed portion of such Global Note, as
provided in Section 2.05 hereof.
SECTION 3.07. Optional Redemption.
(a) Except as set forth in subsection (b) of this Section 3.07,
the Company shall not have the option to redeem the Securities pursuant to this
Section 3.07 prior to ____, 2002. On or after such date, the Company shall have
the option to redeem the Securities , in whole or in part upon not less than 30
days' nor more than 60 days' notice, at the Redemption Prices (expressed as
percentages of principal amount at Stated Maturity), if redeemed during the
twelve month period beginning ____________________ of the years indicated
below, in each case, together with any interest accrued and unpaid to the
Redemption Date:
Year Percentage
---- ----------
2002 %
2003 %
2004 %
2005 and thereafter 100.0000%
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(b) Notwithstanding the foregoing, at any time during the first 36
months after the Issue Date, the Company may, at its option, redeem up to a
maximum of 30% of the aggregate principal amount at Stated Maturity of the
Securities with the net cash proceeds of one or more Qualified Equity Offerings
at a Redemption Price equal to ____% of the principal amount thereof, plus
accrued and unpaid interest thereon to the Redemption Date; provided that at
least $100,000,000 aggregate principal amount at Stated Maturity of the
Securities shall remain outstanding immediately after the occurrence of any
such redemption; and provided, further, that each such redemption shall occur
within 90 days of the closing of such Qualified Equity Offering.
ARTICLE 4
Covenant
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of, premium, if any, on and interest on the Securities on the
dates and in the manner provided in the Securities and in this Indenture.
Principal, premium and interest shall be considered paid on the date due if on
or before 10:00 a.m., Houston, Texas time, on such date the Trustee or a Paying
Agent, other than the Company or a Guarantor, or an Affiliate of the Company or
a Guarantor, holds in accordance with this Indenture money sufficient to pay all
principal, premium and interest then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the Holders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities plus 1% per annum (the "default rate"), and
it shall pay interest on overdue installments of interest (without regard to any
applicable grace period) at the default rate to the extent lawful.
SECTION 4.02. Commission Reports. So long as any Securities are
outstanding, whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act, or any successor provision thereto, the Company shall file
with the Commission the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to such Section 13(a) or 15(d) or any successor provision thereto if the
Company were subject thereto, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required to file them. The Company shall also (whether
or not it is required to file reports with the Commission), within 30 days of
each Required Filing Date, (i) transmit by mail to all holders of Notes, as
their names and addresses appear in the Security Register, without cost to such
holders or Persons, and (ii) file with the Trustee, copies of the annual
reports, quarterly reports and other documents (without exhibits) which the
Company has filed or would have filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act, any successor provisions thereto or this
Section 4.02. The Company shall not be required to file any report, document or
other information with the Commission if the Commission does not permit such
filing.
SECTION 4.03. Limitation on Indebtedness. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, incur any
Indebtedness (including Acquired Indebtedness) unless, after giving pro forma
effect to the incurrence of such Indebtedness, the Consolidated Interest
Coverage Ratio for the Determination Period would be at least 2.0 to 1.0 if
such Indebtedness is incurred prior to ___________, 1998 and at least 2.25 to
1.0 if such Indebtedness is incurred thereafter. Notwithstanding the foregoing,
the Company or any Subsidiary may incur Permitted Indebtedness. Any
Indebtedness of a Person existing at the time at which such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall
be deemed incurred by such Subsidiary at the time at which it becomes a
Subsidiary.
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SECTION 4.04. Limitation on Subsidiary Indebtedness and Preferred
Stock. The Company will not permit any Subsidiary to, directly or indirectly,
incur any Indebtedness or issue any Preferred Stock except:
(i) Indebtedness or Preferred Stock issued to and held by the Company,
a Guarantor or a Wholly Owned Subsidiary, so long as any transfer of such
Indebtedness or Preferred Stock to a Person other than the Company, Guarantor
or a Wholly Owned Subsidiary will be deemed to constitute an incurrence of such
Indebtedness or Preferred Stock by the issuer thereof as of the date of such
transfer;
(ii) Acquired Indebtedness or Preferred Stock of a Subsidiary issued
and outstanding prior to the date on which such Subsidiary was acquired by the
Company (other than Indebtedness or Preferred Stock issued in connection with
or in anticipation of such acquisition);
(iii) Indebtedness or Preferred Stock outstanding on the Issue Date and
listed on Schedule 4.04 attached hereto;
(iv) Indebtedness described in clauses (b), (c), (d), (e), (f), (g)
and (h) under the definition of "Permitted Indebtedness";
(v) Permitted Subsidiary Refinancing Indebtedness of such Subsidiary;
(vi) Indebtedness or Preferred Stock issued in exchange for, or the
proceeds of which are used to refinance, repurchase or redeem, Indebtedness or
Preferred Stock described in clauses (i) and (iii) of this Section (the
"Retired Indebtedness or Stock"), provided that the Indebtedness or the
Preferred Stock so issued has (A) a principal amount or liquidation value, as
the case may be, not in excess of the principal amount or liquidation value of
the Retired Indebtedness or Stock plus related expenses for redemption and
issuance, (B) a final redemption date later than the Stated Maturity or final
redemption date (if any) of the Retired Indebtedness or Stock and (C) an
Average Life at the time of issuance of such Indebtedness or Preferred Stock
that is greater than the Average Life of the Retired Indebtedness or Stock;
(vii) Indebtedness of a Subsidiary which represents the assumption by
such Subsidiary of Indebtedness of another Subsidiary in connection with a
merger of such Subsidiaries, provided that no Subsidiary or any successor (by
way of merger) thereto existing on the Issue Date shall assume or otherwise
become responsible for any Indebtedness of an entity which is not a Subsidiary
on the Issue Date, except to the extent that a Subsidiary would be permitted to
incur such Indebtedness under this Section; and
(viii) Non-Recourse Indebtedness incurred by a foreign Subsidiary not
constituting a Guarantor.
SECTION 4.05. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its Subsidiaries
to, make any Restricted Payment, unless at the time of and after giving effect
to the proposed Restricted Payment, (i) no Default shall have occurred and be
continuing (or would result therefrom), (ii) the Company could incur at least
$1.00 of additional indebtedness under the tests described in the first
sentence of Section 4.03 of this Indenture and (iii) the aggregate amount of
all Restricted Payments declared or made on or after the Issue Date by the
Company or any Subsidiary shall not exceed the sum of (A) 50% (or if such
Consolidated Net Income shall be a deficit, minus 100% of such deficit) of the
aggregate Consolidated Net Income accrued during the period beginning on the
first day of the fiscal quarter in which the Issue Date falls and ending on the
last day of the fiscal quarter ending immediately prior to the date of such
proposed Restricted Payment, minus 100% of the amount of any writedowns,
write-offs and other negative extraordinary charges not otherwise reflected in
Consolidated Net Income during such period, plus (B) an amount equal to the
aggregate net cash proceeds received by the Company, subsequent to the Issue
Date, from the issuance or sale (other than to a Subsidiary) of shares of its
Capital Stock (excluding Redeemable Stock, but including Capital Stock issued
upon the exercise of options, warrants or rights to purchase Capital Stock
(other than Redeemable Stock) of the Company) and the liability (expressed as a
positive number) as expressed on the face of a balance sheet in accordance with
GAAP in respect of any Indebtedness of the Company or any of its Subsidiaries,
or the carrying value of Redeemable Stock, which has been converted into,
exchanged for or satisfied by the issuance of shares of Capital Stock (other
than Redeemable Stock) of the Company, subsequent to the Issue Date, plus (C)
100% of the net reduction in Restricted Investments, subsequent to the Issue
Date, in any Person, resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of Property (but
only to the extent such interest, dividends, repayments or other transfers of
Property are not included in the calculation of Consolidated Net Income), in
each case to the Company or any Subsidiary from any Person (including, without
limitation, from Unrestricted Subsidiaries) or from redesignations of
Unrestricted Subsidiaries as Subsidiaries (valued in each case as provided in
the definition of "Investments"), not to exceed
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in the case of any Person the amount of Restricted Investments previously made
by the Company or any Subsidiary in such Person and in each such case which was
treated as a Restricted Payment.
(b) The foregoing provisions will not prevent (i) the payment of
any dividend on Capital Stock of any class within 60 days after the date of its
declaration if at the date of declaration such payment would be permitted by
this Indenture; (ii) any repurchase or redemption of Capital Stock or
Subordinated Indebtedness of the Company or a Subsidiary made by exchange for
Capital Stock of the Company (other than Redeemable Stock), or out of the net
cash proceeds from the substantially concurrent issuance or sale (other than to
a Subsidiary) of Capital Stock of the Company (other than Redeemable Stock),
provided that the net cash proceeds from such sale are excluded from
computations under Section 4.05(a)(iii)(B) above to the extent that such
proceeds are applied to purchase or redeem such Capital Stock or Subordinated
Indebtedness; (iii) so long as no Default shall have occurred and be continuing
or should occur as a consequence thereof, any repurchase or redemption of
Subordinated Indebtedness of the Company or a Subsidiary solely in exchange
for, or out of the net cash proceeds from the substantially concurrent sale of,
new Subordinated Indebtedness of the Company or a Subsidiary, so long as such
Subordinated Indebtedness is permitted under Section 4.03 of this Indenture and
(1) is subordinated to the Securities at least to the same extent as the
Subordinated Indebtedness so exchanged, purchased or redeemed, (2) has a stated
maturity later than the stated maturity of the Subordinated Indebtedness so
exchanged, purchased or redeemed and (3) has an Average Life at the time
incurred that is greater than the remaining Average Life of the Subordinated
Indebtedness so exchanged, purchased or redeemed; (iv) Investments in any Joint
Ventures and foreign Subsidiaries not constituting Guarantors in an aggregate
amount not to exceed $10,000,000 and (v) redemptions of the Company's Series A
Preferred Stock issued and outstanding on the Issue Date for an aggregate
redemption price of not more than $1,000,000. Notwithstanding the foregoing,
the amount available for Investments in Joint Ventures and foreign Subsidiaries
pursuant to clause (iv) of the preceding sentence may be increased by the
aggregate amount received by the Company and its Subsidiaries from a Joint
Venture or a foreign Subsidiary on or before such date resulting from payments
of interest on Indebtedness, dividends, repayments of loans or advances or
other transfers of Property made to such Joint Venture or foreign Subsidiary
(but only to the extent such interest dividends, repayments or other transfers
of Property are not included in the calculation of Consolidated Net Income).
Restricted Payments permitted to be made as described in the first sentence of
this Section 4.05(b) will be excluded in calculating the amount of Restricted
Payments thereafter, except that any such Restricted Payments to be permitted
made pursuant to clause (iv) will be included in calculating the amount of
Restricted Payments made pursuant to such clause (iv) thereafter.
(c) For purposes of this Section 4.05, if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the Fair
Market Value of the non-cash portion of such Restricted Payment.
SECTION 4.06. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Company will not, and will not permit any
Subsidiary, directly or indirectly, to create, enter into any agreement with
any Person or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind which by its terms restricts
the ability of any Subsidiary to (a) pay dividends, in cash or otherwise, or
make any other distributions on its Capital Stock to the Company or any
Subsidiary, (b) pay any Indebtedness owed to the Company or any Subsidiary, (c)
make loans or advances to the Company or any Subsidiary or (d) transfer any of
its Property or assets to the Company or any Subsidiary except any encumbrance
or restriction contained in any agreement or instrument:
(i) existing on the Issue Date;
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(ii) relating to any Property or assets acquired after the Issue Date,
so long as such encumbrance or restriction relates only to the Property or
assets so acquired and is not and was not created in anticipation of such
acquisition;
(iii) relating to any Acquired Indebtedness of any Subsidiary at the
date on which such Subsidiary was acquired by the Company or any Subsidiary
(other than Indebtedness incurred in anticipation of such acquisition);
(iv) effecting a refinancing of Indebtedness incurred pursuant to an
agreement referred to in the foregoing clauses (i) through (iii), so long as
the encumbrances and restrictions contained in any such refinancing agreement
are no more restrictive than the encumbrances and restrictions contained in
such agreements;
(v) constituting customary provisions restricting subletting or
assignment of any lease of the Company or any Subsidiary or provisions in
license agreements or similar agreements that restrict the assignment of such
agreement or any rights thereunder;
(vi) constituting restrictions on the sale or other disposition of any
Property securing Indebtedness as a result of a Permitted Lien on such
Property; or
(vii) constituting any temporary encumbrance or restriction with
respect to a Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock of, or
Property and assets of, such Subsidiary.
SECTION 4.07. Limitation on Asset Sales.
(a) The Company will not engage in, and will not permit any
Subsidiary to engage in, any Asset Sale unless (a) except in the case of (i) an
Asset Sale resulting from the requisition of title to, seizure or forfeiture of
any Property or assets or any actual or constructive total loss or an agreed or
compromised total loss or (ii) a Bargain Purchase Contract, the Company or such
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the Property; (b) at
least 75% of such consideration consists of Cash Proceeds (or the assumption of
Indebtedness of the Company or such Subsidiary relating to the Capital Stock or
Property or asset that was the subject of such Asset Sale and the unconditional
release of the Company or such Subsidiary from such Indebtedness); (c) after
giving effect to such Asset Sale, the total non-cash consideration held by the
Company from all such Asset Sales does not exceed $10,000,000; and (d) the
Company delivers to the Trustee an Officers' Certificate certifying that such
Asset Sale complies with clauses (a), (b) and (c). The Company or such
Subsidiary, as the case may be, may apply the Net Available Proceeds from each
Asset Sale (x) to the acquisition of one or more Replacement Assets, or (y) to
repurchase or repay Senior Debt (with a permanent reduction of availability in
the case of revolving credit borrowings); provided that such acquisition or
such repurchase or repayment shall be made within 365 days after the
consummation of the relevant Asset Sale. Any Net Available Proceeds from any
Asset Sale that are not used to so acquire Replacement Assets or to repurchase
or repay Senior Debt within 365 days after consummation of the relevant Asset
Sale constitute "Excess Proceeds."
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(b) When the aggregate amount of Excess Proceeds exceeds
$15,000,000, the Company shall within 30 days thereafter, or at any time after
receipt of Excess Proceeds but prior to there being $15,000,000 of Excess
Proceeds, the Company may, at its option, make a pro rata offer (an "Asset Sale
Offer") to purchase from all holders an aggregate principal amount of
Securities equal to the Excess Proceeds, at a price in cash (the "Asset Sale
Offer Purchase Price") equal to 100% of the outstanding principal amount at
Stated Maturity thereof plus accrued interest, if any, to the Asset Sale
Purchase Date, in accordance with the procedures set forth in Section 4.07(c).
(c) Within 30 days of the date that the amount of Excess
Proceeds exceeds $15,000,000, the Company, or the Trustee at the request and
expense of the Company, shall send to each Holder by first class mail, postage
prepaid, a notice prepared by the Company stating:
(i) that an Asset Sale Offer is being made pursuant
to this Section 4.07 and that all Securities properly tendered will be
accepted for payment, subject to proration in the event that the
amount of Excess Proceeds is less than the aggregate Asset Sale Offer
Purchase Price of all Securities properly tendered pursuant to the
Asset Sale Offer;
(ii) the Asset Sale Offer Purchase Price, the amount
of Excess Proceeds that are available to be applied to purchase
tendered Securities, and the date Securities are to be purchased
pursuant to the Asset Sale Offer (the "Asset Sale Offer Purchase
Date"), which date shall be a date no earlier than 30 days and not
later than 40 days subsequent to the date such notice is mailed;
(iii) that any Securities or portions thereof not
properly tendered or accepted for payment will continue to accrue
interest;
(iv) that, unless the Company defaults in the
payment of the Asset Sale Offer Purchase Price with respect thereto,
all Securities or portions thereof accepted for payment pursuant to
the Asset Sale Offer shall cease to accrue interest from and after the
Asset Sale Offer Purchase Date;
(v) that any Holder electing to have any Securities
or portions thereof purchased pursuant to the Asset Sale Offer will be
required to surrender such Securities, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of such Securities
completed, to the Paying Agent at the address specified in the notice,
prior to the close of business on the third Business Day preceding
the Asset Sale Offer Purchase Date;
(vi) that any Holder shall be entitled to withdraw
such election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Asset Sale
Purchase Date, a telegram, telex, facsimile transmission or letter,
setting forth the name of the Holder, the principal amount of
Securities delivered for purchase, and a statement that such Holder is
withdrawing such Holder's election to have such Securities or portions
thereof purchased pursuant to the Asset Sale Offer;
(vii) that any Holder electing to have Securities
purchased pursuant to the Asset Sale Offer must specify the principal
amount at Stated Maturity that is being tendered for purchase, which
principal amount must be $1,000 or an integral multiple thereof;
(viii) if Certificated Securities have been issued
pursuant to Section 2.06(a), that any Holder of Certificated
Securities whose Certificated Securities are being purchased only in
part will be issued new Certificated Securities equal in principal
amount at Stated Maturity to the unpurchased portion of the
Certificated Security or Securities surrendered, which unpurchased
portion will be equal in principal amount at Stated Maturity to $1,000
or an integral multiple thereof;
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(ix) that the Trustee will return to the Holder of
of a Global Security that is being purchased in part, such Global
Security with a notation on Schedule A thereof adjusting the
principal amount at Stated Maturity thereof to be equal to the
unpurchased portion of such Global Security; and
(x) the instructions and any other information
necessary to enable any Holder to tender Securities and to have such
Securities purchased, or to withdraw such tender, pursuant to this
Section 4.07.
(d) If the aggregate Asset Sale Offer Purchase Price of the
Securities surrendered by Holders exceeds the amount of Excess Proceeds as
indicated in the notice required by Section 4.07(c) hereof, the Trustee shall
select the Securities to be purchased on a pro rata basis based on the
principal amount of the Securities tendered, with such adjustments as may be
deemed appropriate by the Trustee and to comply with any securities exchange
and other applicable requirements, so that only Securities in denominations of
$1,000 or integral multiples thereof shall be purchased.
(e) On or before the Asset Sale Offer Purchase Date, the
Company shall (i) accept for payment any Securities or portions thereof
properly tendered and selected for purchase pursuant to the Asset Sale and
Section 4.07(d) hereof; (ii) irrevocably deposit with the Paying Agent, by
10:00 a.m., New York City time, on such date, in immediately available funds,
an amount equal to the Asset Sale Offer Purchase Price in respect of all
Securities or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee the Securities so accepted together with an Officers'
Certificate listing the Securities or portions thereof tendered to the Company
and accepted for payment. The Paying Agent shall promptly send by first class
mail, postage prepaid, to each Holder of Notes or portions thereof so accepted
for payment, payment in an amount equal to the Asset Sale Offer Purchase Price
for such Securities or portions thereof. The Company shall publicly announce
the results of the Asset Sale Offer on or as soon as practicable after the
Asset Sale Offer Purchase Date. For purposes of this Section 4.07, the Trustee
shall act as the Paying Agent.
(f) Upon surrender and cancellation of a Certificated
Security that is purchased in part, the Company shall promptly issue and the
Trustee shall authenticate and deliver to the surrendering Holder of such
Certificated Security a new Certificated Security equal in principal amount to
the unpurchased portion of such surrendered Certificated Security; provided
that each such new Certificated Security shall be in a principal amount at
Stated Maturity of $1,000 or an integral multiple thereof.
Upon surrender of a Global Security that is purchased in part
pursuant to an Asset Sale Offer, the Paying Agent shall forward such Global
Security to the Trustee who shall make a notation on Schedule A thereof to
reduce the principal amount of such Global Security to an amount equal to the
unpurchased portion of such Global Security, as provided in Section 2.05
hereof.
(g) Upon completion of an Asset Sale Offer (including payment
of the Asset Sale Offer Purchase Price for accepted Securities), any surplus
Excess Proceeds that were subject to such offer shall cease to be Excess
Proceeds, the amount of Excess Proceeds shall be reset to zero and the Company
may use any remaining amount for general corporate purposes.
(h) The Company shall comply with any applicable tender offer
rules (including, without limitation, any applicable requirements of Rule 14e-1
under the Exchange Act) in the event that an Asset Sale Offer is required under
the circumstances described herein.
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SECTION 4.08. Limitation on Transactions with Affiliates.
(a) Subsequent to the Issue Date, the Company will not, and will not
permit any Subsidiary to, directly or indirectly, enter into or permit to exist
any transaction or series of related transaction (including, but limited to,
the purchase, sale or exchange of Property, the making of any Investment, the
giving of any guarantee or the rendering of any service with any Affiliate of
the Company, other than transactions among the Company and any Guarantor or any
Wholly Owned Subsidiaries) unless (i) such transaction or series of related
transactions is on terms no less favorable to the Company or such Subsidiary
than those that could be obtained in a comparable arm's length transaction with
a Person that is not such an Affiliate and (ii) (A) with respect to a
transaction or series of related transactions that has a Fair Market Value in
excess of $2,000,000 but less than $5,000,000, the Company delivers an
Officers' Certificate to the Trustee certifying that such transaction or series
of related transactions complies with clause (i) above; or (B) with respect to a
transaction or series of related transactions that has a Fair Market Value
equal to or in excess of $5,000,000, the transaction or series of related
transactions is approved by a majority of the Board of Directors of the Company
(including a majority of the disinterested directors), which approval is set
forth in a Board Resolution certifying that such transaction or series of
transactions comply with clause (i) above.
(b) The foregoing provisions shall not be applicable to (i) reasonable
and customary compensation, indemnification and other benefits paid or made
available to an officer, director or employee of the Company or a Subsidiary
for services rendered in such person's capacity as an officer, director or
employee (including reimbursement or advancement of reasonable out-of-pocket
expenses and provisions of directors' and officers' liability insurance) or
(ii) the making of any Restricted Payment otherwise permitted by this
Indenture.
SECTION 4.09. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will have
the right to require the Company to repurchase all of such Holder's Securities
in whole or in part (the "Change of Control Offer") at a purchase price (the
"Change of Control Purchase Price") in cash equal to 101% of the aggregate
principal amount at Stated Maturity thereof, plus accrued and unpaid interest
thereon, if any, to the Change of Control Payment Date on the terms described
below.
(b) Within 30 days following any Change of Control, the Company or the
Trustee (at the expense of the Company) will mail a notice to each Holder and
to the Trustee stating,
(i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section 4.09, and that,
although holders are not required to tender their Securities, all
Securities that are timely tendered will be accepted for payment;
(ii) the Change of Control Purchase Price and the repurchase
date, which will be no earlier than 30 days and no later than 60 days
after the date such notice is mailed (the "Change of Control Payment
Date");
(iii) that any Security or portion thereof accepted for
payment pursuant to the Change of Control Offer (and duly paid for on
the Change of Control Payment Date) will cease to accrue interest
after the Change of Control Payment Date;
(iv) that any Security or portion thereof not properly
tendered will continue to accrue interest;
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(v) that any Holder electing to have any Securities or
portions thereof purchased pursuant to a Change of Control Offer will
be required to surrender such Securities, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of such
Securities completed, to the Paying Agent at the address specified in
the notice, prior to the close of business on the third Business day
preceding the Change of Control Date;
(vi) that any Holder shall be entitled to withdraw such
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter,
setting forth the name of the Holder, the principal amount of
Securities delivered for purchase, and a statement that such Holder
is withdrawing such Holder's election to have such Securities or
portions thereof purchased pursuant to the Change of Control Offer.
(vii) that any Holder electing to have Securities purchased
pursuant to the Change of Control Offer must specify the principal
amount that is being tendered for purchase, which principal amount
must be $1,000 at Stated Maturity or an integral multiple thereof;
(viii) if Certificated Securities have been issued pursuant
to Section 2.06(a), that any Holder of Certificated Securities whose
Certificated Notes are being purchased only in part will be issued
new Certificated Securities equal in principal amount at Stated
Maturity to the unpurchased portion of the Certificated Security or
Securities surrendered, which unpurchased portion will be equal in
principal amount at Stated Maturity to $1,000 or an integral multiple
thereof;
(ix) that the Trustee will return to the Holder of a
Global Security that is being purchased in part, such Security with a
notation on Schedule A thereof adjusting the principal amount thereof
to be equal to the unpurchased portion of such Global Security;
(x) the instructions and any other information
necessary to enable any Holder to accept a Change of Control Offer or
effect withdrawal of such acceptance; and
(xi) the instructions and any other information
necessary to enable Holders to tender their Securities and have such
Securities purchased pursuant to the Change of Control Offer.
(c) On or before the Change of Control Payment Date, the Company shall
(i) accept for payment any Securities or portions thereof
properly tendered pursuant to the Change of Control Offer; (ii) irrevocably
deposit with the Paying Agent, by 10:00 a.m., New York City time, on such date,
in immediately available funds, an amount equal to the Change of Control
Purchase Price in respect of all Securities or portions thereof so accepted,
including interest, if applicable; and (iii) deliver, or cause to be delivered,
to the Trustee the Securities so accepted together with an Officers'
Certificate listing the Securities or portions thereof tendered to the Company
and accepted for payment. The Paying Agent shall promptly send by first class
mail, postage prepaid, to each Holder of Securities or portions thereof so
accepted for payment, payment in an amount equal to the Change of Control
Purchase Price for such Securities or portions thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date. For purposes of this
Section 4.09, the Trustee shall act as the Paying Agent.
(d) Upon surrender and cancellation of a Certificated Security that is
purchased in part pursuant to the Change of Control Offer, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Security, a new Certificated Note
equal in principal amount at Stated Maturity to the unpurchased portion of such
surrendered
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Certificated Note; provided that each such new Certificated Security shall be
in a principal amount of $1,000 at Stated Maturity or an integral multiple
thereof.
Upon surrender of a Global Security that is purchased in part
pursuant to a Change of Control Offer, the Paying Agent shall forward such
Global Security to the Trustee who shall make a notation on Schedule A thereof
to reduce the principal amount at Stated Maturity of such Global Note to an
amount equal to the unpurchased portion of such Global Security, as provided in
Section 2.05 hereof.
(e) The Company will not be required to make a
Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Indenture applicable to a Change of
Control Offer made by the Company and repurchases all Securities validly
tendered and not withdrawn under such Change of Control Offer.
(f) The Company will comply with any applicable
tender offer rules (including, without limitation, any applicable requirements
of Rule 14e-1 under the Exchange Act) in the event that the Change of Control
Offer is triggered under the circumstances described herein.
SECTION 4.10. Limitation on Liens. The Company will not, and will
not permit any Subsidiary to, directly or indirectly, create, affirm, incur,
assume or suffer to exist any Liens of any kind other than Permitted Liens on
or with respect to any Property or assets of the Company or such Subsidiary or
any interest therein or any income or profits therefrom, whether owned at the
Issue Date or thereafter acquired, without effectively providing that the
Securities shall be secured equally and ratably with (or prior to) the
Indebtedness so secured for so long as such obligations are so secured.
SECTION 4.11. Limitation on Guarantees by Guarantors. The Company
will not permit any Guarantor to guarantee the payment of any Subordinated
Indebtedness of the Company unless such guarantee shall be subordinated to such
Guarantor's Guarantee at least to the same extent as such Subordinated
Indebtedness is subordinated to the Securities; provided that this covenant
will not be applicable to any guarantee of any Guarantor that (i) existed at
the time at which such Person became a Subsidiary of the Company and (ii) was
not incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary of the Company.
SECTION 4.12. Unrestricted Subsidiaries.
(a) The Company may designate a subsidiary (including a newly
formed or newly acquired subsidiary) of the Company or any of its Subsidiaries
as an Unrestricted Subsidiary; provided that (i) immediately after giving
effect to the transaction, the Company could incur $1.00 of additional
Indebtedness pursuant to the first sentence of Section 4.03(a) and (ii) such
designation is at the time permitted under Section 4.05. Notwithstanding any
provisions of this covenant all subsidiaries of an Unrestricted Subsidiary will
be Unrestricted Subsidiaries.
(b) The Company will not, and will not permit any of its
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person (other than a newly formed
subsidiary having no outstanding Indebtedness (other than Indebtedness to the
Company or a Subsidiary) at the date of determination) becoming a Subsidiary
(whether through an acquisition, the redesignation of an Unrestricted
Subsidiary or otherwise) unless, after giving effect to such action,
transaction or series of transactions on a pro forma basis, (i) the Company
could incur at least $1.00 of additional Indebtedness pursuant to the first
sentence of Section 4.03(a) and (ii) no Default or Event of Default would
occur.
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(c) Subject to Sections 4.12(a) and (b), an Unrestricted Subsidiary
may be redesignated as a Subsidiary. The designation of a subsidiary as an
Unrestricted Subsidiary or the designation of an Unrestricted Subsidiary as a
Subsidiary in compliance with this Section 4.12 shall be made by the Board of
Directors pursuant to a Board Resolution delivered to the Trustee and shall be
effective as of the date specified in such Board Resolution, which shall not be
prior to the date such Board Resolution is delivered to the Trustee. Any
Unrestricted Subsidiary shall become a Subsidiary if it incurs any Indebtedness
other than Non-Recourse Indebtedness. If at any time Indebtedness of an
Unrestricted Subsidiary which was Non-Recourse Indebtedness no longer so
qualifies, such Indebtedness shall be deemed to have been incurred when such
Non-Recourse Indebtedness becomes Indebtedness.
SECTION 4.13. Limitation on Sale and Lease-Back Transactions. The
Company will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Lease-Back Transaction unless (i) the proceeds from
such Sale and Lease-Back Transaction are at least equal to the Fair Market
Value of such Property being transferred and (ii) the Company or such
Subsidiary would have been permitted to enter into such transaction under the
provisions of Sections 4.03, 4.04 and 4.10.
SECTION 4.14. Limitation on Line of Business. None of the Company or
any of its Subsidiaries will directly or indirectly engage to any substantial
extent in any line or lines of business activity other than a Related Business.
SECTION 4.15. Maintenance of Office or Agency. The Company shall
maintain in The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served.
Unless otherwise designated by the Company by written notice to the Trustee,
such office or agency shall be the office of the Trustee's agent, Texas
Commerce Trust Company of New York, which is located at 55 Water Street, North
Building, Room 234, Windows 20 and 21, New York, New York 10041, Attention:
Vice President, Global Trust Services. The Company shall 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, and the Company hereby
appoints the Trustee its agent to receive all presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all of such purposes, and
may from time to time rescind such designations; provided that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation and any change in the location of any such other office or
agency.
SECTION 4.16. Money for the Security Payments to be Held in Trust. If
the Company, any Subsidiary of the Company or any of their respective
Affiliates shall at any time act as Paying Agent with respect to the
Securities, such Paying Agent shall, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the principal (and premium, if any) or interest so
becoming due until such money shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to the Securities, it shall, prior to or on each due date of the principal of
(and premium, if any) or interest on any of the Securities, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due,
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such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest, and (unless such Paying Agent is the Trustee)
the Paying Agent shall promptly notify the Trustee of the Company's action or
failure so to act.
SECTION 4.17. Corporate Existence. The Company will, and will cause
each of its Subsidiaries to, preserve and keep in full force and effect its
corporate existence in accordance with applicable law, except as permitted in
Sections 5.01 and 5.02; provided, however, that the Company may terminate the
corporate existence of any Subsidiary if, in the good faith judgment of the
Board of Directors of the Company, such termination is desirable in the conduct
of the business of the Company and its Subsidiaries and is not disadvantageous
in any material respect to the Holders of the Securities.
SECTION 4.18. Maintenance of Property. The Company shall cause all
Property used in the conduct of its business or the business of any of its
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as, in the judgment of
the Company, may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section 4.18 shall prevent the Company from discontinuing
the operation or maintenance of any of such Property if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business or the
business of any of its Subsidiaries and not disadvantageous in any material
respect to the Holders of the Securities.
SECTION 4.19. Payment of Taxes and Other Claims. The Company shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any of its Subsidiaries or upon the income,
profits or property of the Company or any of its Subsidiaries and (b) all
material lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the property of the Company or any of its
Subsidiaries; provided that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made.
SECTION 4.20 Compliance Certificate; Notice of Default or Event of
Default.
(a) The Company shall 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 (which shall be signed by officers satisfying the
requirements of Section 314 of the Trust Indenture Act) stating whether or not,
to the best knowledge of such officers, the Company has complied with all
conditions and covenants under this Indenture, and, if the Company shall be in
Default, specifying all such Defaults and the nature thereof of which such
officer may have knowledge.
(b) The year-end financial statements delivered pursuant to Section
4.02 above shall be accompanied by a written statement of the Company's
independent public accountants (who shall be a firm of established national
reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing
has come to their attention which would lead them to believe that the Company
or any of its Subsidiaries has violated the provisions of Section 4.01, 4.03,
4.04, 4.05, 4.07, 4.09 or 4.17 hereof or of Article 5 of this Indenture or, if
any such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any person for any failure to obtain knowledge of any such
violation, and it being further understood that such statement may not be
provided to the extent contrary to the then current recommendations of the
accountants' governing body.
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(c) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, within 5 days of any Officer becoming
aware of (i) any Default or Event of Default or (ii) any event of default under
any other mortgage, indenture or instrument referred to in Section 6.01(e), an
Officers' Certificate specifying such Default, Event of Default or other event
of default and what action the Company or applicable Subsidiary is taking or
proposes to take with respect thereto.
SECTION 4.21. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.22. Prohibition on Company and Guarantors Becoming
Investment Companies. None of the Company or the Guarantors shall become an
"investment company" as defined in the Investment Company Act of 1940, as
amended.
SECTION 4.23. Stay, Extension and Usury Laws. The Company and each of
the Guarantors covenant (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit of advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company and each of the
Guarantors (to the extent that it may lawfully do so) hereby expressly waive
all benefit or advantage of any such law, and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
ARTICLE 5
Consolidation, Merger, Conveyance, Lease or Transfer
SECTION 5.01. Consolidation, Merger, Conveyance, Lease or Transfer.
(a) The Company will not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than a
merger of a Subsidiary into the Company in which the Company is the continuing
corporation), or continue in any new jurisdiction, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of the
Property and assets of the Company and the Subsidiaries, taken as a whole, to
any Person, unless
(i) either (A) the Company shall be the continuing
corporation or (B) the corporation (if other than the Company) formed
by such consolidation or into which the Company is merged, or the
Person which acquires, by sale, assignment, conveyance, transfer,
lease or disposition, all or substantially all of the Property and
assets of the Company and the Subsidiaries, taken as a whole (such
corporation or Person, the "Surviving Entity"), shall be a
corporation organized and validly existing under the laws of the
United States of America, any political subdivision thereof or any
state thereof or the District of Columbia, and shall expressly
assume, by a supplemental indenture, the due and punctual payment of
the principal of (and premium, if any) and interest on all the
Securities and the performance of the Company's covenants and
obligations under this Indenture;
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(ii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction or series of transactions), no Event of Default or
Default shall have occurred and be continuing or would result
therefrom;
(iii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without
limitation, any Indebtedness incurred or anticipated to be incurred
in connection with or in respect of such transaction or series of
transactions), the Company (or the Surviving Entity if the Company is
not continuing) shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to such transactions; and
(iv) immediately after giving effect to any such transaction
or series of transactions on a pro forma basis as if such transaction
or series of transactions had occurred on the first day of the
Determination Period, the Company (or the Surviving Entity if the
Company is not continuing) would be permitted to incur $1.00 of
additional Indebtedness pursuant to the provisions of the first
sentence of Section 4.03.
(b) The provision of Section 5.01(a)(iv) above shall not apply to any
merger or consolidation into or with, or any such transfer of all or
substantially all of the Property and assets of the Company and the
Subsidiaries taken as a whole into, the Company.
SECTION 5.02. Officers' Certificate and Opinion of Counsel. In
connection with any consolidation, merger, continuation, transfer of assets or
other transactions contemplated by Section 5.01, the Company shall deliver,
or cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, continuation, sale,
assignment, conveyance or transfer and the supplemental indenture in respect
thereto comply with the provisions of this Indenture and that all conditions
precedent in this Indenture relating to such transactions have been complied
with.
SECTION 5.03. Substitution of Surviving Entity. Upon any transaction
or series of transactions that are of the type described in, and are effected
in accordance with, this Article 5, the Surviving Entity shall succeed to, and
be substituted for, and may exercise every right and power of, the Company
under this Indenture and the Securities with the same effect as if such
Surviving Entity had been named as the Company in this Indenture; and when a
Surviving Person duly assumes all of the obligations and covenants of the
Company pursuant to this Indenture and the Securities, except in the case of a
lease, the predecessor Person shall be relieved of all such obligations.
If such Surviving Entity shall have succeeded to and been substituted
for the Company, such Surviving Entity may cause to be signed,, and may issue
either in its own name or in the name of the Company prior to such succession
any or all of the Securities delivered to the Trustee; and, upon the order of
such Surviving Entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such Surviving Entity thereafter shall
cause to be signed and delivered to the Trustee for that purpose (in each
instance with endorsements of Guarantees thereon by the Guarantors). All of the
Securities so issued and so endorsed shall in all respects have the same legal
rank and benefit under this Indenture as
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the Securities theretofore or thereafter issued and endorsed in accordance with
the terms of this Indenture and the Guarantee as though all of such Securities
had been issued and endorsed at the date of the execution hereof.
In case of any such consolidation, merger, sale, transfer, conveyance
or other disposal, such changes in phraseology and form (but not in substance)
may be made in the Securities thereafter to be issued or the Guarantees to be
endorsed thereon as may be appropriate.
For all purposes of this Indenture and the Securities, Subsidiaries of
any Surviving Entity will, upon such transaction or series of transactions,
become Subsidiaries or Unrestricted Subsidiaries as provided pursuant to this
Indenture and all Indebtedness, and all Liens on Property or assets, of the
Surviving Entity and its Subsidiaries immediately prior to such transaction or
series of transactions shall be deemed to have been incurred upon such
transaction or series of transactions.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. Whenever used herein, an "Event of
Default" 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):
(a) default in the payment of interest on any Security pursuant to
this Indenture when the same becomes due and payable, and the continuance
of such Default for a period of 30 days;
(b) default in the payment of principal of (or premium, if any, on)
any Security when the same becomes due and payable, whether upon Maturity,
upon optional redemption, required repurchase (including pursuant to a
Change of Control Offer or an Asset Sale Offer) or otherwise or the
failure to make an offer to purchase any such Security as required
pursuant to the provisions of the Securities and this Indenture;
(c) the Company fails to comply with any of its covenants or
agreements contained in Sections 4.03, 4.04, 4.05, 4.07, 4.09, 4.13 and
5.01 of this Indenture;
(d) the Company defaults in the performance, or breach, of any
covenant or warranty of the Company in this Indenture (other than a
covenant or warranty addressed in clause (a), (b) or (c) above) and
continuance of such Default or breach for a period of 30 days after
written notice thereof has been given to the Company by the Trustee or to
the Company and the Trustee by holders of at least 25% of the aggregate
principal amount at Stated Maturity of the outstanding Securities;
(e) Indebtedness of the Company or any Subsidiary is not paid when due
within the applicable grace period, if any, or is accelerated by the
holders thereof and, in either case, the principal amount of such unpaid
or accelerated Indebtedness exceeds $10,000,000;
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(f) the entry by a court of competent jurisdiction of one or more
final judgments against the Company or any Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 which is not
discharged, waived, appealed, stayed, bonded or satisfied for a period of
60 consecutive days;
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal,
state, or foreign bankruptcy, insolvency, or other similar law or (ii) a
decree or order adjudging the Company or any Significant Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under U.S. bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency, or similar law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Significant Subsidiary or of any
substantial part of the Property or assets of the Company or any
Significant Subsidiary, or ordering the winding up or liquidation of the
affairs of the Company or any Significant Subsidiary, and the continuance
of any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days;
(h) (i) the commencement by the Company or any Significant Subsidiary
of a voluntary case or proceeding under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent; or (ii) the consent
by the Company or any Significant Subsidiary to the entry of a decree or
order for relief in respect of the Company or any Significant Subsidiary
in an involuntary case or proceeding under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Significant Subsidiary; or (iii) the filing by the Company or any
Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign bankruptcy,
insolvency or other similar law; or (iv) the consent by the Company or any
Significant Subsidiary to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the Property or
assets of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or the making by the Company or any Significant Subsidiary of
an assignment for the benefit of creditors; or (v) the admission by the
Company or any Significant Subsidiary in writing of its inability to pay
its debts generally as they become due; or (vi) the taking of corporate
action by the Company or any Significant Subsidiary in furtherance of any
such action; or
(i) any Guarantee shall for any reason cease to be, or be asserted by
the Company or any Guarantor, as applicable, not to be, in full force and
effect (except pursuant to the release of any such Guarantee in accordance
with the provisions of this Indenture).
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default described in clause (g) or (h) of Section 6.01) occurs
and shall be continuing, then in each and every case the Trustee or the
Holders of not less than 25% of the outstanding aggregate principal amount
at Stated Maturity of the Securities may declare the principal amount at
Stated Maturity of the Securities to be due and payable
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immediately by a notice in writing to the Company (and to the Trustee if given
by Holders of such Securities), and upon any such declaration the principal
amount at Stated Maturity of, premium, if any, on any accrued and unpaid
interest on, and any other amounts payable in respect of, the Securities then
outstanding will become and be immediately due and payable. If any Event of
Default specified in clause (g) or (h) of Section 6.01 occurs, the principal
amount at Stated Maturity of, premium, if any, and any accrued and unpaid
interest on, and any other amount payable in respect of, the Securities then
outstanding shall become immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder of such Securities. In the
event of a declaration of acceleration because an Event of Default set forth in
Section 6.01(e) above has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to Section 6.01(e) shall be
remedied, or cured or waived by the holders of the relevant Indebtedness within
30 days after such event of default; provided that no judgment or decree for
the payment of the money due on the Securities has been obtained by the Trustee
as provided in this Indenture.
After any such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount at Stated
Maturity of the Securities at the time outstanding may rescind and annul such
acceleration if
(a) the Company or any Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursement and advances of
the Trustee, its agents and counsel,
(ii) all overdue installments of interest on any other
amounts due in respect of all Securities;
(iii) the principal of (and premium, if any, on ) any
Securities that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in the Securities and this Indenture, and
(iv) to the extent that payment of such interest is lawful,
interest upon Defaulted Interest at the rate or rates prescribed
therefor in the Securities and this Indenture;
(b) all Events of Default, other than the nonpayment of principal
of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.04;
(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal (and premium, if any) of or interest on, and any other amounts
then due in respect of, the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
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SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount at Stated Maturity of the Securities then outstanding by
notice to the Trustee may waive an existing Default and its consequences except
(i) a Default in the payment of the principal of or interest on a Security or
(ii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Holder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount at Stated Maturity of the Securities then outstanding may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to the rights of other Holders, it being
understood that the Trustee shall have no duty to ascertain whether or not such
actions or forbearances are unduly prejudiced to such Holders, or would involve
the Trustee in personal liability; provided that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. No Holder of any Securities shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or a trustee, or for
any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default with respect to the Securities;
(ii) the Holders of at least 25% in aggregate principal amount at
Stated Maturity of the Securities then outstanding have made written
request, and such Holder or Holders have offered reasonable indemnity, to
the Trustee to institute such proceeding as trustee; and
(iii) the Trustee has failed to institute such proceeding, and has
not received from the Holders of a majority in aggregate principal amount
at Stated Maturity of the Securities then outstanding a direction
inconsistent with such request, within 60 days after such notice, request
and offer.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
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SECTION 6.09. Trustee May File Proofs of Claim. The Trustee shall be
entitled and empowered, without regard to whether the Trustee or any Holder
shall have made any demand or performed any other act pursuant to the
provisions of this Article and without regard to whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise, by intervention in any proceedings relative to the Company or any
Obligor upon the Securities, or to the creditors or Property of the Company,
any Guarantor or any other Obligor or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee
shall be entitled and empowered in such instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest and any other amounts owing and
unpaid in respect of the Securities, and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including all amounts owing to the Trustee and each predecessor Trustee
pursuant to Section 7.07 hereof) and of the Holders allowed in any judicial
proceedings relative to the Company or other obligor upon the Securities, or to
the creditors or property of the Company, any Guarantor, or any such other
Obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Securities in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other bankruptcy
or insolvency proceedings or Person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other Property or assets
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Holders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Holders, to pay to the Trustee such amounts as shall
be sufficient to cover all amounts owing to the Trustee and each predecessor
Trustee pursuant to Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for 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 except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar
person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities, and it shall not be necessary to make any Holders of
the Securities parties to any such proceedings.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal (premium, if any) and interest, respectively; and
THIRD: to the Company or the Guarantors or to such other party as a
court of competent jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid. The Trustee may mail such
notice in the name and at the expense of the Company.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount at Stated Maturity of the Securities.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or
any Holder of Securities 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 the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding has been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
provided in Section 2.08 hereof, no right or remedy conferred herein, upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security 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 6 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.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this subsection does not limit the effect of subsection (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur 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 to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) 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 and to the provisions of the Trust
Indenture Act.
SECTION 7.02. Rights of Trustee.
(a) Subject to the provisions of Section 7.01(a) hereof, the
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
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(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, Officer's Certificate, or other certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless requested
in writing to do so by the Holders of not less than a majority in aggregate
principal amount of the Securities then outstanding; provided, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such examination shall be paid by
the Company or, if advanced by the Trustee, shall be repaid by the Company upon
demand.
(g) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(h) The Trustee shall not be bound to ascertain or inquire as
to the performance or observance of any covenants, conditions, or agreements on
the part of the Company, except as otherwise set forth herein, but the Trustee
may require of the Company full information and advice as to the performance of
the covenants, conditions and agreements contained herein and shall be entitled
in connection herewith to examine the books, records and premises of the
Company.
(i) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.01(a) or (b), or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any Default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less
than 25% in aggregate principal amount at Stated Maturity of the Securities
then outstanding; provided that the Trustee shall comply with the "automatic
stay" provisions contained in the U.S. bankruptcy laws, if applicable; and as
used herein, the term "actual knowledge" means the actual fact or statement of
knowing by a Responsible Officer, without any duty to make any investigation
with regard thereto.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
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SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within 90 days after it occurs. Except in the case
of a Default in payment of principal of (or premium, if any) or interest on any
Security (including payments pursuant to the mandatory repurchase provisions of
such Security, if any), the Trustee may withhold the notice if and so long as
the Trustee in good faith determines that withholding the notice is in the
interests of Holders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after May 15 beginning with the May 15 following the date of this
Indenture, and in any event prior to August 15 in each year, the Trustee shall
mail to each Holder a brief report dated as of such date that complies with TIA
Section 313(a) if and to the extent required by TIA Section 313(a). The Trustee
also shall comply with TIA Sections 313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee promptly upon request from time to time the compensation for its
services as agreed to by the Trustee and the Company. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request
for all reasonable out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
reasonable expense (including reasonable attorneys' fees) incurred by it in
connection with the acceptance and administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee may have separate
counsel and the Company shall pay the fees and expenses of such counsel. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own willful
misconduct, negligence or bad faith. The Company need not pay for any
settlement made by the Trustee without the Company's consent, such consent not
to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(g) or (h) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any applicable bankruptcy laws.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
at Stated Maturity of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request thereof by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, unless the Trustee's duty to resign is stayed in accordance with
the provisions of TIA Section 310(b); or
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(ii) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the
Company or by any Holder; or
(iii) the Trustee shall become incapable of acting or a decree or
order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Trustee in an involuntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or similar law,
or a decree or order by a court having jurisdiction in the premises shall
have been entered for the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Trustee or of its Property and assets or affairs, or any public
officer shall take charge or control of the Trustee or of its Property and
assets or affairs for the purpose of rehabilitation, conservation,
winding-up or liquidation; or
(iv) the Trustee shall commence a voluntary case under the
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or similar law or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or of its Property and assets or affairs, or
shall make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or
shall take corporate action in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Securities, or (ii) subject to Section 6.11 hereof,
any Holder who has been a bona fide Holder of a Note for at least six months
may, on behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee for the Securities.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount at Stated Maturity of the Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the Lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount at Stated Maturity of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
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SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
Satisfaction and Discharge
SECTION 8.01. Satisfaction and Discharge. This Indenture
shall upon the request of the Company cease to be of further effect (except as
to surviving rights of registration of transfer or exchange of Securities
herein expressly provided for, the Company's obligations under Sections 7.07
and 8.04 hereof, and the Company's, the Trustee's and the Paying Agent's
obligations under Section 8.03 hereof) 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 therefore authenticated and
delivered (other than (A) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as provided
in Section 2.08 and (B) Securities for whose payment money has
been deposited in trust with the Trustee or any Paying Agent and
thereafter paid to the Company or discharged from such trust)
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
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(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 clause (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose money or U.S. Government
Obligations in an amount sufficient (as certified by an independent
public accountant designated by the Company) to pay and discharge the
entire indebtedness of such Securities not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and
interest, if any, to the date of such deposit (in the case of
Securities which have become due and payable) or the Stated Maturity
or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other
sums then due and payable hereunder by the Company;
(c) no Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such deposit
and after giving effect to such deposit; and
(d) 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.
Notwithstanding the satisfaction and discharge of this
Indenture, the Company's obligations in Sections 2.03, 2.04, 2.06, 2.08, 2.11,
7.07, 7.08, 8.02, 8.03 and 8.04, and the Trustee's and Paying Agent's
obligations in Section 8.03 shall survive until the Securities are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.07, 8.03
and 8.04 and the Trustee's and Paying Agent's obligations in Section 8.03 shall
survive.
In order to have money available on a payment date to pay
principal (and premium, if any, on) or interest on the Securities, the U.S.
Government Obligations shall be payable as to principal (and premium, if any)
or interest at least one Business Day before such payment date in such amounts
as will provide the necessary money. U.S. Government Obligations shall not be
callable at the issuer's option.
SECTION 8.02. Application of Trust. All money deposited with
the Trustee pursuant to Section 8.01 shall be held in trust and, at the written
direction of the Company, be invested prior to maturity in U.S. Government
Obligations, and applied by the Trustee in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or through
any Paying Agent as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for the payment of which
money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 8.03. Repayment to the Company.
The Trustee and the Paying Agent shall promptly pay to the
Company upon written request any excess money or securities held by them at any
time.
The Trustee and the Paying Agent shall pay to the Company
upon written request any money held by them for the payment of principal or
interest that remains unclaimed for two years after the date upon which such
payment shall have become due; provided that the Company shall have either
caused notice of such payment to be mailed to each Securityholder entitled
thereto no less than 30 days prior to such repayment or within such period
shall have published such notice in a financial newspaper of widespread
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circulation published in The City of New York, including, without limitation,
The Wall Street Journal. After payment to the Company, Holders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all liability
of the Trustee and such Paying Agent with respect to such money shall cease.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court of governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and Guarantors' obligations under this Indenture, the Securities and
the Guarantees shall be revived and reinstated as though no deposit has
occurred pursuant to Section 8.01 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 8.02; provided, however, that if the Company or the
Guarantors have made any payment of interest on or principal of any Securities
because of the reinstatement of their Obligations, the Company or such
Guarantors shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
Defeasance
SECTION 9.01. Company's Option to Effect Defeasance or Covenant
Defeasance. The Company may elect, at its option, at any time, to have Section
9.02 or Section 9.03 hereof applied to the outstanding Securities (in whole and
not in part) upon compliance with the conditions set forth below in this
Article 9, such election to be evidenced by a Board Resolution delivered to the
Trustee.
SECTION 9.02. Defeasance and Discharge. Upon the Company's
exercise of its option to have this Section 9.02 applied to the outstanding
Securities (in whole and not in part), the Company shall be deemed to have been
discharged from its Obligations with respect to such Securities as provided in
this Section 9.02 on and after the date on which the conditions set forth in
Section 9.04 hereof are satisfied (hereinafter called "Defeasance"). For this
purpose, Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Securities and the
Company and the Guarantors shall be deemed to have satisfied all of their other
obligations under such Securities, this Indenture and the Guarantees (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:
(a) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 9.04 hereof and as more fully set
forth in Section 9.04, payments in respect of the principal of and any premium
and interest on such Securities when payments are due,
(b) the Company's obligations with respect to such Securities
under Sections 2.06, 2.08, 2.10, 4.15, 4.16 and 4.17 hereof,
(c) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture,
(d) Article 3 hereof, and
(e) this Article 9.
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Subject to compliance with this Article 9, the Company may
exercise its option to have this Section 9.02 applied to the outstanding
Securities notwithstanding the prior exercise of its option to have Section
9.03 hereof applied to such Securities.
SECTION 9.03. Covenant Defeasance. Upon the Company's exercise of its
option to have this Section 9.03 applied to the outstanding Securities (in
whole and not in part), (i) the Company and the Guarantors shall be released
from their respective obligations under Sections 5.01 and 5.02, Sections 4.02
through 4.14, inclusive, Sections 4.18, 4.19 and 4.21 and any covenant added to
this Indenture subsequent to the Issue Date pursuant to Section 10.01 hereof,
and (ii) the occurrence of any event specified in Section 6.01(c) or 6.01(d)
hereof, with respect to any of Sections 5.01 and 5.02, Sections 4.03 through
4.14, inclusive, Sections 4.18, 4.19 and 4.21, and any covenant added to this
Indenture subsequent to the Issue Date pursuant to Section 10.01 hereof, shall
be deemed not to be or result in an Event of Default, in each case with respect
to such Securities as provided in this Section 9.03 on and after the date on
which the conditions set forth in Section 9.04 hereof are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, Covenant
Defeasance means that, with respect to such Securities, the Company and the
Guarantors 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 6.01(c) and 6.01(d) hereof),
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
provisions herein or in any other document; but the remainder of this
Indenture, the Guarantees and such Securities shall be unaffected thereby.
SECTION 9.04. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to the application of Section 9.03 or Section
9.04 hereof to the outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to the benefits of the Holders of such Securities, (i) money in an
amount, or (ii) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms
will provide, not later than one Business 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 expressed in a written certification thereof delivered to the
Trustee, to pay and discharge the principal of (premium, if any on) and any
installment of interest on such Securities on the Stated Maturity thereof, in
accordance with the terms of this Indenture and such Securities.
(b) In the event of an election to have Section 9.02 hereof apply to
the outstanding Securities, 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
of this Indenture, there has been a change in the applicable United States
federal income tax law, in either case (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 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 in 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.
(c) In the event of an election to have Section 9.03 hereof apply to
the outstanding Securities, the Company shall have delivered to the Trustee an
Opinion of Counsel 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 and Covenant Defeasance to be effected with respect to
such Securities and will be subject to United States federal income tax in the
same amount, in the same manner and at the same times as would be the case if
such deposit, Covenant Defeasance and discharge were not to occur.
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(d) No Default or Event of Default with respect to the outstanding
Securities shall have occurred and be continuing at the time of such deposit
after giving effect thereto or and no Default or Event of Default under Section
6.01(g) or 6.01(h) shall have occurred at any time on or prior to the 91st day
after the date of such deposit and be continuing on such 91st day (it being
understood that this condition shall not be deemed satisfied until after such
91st day).
(e) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming for the purpose of this clause (e) that all Securities are in default
within the meaning of such Act).
(f) 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 or the Guarantor is a party or by which it is
bound.
(g) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder.
(h) 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.
SECTION 9.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Miscellaneous Provisions. Subject to Section 9.06 hereof, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee pursuant to Section 9.04 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent as the Trustee may
determine, to the Holders of such Securities, 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 upon other funds except to the extent required
by law. The Company shall pay and indemnity the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 9.04 hereof or the principal and interest
received in respect thereof other than such tax, fee or other charge imposed on
or assessed against the U.S. Government Obligations deposited pursuant to
Section 9.04 hereof or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of outstanding Securities.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Order any money or U.S. Government Obligations held by it as provided in
Section 9.04 hereof which, in the opinion of a nationally recognized firm of
independent public 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 the Defeasance or Covenant Defeasance, as
the case may be, with respect to the outstanding Securities.
SECTION 9.06. Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, or interest, if any, on any
Security and remaining unclaimed for two years after such principal, premium,
if any, or interest, if any, have become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Company
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as trustee thereof, shall thereupon cease; provided that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 9.07. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money in accordance with this Article 9 with respect to any Notes
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture, the Guarantees and such Securities from which
the Company or the Guarantors have been discharged or released pursuant to
Section 9.02 or 9.03 hereof shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 9 with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to
apply all money held in trust pursuant to Section 9.05 hereof with respect to
such Securities in accordance with this Article 9; provided that if the Company
or any Guarantor makes any payment of principal of, premium, if any, or
interest on any such Security following such reinstatement of its obligations,
the Company or such Guarantor, as the case may be, shall be subrogated to the
Holders of such Securities to receive such payment from the money so held in
trust.
ARTICLE 10
Amendments
SECTION 10.01. Without Consent of Holders.
(a) The Company, the Guarantors and the Trustee may at any time and
from time to time, without notice to or consent of any Holder, enter into one
or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(i) to evidence the succession of another Person to the
Company and the Guarantors and the assumption by such successor of
the covenants and Obligations of the Company under this Indenture and
contained in the Securities and the Guarantors contained in this
Indenture and the Guarantees;
(ii) to add to the covenants of the Company, for the benefit of
the Holders, or to surrender any right or power conferred upon the
Company or the Guarantors by this Indenture;
(iii) to add any additional Events of Default;
(iv) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(v) to evidence and provide for the acceptance of appointment
under this Indenture by the successor Trustee;
(vi) to secure the Securities and/or the Guarantees;
(vii) to cure any ambiguity, to correct or supplement any
provision in this Indenture which may be inconsistent with any other
provision therein or to add any other provisions
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with respect to matters or questions arising under the Indenture,
provided that such actions will not adversely affect the interests of
the holders in any material respect; or
(viii) to add or release any Guarantor pursuant to the terms of
this Indenture.
SECTION 10.02. With Consent of Holders. With the consent of the
Holders of at least a majority of the principal amount at Stated Maturity of
the outstanding Securities (including consents obtained in connection with a
tender offer or an exchange offer for the Securities), by Act delivered to the
Company, the Guarantors and the Trustee, the Company, the Guarantors and the
Trustee may enter into one or more indentures supplemental hereto for the
purpose of adding any provisions to or changing or eliminating any of the
provisions of this Indenture or modifying the rights of the Holders of the
Securities, provided that no such supplemental indenture, without the consent
of the holder of each outstanding security affected thereby, will:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount thereof
(or any premium, if any), or the interest thereon, that would be due and
payable upon Maturity thereof, or change the place of payment where, or in 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 thereof; or
(b) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture or required for any waiver of compliance with the provisions of this
Indenture; or
(c) modify any of the provisions of Section 6.04 hereof, except
to increase the percentage set forth therein or to provide that certain other
provisions of this Indenture cannot be amended or waived without the consent of
the Holder of each outstanding Security affected thereby; or
(d) subordinate in right of payment, or otherwise subordinate,
the Securities or the Guarantees to any other Indebtedness; or
(e) modify any provision of this Indenture relating to the
obligations of the Company to make offers to purchase Securities upon a Change
of Control or from the proceeds of an Asset Sale; or
(f) modify any of the provisions of this Section 10.02 except to
increase any percentage set forth herein or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holders of each outstanding Security affected thereby; or
(g) amend, supplement or otherwise modify the provisions of the
Indenture relating to the Guarantees.
It shall not be necessary for any Act of Holders under this Section
10.02 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 10.03. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article 10, 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. After a Supplemental Indenture becomes effective, the Company shall
mail to Holders a notice briefly describing such amendment. The failure to give
such notice to all Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
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SECTION 10.04. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the Trust Indenture Act as
then in effect.
SECTION 10.05. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a Holder of a Security
shall bind the Holder and every subsequent Holder of that Security or
portion of the Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent or waiver is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent
or waiver as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Holder. An amendment or waiver becomes effective upon the
execution of a supplemental indenture containing such amendment or waiver by
the Trustee.
(b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding subsection, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 10.06. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 10.07. Trustee To Execute Supplemental Indentures. The
Trustee shall execute any supplemental indenture authorized pursuant to this
Article 10 if such supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
but shall not be required to, execute such supplemental indenture. In executing
any supplemental indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01
hereof) shall be fully protected in relying upon, an Officers' Certificate
(which need only cover the matters set forth in clause (a) below) and an
Opinion of Counsel provided by the Company stating that:
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied:
(b) the Company and the Guarantors have all necessary corporate power
and authority to execute and deliver the supplemental indenture and that the
execution, delivery and performance of such supplemental indenture has been
duly authorized by all necessary corporate action of the Company and the
Guarantors;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or
(iii) any material agreement or instrument to which the Company or any
Guarantor is subject and of which such counsel is aware;
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(d) to the knowledge of legal counsel writing such Opinion of
Counsel, the execution, delivery and performance of the supplemental indenture
do not conflict with, or result in the breach of any of the terms, conditions
or provisions of (i) any law or regulation applicable to the company or any
Guarantor, or (ii) any material order, writ, injunction or decree of any court
or governmental instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and validly executed
and delivered by the Company and the Guarantors, and the Indenture together
with such supplemental indenture constitutes a legal, valid and binding
obligations of the Company and the Guarantors enforceable against the Company
and the Guarantors, as applicable, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles; and
(f) the Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
SECTION 10.08. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 11
Guarantees
SECTION 11.01. Guarantees.
(a) For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the Guarantors, together with each
Subsidiary of the Company which in accordance with Section 11.07 is required in
the future to guarantee the Obligations of the Company and the Guarantors under
the Securities, the Guarantees and this Indenture upon execution of a
supplemental indenture, hereby jointly and severally and irrevocably and
unconditionally guarantees to the Trustee and to each Holder of a Security
authenticated and delivered by the Trustee irrespective of the validity or
enforceability of this Indenture or the Securities or the Obligations of the
Company and the Guarantors under this Indenture, that: (i) the principal of,
premium, if any, and any interest, on the Securities (including, without
limitation, any interest that accrues after the filing of a proceeding of the
type described in Sections 6.01(g) and (h)) and any fees, expenses and other
amounts owing under this Indenture will be duly and punctually paid in full
when due, whether at Stated Maturity, by acceleration, call for redemption,
upon a Change of Control Offer, Asset Sale Offer, purchase or otherwise, and
interest on the overdue principal and (to the extent permitted by law)
interest, if any, on the Securities and any other amounts due in respect of the
Securities, and all other Obligations of the Company and the Guarantors to the
Holders of the Securities under this Indenture and the Securities, whether now
or hereafter existing, will be promptly paid in full or performed, all strictly
in accordance with the terms hereof, and of the Securities; and (ii) in case of
any extension of time of payment or renewal of any Securities or any of such
other Obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration, call for redemption, upon Change of Control Offer,
Asset Sale Offer, purchase or otherwise. If payment is not made when due of any
amount so guaranteed for whatever reason, each Guarantor shall be jointly and
severally obligated to pay the same individually whether or not such failure to
pay has become an
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Event of Default which could cause acceleration pursuant to Section 6.02. Each
Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection. An Event of Default under this Indenture or the Securities shall
constitute an Event of Default under this Guarantee, and shall entitle the
Holders to accelerate the Obligations of each Guarantor hereunder in the same
manner and to the same extent as the Obligations of the Company. This Guarantee
is intended to be superior to or pari passu in right of payment with all
Indebtedness of the Guarantors and each Guarantor's Obligations are independent
of any Obligation of the Company or any other Guarantor.
(b) Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Obligations under this Indenture or the
Securities and also waives notice of protest for nonpayment. Each Guarantor
waives notice of any default under the Securities or the Obligations. The
Obligations of each Guarantor hereunder shall not be affected by (a) the
failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the
Securities or any other agreement; (d) the release of any security held by any
Holder or the Trustee for the Obligations or any of them; (e) the failure of
any Holder or the Trustee to exercise any right or remedy against any other
guarantor of the Obligations; or (f) any change in the ownership of such
Guarantor.
(c) The Obligations of each Guarantor hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations of the Company or otherwise. Without
limiting the generality of the foregoing, the Obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations of the Company, or
by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of such
Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
(d) Each Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of, premium, if any, or interest on
any Obligation of the Company is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
(e) In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of, premium, if any, or interest on any Obligation when and as the
same shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid amount of such Obligations, (ii)
accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
(f) Until such time as the Securities and the other Obligations of the
Company guaranteed hereby have been satisfied in full, each Guarantor hereby
irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's Obligations
under this Guarantee, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and
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any right to participate in any claim or remedy of the Holders or the Trustee
against the Company or any other Guarantor or any security, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company or any other Guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account
of such claim, remedy or right. If any amount shall be paid to such Guarantor
in violation of the preceding sentence at any time prior to the later of the
payments in full of the Securities and all other amounts payable under this
Indenture, this Guarantee and the Stated Maturity of the Notes, such amount
shall be held in trust for the benefit of the Holders and the Trustee and shall
forthwith be paid to the Trustee to be credited and applied to the Notes and
all other amounts payable under this Guarantee, whether matured or unmatured,
in accordance with the terms of this Indenture, or to be held as security for
any Obligations or other amounts payable under this Guarantee thereafter
arising.
(g) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this
Indenture and that the waiver set forth in this Section 11.01 is knowingly made
in contemplation of such benefits. Each Guarantor further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) subject to this Article 11, the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any acceleration of such Obligations guaranteed hereby
as provided in Article 6, such Obligations (whether or not due and payable)
shall further then become due and payable by the Guarantors for the purposes of
this Guarantee.
(h) A Guarantor that makes a distribution or payment under a Guarantee
shall be entitled to contribution from each other Guarantor in a pro rata
amount based on the Adjusted Net Assets of each such other Guarantor for all
payments, damages and expenses incurred by that Guarantor in discharging the
Company's obligations with respect to the Securities and this Indenture or any
other Guarantor with respect to its Guarantee, so long as the exercise of such
right does not impair the rights of the Holders of the Securities under the
Guarantees.
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum
amount that can be hereby guaranteed without rendering this Indenture, as it
relates to such Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. To effectuate the foregoing intention, the Obligations of
each Guarantor shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the Obligations of such other Guarantor under
its Guarantee or pursuant to its contribution Obligations hereunder, result in
the obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal, state or foreign
law. Each Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a contribution from each other Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Guarantor.
SECTION 11.03. Execution and Delivery of Guarantees. To further
evidence its Guarantee set forth in Section 11.01 hereof, each Guarantor hereby
agrees that notation of such Guarantee shall be endorsed on each Security
authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of an authorized officer of such Guarantor. Each Guarantor
hereby agrees that its Guarantee set forth in Section 11.01 hereof shall remain
in full force and effect notwithstanding any failure to endorse on each Note a
notation of such Guarantee. If an officer of a Guarantor whose signature is on
this
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Indenture or a Security no longer holds that office at the time the Trustee
authenticates such Security or at any time thereafter, such Guarantor's
Guarantee of such Security shall be valid nevertheless. The delivery of any
Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of any Guarantee set forth in this Indenture on behalf
of the Guarantor.
SECTION 11.04. When a Guarantor May Merge, etc. No Guarantor shall
consolidate with or merge with or into (whether or not such Guarantor is the
surviving person) another corporation, Person or entity whether or not
affiliated with such Guarantor (but excluding any consolidation, amalgamation
or merger if the surviving corporation is no longer a Subsidiary) unless (i)
subject to the provisions of Section 11.07 hereof, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
assumes all the Obligations of such Guarantor pursuant to a supplemental
indenture in form reasonably satisfactory to the Trustee under the Securities
and this Indenture and (ii) immediately after giving effect to such
transaction, no Default or Event of Default exists. In connection with any such
consolidation or merger, the Trustee shall be entitled to receive an Officers'
Certificate and an Opinion of Counsel stating that such consolidation or merger
is permitted by this Section 11.04.
SECTION 11.05. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 11
at law, in equity, by statute or otherwise.
SECTION 11.06. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor
to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 11.07. Release of Guarantor. Upon the sale or other transfer
of all of the Capital Stock of a Guarantor to any Person that is not an
Affiliate of the Company in compliance with the terms of this Indenture
(including, without limitation, Section 4.07 hereof), such Guarantor shall be
deemed automatically and unconditionally released and discharged from all
obligations under this Indenture without any further action required on the
part of the Trustee or any Holder; provided that the Net Available Proceeds of
such sale or other disposition are applied in accordance with Section 4.07 of
this Indenture as if such sale or disposition were an Asset Sale and in
accordance with the applicable provisions of this Indenture. The Trustee shall
at the direction and expense of the Company deliver an appropriate instrument or
instruments evidencing such release upon receipt of a request of the Company
accompanied by an Officers' Certificate and Opinion of Counsel certifying as to
the compliance with this Section 11.07 and the other applicable provisions of
this Indenture.
SECTION 11.08. Execution of Supplemental Indenture for Future
Guarantors. Any Wholly Owned Subsidiary that is a domestic Subsidiary or any
other Subsidiary that guarantees any Indebtedness of an Obligor is required to
become a Guarantor and the Company shall cause each such Subsidiary to promptly
execute and deliver to the Trustee a supplemental indenture in the form of
Exhibit C hereto pursuant to which such Subsidiary shall become a Guarantor
under this Article 11 and shall guarantee the Obligations of the Company under
the Securities and this Indenture. Concurrently with the execution and delivery
of such supplemental indenture, the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors' rights generally and to
the principles of equity, whether considered in a proceeding at
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law or in equity, the Guarantee of such Guarantor is a legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, and as to any such other matters as the Trustee may reasonably
request.
ARTICLE 12
Miscellaneous
SECTION 12.01. Compliance Certificates and Opinions. Upon any
application or request by the Company or the Guarantors to the Trustee to take
any action under any provision of this Indenture, the Company and the
Guarantors, as applicable, shall furnish to the Trustee, to the extent required
by the TIA or this Indenture, (i) an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture (including any
covenant, compliance with which constitutes a condition precedent) relating to
the proposed action have been complied with and (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application
or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such 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
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 12.02. 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 or any
Guarantor 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, and may state that it is so based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or such Guarantor
stating that the information with respect to such factual matters is in the
possession of the Company or such Guarantor, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate of opinion or
representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 12.03. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage of Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage
of Holders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are received by the Trustee and, where it is
hereby expressly required, to the Company and the Guarantors. 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 Sections 7.01 and 7.02) conclusive in favor of the
Trustee, the Company and the Guarantors, 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 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, including the execution
of such instrument or writing without more.
(c) The ownership, principal amount and serial numbers of Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. Such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not earlier than the date 30 days prior to the first
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(e) Except to the extent otherwise expressly provided in this
Indenture, 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
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Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action 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.
SECTION 12.04. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by Sections 310 to 318, inclusive, of
the Trust Indenture Act, the required provision shall control. If any provision
of this Indenture modifies or excludes any provision of the TIA that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
SECTION 12.05. Notices. Any notice or communication shall be in
writing and delivered in person, or sent by registered or certified mail, by
air courier guaranteeing overnight delivery or by fax (promptly confirmed by
telephone) and addressed as follows:
if to the Company or any Guarantor:
DI Industries, Inc.
10370 Richmond Avenue
Suite 600
Houston, Texas 77042
Attn: Chief Financial Officer
Phone: (281) 435-6100
Fax: (281) 435-6171
if to the Trustee:
Texas Commerce Bank National Association
600 Travis Street, Suite 1150
Houston, Texas 77002
Attention: Corporate Trust Division
Phone: (713) 216-5811
Fax: (713) 216-5476
Dallas payment office address:
Texas Commerce Bank National Association
1201 Main Street
Dallas, Texas 75202
Attention: Corporate Trust Services
The Company, the Guarantors or the Trustee by notice to the
others may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication mailed to a Holder shall be sent
to the Holder by first class mail, postage prepaid, at the Holder's address as
it appears in the Security Register and shall be given if so sent within the
time prescribed. Failure to mail a notice or communications to a Holder or any
default in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed or faxed to the Company, the Guarantors,
the Trustee or a Holder in the manner provided above, it is duly given, whether
or not the addressee receives it but shall not be effective unless in the case
of the Company, the Guarantors or the Trustee actually received. In case by
reason of the suspension of regular mail service or by reason or any other
cause it shall be impracticable to give notice by mail to Holders, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
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SECTION 12.06. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA Section 312(b) with other Holders with respect
to their rights under this Indenture or the Securities. The Company, the
Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 12.08. Payments on Business Days. If a payment hereunder is
scheduled to be made on a date that is not a Business Day, payment shall be made
on the next succeeding day that is a Business Day, and no interest shall accrue
with respect to that payment during the intervening period. If a regular Record
Date is not a Business Day, such Record Date shall not be affected.
SECTION 12.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 12.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 12.11. Submission to Jurisdiction; Appointment of Agent for
Service of Process; Waiver Immunities.
(a) The Company and each Guarantor hereby irrevocably, to the
fullest extent it may do so under applicable law, submits to the jurisdiction
of any New York State or federal court sitting in the Borough of Manhattan, The
City of New York and to the courts of its own corporate domicile with respect
to all actions brought against it as a defendant in respect of any suit, action
or proceeding or arbitral award arising out or relating to this Indenture, the
Securities or any transaction contemplated hereby or thereby (a "Proceeding"),
and irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts, to the fullest
extent it may do so under applicable law. The Company and each Guarantor
irrevocably waives, to the fullest extent it may do so under applicable law,
trial by jury and any objection which it may now or hereafter have to the
laying of the venue of any such Proceeding brought in any such court and any
claim that any such Proceeding brought in any such court has been brought in an
inconvenient forum. The Company and each Guarantor acknowledges that it has, by
separate written instrument, irrevocably appointed CT Corporation System (the
"Process Agent"), with an office at 1633 Broadway, New York, New York 10019, as
its authorized agent to receive on behalf of the Company and each Guarantor and
its property service of copies of the summons and complaint and any other
process which may be served in any Proceeding, and that the Process Agent has
accepted such appointment. If for any reason such Process Agent shall cease to
be such agent for service of process, the Company and each Guarantor shall
forthwith appoint a new agent of recognized standing for service of process in
the State of New York, United States and deliver to the Trustee a copy of the
new agent's acceptance of that appointment within 30 days. Nothing herein shall
affect the right of the Trustee, any Paying Agent or any Holder to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against the Company or the Guarantors in any other court
of competent jurisdiction.
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(b) Service may be made by delivering by hand a copy of such
process to the Company or the Guarantors, as the case may be, in care of the
Process Agent at the address specified above. The Company and the Guarantors
hereby irrevocably authorize and direct the Process Agent to accept such
service on their behalf. Failure of the Process Agent to give notice to the
Company or the Guarantors or failure of the Company or the Guarantors to
receive notice of such service of process shall not affect in any way the
validity of such service on the Process Agent or the Company or the Guarantors.
As an alternative method of service, the Company and the Guarantors also
irrevocably consent to the service of any and all process in any such
proceeding by the delivery by hand of copies of such process to the Company or
the Guarantors, as the case may be, at the applicable address specified in
Section 11.05 hereof or at the address most recently furnished in writing by
the Company or the Guarantors to the Trustee. The Company and the Guarantors
covenant and agree that they shall take any and all reasonable action,
including the execution and filing of any and all documents, that may be
necessary to continue the designation of the Process Agent specified above in
full force and effect during the term of the Securities, and to cause the
Process Agent to continue to act as such.
(c) The Company and the Guarantors irrevocably agree that, in any
Proceedings anywhere (whether for an injunction, specific performance or
otherwise), no immunity (to the extent that it may at any time exist, whether
on the grounds of sovereignty or otherwise) from such Proceedings, from
attachment (whether in aid of execution, before judgment or otherwise) of their
assets or from execution of judgment shall be claimed by them or on their
behalf or with respect to their assets, except to the extent required by
applicable law, any such immunity being irrevocably waived, to the fullest
extent permitted by applicable law. The Company and the Guarantors irrevocably
agree that, where permitted by applicable law, they and their assets are, and
shall be, subject to such Proceedings, attachment or execution in respect of
their obligations under this Indenture or the Securities.
SECTION 12.12. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 12.13. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture. This Indenture may be executed in any number of counterparts,
each of which shall be deemed an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 12.14. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
68
79
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first above written.
COMPANY:
DI INDUSTRIES, INC.
By:
Name:
Title:
GUARANTORS:
DRILLERS, INC.
By:
Name:
Title:
DI INTERNATIONAL, INC.
By:
Name:
Title:
DI ENERGY, INC.
By:
Name:
Title:
TRUSTEE:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By:
Name:
Title:
69
80
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
DI INDUSTRIES, INC.
No._____ ____% SENIOR NOTE DUE 2007
CUSIP No. 232909 AA 9
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
REFERRED TO ON THE REVERSE THEREOF
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO DI INDUSTRIES, INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.06 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES IN DEFINITIVE,
FULLY REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE
COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS
GLOBAL SECURITY OR IF AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY"
REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND A
SUCCESSOR DEPOSITORY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OF SUCH
NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS TO THE TRUSTEE A NOTICE THAT THIS
GLOBAL SECURITY SHALL BE TRANSFERABLE, REGISTRABLE AND EXCHANGEABLE, AND SUCH
TRANSFER SHALL BE REGISTRABLE, OR (C) AN EVENT OF DEFAULT (AS HEREINAFTER
DEFINED) HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE SECURITIES.
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DI INDUSTRIES, INC., a Texas corporation, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum indicated on Schedule A
hereof, on ___ ___, 2007.
Interest Payment Dates: _______ and ________, commencing ______, 1997.
Record Dates: _________ and __________.
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 in this place.
Unless the certificate of authentication hereon has been duly
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 purposes.
IN WITNESS WHEREOF, DI INDUSTRIES, INC. has caused this instrument to
be duly executed under its corporate seal.
Dated:
DI INDUSTRIES, INC.
By:
Name:
Title:
[Corporate Seal]
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is
one of the Securities referred to
in the Indenture.
By:
Authorized Signatory
82
[FORM OF REVERSE SIDE OF SECURITY]
_____% Senior Note Due 2007
1. Interest
DI Industries, Inc., a Texas corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on _______ and __________ of each year (an "Interest
Payment Date") commencing on ________, 1997, until the principal amount is paid
or made available for payment. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the Issue Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Securities (except Defaulted
Interest) to the Persons who are registered Holders of Securities at the close
of business on the ________ or ________ immediately preceding the Interest
Payment Date even if Securities are canceled after the Record Date and on or
before the Interest Payment Date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal, premium,
if any, and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium,
if any, and interest) will be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company, but, at the
option of the Company, interest may be paid by check mailed to the registered
Holders at their registered addresses.
3. Paying Agent and Registrar
Initially, Texas Commerce Bank National Association, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. In certain situations, the Company or any of its Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
___, 1997 (as such may be amended from time to time, the "Indenture"), among
the Company, the corporations acting as guarantors and named therein (the
"Guarantors") and the Texas Commerce Bank National Association, as trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and each Holder of the Securities and the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the Act for a statement of those
terms.
83
The Securities are limited to $125,000,000 aggregate principal amount
at any one time outstanding (subject to Section 2.08 of the Indenture). This
Security is one of the Securities referred to in the Indenture. The Indenture
imposes certain limitations on the incurrence of additional Indebtedness by the
Company and its Subsidiaries; the payment of dividends on, and redemption of,
Capital Stock of the Company and its Subsidiaries and the redemption of
Subordinated Indebtedness of the Company and its Subsidiaries; Investments;
sales of assets and Subsidiary Capital Stock; certain transactions with
Affiliates of the Company and the right of the Company and its Subsidiaries to
engage in unrelated lines of business.
5. Optional Redemption
Except as provided in the next paragraph, the Securities are not
redeemable prior to _______, 2002. At any time on or after ___________, 2002,
the Securities are redeemable at the option of the Company, in whole or in
part, on not less than 30 nor more than 60 days' notice, at the following
Redemption Prices (expressed as percentages of principal amount at Stated
Maturity), if redeemed during the 12 months beginning _______ of the years
indicated below, plus accrued and unpaid interest (if any) thereon to the
Redemption Date:
Redemption
Year Price
---- -----
2002 %
2003 %
2004 %
2005 and thereafter 100.000%
Notwithstanding the foregoing, on and prior to ________, 2000, the
Company may redeem up to 30% of the aggregate principal amount of the
Securities originally outstanding at a redemption price of ______% of the
principal amount thereof, plus accrued and unpaid interest (if any) thereon to
the Redemption Date, with the net proceeds of one or more Qualified Equity
Offerings of the Company; provided that at least $100.0 million aggregate
principal amount of the Securities shall remain outstanding immediately after
the occurrence of any such redemption; and provided, further, that such
redemption shall occur not later than 90 days after the date of the closing of
any such Qualified Equity Offering. The redemption shall be made in accordance
with procedures set forth in the Indenture.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at his address as it appears in the
Security Register. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If less than all of the
Securities are to be redeemed at any time, the Securities to be redeemed will
be chosen by the Trustee in accordance with the Indenture. If any Security is
redeemed subsequent to a Record Date with respect to any Interest Payment Date
specified above and on or prior to such Interest Payment Date, then any accrued
interest will be paid on such Interest Payment Date to the Holder of the
Security at the close of business on such Record Date. If money sufficient to
pay the Redemption Price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
84
7. Change of Control
Upon the occurrence of a Change of Control, each Holder of Securities
shall have the right to require the Company to purchase such Holder's
Securities, in whole or in part in a principal amount at Stated Maturity that
is an integral multiple of $1,000, pursuant to a Change of Control Offer, at a
purchase price in cash equal to 101% of the principal amount thereof on any
Change of Control Payment Date, plus accrued and unpaid interest, if any, to
the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Securities. The Holder
of this Security may elect to have this Security or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Require Purchase" appearing below and tendering this Security
pursuant to the Change of Control Offer. Unless the Company defaults in the
payment of the Change of Control Purchase Price with respect thereto, all
Securities or portions thereof accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest from and after the Change of
Control Payment Date.
8. Repurchase at the Option of Holders upon Asset Sale.
Subject to the limitations set forth in the next following paragraph,
if at any time the Company or any Subsidiary engages in any Asset Sale, as a
result of which the aggregate amount of Excess Proceeds exceeds $15,000,000,
the Company shall, within 30 calendar days of the date the amount of Excess
Proceeds exceeds $5,000,000, or at any time after receipt of Excess Proceeds
but prior to there being $15,000,000 of Excess Proceeds may, at its option, use
the then-existing Excess Proceeds to make an offer to purchase from all
Holders, on a pro rata basis, Securities in an aggregate principal amount equal
to the maximum principal amount that may be purchased out of the then-existing
Excess Proceeds, at a purchase price in cash equal to 100% of the principal
amount at Stated Maturity thereof, plus accrued and unpaid interest, if any, to
the Asset Sale Offer Purchase Date. Upon completion of an Asset Sale Offer
(including payment of the Asset Sale Offer Purchase Price for accepted
Securities), any surplus Excess Proceeds that were the subject of such offer
shall cease to be Excess Proceeds, and the Company may then use such amounts
for general corporate purposes.
Within 30 calendar years of the date the amount of Excess Proceeds
exceeds $15,000,000, the Company shall send, or cause to be sent, by first
class mail, postage prepaid, a notice regarding the Asset Sale Offer to each
Holder of Securities. The Holder of this Security may elect to have this
Security or a portion hereof in an authorized denomination purchased by
completing the form entitled "Option of Holder to Require Purchase" appearing
below and tendering this Security pursuant to the Asset Sale Offer. Unless the
Company defaults in the payment of the Asset Sale Offer Purchase Price with
respect thereto, all Securities or portions thereof selected for payment
pursuant to the Asset Sale Offer will cease to accrue interest from and after
the Asset Sale Offer Purchase Date.
85
9. The Global Security.
So long as this Global Security is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
("Agent Members") shall have no rights under the Indenture with respect to this
Global Security held on their behalf by the Depositary or the Trustee as its
custodian, and the Depositary may be treated by the Company, the Guarantors,
the Trustee and any agent of the Company, the Guarantors or the Trustee as the
absolute owner of this Global Security for all purposes. Notwithstanding the
foregoing, nothing herein shall (i) prevent the Company, the Guarantors, the
Trustee or any agent of the Company, the Guarantors or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (ii) impair, as between the Depositary and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
Holder of Securities.
The Holder of this Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests in this Global Note through Agent Members, to take any action which a
Holder of Securities is entitled to take under the Indenture or the Securities.
Whenever, as a result of an optional redemption of Securities by the
Company, a Change of Control Offer, an Asset Sale Offer or an exchange for
Certificated Securities, this Global Note is redeemed, repurchased or exchanged
or substituted in part, this Global Security shall be surrendered by the Holder
thereof to the Trustee who shall cause an adjustment to be made to Schedule A
hereof so that the principal amount of this Global Security will be equal to
the portion not redeemed, repurchased or exchanged and shall thereafter return
this Global Security to such Holder; provided that this Global Security shall
be in a principal amount at Stated Maturity of $1,000 or an integral multiple
of $1,000.
10. Transfer and Exchange.
The Holder of this Global Security shall, by its acceptance of this
Global Security, agree that transfers of beneficial interests in this Global
Security may be effected only through a book entry system maintained by such
Holder (or its agent), and that ownership of a beneficial interest in the
Securities represented thereby shall be required to be reflected in book entry
form.
Transfers of this Global Security shall be limited to transfers in
whole, and not in part, to the Depositary, its successors and their respective
nominees. Interests of beneficial owners in this Global Security may be
transferred in accordance with the rules and procedures of the Depositary (or
its successors).
This Global Security will be exchanged by the Company for one or more
Certificated Securities if (a) the Depositary (i) has notified the Company for
one or more Certificated Securities if (a) the Depositary (i) has notified the
Company that it is unwilling or unable to continue as, or ceases to be, a
"Clearing Agency" registered under Section 17A of the Exchange Act and (ii) a
successor to the Depositary registered as a "Clearing Agency" under Section 17A
of the Exchange Act is not appointed by the Company within 90 calendar days or
(b) the Depositary is at any time unwilling or unable to continue as Depositary
and a successor to the Depositary is not able to be appointed by the Company
within 90 calendar days. If an Event of Default occurs and is continuing, the
Company shall, at the request of the Holder hereof, exchange all or a part of
this Global Security for one or more Certificated Securities; provided that the
principal amount at Stated Maturity of each of such Certificated Securities and
this Global Security, after such exchange, shall be $1,000 or an integral
multiple thereof. Whenever this Global Security is exchanged as a whole for one
or more Certificated Securities, it shall be surrendered by the Holder to the
Trustee for cancellation. Whenever this Global Security is exchanged in part
for one or more Certificated Securities, it shall be surrendered by the Holder
to the Trustee and the Trustee shall make the appropriate notations thereon
pursuant to Section 2.05 of the Indenture. Interests in this Global Security
may not be exchanged for Certificated Securities other than as provided in this
paragraph.
86
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its Obligations and the Guarantors' Obligations under the
Securities, the Guarantees and the Indenture if the Company deposits with the
Trustee money or U.S. Government Obligations for the payment of principal,
premium and interest on the Securities to redemption or maturity, as the case
may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in outstanding principal amount at stated
Maturity of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a majority
in outstanding principal amount at Stated Maturity outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder, the Company, the Guarantors and the Trustee may
amend the Indenture or the Securities (a) to evidence the succession of another
Person to the Company and the Guarantors and the assumption by such successor
of the covenants and Obligations of the Company under the Indenture and
contained in the Securities and of the Guarantors contained in the Indenture
and the Guarantees, (b) to add to the covenants of the Company, for the benefit
of the Holders, or to surrender any right or power conferred upon the Company
or the Guarantors by the Indenture, (c) to add any additional Events of
Default, (d) to provide for uncertificated Securities in addition to or in
place of Certificated Securities, (e) to evidence and provide for the
acceptance of appointment under the Indenture by the successor Trustee, (f) to
secure the Securities and/or the Guarantees, (g) to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be inconsistent
with any other provision therein or to add any other provision with respect to
matters or questions arising under the Indenture, provided that such actions
will not adversely affect the interests of the Holders in any material respect
or (h) to add or release any Guarantor pursuant to the terms of the Indenture.
Certain provisions of the Securities and the Indenture may not be amended or
waived without the consent of each Holder affected thereby.
15. Defaults and Remedies
Under the Indenture, Events of Default include in summary form (i)
default in the payment of interest on the Securities when due, continued for 30
days; (ii) default in the payment of principal of (or premium, if any, on) the
Securities when due; (iii) failure to comply with certain of the covenants in
the Indenture, including the Change of Control covenant, the Asset Sale
covenant and the Restrictive Payments covenant; (iv) failure to perform any
other covenant of the Company or any Guarantor in the Indenture, continued for
30 days after written notice as provided in the Indenture; (v) Indebtedness of
the Company or any Subsidiary is not paid when due within the applicable grace
period, or is accelerated and, in either case, the principal amount of such
unpaid Indebtedness exceeds $5,000,000; (vi) one or more final judgments or
orders by a court of competent jurisdiction are entered against the Company or
any Subsidiary in an uninsured or
87
unindemnified aggregate amount in excess of $5,000,000 and such judgments or
orders are not discharged, waived, appealed, stayed, satisfied or bonded for a
period of 60 consecutive days; (vii) certain events of bankruptcy, insolvency
or reorganization; or (viii) a Guarantee ceases to be in full force and effect
(other than in accordance with the terms of the Indenture and such Guarantee)
or a Guarantor denies or disaffirms its obligations under its Guarantee.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount at Stated
Maturity of the Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders. The Holders of a
majority in principal amount at Stated Maturity of the outstanding Securities,
by written notice to the Company and the Trustee, may rescind any declaration
of acceleration and its consequences if the rescission would not conflict with
any judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the
Company or a Guarantor under the Securities, the Guarantees or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
18. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
19. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of this Security.
88
SECURITY GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors
(as defined in the Indenture referred to in this Security and each hereinafter
referred to as a "Guarantor," which term includes any successor or additional
Guarantor under the Indenture) have jointly and severally, irrevocably and
unconditionally guaranteed (a) the due and punctual payment of the principal
(and premium, if any) of and interest on the Securities, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest on the Securities, if any, to
the extent lawful, (c) the due and punctual performance of all other
Obligations of the Company and the Guarantors to the Holders under the
Indenture and the Notes and (d) in case of any extension of time of payment or
renewal of any Securities or any of such other Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer, purchase or
otherwise. Capitalized terms used herein shall have the same meanings assigned
to them in the Indenture unless otherwise indicated.
Payment on each Security is guaranteed jointly and severally, by the
Guarantors pursuant to Article 11 of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The Obligations of each Guarantor are limited to the lesser of (a) an
amount equal to such Guarantor's Adjusted Net Assets as of the date of the
Guarantee and (b) the maximum amount as well, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the Obligations of such other
Guarantor under its Guarantee or pursuant to its contribution Obligations under
the Indenture, result in the Obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent conveyance or fraudulent
transfer under federal or state law or not otherwise being void, voidable or
unenforceable under any similar other bankruptcy, receivership, insolvency,
liquidation or other similar legislation or legal principles under applicable
foreign law. Each Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Company in a pro
rata amount based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their Guarantors upon
the terms and subject to the conditions provided in the Indenture.
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
DRILLERS, INC.
By:
DI INTERNATIONAL, INC.
By:
DI ENERGY, INC.
By:
89
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Dated: ________________ Your Signature:
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
Signature must be guaranteed
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program ("STAMP") or
similar program.
90
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.07 or Section 4.09 of the Indenture, check the
appropriate box:
Section 4.07 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.07 or Section 4.09 of the
Indenture, state the amount in principal amount (must be an integral of
$1,000): $_______________
Dated: _______________ Your Signature:
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
(Signature must be guaranteed)
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
91
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN PRINCIPAL AMOUNT
The initial principal amount at Maturity of this Global Security shall
be $125,000,000. The following increases or decreases in this Global Security
have been made:
Total Principal Signature of
Amount of Amount of amount of this authorized
Date of decrease in increase in Global Security signatory of
Increase/ Principal Amount Principal Amount following such Trustee or
Decrease at Maturity at Maturity Decrease/Increase Securities Custodian
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
- -------- ---------------- ---------------- ----------------- --------------------
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EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
DI INDUSTRIES, INC.
No._________ ____% SENIOR NOTE DUE 2007
CUSIP No.__________
DI INDUSTRIES, INC., a Texas corporation, hereby promises to pay to
_________________, or registered assigns, the principal sum of _______________
on _______, 2007.
Interest Payment Dates: _______ and ________, commencing ______, 1997.
Record Dates: _________ and __________.
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 in this place.
IN WITNESS WHEREOF, DI INDUSTRIES, INC. has caused this instrument to
be duly executed under its corporate seal.
Dated:
DI INDUSTRIES, INC.
By:
Name:
Title:
[Corporate Seal]
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By:
Authorized Signatory
93
[FORM OF REVERSE SIDE OF SECURITY]
_____% Senior Note Due 2007
1. Interest
DI Industries, Inc., a Texas corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on _______ and __________ of each year (an "Interest
Payment Date") commencing on ________, 1997, until the principal amount is paid
or made available for payment. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the Issue Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
2. Method of Payment
The Company will pay interest on the Securities (except Defaulted
Interest) to the Persons who are registered Holders of Securities at the close
of business on the ________ or ________ immediately preceding the Interest
Payment Date even if Securities are canceled after the Record Date and on or
before the Interest Payment Date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal, premium,
if any, and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium,
if any, and interest) will be made by wire transfer of immediately available
funds to the accounts specified by The Depository Trust Company, but, at the
option of the Company, interest may be paid by check mailed to the registered
Holders at their registered addresses.
3. Paying Agent and Registrar
Initially, Texas Commerce Bank National Association, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. In certain circumstances, the Company or any of its
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of June
___, 1997 (as such may be amended from time to time, the "Indenture"), among
the Company, the corporations acting as guarantors and named therein (the
"Guarantors") and the Texas Commerce Bank National Association, as trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, duties and immunities thereunder of the Company, the Guarantors, the
Trustee and each Holder of the Securities and the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the Act for a statement of those
terms.
94
The Securities are limited to $125,000,000 aggregate principal amount
at any one time outstanding (subject to Section 2.08 of the Indenture). This
Security is one of the Securities referred to in the Indenture. The Indenture
imposes certain limitations on the incurrence of additional Indebtedness by the
Company and its Subsidiaries; the payment of dividends on, and redemption of,
Capital Stock of the Company and its Subsidiaries and the redemption of
Subordinated Indebtedness of the Company and its Subsidiaries; Investments;
sales of assets and Subsidiary Capital Stock; certain transactions with
Affiliates of the Company and the right of the Company and its Subsidiaries to
engage in unrelated lines of business.
5. Optional Redemption
Except as provided in the next paragraph, the Securities are not
redeemable prior to _______, 2002. At any time on or after ___________, 2002,
the Securities are redeemable at the option of the Company, in whole or in
part, on not less than 30 nor more than 60 days' notice, at the following
Redemption Prices (expressed as percentages of principal amount at Stated
Maturity), if redeemed during the 12 months beginning _______ of the years
indicated below, plus accrued and unpaid interest (if any) thereon to the
Redemption Date:
Redemption
Year Price
---- -----
2002 %
2003 %
2004 %
2005 and thereafter 100.000%
Notwithstanding the foregoing, on and prior to ________, 2000, the
Company may redeem up to 30% of the aggregate principal amount of the
Securities originally outstanding at a redemption price of _____ _% of the
principal amount thereof, plus accrued and unpaid interest (if any) thereon to
the Redemption Date, with the net proceeds of one or more Qualified Equity
Offerings of the Company; provided that at least $100.0 million aggregate
principal amount of the Securities shall remain outstanding immediately after
the occurrence of any such redemption; and provided, further, that such
redemption shall occur not later than 90 days after the date of the closing of
any such Qualified Equity Offering. The redemption shall be made in accordance
with procedures set forth in the Indenture.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at his address as it appears in the
Security Register. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If less than all of the
Securities are to be redeemed at any time, the Securities to be redeemed will
be chosen by the Trustee in accordance with the Indenture. If any Security is
redeemed subsequent to a Record Date with respect to any Interest Payment Date
specified above and on or prior to such Interest Payment Date, then any accrued
interest will be paid on such Interest Payment Date to the Holder of the
Security at the close of business on such Record Date. If money sufficient to
pay the Redemption Price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent on or before the Redemption Date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
95
7. Change of Control
Upon the occurrence of a Change of Control, each Holder of Securities
shall have the right to require the Company to purchase such Holder's
Securities, in whole or in part in a principal amount at Stated Maturity that
is an integral multiple of $1,000, pursuant to a Change of Control Offer, at a
purchase price in cash equal to 101% of the principal amount thereof on any
Change of Control Payment Date, plus accrued and unpaid interest, if any, to
the Change of Control Payment Date.
Within 30 calendar days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Securities. The Holder
of this Security may elect to have this Security or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Require Purchase" appearing below and tendering this Security
pursuant to the Change of Control Offer. Unless the Company defaults in the
payment of the Change of Control Purchase Price with respect thereto, all
Securities or portions thereof accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest from and after the Change of
Control Payment Date.
8. Repurchase at the Option of Holders upon Asset Sale
Subject to the limitations set forth in the next following paragraph,
if at any time the Company or any Subsidiary engages in any Asset Sale, as a
result of which the aggregate amount of Excess Proceeds exceeds $15,000,000,
the Company shall, within 30 calendar days of the date the amount of Excess
Proceeds exceeds $5,000,000, or at any time after receipt of Excess Proceeds
but prior to there being $15,000,000 of Excess Proceeds, the Company may, at
its option, use the then-existing Excess Proceeds to make an offer to purchase
from all Holders, on a pro rata basis, Securities in an aggregate principal
amount equal to the maximum principal amount that may be purchased out of the
then-existing Excess Proceeds, at a purchase price in cash equal to 100% of the
principal amount at Stated Maturity thereof, plus accrued and unpaid interest,
if any, to the Asset Sale Offer Purchase Date. Upon completion of an Asset Sale
Offer (including payment of the Asset Sale Offer Purchase Price for accepted
Securities), any surplus Excess Proceeds that were the subject of such offer
shall cease to be Excess Proceeds, and the Company may then use such amounts
for general corporate purposes.
Within 30 calendar years of the date the amount of Excess Proceeds
exceeds $15,000,000, the Company shall send, or cause to be sent, by first
class mail, postage prepaid, a notice regarding the Asset Sale Offer to each
Holder of Securities. The Holder of this Security may elect to have this
Security or a portion hereof in an authorized denomination purchased by
completing the form entitled "Option of Holder to Require Purchase" appearing
below and tendering this Security pursuant to the Asset Sale Offer. Unless the
Company defaults in the payment of the Asset Sale Offer Purchase Price with
respect thereto, all Securities or portions thereof selected for payment
pursuant to the Asset Sale Offer will cease to accrue interest from and after
the Asset Sale Offer Purchase Date.
9. Transfer and Exchange
A Holder may transfer a Security only upon the surrender of such
Security for registration of transfer. No such transfer shall be effected
until, and such transferee shall succeed to the rights of a Holder only upon,
final acceptance and registration of the transfer in the Security Register by
the Registrar. When Securities are presented to the Registrar with a request to
register the transfer of, or to exchange, such Securities, the Registrar shall
register the transfer or make such exchange as requested if its requirements
for such transactions and any applicable requirements hereunder are satisfied.
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 of Securities.
96
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its Obligations and the Guarantors' Obligations under the
Securities, the Guarantees and the Indenture if the Company deposits with the
Trustee money or U.S. Government Obligations for the payment of principal,
premium and interest on the Securities to redemption or maturity, as the case
may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in outstanding principal amount at Stated
Maturity of the Securities and (ii) any default or noncompliance with any
provision may be waived with the written consent of the Holders of a majority
in outstanding principal amount at Stated Maturity outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder, the Company, the Guarantors and the Trustee may
amend the Indenture or the Securities (a) to evidence the succession of another
Person to the Company and the Guarantors and the assumption by such successor
of the covenants and Obligations of the Company under the Indenture and
contained in the Securities and of the Guarantors contained in the Indenture
and the Guarantees, (b) to add to the covenants of the Company, for the benefit
of the Holders, or to surrender any right or power conferred upon the Company
or the Guarantors by the Indenture, (c) to add any additional Events of
Default, (d) to provide for uncertificated Securities in addition to or in
place of certificated Securities, (e) to evidence and provide for the
acceptance of appointment under the Indenture by the successor Trustee, (f) to
secure the Securities and/or the Guarantees, (g) to cure any ambiguity, to
correct or supplement any provision in the Indenture which may be inconsistent
with any other provision therein or to add any other provision with respect to
matters or questions arising under the Indenture, provided that such actions
will not adversely affect the interests of the Holders in any material respect
or (h) to add or release any Guarantor pursuant to the terms of the Indenture.
Certain provisions of the Securities and the Indenture may not be amended or
waived without the consent of each Holder affected thereby.
15. Defaults and Remedies
Under the Indenture, Events of Default include in summary form (i)
default in the payment of interest on the Securities when due, continued for 30
days; (ii) default in the payment of principal of (or premium, if any, on) the
Securities when due; (iii) failure to comply with certain of the covenants in
the Indenture, including the Change of Control covenant, the Asset Sale
covenant and the Restrictive Payments covenant; (iv) failure to perform any
other covenant of the Company or any Guarantor in the Indenture, continued for
30 days after written notice as provided in the Indenture; (v) Indebtedness of
the Company or
97
any Subsidiary is not paid when due within the applicable grace period, or is
accelerated and, in either case, the principal amount of such unpaid
Indebtedness exceeds $5,000,000; (vi) one or more final judgments or orders by
a court of competent jurisdiction are entered against the Company or any
Subsidiary in an uninsured or unindemnified aggregate amount in excess of
$5,000,000 and such judgments or orders are not discharged, waived, appealed,
stayed, satisfied or bonded for a period of 60 consecutive days; (vii) certain
events of bankruptcy, insolvency or reorganization; or (viii) a Guarantee
ceases to be in full force and effect (other than in accordance with the terms
of the Indenture and such Guarantee) or a Guarantor denies or disaffirms its
obligations under its Guarantee.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount at Stated
Maturity of the Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders. The Holders of a
majority in principal amount at Stated Maturity of the outstanding Securities,
by written notice to the Company and the Trustee, may rescind any declaration
of acceleration and its consequences if the rescission would not conflict with
any judgment or decree, and if all Events of Default have been cured or waived
except nonpayment of principal and interest that has become due solely because
of the acceleration.
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the
Company or a Guarantor under the Securities, the Guarantees or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
18. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
19. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
98
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture which has in it the text
of this Security.
99
SECURITY GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors
(as defined in the Indenture referred to in this Security and each hereinafter
referred to as a "Guarantor," which term includes any successor or additional
Guarantor under the Indenture) have jointly and severally, irrevocably and
unconditionally guaranteed (a) the due and punctual payment of the principal
(and premium, if any) of and interest on the Securities, whether at Stated
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest on the Securities, if any, to
the extent lawful, (c) the due and punctual performance of all other
Obligations of the Company and the Guarantors to the Holders under the
Indenture and the Notes and (d) in case of any extension of time of payment or
renewal of any Securities or any of such other Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Asset Sale Offer, purchase or
otherwise. Capitalized terms used herein shall have the same meanings assigned
to them in the Indenture unless otherwise indicated.
Payment on each Security is guaranteed jointly and severally, by the
Guarantors pursuant to Article 11 of the Indenture and reference is made to
such Indenture for the precise terms of the Guarantees.
The obligations of each Guarantor are limited to the lesser of (a) an
amount equal to such Guarantor's Adjusted Net Assets as of the date of the
Guarantee and (b) the maximum amount as well, after giving effect to such
maximum amount and all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the Obligations of such other
Guarantor under its Guarantee or pursuant to its contribution Obligations under
the Indenture, result in the Obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent conveyance or fraudulent
transfer under federal or state law or not otherwise being void, voidable or
unenforceable under any similar other bankruptcy, receivership, insolvency,
liquidation or other similar legislation or legal principles under applicable
foreign law. Each Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Company in a pro
rata amount based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their Guarantors upon
the terms and subject to the conditions provided in the Indenture.
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights, the rights and privileges herein conferred upon that party
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
DRILLERS, INC.
By:
DI INTERNATIONAL, INC.
By:
DI ENERGY, INC.
By:
100
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
Dated: ________________ Your Signature:
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
Signature must be guaranteed
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
101
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.07 or Section 4.09 of the Indenture, check the
appropriate box:
Section 4.07 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.07 or Section 4.09 of the
Indenture, state the amount in principal amount (must be an integral of
$1,000): $_______________
Dated: _______________ Your Signature:
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
(Signature must be guaranteed)
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
102
APPENDIX B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among [GUARANTOR] (the "New Guarantor"), a subsidiary of DI
Industries, Inc. (or its successor), a Texas corporation (the "Company"), DI
INDUSTRIES, INC., the Guarantors (the "Existing Guarantors") under the
Indenture referred to below, and Texas Commerce Bank National Association, a
national banking association, as trustee under the Indenture referred to below
(the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has heretofore executed and delivered to
the Trustee an Indenture (as such may be amended from time to time, the
"Indenture"), dated as of __________, 1997, providing for the issuance of an
aggregate principal amount of $150,000,000 of ___% Senior Notes due 2007 (the
"Securities");
WHEREAS Section 11.07 of the Indenture provides that the
Company is required to cause the New Guarantor to execute and deliver to the
Trustee a supplemental indenture pursuant to which the New Guarantor shall
jointly and severally and unconditionally and irrevocably guarantee all of the
Company's Obligations under the Securities and the Indenture pursuant to a
Guarantee contained in the Indenture on the terms and conditions set forth
herein; and
WHEREAS pursuant to Section 10.01 of the Indenture, the
Trustee, the Company and Existing Guarantors are authorized to execute and
deliver this Supplemental Indenture;
NOW THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the New Guarantor, the Company, the Existing Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Securities as follows:
1. Definitions. (a) Capitalized terms used herein
without definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except
as otherwise herein expressly provided or unless the context otherwise
requires: (i) the terms and expressions used herein shall have the same
meanings as corresponding terms and expressions used in the Indenture; and (ii)
the words "herein," "hereof" and "hereby" and other words of similar import
used in this Supplemental Indenture refer to this Supplemental Indenture as a
whole and not to any particular section hereof.
2. Agreement to Guarantee. The New Guarantor hereby agrees,
jointly and severally and unconditionally and irrevocably, with all other
Guarantors, to guarantee the Company's Obligations under the Securities and the
Indenture on the terms and subject to the conditions set forth in Article 11 of
the Indenture and to be bound by all other applicable provisions of the
Indenture. From and after the date hereof, the New Guarantor shall be a
Guarantor for all purposes under the Indenture and the Securities.
3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
103
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
5. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental
Indenture.
6. Counterparts. The parties may sign any number of copies
of this Supplemental Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement.
7. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW GUARANTOR]
By:
Name:
Title:
DI INDUSTRIES, INC.
By:
Name:
Title:
[ALL EXISTING GUARANTORS]
By:
Name:
Title:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Trustee
By:
Name:
Title: