EXHIBIT 4.1
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GREY WOLF, INC.
Floating Rate Contingent Convertible Senior Notes Due 2024
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INDENTURE
Dated as of March 31, 2004
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JPMORGAN CHASE BANK
Trustee
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GREY WOLF, INC.
Floating Rate Contingent Convertible Senior Notes Due 2024
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INDENTURE
Dated as of March 31, 2004
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JPMorgan Chase Bank
TRUSTEE
CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section
310 (a)(1)..................................................................7.10
(a)(2)......................................................................7.10
(a)(3)......................................................................N.A.
(a)(4)......................................................................N.A.
(a)(5)......................................................................N.A.
(b)...................................................................7.08, 7.10
(c).........................................................................N.A.
311(a)......................................................................7.11
(b).........................................................................7.11
(c).........................................................................N.A.
312 (a).....................................................................2.05
(b)........................................................................12.03
(c)........................................................................12.03
313(a)......................................................................7.06
(b)(1)......................................................................7.06
(b)(2)......................................................................7.06
(c).........................................................................7.06
(d).........................................................................7.06
314(a)................................................................4.02, 4.03
(b).........................................................................N.A.
(c)(1).....................................................................12.04
(c)(2).....................................................................12.04
(c)(3)......................................................................N.A.
(d).........................................................................N.A.
(e)........................................................................12.05
(f).........................................................................N.A.
315 (a)..................................................................7.01(b)
(b).........................................................................7.05
ii
(c).........................................................................7.01
(d)......................................................................7.01(c)
(e).........................................................................6.11
316(a)(1)(A)................................................................6.05
(a)(1)(B)...................................................................6.04
(a)(2)......................................................................N.A.
(b).........................................................................6.07
(c)......................................................................1.05(d)
317 (a)(1)..................................................................6.08
(a)(2)......................................................................6.09
(b).........................................................................2.04
318 (a).....................................................................N.A.
N.A. means not applicable.
*This Cross-Reference Table is not part of the 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. Other Definitions.............................................................5
Section 1.03. Incorporation by Reference of Trust Indenture Act.............................6
Section 1.04. Rules of Construction.........................................................7
Section 1.05. Acts of Holders...............................................................7
Article 2 THE SECURITIES..........................................................................................8
Section 2.01. Form and Dating...............................................................8
Section 2.02. Execution and Authentication..................................................9
Section 2.03. Registrar, Paying Agent and Conversion Agent.................................10
Section 2.04. Paying Agent to Hold Money in Trust..........................................10
Section 2.05. Securityholder Lists.........................................................11
Section 2.06. Transfer and Exchange........................................................11
Section 2.07. Replacement Securities.......................................................12
Section 2.08. Outstanding Securities; Determinations of Holders' Action....................13
Section 2.09. Temporary Securities.........................................................14
Section 2.10. Cancellation.................................................................14
Section 2.11. Persons Deemed Owners........................................................14
Section 2.12. Global Securities............................................................15
Section 2.13. CUSIP Numbers................................................................17
Article 3 REDEMPTION AND PURCHASES...............................................................................17
Section 3.01. Right To Redeem; Notices To Trustee..........................................17
Section 3.02. Selection of Securities to Be Redeemed.......................................17
Section 3.03. Notice of Redemption.........................................................18
Section 3.04. Effect of Notice of Redemption...............................................19
Section 3.05. Deposit of Redemption Price..................................................19
Section 3.06. Securities Redeemed in Part..................................................19
Section 3.07. Reserved.....................................................................19
Section 3.08. Purchase of Securities at Option of the Holder...............................19
Section 3.09. Purchase of Securities at Option of the Holder upon Change in Control........21
Section 3.10. Effect of Purchase Notice or Change in Control Purchase Notice...............24
Section 3.11. Deposit of Purchase Price or Change in Control Purchase Price................25
Section 3.12. Securities Purchased in Part.................................................25
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of Securities..........26
Section 3.14. Repayment to the Company.....................................................26
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Article 4 COVENANTS..............................................................................................26
Section 4.01. Payment of Securities........................................................26
Section 4.02. SEC and Other Reports........................................................27
Section 4.03. Compliance Certificate.......................................................27
Section 4.04. Further Instruments and Acts.................................................27
Section 4.05. Maintenance of Office or Agency..............................................27
Section 4.06. Delivery of Certain Information..............................................28
Section 4.07. [Intentionally omitted.].....................................................28
Section 4.08. Liquidated Damages...........................................................28
Article 5 SUCCESSOR CORPORATION..................................................................................28
Section 5.01. Consolidation, Merger and Sale of Assets.....................................28
Article 6 DEFAULTS AND REMEDIES..................................................................................29
Section 6.01. Events of Default............................................................29
Section 6.02. Defaults and Remedies........................................................31
Section 6.03. Other Remedies...............................................................31
Section 6.04. Waiver of Past Defaults......................................................31
Section 6.05. Control by Majority..........................................................32
Section 6.06. Limitation on Suits..........................................................32
Section 6.07. Rights of Holders to Receive Payment.........................................32
Section 6.08. Collection Suit by Trustee...................................................32
Section 6.09. Trustee May File Proofs of Claim.............................................33
Section 6.10. Priorities...................................................................33
Section 6.11. Suits........................................................................34
Section 6.12. Waiver of Stay, Extension or Usury Laws......................................34
Article 7 TRUSTEE................................................................................................34
Section 7.01. Duties of Trustee............................................................34
Section 7.02. Rights of Trustee............................................................35
Section 7.03. Individual Rights of Trustee.................................................37
Section 7.04. Trustee's Disclaimer.........................................................37
Section 7.05. Notice of Defaults...........................................................37
Section 7.06. Reports by Trustee to Holders................................................38
Section 7.07. Compensation and Indemnity...................................................38
Section 7.08. Replacement of Trustee.......................................................38
Section 7.09. Successor Trustee by Merger..................................................39
Section 7.10. Eligibility; Disqualification................................................39
Section 7.11. Preferential Collection of Claims Against Company............................40
Article 8 DISCHARGE OF INDENTURE.................................................................................40
Section 8.01. Discharge of Liability on Securities.........................................40
Section 8.02. Repayment to the Company.....................................................40
Article 9 AMENDMENTS.............................................................................................40
Section 9.01. Without Consent of Holders...................................................40
Section 9.02. With Consent of Holders......................................................41
Section 9.03. Compliance with Trust Indenture Act..........................................42
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Section 9.04. Revocation and Effect of Consents............................................42
Section 9.05. Notation on or Exchange of Securities........................................42
Section 9.06. Trustee to Sign Supplemental Indentures......................................42
Section 9.07. Effect of Supplemental Indentures............................................43
Article 10 CONVERSIONS...........................................................................................43
Section 10.01. Conversion Privilege.........................................................43
Section 10.02. Conversion Procedure.........................................................45
Section 10.03. Adjustments Below Par Value..................................................47
Section 10.04. Taxes on Conversion..........................................................47
Section 10.05. Company to Provide Stock.....................................................48
Section 10.06. Adjustment of Conversion Price...............................................49
Section 10.07. No Adjustment................................................................52
Section 10.08. Equivalent Adjustments.......................................................53
Section 10.09. Adjustment for Tax Purposes..................................................53
Section 10.10. Notice of Adjustment.........................................................53
Section 10.11. Notice of Certain Transactions...............................................54
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share Exchange or
Sale on Conversion Privilege.................................................54
Section 10.13. Trustee's Disclaimer.........................................................55
Section 10.14. Voluntary Reduction..........................................................56
Section 10.15. Simultaneous Adjustments.....................................................56
Article 11 GUARANTEES............................................................................................56
Section 11.01. Guarantees...................................................................56
Section 11.02. Limitation on Liability......................................................59
Section 11.03. Execution and Delivery of Guarantees.........................................59
Section 11.04. When a Guarantor May Merge, etc..............................................59
Section 11.05. No Waiver....................................................................59
Section 11.06. Modification.................................................................60
Section 11.07. Release of Guarantor.........................................................60
Section 11.08. Execution of Supplemental Indentures for Future Guarantors...................60
Article 12 MISCELLANEOUS.........................................................................................61
Section 12.01. Trust Indenture Act Controls.................................................61
Section 12.02. Notices......................................................................61
Section 12.03. Communication by Holders with Other Holders..................................62
Section 12.04. Certificate and Opinion as to Conditions Precedent...........................62
Section 12.05. Statements Required in Certificate or Opinion................................62
Section 12.06. Separability Clause..........................................................63
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar...............63
Section 12.08. Legal Holidays...............................................................63
Section 12.09. Governing Law................................................................63
Section 12.10. No Recourse Against Others...................................................63
Section 12.11. Successors...................................................................63
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Section 12.12. Multiple Originals...........................................................63
Exhibit A-1 - Form of Global Security
Exhibit A-2 - Form of Certificated Security
Exhibit B - Transfer Certificate
Exhibit C - Form of Supplemental Indenture
vii
INDENTURE dated as of March 31, 2004 between GREY WOLF, INC., a Texas
corporation (the "COMPANY"), certain of the Company's subsidiaries signatory
hereto (each a "GUARANTOR," collectively, the "GUARANTORS") and JPMorgan Chase
Bank, a New York banking corporation duly organized and existing under the laws
of the State of New York (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's Floating Rate
Contingent Convertible Senior Notes Due 2024:
Article 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"144A GLOBAL SECURITY" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A-1 that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A.
"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 any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"CONTROL" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BOARD RESOLUTION" means a copy of one or more resolutions, certified
by an Officer of the Company to have been duly adopted or consented to by the
applicable Board of Directors and to be in full force and effect, and delivered
to the Trustee.
"BUSINESS DAY" means, with respect to any Security, a day that in The
City of New York or Houston, Texas is not a day on which banking institutions
are authorized by law or regulation to close.
"CAPITAL STOCK" for any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that Person.
"CERTIFICATED SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.
"COMMON STOCK" shall mean shares of the Company's Common Stock, $0.10
par value per share, as they exist on the date of this Indenture or any other
shares of Capital Stock of the Company into which the Common Stock shall be
reclassified or changed.
"COMPANY" means the party named as the "COMPANY" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"COMPANY ORDER" means a written request or order signed in the name of
the Company by any two Officers.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any time the trust created by this Indenture shall be administered, which office
at the date hereof is located at JPMorgan Chase Bank, 4 New York Plaza, 15th
Floor, New York, New York 10004, Attention: Institutional Trust Services, or
such other address as the Trustee may designate from time to time by notice to
the Holders and the Company, or the principal corporate trust office of any
successor Trustee (or such other address as a successor Trustee may designate
from time to time by notice to the Holders and the Company).
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"GLOBAL SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 2.06 such
Securities will be in the form of a 144A Global Security.
"GUARANTEE" means an unconditional guaranty of the Securities given by
any Subsidiary pursuant to the provisions of Article 11 of this Indenture.
"GUARANTOR" means Grey Wolf Drilling Company L.P., a Texas limited
partnership, Grey Wolf LLC, a Louisiana limited liability company, Grey Wolf
Holdings Company, a Nevada corporation, Murco Drilling Corporation, a Delaware
corporation, Grey Wolf International, Inc., a Texas corporation, DI/Perfensa,
Inc., a Texas corporation, DI Energy, Inc., a Texas corporation, and Grey Wolf
Mexico Holdings LLC, a Nevada limited liability company, 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.
2
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"INITIAL PURCHASERS" shall mean Deutsche Bank Securities Inc. and
Credit Suisse First Boston LLC.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"LIQUIDATED DAMAGES" has the meaning set forth in the Registration
Rights Agreement dated as of March 31, 2004 by and among the Company, the
Guarantors and the Initial Purchasers.
"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.
"OFFERING MEMORANDUM" means the Confidential Offering Memorandum dated
March 25, 2004, relating to the Company's offering and placement of the
Securities.
"OFFICER" 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, 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.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company or any Guarantor by any two Officers, and delivered to the Trustee. An
Officers' Certificate given pursuant to Section 4.03 shall be signed by the
Treasurer or Chief Financial Officer of the Company but need not contain the
information specified in Sections 12.04 and 12.05.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Section 12.04 and 12.05, from legal counsel who is acceptable to
the Trustee in its reasonable discretion. The counsel may be an employee of, or
counsel to, the Company, a Guarantor or the Trustee.
"PERSON" or "PERSON" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or other entity.
"PRINCIPAL AMOUNT" or "PRINCIPAL AMOUNT" of a Security means the
Principal Amount as set forth on the face of the Security.
3
"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.
"REDEMPTION DATE" or "REDEMPTION DATE" shall mean the date specified
for redemption of the Securities in accordance with the terms of the Securities
and this Indenture.
"REDEMPTION PRICE" or "REDEMPTION PRICE" shall have the meaning set
forth in paragraph 5 of the Securities.
"RESPONSIBLE OFFICER" when used with respect to the Trustee means the
officer in the Institutional Trust Services department of the Trustee having
direct responsibility for administration of this Indenture.
"RESTRICTED SECURITY" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A-1 and A-2 of
this Indenture.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means any of the Company's Floating Rate Contingent
Convertible Senior Notes Due 2024, as amended or supplemented from time to time,
issued under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"SECURITYHOLDER" or "HOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"STATED MATURITY", when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal Amount of such Security is due and payable.
"SUBSIDIARY" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"TRADING DAY" means a day during which trading in securities generally
occurs on the American Stock Exchange or, if the Common Stock is not listed on
the American Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if
4
the Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"TREASURY REGULATIONS" means the "Income Tax Regulations" promulgated
under the Internal Revenue Code of 1986, as amended, as such regulations may be
amended from time to time (including corresponding provisions or succeeding
regulations).
"TRUSTEE" means the party named as the "TRUSTEE" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"VOTING STOCK" of a person means Capital Stock of such person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"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. Other Definitions.
Defined in
Term: Section:
---- -------
95% Trading Condition......................................................10.01
Act.........................................................................1.05
Agent Members.........................................................2.12(e)(v)
beneficial owner.........................................................3.09(a)
cash.....................................................................3.08(b)
Change in Control........................................................3.09(a)
Change in Control Offer..................................................3.09(a)
Change in Control Purchase Date..........................................3.09(a)
Change in Control Purchase Notice........................................3.09(c)
Change in Control Purchase Price.........................................3.09(a)
Closing Price...........................................................10.06(f)
Company Control Change Notice............................................3.09(b)
Company Notice...........................................................3.08(c)
5
Company Notice Date......................................................3.08(c)
Continuing Directors.....................................................3.09(a)
Conversion Agent............................................................2.03
Conversion Date............................................................10.02
Conversion Price...........................................................10.06
Conversion Shares..........................................................10.01
current market price per share..........................................10.06(f)
Depositary...............................................................2.01(a)
Dividend Adjustment Amount...........................................10.06(e)(i)
DTC......................................................................2.01(a)
Event of Default............................................................6.01
Ex-Dividend Date...........................................................10.01
Expiration Time.........................................................10.06(d)
Group....................................................................3.09(a)
Legal Holiday..............................................................12.08
Legend...................................................................2.06(f)
Notice of Default...........................................................6.01
Paying Agent................................................................2.03
Pre-Dividend Sales Price.............................................10.06(e)(i)
Principal Value Conversion.................................................10.02
Principal Value Conversion Notice..........................................10.02
Purchase Date............................................................3.08(a)
Purchase Notice.......................................................3.08(a)(i)
Purchase Price...........................................................3.08(a)
Purchased Shares....................................................10.06(d)(ii)
QIB......................................................................2.01(a)
Quarter.................................................................10.01(a)
Registrar...................................................................2.03
Rule 144A Information.......................................................4.06
Security Trading Price.....................................................10.01
Stockholder Rights Plan.................................................10.06(g)
transfer.................................................................2.12(d)
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
6
"OBLIGOR" on the Indenture Securities means the Company and the
Guarantors.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by a TIA reference to another statute or defined by an SEC rule have the
meanings assigned to them by such definitions.
Section 1.04. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
from time to time;
(c) "OR" is not exclusive;
(d) "INCLUDING" means including, without limitation; and
(e) words in the singular include the plural, and words in the plural
include the singular.
Section 1.05. Acts of Holders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "ACT" of 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 conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(a) 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 such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's 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.
(b) The ownership of Certificated Securities shall be proved by the
register maintained by the Registrar.
7
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a 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. 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 six months after the
record date.
Article 2
THE SECURITIES
Section 2.01. Form and Dating. The Securities, together with the
Trustee's certificate of authentication and the Guarantors' notation of
Guarantee, shall be substantially in the forms set forth on Exhibits A-1 and
A-2, which are a part of this Indenture and incorporated by reference herein.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage; provided that any such notation, legend or
endorsement required by usage is in a form acceptable to the Company. The
Company shall provide any such notations, legends or endorsements to the Trustee
in writing. Each Security shall be dated the date of its authentication.
(a) 144A Global Securities. Securities offered and sold to qualified
institutional buyers as defined in Rule 144A ("QIBS") in reliance on Rule 144A,
with the notations of the Guarantees thereon, shall be issued, initially in the
form of a 144A Global Securities, which shall be deposited with the Trustee at
its Corporate Trust Office, as custodian for the Depositary and registered in
the name of The Depository Trust Company ("DTC") or the nominee thereof (such
depositary, or any successor thereto, and any such nominee being hereinafter
referred to as the "DEPOSITARY"), duly executed by the Company and authenticated
by the Trustee as hereinafter provided. The aggregate principal amount of the
144A Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary as hereinafter
provided.
(b) Global Securities in General. Each Global Security shall represent
such of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the
8
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, redemptions
and conversions.
Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof and
shall be made on the records of the Trustee and the Depositary.
(c) Book-Entry Provisions. The Company shall execute and the Trustee
shall, in accordance with this Section 2.01(c), authenticate and deliver
initially one or more Global Securities that (a) shall be registered in the name
of the Depositary, (b) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions and (c) shall bear legends
substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO GREY WOLF, 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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY 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 ARTICLE 2 OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF."
(d) Certificated Securities. Securities not issued as interests in the
Global Securities will be issued in certificated form substantially in the form
of Exhibit A-2 attached hereto.
Section 2.02. Execution and Authentication. The Securities shall be
executed on behalf of the Company by any Officer, under its corporate seal
reproduced thereon. The signature of the Officer of the Company on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at the time of the execution of the Securities the proper Officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the
9
authentication and delivery of such Securities or did not hold such offices at
the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount of up to $125,000,000 (which shall
include one of the Initial Purchasers' option to purchase $25,000,000 of
additional Securities) upon a Company Order without any further action by the
Company. The aggregate Principal Amount of Securities outstanding at any time
may not exceed the amount set forth in the foregoing sentence, except as
provided in Section 2.07.
The Securities shall be issued only in registered form without coupons
and only in denominations of $1,000 of Principal Amount and any integral
multiple thereof.
Section 2.03. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("REGISTRAR"), an office or agency
where Securities may be presented for purchase or payment ("PAYING AGENT") and
an office or agency where Securities may be presented for conversion
("CONVERSION AGENT"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 4.05. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (other than the
Trustee). 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, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
Section 2.04. Paying Agent to Hold Money in Trust. Except as otherwise provided
herein, on or prior to each due date of payments in respect of any Security, the
Company shall deposit with the Paying Agent a sum of money (in immediately
available funds if deposited on the due date) sufficient to make such payments
when so becoming due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall
10
hold in trust for the benefit of Securityholders or the Trustee all money held
by the Paying Agent for the making of payments in respect of the Securities and
shall notify the Trustee of any Default by the Company in making any such
payment. At any time during the continuance of any such Default, the Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all money so held in trust. If the Company, a Subsidiary or an Affiliate
of either of them 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 it. Upon doing so, the Paying Agent shall
have no further liability for the money.
Section 2.05. Securityholder 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 Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee at least
quarterly on March 16, June 16, September 16 and December 16 a listing of
Securityholders dated within 15 days of the date on which the list is furnished
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 Securityholders.
Section 2.06. Transfer and Exchange.
(a) Subject to Section 2.12 hereof, upon surrender for registration of
transfer of any Securities, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Securityholder or such
Securityholder's attorney duly authorized in writing, at the office or agency of
the Company designated as Registrar or co-registrar pursuant to Section 2.03,
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 a like aggregate Principal
Amount. The Company shall not charge a service charge for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities that the Holder making the exchange is entitled to
receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.
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(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(c) Successive registrations and registrations of transfers and
exchanges as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(e) No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(f) If Securities are issued upon the transfer, exchange or replacement
of Securities subject to restrictions on transfer and bearing the legends set
forth on the forms of Securities attached hereto as Exhibits A-1 and A-2 setting
forth such restrictions (collectively, the "LEGEND"), or if a request is made to
remove the Legend on a Security, the Securities so issued shall bear the Legend,
or the Legend shall not be removed, as the case may be, unless there is
delivered to the Company and the Registrar such satisfactory evidence, which
shall include an Opinion of Counsel, as may be reasonably required by the
Company and the Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that
such Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon (i) provision of such satisfactory evidence, or (ii)
notification by the Company to the Trustee and registrar of the sale of such
Security pursuant to a registration statement that is effective at the time of
such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Company, the Legend shall be reinstated.
Section 2.07. Replacement Securities. If any mutilated Security is
surrendered to the Trustee, or the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, and there
is delivered to the Company, the Guarantors and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a protected purchaser (within the meaning of Section 8-303 of the
Uniform Commercial Code), the Company shall execute, and upon the Company's
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount, bearing a number
not contemporaneously outstanding.
12
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, 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 benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 2.08. Outstanding Securities; Determinations of Holders'
Action. Securities outstanding at any time are all the Securities authenticated
by the Trustee, except for those cancelled by it, those paid pursuant to Section
2.07 delivered to it for cancellation and those described in this Section 2.08
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite Principal Amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
If the Paying Agent (other than the Company, a Guarantor, a Subsidiary
or an Affiliate of any thereof) holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change in
Control Purchase Date, or on Stated Maturity, money sufficient to pay amounts
owed with respect to Securities payable on that date, then immediately after
such Redemption Date, Purchase Date, Change in Control Purchase Date or Stated
Maturity, as the case may be, such Securities shall cease to be outstanding and
interest, if any, and Liquidated Damages, if any, on such Securities shall cease
to accrue; provided that if
13
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made.
If a Security is converted in accordance with Article 10, then from and
after the time of conversion on the Conversion Date, such Security shall cease
to be outstanding and interest, if any, and Liquidated Damages, if any, shall
cease to accrue on such Security.
Section 2.09. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 2.10. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange (other than Securities exchanged pursuant
to Section 10.02) shall, if surrendered to any person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly cancelled
by the Trustee. The Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article 10. No Securities shall be authenticated in
lieu of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of by the Trustee in accordance with the
Trustee's customary procedure.
Section 2.11. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the Principal Amount of the Security or the payment of any Redemption Price,
Purchase Price or Change in Control Purchase Price in respect thereof, and
accrued and unpaid interest thereon, for the purpose of conversion and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
14
Section 2.12. Global Securities.
(a) A Global Security may not be transferred, in whole or in part, to
any Person other than the Depositary or a nominee or any successor thereof, and
no such transfer to any such other Person may be registered; provided that the
foregoing shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No transfer
of a Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such Person. Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.06 and this Section 2.12.
(b) Subject to the succeeding paragraph, every Security shall be
subject to the restrictions on transfer provided in the Legend including the
delivery of an opinion of counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit B, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by an opinion of counsel having
substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144 or such successor provision), be exchanged
for a new Security, of like tenor and aggregate Principal Amount, which shall
not bear the restrictive Legend. The Company shall inform the Trustee of the
effective date of any registration statement registering the Securities under
the Securities Act. The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the
term "TRANSFER" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(e) The provisions of clauses (i), (ii), (iii) and(iv) below shall
apply only to Global Securities:
15
(i) Notwithstanding any other provisions of this Indenture or
the Securities, a Global Security shall not be exchanged in whole or in
part for a Security registered in the name of any Person other than the
Depositary or one or more nominees thereof; provided that a Global
Security may be exchanged for Securities registered in the names of any
person designated by the Depositary in the event that (x) the
Depositary has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security or such Depositary has
ceased to be a "clearing agency" registered under the Exchange Act, and
a successor Depositary is not appointed by the Company within 90 days,
(y) the Company has provided the Depositary with written notice that it
has decided to discontinue use of the system of book-entry transfer
through the Depositary or any successor Depositary or (z) an Event of
Default has occurred and is continuing with respect to the Securities.
Any Global Security exchanged pursuant to clauses (x) or (y) above
shall be so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (z) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any Security
issued in exchange for a Global Security or any portion thereof shall
be a Global Security; provided that any such Security so issued that is
registered in the name of a Person other than the Depositary or a
nominee thereof shall not be a Global Security.
(ii) Securities issued in exchange for a Global Security or
any portion thereof shall be issued in definitive, fully registered
form, without interest coupons, shall have an aggregate Principal
Amount equal to that of such Global Security or portion thereof to be
so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall
bear the applicable legends provided for herein. Any Global Security to
be exchanged in whole shall be surrendered by the Depositary to the
Trustee, as Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so surrendered
for exchange or, if the Trustee is acting as custodian for the
Depositary or its nominee with respect to such Global Security, the
Principal Amount thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender
or adjustment, the Trustee shall authenticate and deliver the Security
issuable on such exchange to or upon the order of the Depositary or an
authorized representative thereof.
(iii) Subject to the provisions of clause (v) below, the
registered Holder may grant proxies and otherwise authorize any Person,
including Agent Members (as defined below) and persons that may hold
interests through Agent Members, to take any action which a holder is
entitled to take under this Indenture or the Securities.
(iv) In the event of the occurrence of any of the events
specified in clause (i) above, the Company will promptly make available
to the Trustee a reasonable supply of Certificated Securities in
definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the Depositary
(collectively, the "AGENT MEMBERS") nor any other Persons on whose
behalf Agent Members may act shall have any rights under this Indenture
with respect to any Global Security registered in the name of the
Depositary or any nominee thereof, or under any such Global Security,
16
and the Depositary or such nominee, as the case may be, may be treated
by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner and holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent Members
and any other person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the exercise
of the rights of a holder of any Security.
Section 2.13. CUSIP Numbers. The Company may issue the Securities with
one or more "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
Article 3
REDEMPTION AND PURCHASES
Section 3.01. Right To Redeem; Notices To Trustee.
(a) Optional Redemption. The Company, at its option, may redeem the
Securities in accordance with the provisions of paragraphs 5 and 7 of the
Securities and at the Redemption Price specified in paragraph 5 of the
Securities, together with accrued and unpaid interest and Liquidated Damages, if
any, thereon up to but not including the Redemption Date; provided that if the
Redemption Date is on or after an interest record date, but on or prior to the
related interest payment date, interest will be payable to the Holders in whose
names the Securities are registered at the close of business on the relevant
record date for payment of such interest.
(b) Notice to Trustee. If the Company elects to redeem Securities
pursuant to this Section 3.01, it shall notify the Trustee in writing of the
Redemption Date, the Principal Amount of Securities to be redeemed and the
Redemption Price. The Company shall give the notice to the Trustee provided for
in this Section 3.01(b) by a Company Order at least 45 days before the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee).
Section 3.02. Selection of Securities to Be Redeemed. If less than all
the Securities are to be redeemed, unless the procedures of the Depositary
provide otherwise, the Trustee shall select the Securities to be redeemed on a
pro rata basis. The Trustee may select for redemption portions of the Principal
Amount of Securities that have denominations of $1,000 and integral multiples
thereof.
Securities and portions of them the Trustee selects shall be in
Principal Amounts of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to Securities
17
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.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as possible) to be the portion selected for redemption. Securities that have
been converted during a selection of Securities to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
Section 3.03. Notice of Redemption. At least 20 days but not more than
60 days before a Redemption Date, the Company shall mail a notice of redemption
by first-class mail, postage prepaid, to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Price;
(d) the name and address of the Paying Agent and Conversion Agent;
(e) that Securities called for redemption may be converted at any time
before the close of business on the second Business Day immediately preceding
the Redemption Date;
(f) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;
(g) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price therefor, together with all accrued
and unpaid interest and Liquidated Damages;
(h) that if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers, if any, and Principal Amounts of the
particular Securities to be redeemed;
(i) that, unless the Company defaults in making payment of such
Redemption Price, interest, if any, and Liquidated Damages, if any, on
Securities called for redemption will cease to accrue on and after the
Redemption Date and the Securities will cease to be convertible; and
(j) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; provided that the
Company makes such request prior to the date by which such notice of redemption
must be given to Holders in accordance with this Section 3.03 and the Company
provides the Trustee with all information required for such notice of
redemption.
18
Section 3.04. Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice, except for
Securities which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice, together with accrued and unpaid
interest, if any, and Liquidated Damages, if any, thereon, up to but not
including the Redemption Date.
Section 3.05. Deposit of Redemption Price. Prior to 11:00 a.m. (New
York City time) on the Redemption Date the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date, together with
accrued and unpaid interest, if any, and Liquidated Damages, if any, thereon, up
to but not including the Redemption Date other than Securities or portions of
Securities called for redemption that on or prior thereto have been delivered by
the Company to the Trustee for cancellation or have been converted. The Paying
Agent shall as promptly as practicable return to the Company any money not
required for that purpose because of conversion of Securities pursuant to
Article 10. If such money is then held by the Company in trust and is not
required for such purpose it shall be discharged from such trust.
Section 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, without service charge, a new Security
or Securities, of any authorized denomination as requested by such Holder in
aggregate Principal Amount equal to, and in exchange for, the unredeemed portion
of the Principal Amount of the Security surrendered.
Section 3.07. Reserved.
Section 3.08. Purchase of Securities at Option of the Holder.
(a) General. Securities shall be purchased by the Company in accordance
with the provisions of paragraph 6 of the Securities on April 1, 2014 and April
1, 2019 (each, a "PURCHASE DATE") at a purchase price per Security equal to 100%
of the aggregate Principal Amount of the Security (the "PURCHASE PRICE"),
together with accrued and unpaid interest and Liquidated Damages, if any,
thereon, up to but not including the Purchase Date; provided that if the
Purchase Date is on or after an interest record date but on or prior to the
related interest payment date, interest and Liquidated Damages, if any, will be
payable to the Holders in whose names the Securities are registered at the close
of business on the relevant record date.
Purchases of Securities hereunder shall be made, at the option of the
Holder thereof, upon:
(i) delivery to the Company and the Paying Agent by the Holder
of a written notice of purchase (a "PURCHASE NOTICE") at any time from
the opening of business on the date that is 20 Business Days prior to
the Purchase Date until the close of business on the Business Day prior
to such Purchase Date stating:
(A) the certificate number of the Security which the
Holder will deliver to be purchased;
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(B) the portion of the Principal Amount of the
Security which the Holder will deliver to be purchased, which
portion must be in a principal amount at maturity of $1,000 or
an integral multiple thereof;
(C) that such Security shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified
in paragraph 6 of the Securities and in this Indenture; and
(ii) delivery of such Security to the Paying Agent prior to,
on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery being a
condition to receipt by the Holder of the Purchase Price therefor,
together with accrued and unpaid interest, if any, and Liquidated
Damages, if any; provided, however, that such Purchase Price, together
with accrued and unpaid interest, if any, and Liquidated Damages, if
any, shall be so paid pursuant to this Section 3.08 only if the
Security so delivered to the Paying Agent shall conform in all respects
to the description thereof in the related Purchase Notice, as
determined by the Company in its sole discretion.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08(a), a portion of a Security if the Principal Amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Purchase Date and
the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.08(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Business Day preceding the Purchase Date by delivery of
a written notice of withdrawal to the Paying Agent at the principal office of
the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(b) Manner of Payment of Purchase Price. The Purchase Price of
Securities in respect of which a Purchase Notice pursuant to Section 3.08 has
been given shall be paid in U.S. legal tender ("CASH").
(c) Company Notice. In connection with any purchase of Securities
pursuant to Section 3.08, the Company shall give written notice of the Purchase
Date to the Holders (the "COMPANY NOTICE"). The Company Notice shall be sent by
first-class mail to the Trustee and to each Holder not less than 20 Business
Days prior to any Purchase Date (the "COMPANY NOTICE DATE"). Each Company Notice
shall include a form of Purchase Notice to be completed by a Securityholder and
shall state:
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(i) the Purchase Price and the Conversion Price;
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Securities as to which a Purchase Notice has been
given may be converted if they are otherwise convertible only in
accordance with Article 10 hereof and paragraph 8 of the Securities if
the applicable Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent
to collect payment;
(v) that the Purchase Price for, and any accrued and unpaid
interest and Liquidated Damages, if any, on, any Security as to which a
Purchase Notice has been given and not withdrawn will be paid promptly
following the later of the Purchase Date and the time of surrender of
such Security as described in subclause (iv) above;
(vi) the procedures that the Holder must follow to exercise
rights under Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities;
(viii) the procedures for withdrawing a Purchase Notice (as
specified in Section 3.10);
(ix) that, unless the Company defaults in making payment on
Securities for which a Purchase Notice has been submitted, interest, if
any, and Liquidated Damages, if any, on such Securities will cease to
accrue on the Purchase Date; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such Company Notice in
the Company's name and at the Company's expense; provided, however, that the
Company makes such request at least three (3) Business Days prior to the date by
which such Company Notice must be given to the Holders and that, in all cases,
the text of such Company Notice shall be prepared by the Company.
Section 3.09. Purchase of Securities at Option of the Holder upon
Change in Control.
(a) If at any time that Securities remain outstanding there shall have
occurred a Change in Control (as hereinafter defined), Securities shall be
repurchased by the Company, at the option of the Holder thereof (the "CHANGE IN
CONTROL OFFER"), at a purchase price (the "CHANGE IN CONTROL PURCHASE PRICE")
equal to the principal amount thereof plus accrued and unpaid interest, if any,
and Liquidated Damages, if any, thereon, up to but not including the date (the
"CHANGE IN CONTROL PURCHASE DATE") fixed by the Company that is not less than 45
days nor more than 60 days after the date of the Company Control Change Notice
(as defined below), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in Section 3.09(c).
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Whenever in this Indenture there is a reference to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Change in Control Purchase Price payable in respect of such Security to the
extent that such Change in Control Purchase Price is, was or would be payable at
such time, and express mention of the Change in Control Purchase Price in any
provision of this Indenture shall not be construed as excluding the Change in
Control Purchase Price in those provisions of this Indenture when such express
mention is not made.
A "CHANGE IN CONTROL" shall be deemed to have occurred at such time
after the original issuance of the Securities as any of the following occur:
(i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company or the Company and its
Subsidiaries' assets, taken as a whole, to any person or group of
related persons, as defined in Section 13(d) of the Exchange Act (a
"GROUP");
(ii) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution of
the Company (whether or not otherwise in compliance with the provisions
of this Indenture);
(iii) any person or Group shall become the owner, directly or
indirectly, beneficially or of record, of shares representing more than
50% of the aggregate ordinary voting power represented by the Company's
issued and outstanding Voting Stock or any successor to all or
substantially all of the Company's assets; or
(iv) the first day on which a majority of the members of the
Company's Board of Directors are not Continuing Directors (as
hereinafter defined).
"BENEFICIAL OWNER" shall be determined in accordance with Rules 13d-3
and 13d-5 promulgated by the SEC under the Exchange Act or any successor
provision, except that a Person shall be deemed to have "beneficial ownership"
of all securities that such Person has the right to acquire, whether exercisable
immediately or only after the passage of time.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of the Board of Directors
on the date of the original issuance of the Securities or (ii) was nominated for
election or elected to the Board of Directors with the approval of a majority of
the Continuing Directors who were members of the Board of Directors at the time
of such nomination or election.
(b) On or before the 30th day after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control by
first-class mail to the Trustee and to each Holder (and to beneficial owners as
required by applicable law) (the "COMPANY CONTROL CHANGE NOTICE"). The notice
shall include a form of Change in Control Purchase Notice to be completed by the
Securityholder and shall state:
(i) briefly, the events causing a Change in Control and the
date of such Change in Control for purposes of this Section;
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(ii) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.09 must be given;
(iii) the Change in Control Purchase Date;
(iv) the Change in Control Purchase Price;
(v) the name and address of the Paying Agent and the
Conversion Agent;
(vi) the Conversion Price and any adjustments thereto;
(vii) that Securities as to which a Change in Control Purchase
Notice has been given may be converted pursuant to Article 10 hereof
only if the Change in Control Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
(viii) that Securities must be surrendered to the Paying Agent
to collect payment;
(ix) that the Change in Control Purchase Price for any
Security as to which a Change in Control Purchase Notice has been duly
given and not withdrawn will be paid promptly following the later of
the Change in Control Purchase Date and the time of surrender of such
Security as described in clause (viii);
(x) briefly, the procedures that the Holder must follow to
exercise rights under this Section 3.09;
(xi) briefly, the conversion rights of the Securities;
(xii) the procedures for withdrawing a Change in Control
Purchase Notice (as specified in Section 3.10);
(xiii) that, unless the Company defaults in making payment of
such Change in Control Purchase Price, interest and Liquidated Damages,
if any, on Securities surrendered for purchase by the Company will
cease to accrue on and after the Change in Control Purchase Date; and
(xiv) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "CHANGE IN CONTROL PURCHASE
NOTICE"), together with the securities subject thereto, to the Company and the
Paying Agent at any time prior to the close of business on the third Business
Day prior to the Change in Control Purchase Date, stating:
(i) the certificate number of the Security that the Holder
will deliver to be purchased;
23
(ii) the portion of the Principal Amount of the Security which
the Holder will deliver to be purchased, which portion must be in a
principal amount at maturity of $1,000 or an integral multiple thereof;
and
(iii) that such Security shall be purchased pursuant to the
terms and conditions specified in paragraph 6 of the Securities and in
this Indenture.
The delivery of such Security to the Paying Agent prior to, on or after
the Change in Control Purchase Date (together with all necessary endorsements)
at the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Purchase Price therefor; provided, however, that
such Change in Control Purchase Price shall be so paid pursuant to this Section
3.09 only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof set forth in the related Change in Control
Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Security to the Paying Agent in
accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Business Day preceding
the Change in Control Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.
Notwithstanding anything herein to the contrary, the Company's
obligations to make a Change in Control Offer pursuant to this Section 3.09
shall be satisfied if a third party makes a change of control offer in the
manner and at the times and otherwise in compliance in all material respects
with the requirements of this Section 3.09 and purchases all Securities properly
tendered and not withdrawn pursuant to the requirements of this Section 3.09.
Section 3.10. Effect of Purchase Notice or Change in Control Purchase Notice.
Upon receipt by the Paying Agent of the Purchase Notice or Change in Control
Purchase Notice specified in Section 3.08 or Section 3.09(c), as applicable, the
Holder of the Security in respect of which such Purchase Notice or Change in
Control Purchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Change in Control Purchase Notice is withdrawn as specified
in the following paragraph) thereafter be entitled to receive solely the
Purchase Price, or the Change in Control Purchase Price, as the case may be,
together with all accrued and unpaid interest and Liquidated Damages, if any,
thereon, to but not including the Purchase Date
24
or Change in Control Purchase Price, as the case may be, with respect to such
Security. Such Purchase Price, or the Change in Control Purchase Price, as the
case may be, together with accrued and unpaid interest, if any, and Liquidated
Damages, if any, thereon, to but not including the Purchase Date or Change in
Control Purchase Price, as the case may be, shall be paid to such Holder,
subject to receipt of funds and/or securities by the Paying Agent, promptly
following the later of (x) the Purchase Date or the Change in Control Purchase
Date, as the case may be, with respect to such Security (provided that the
conditions in Section 3.08 or Section 3.09(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.08 or Section 3.09(c), as
applicable. Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been given by the Holder
thereof may not be converted pursuant to Article 10 hereof on or after the date
of the delivery of such Purchase Notice or Change in Control Purchase Notice, as
the case may be, unless such Purchase Notice or Change in Control Purchase
Notice, as the case may be, has first been validly withdrawn as specified in the
following paragraph.
A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Business Day preceding the Purchase Date or prior to the close
of business on the Business Day preceding the Change in Control Purchase Date,
as the case may be, specifying:
(i) the certificate number, if any, of the Security in respect
of which such notice of withdrawal is being submitted,
(ii) the Principal Amount of the Security with respect to
which such notice of withdrawal is being submitted, and
(iii) the Principal Amount, if any, of such Security which
remains subject to the original Purchase Notice or Change in Control
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.
Section 3.11. Deposit of Purchase Price or Change in Control Purchase
Price. Prior to 11:00 a.m. (New York City time) on the Business Day following
the Purchase Date or the Change in Control Purchase Date, as the case may be,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of money (in immediately available funds if deposited on such Business
Day) sufficient to pay the aggregate Purchase Price, together with all accrued
and unpaid interest and Liquidated Damages, if any, thereon, to but not
including the Purchase Date or Change in Control Purchase Date, as the case may
be, of all the Securities or portions thereof which are to be purchased as of
the Purchase Date or Change in Control Purchase Date, as the case may be.
Section 3.12. Securities Purchased in Part. Any Certificated Security
that is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such
25
Holder's attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal to,
and in exchange for, the portion of the Principal Amount of the Security so
surrendered which is not purchased.
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of
Securities. When complying with the provisions of Sections 3.08 or 3.09 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply in all material respects with Rule 13e-4
and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act, and (iii) otherwise
comply in all material respects with all Federal and state securities laws so as
to permit the rights and obligations under Sections 3.08 or 3.09 to be exercised
in the time and in the manner specified in Sections 3.08 or 3.09.
Section 3.14. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed as provided in
paragraph 11 of the Securities, together with interest or dividends, if any,
thereon (subject to the provisions of Section 7.01(f)), held by them for the
payment of the Purchase Price and accrued and unpaid interest, if any, and
Liquidated Damages, if any or the Change in Control Purchase Price, as the case
may be; provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.11 exceeds the aggregate Purchase
Price and accrued and unpaid interest thereon, if any, and Liquidated Damages,
if any or the Change in Control Purchase Price, as the case may be, of the
Securities or portions thereof which the Company is obligated to purchase as of
the Purchase Date or Change in Control Purchase Date, as the case may be, then,
unless otherwise agreed in writing with the Company, promptly after the Business
Day following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of Section
7.01(f)).
Article 4
COVENANTS
Section 4.01. Payment of Securities. The Company shall promptly make
all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts to be
given to the Trustee or Paying Agent, as the case may be, shall be deposited
with the Trustee or Paying Agent, as the case may be, by 11:00 a.m. (New York
City time) by the Company. Interest installments, Liquidated Damages, Principal
Amount, Redemption Price, Purchase Price, Change in Control Purchase Price and
interest, if any, due on overdue amounts shall be considered paid on the
applicable date due if at 11:00 a.m. (New York City time) on such date (or, in
the case of a Purchase Price or Change in Control Purchase Price, on the
Business Day following the applicable Purchase Date or Change in Control
Purchase Date, as the case may be) the Trustee or the Paying Agent (other than
the Company, a Guarantor, or an Affiliate of the Company or a Guarantor), as the
case may be, holds, in accordance with this Indenture, money sufficient to pay
all such amounts then due.
26
The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the
Securities, compounded quarterly, which interest shall accrue from the date such
overdue amount was originally due to the date payment of such amount, including
interest thereon, has been made or duly provided for. All such interest shall be
payable on demand. The accrual of such interest on overdue amounts shall be in
addition to the continued accrual of interest on the Securities.
Section 4.02. SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. In the event the Company is at any time
no longer subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, it shall continue to provide the Trustee with reports containing
substantially the same information as would have been required to be filed with
the SEC had the Company continued to have been subject to such reporting
requirements. In such event, such reports shall be provided to the Trustee at
the times the Company would have been required to provide reports had it
continued to have been subject to such reporting requirements.
In addition, the Company shall comply with the other provisions of TIA
Section 314(a).
Section 4.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on December 31, 2004) an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such Defaults and the nature and status thereof of
which they may have knowledge.
Section 4.04. 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 purposes of this Indenture.
Section 4.05. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company and the Guarantors in respect
of the Securities and this Indenture may be served. The Corporate Trust Office
of the Trustee shall initially be such office or agency for all of the aforesaid
purposes.
The Company shall give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency (other
than a change in the location of the office of the Trustee). 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,
27
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 12.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes.
Section 4.06. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or holder or
beneficial owner of Common Stock delivered upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or any beneficial owner of Securities or holder or
beneficial owner of Common Stock, or to a prospective purchaser of any such
security designated by any such holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act in connection with the resale of any such security. "RULE 144A
INFORMATION" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act or any successor provisions. Whether a
person is a beneficial owner shall be determined by the Company to the Company's
reasonable satisfaction.
Section 4.07. [Intentionally omitted.]
Section 4.08. Liquidated Damages. If at any time Liquidated Damages
become payable by the Company pursuant to the Registration Rights Agreement, the
Company shall promptly deliver to the Trustee a certificate to that effect and
stating (i) the amount of such Liquidated Damages that are payable and (ii) the
date on which such damages are payable pursuant to the terms of the Registration
Rights Agreement. Unless and until a Responsible Officer of the Trustee receives
such a certificate, the Trustee may assume without inquiry that no Liquidated
Damages are payable. If the Company has paid Liquidated Damages directly to the
persons entitled to them, the Company shall deliver to the Trustee a certificate
setting forth the particulars of such payment.
Article 5
SUCCESSOR CORPORATION
Section 5.01. Consolidation, Merger and Sale of Assets. The Company
shall not consolidate with or merge with or into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to any
person, unless:
(i) (1) the Company shall be the continuing corporation or (2) the
person (if other than the Company) formed by such consolidation
or into which the Company is merged or the person which acquires
by conveyance, transfer or lease the properties and assets of the
Company substantially as an entirety (i) shall be a corporation
organized and validly existing under the laws of the United
States or any State thereof or the District of Columbia, and (ii)
shall expressly assume, by
28
an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the
Obligations of the Company under the Securities and this
Indenture;
(ii) after giving effect to such transaction, no Default shall have
occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this
Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of the properties and assets of one or more Subsidiaries (other
than to the Company or another Subsidiary), which, if such assets were owned by
the Company would constitute all or substantially all of the properties and
assets of the Company shall be deemed to be the transfer of all or substantially
all of the properties and assets of the Company.
The successor person formed by such consolidation or into which the
Company is merged or the successor person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease and obligations the Company may have under a supplemental
indenture pursuant to Section 10.12, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 9.06, the Company, the Trustee and the successor person shall enter into
a supplemental indenture (with endorsements of Guarantees thereon by the
Guarantors) to evidence the succession and substitution of such successor person
and such discharge and release of the Company.
Article 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. Subject to the provisions set forth
below in this Section 6.01, an "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of interest, if any, and
Liquidated Damages, if any, payable on any Security when the same
becomes due and payable and such Default continues for a period
of 30 days;
(b) the Company defaults in the payment of the Principal Amount,
Redemption Price, Purchase Price or Change in Control Purchase
Price on any Security when the same becomes due and payable at
its Stated Maturity, upon redemption, upon declaration, when due
for purchase by the Company or otherwise;
(c) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in
clauses (a) and (b) above) and such
29
failure continues for 60 days after receipt by the Company of a
Notice of Default from the Trustee or from Holders of not less
than 25% in aggregate Principal Amount of the then outstanding
Securities;
(d) the Company or its Subsidiaries fails to pay when due the
principal of indebtedness for money borrowed by the Company or
its Subsidiaries in excess of $10,000,000, or the acceleration of
that indebtedness that is not withdrawn within 30 days after the
date of written notice to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the then outstanding Securities;
(e) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company or any Guarantor in
an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Company or any
Guarantor or for any substantial part of the property of the
Company or any Guarantor or ordering the winding up or
liquidation of the affairs of the Company or any Guarantor and
such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days;
(f) the Company or any Guarantor shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order
for relief in an involuntary case under any such law, or consent
to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or
similar official) of the Company or any Guarantor or for any
substantial part of the property of the Company or any Guarantor
or make any general assignment for the benefit of creditors; or
(g) any Guarantee by a Guarantor that is a "significant subsidiary"
as defined in Item 1-02(w) of Regulation S-X, 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).
A Default under clause (c) or (d) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate Principal Amount of the Securities at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default (and such Default is not waived) within the time specified in clause (c)
or (d) above, as applicable, after actual receipt of such notice. Any such
notice must specify the Default, demand that it be remedied and state that such
notice is a "NOTICE OF DEFAULT."
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice or the lapse of time, or both, would become an Event of
Default under clause (c) or (d) above, its status and what action the Company is
taking or proposes to take with respect thereto.
30
Section 6.02. Defaults and Remedies. If an Event of Default (other than
an Event of Default specified in Section 6.01(e) or 6.01(f)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in aggregate Principal Amount of the Securities at the time outstanding by
notice to the Company and the Trustee, may declare the Principal Amount of all
the Securities plus accrued and unpaid interest, if any, and Liquidated Damages,
if any, thereon, through the date of declaration to be immediately due and
payable. Upon such a declaration, such Principal Amount plus accrued and unpaid
interest, if any, and Liquidated Damages, if any, shall become and be
immediately due and payable. If an Event of Default specified in Section 6.01(e)
or 6.01(f) occurs and is continuing, the Principal Amount of all the Securities
plus accrued and unpaid interest, if any, and Liquidated Damages, if any,
thereon, shall become and be immediately due and payable without any declaration
or other act on the part of the Trustee or any Securityholder.
The Holders of not less than a majority in aggregate Principal Amount
of the Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if (a) all existing Events of Default, other
than the nonpayment of the principal of and accrued and unpaid interest, if any,
and Liquidated Damages, if any, on the Securities which has become due solely by
such declaration of acceleration, have been cured or waived; (b) the Company or
any Guarantor has paid or deposited with the Trustee a sum sufficient to pay (i)
all overdue interest and Liquidated Damages, if any, on the Securities, (ii) the
principal of any Security which has become due otherwise than by such
declaration of acceleration, and (iii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and Liquidated
Damages, if any, and overdue principal, which has become due otherwise than by
such declaration of acceleration; (c) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction; and (d) all payments
due to the Trustee and any predecessor Trustee under Section 7.07 have been
made. No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
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 the Principal Amount of all the Securities plus all accrued and unpaid
interest and Liquidated Damages, if any, thereon or to enforce the performance
of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder 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 to the extent permitted by law.
Section 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
in writing to the Trustee (and without notice to any other Securityholder), may
waive an existing Default and its consequences, except (a) an Event of Default
described in Section 6.01(a) or 6.01(b), (b) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected or (c) a Default which constitutes a failure to convert
any Security in accordance with the terms of Article 10. When a Default is
waived, it is deemed cured, but no such waiver shall
31
extend to any subsequent or other Default or impair any consequent right. This
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
Section 6.05. Control by Majority. The Holders of a majority in
aggregate Principal Amount of the Securities at the time 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 that the Trustee determines in good faith is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee is provided indemnity or security
satisfactory to it. This Section 6.05 shall be in lieu of Section 316(a)(1)(A)
of the TIA and such Section 316(a)(1)(A) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 6.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(b) Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(c) Holder or Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(d) Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or
indemnity; and
(e) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a
direction inconsistent with the request during such 60-day
period.
A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.
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
interest installments, Liquidated Damages, if any, the Principal Amount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, due on overdue amounts in respect of the Securities held by such Holder,
on or after the respective due dates expressed in the Securities, and to convert
the Securities in accordance with Article 10, or to bring suit for the
enforcement of any such payment on or after such respective dates or the right
to convert, shall not be impaired or affected adversely without the consent of
such Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default described in
Section 6.01(a) or 6.01(b) occurs and is continuing, the Trustee may recover
judgment in its own
32
name and as trustee of an express trust against the Company for the whole amount
owing with respect to the Securities and the amounts provided for in Section
7.07.
Section 6.09. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company, any Guarantor, or any other Obligor upon the Securities or the
property of the Company, any Guarantor or of such other Obligor or their
creditors, the Trustee (irrespective of whether interest installments,
Liquidated Damages, if any, the Principal Amount, Redemption Price, Purchase
Price, Change in Control Purchase Price or interest, if any, due on overdue
amounts in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company or the Guarantors for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for any accrued and unpaid interest
installments, Liquidated Damages, if any, the whole amount of
the Principal Amount, Redemption Price, Purchase Price, Change
in Control Purchase Price or interest, if any, due on overdue
amounts 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 any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel or any other amounts
due the Trustee under Section 7.07) and of the Holders allowed
in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for any accrued and unpaid interest installments,
Liquidated Damages, if any, the Principal Amount, Redemption
Price, Purchase Price, Change in Control Purchase
33
Price or interest, if any, due on overdue amounts in respect
of the Securities, as the case may be, ratably, without
preference or priority of any kind, according to such amounts
due and payable on the Securities; and
THIRD: the balance, if any, to the Company or the Guarantors
or to such other party as a court of competent jurisdiction
shall direct.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 6.11. Suits. 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 (other than the Trustee) 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 and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate Principal Amount of the
Securities at the time outstanding. This Section 6.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 6.12. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of any interest installment,
Liquidated Damages, if any, the Principal Amount, Redemption Price, Purchase
Price, Change in Control Purchase Price or interest, if any, due on overdue
amounts in respect of the Securities, as contemplated herein, or which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Article 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 its 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:
34
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, but in case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture, but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and
such Section 315(a) is hereby expressly excluded from this Indenture, as
permitted by the TIA.
(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:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
Section 7.01(c)(i), (ii) and (iii) shall be in lieu of Sections
315(d)(1), 315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1),
315(d)(2) and 315(d)(3) are hereby expressly excluded from this Indenture, as
permitted by the TIA.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to Section 7.01(a), (b), (c) and (e).
(e) The Trustee may refuse to perform any duty or exercise any right or
power or expend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.
Section 7.02. Rights of Trustee. Subject to its duties and
responsibilities under the TIA,
35
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may obtain and, in the absence of bad faith
or negligence on its part, conclusively rely upon an Officers' Certificate
and/or an Opinion of Counsel;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder;
(d) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith which it reasonably believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion of such counsel;
(f) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have provided to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Order and any resolution of the Board of
Directors shall be sufficiently evidenced by a Board Resolution;
(h) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled, during normal
business hours, to examine the books, records and premises of the Company,
personally or by agent or attorney, at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice
36
of any event which is in fact such a Default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Securities
and this Indenture;
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, and to
each agent, custodian and other Person employed to act hereunder; and
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Neither the Trustee nor any of its officers, directors, employees or
agents shall be liable for any action taken or omitted under this Indenture or
in connection therewith except to the extent caused by the Trustee's gross
negligence, bad faith or willful misconduct, as determined by the final judgment
of a court of competent jurisdiction, no longer subject to appeal or review.
Anything in this Indenture to the contrary notwithstanding, in no event shall
the Trustee be liable for special, indirect or consequential loss or damage of
any kind whatsoever (including but not limited to lost profits), even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
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, Conversion
Agent or co-registrar 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 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 or application of the proceeds from the
Securities, and it shall not be responsible for any statement in any
registration statement for the Securities under the Securities Act or in any
offering document for the Securities, this Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
Section 7.05. Notice of Defaults. If a Default occurs and if it is
known to the Trustee, the Trustee shall give to each Securityholder notice of
all current Defaults known to it within 90 days after any such Default occurs
or, if later, within 15 days after it is known to the Trustee, unless such
Default shall have been cured or waived before the giving of such notice.
Notwithstanding the preceding sentence, except in the case of a Default
described in Sections 6.01(a) and 6.01(b), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the
Securityholders. The second sentence of this Section 7.05 shall be in lieu of
the proviso to Section 315(b) of the TIA and such proviso is hereby expressly
excluded from this Indenture, as permitted by the TIA.
37
Section 7.06. Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with May 15, 2005, the Trustee shall mail to each
Securityholder a brief report dated as of such May 15 that complies with TIA
Section 313(a), if required by such Section 313(a). The Trustee also shall
comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee promptly
whenever the securities become listed on any Securities exchange and of any
delisting thereof.
Section 7.07. Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as the Company and the Trustee shall from time to
time agree in writing for all services rendered by it hereunder (which
compensation shall not be limited (to the extent permitted by law) by any
provision of law in regard to the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or any documents executed in
connection herewith (including the reasonable compensation and the expenses,
advances and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad faith or
willful misconduct; and
(c) to indemnify the Trustee or any predecessor Trustee and their
agents, officers, directors and employees for, and to hold them harmless
against, any loss, damage, claim, liability, cost or expense (including
attorneys' fees and expenses and taxes (other than taxes based upon, measured by
or determined by the income of the Trustee)) incurred without negligence,
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay interest
installments, Liquidated Damages, if any, the Principal Amount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if any, due
on overdue amounts, as the case may be, in respect of any particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture or the earlier termination or
resignation of the Trustee. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.01(e) or Section 6.01(f), the
expenses, including the reasonable charges and expenses of its counsel, are
intended to constitute expenses of administration under any bankruptcy law.
Section 7.08. Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, that no such resignation shall be
effective until a successor
38
Trustee has accepted its appointment pursuant to this Section 7.08. The Holders
of a majority in aggregate Principal Amount of the Securities at the time
outstanding may remove the Trustee by so notifying the Trustee and the Company.
The Company shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the Trustee or its
property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by Board
Resolution, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and 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
Securityholders. 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 30 days after the
retiring Trustee gives its notice of resignation or is removed, the retiring
Trustee, the Company or the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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 (including the administration of the trust
created by this Indenture) to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1). The Trustee (or its
parent holding company) shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the SEC the application referred to in the penultimate paragraph of TIA Section
310(b). 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.
39
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
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities. When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits with
the Trustee cash sufficient to pay all amounts due and owing on all outstanding
Securities (other than Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 7.07, cease to be of further
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand at
the cost and expense of the Company and accompanied by an Officers' Certificate
and Opinion of Counsel.
Section 8.02. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company upon written request any money held by them
for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After
return to the Company, as applicable, 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 the Trustee and the Paying Agent
shall have no further liability to the Securityholders with respect to such
money or securities for that period commencing after the return thereof.
Article 9
AMENDMENTS
Section 9.01. Without Consent of Holders. The Company, the Guarantors
and the Trustee may amend or supplement this Indenture or the Securities without
notice to or consent of any Securityholder:
(a) to comply with Article 5 or Section 10.12;
(b) to cure any ambiguity, omission, defect or inconsistency;
(c) to make any other change that does not adversely affect the rights
of any Securityholder;
(d) to add covenants, including applicable defeasance provisions
relating thereto, and Events of Default or to surrender any rights the Company
has under this Indenture that do not adversely affect the Holders of the
Securities;
(e) to provide security for the Securities;
40
(f) to make provisions with respect to the conversion right of the
Holders pursuant to the requirements of Section 10.12 and Section 10.01;
(g) to evidence and provide for the acceptance of appointment hereunder
by a successor or another Trustee with respect to the Securities;
(h) to comply with the provisions of the TIA, or with any requirement
of the SEC arising as a result of the qualification of this Indenture under the
TIA;
(i) to add or release any Guarantor pursuant to the terms of this
Indenture; and
(j) to release any Guarantor pursuant to the terms of this Indenture
other than as contemplated under Article 11, provided it does not adversely
affect the interests of the Holders of the Securities in any material respect;
provided that any amendment made within 15 days after the date of this Indenture
solely to conform the provisions of this Indenture to the description of the
Securities contained in the Offering Memorandum will not be deemed to adversely
affect the interests of the Holders of the Securities.
Section 9.02. With Consent of Holders. The Company, the Guarantors and
the Trustee may amend or supplement this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Holders of a
majority in aggregate Principal Amount of the Securities then outstanding. The
Holders of a majority in aggregate Principal Amount of the Securities then
outstanding may waive compliance by the Company with restrictive provisions of
this Indenture other than as set forth in this Section 9.02 below, and waive any
past Default under this Indenture and its consequences, except a Default in the
payment of the principal of or interest on any Security or in respect of a
provision which under this Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.
Subject to Section 9.04, without the written consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, may not:
(a) change the Stated Maturity of the principal of, or any payment date
of any installment of interest or Liquidated Damages, if any, on, any Security;
(b) reduce the principal amount of, or the rate of interest or
Liquidated Damages, if any, on, any Security, whether upon acceleration,
redemption or otherwise, or alter the manner of calculation of interest or
Liquidated Damages, if any;
(c) change the currency for payment of principal of, or interest or
Liquidated Damages, if any, on, any Security;
(d) impair the right to institute suit for the enforcement of any
payment of principal of, or interest or Liquidated Damages, if any, on, any
Security when due;
(e) materially and adversely affect the conversion rights provided in
Article 10;
41
(f) modify the provisions of this Indenture requiring the Company to
make an offer to repurchase Securities upon a Change in Control or to repurchase
the Securities at the option of the Holders pursuant to Section 3.08 in any case
in a manner adverse to the Holders of the Securities;
(g) reduce the percentage of principal amount of the outstanding
Securities necessary to modify or amend this Indenture or to consent to any
waiver provided for in this Indenture;
(h) waive a Default in the payment of the principal amount of, or
interest or Liquidated Damages, if any, on, any Security (except as provided in
Section 6.02);
(i) subordinate in right of payment the Securities or the Guarantees to
any other indebtedness; or
(j) make any changes in Section 6.04, Section 6.07 or this paragraph.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
Failure to mail the notice or a defect in the notice shall not effect the
validity of the amendment.
Section 9.03. Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.
Section 9.04. Revocation and Effect of Consents. Until an amendment,
waiver or other action by Holders becomes effective, a consent thereto by a
Holder of a Security hereunder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same obligation as the consenting Holder's Security, even if notation of the
consent, waiver or action is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent, waiver or action as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment, waiver or action becomes effective.
After an amendment, waiver or action becomes effective, it shall bind every
Securityholder.
Section 9.05. Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of Directors
of the Company, to any such supplemental indenture may be prepared and executed
by the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.
Section 9.06. Trustee to Sign Supplemental Indentures. The Trustee
shall sign any supplemental indenture authorized pursuant to this Article 9 if
the amendment contained therein does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the
42
Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.01) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.
Section 9.07. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article 9, 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.
Article 10
CONVERSIONS
Section 10.01. Conversion Privilege. Subject to the provisions of this
Article 10, a Holder of a Security may convert such Security into Common Stock
(the shares of Common Stock issuable upon such conversion, the "CONVERSION
SHARES"), at the Conversion Price then in effect, together with those rights,
warrants or options hereinafter specified, to the extent applicable, if any of
the following conditions is satisfied:
(a) during any calendar quarter (the "QUARTER"), if the Closing Price
(as defined hereinafter) per share of Common Stock for at least 20 Trading Days
in the period of 30 consecutive Trading Days ending on the last Trading Day of
the Quarter preceding the Quarter in which the conversion of such Security
occurs is more than 120% of the Conversion Price on such thirtieth Trading Day;
(b) the Security has been called for redemption by the Company pursuant
to Section 3.01;
(c) during any period in which the credit ratings assigned to the
senior unsecured debt of the Company by both Xxxxx'x Investors Service Inc. and
Standard & Poor's Ratings Group are reduced below B1 and B+, respectively;
(d) if neither Xxxxx'x Investors Service Inc. nor Standard & Poor's
Ratings Group is rating the senior unsecured debt of the Company;
(e) the conversion of such Security occurs during the five Trading Day
period immediately following a period of nine consecutive Trading Days in which
the Security Trading Price (as determined following a request by a Holder of the
Securities in accordance with the procedures set forth below in this Section
10.01) for each Trading Day in such period was less than 95% of the product of
the Closing Price per share of Common Stock on such Trading Day multiplied by
the number of shares of Common Stock issuable (assuming satisfaction of
conditions to conversion) upon conversion of $1,000 in principal amount of the
Securities (the condition specified in this clause (e) being the "95% TRADING
CONDITION");
(f) (i) an issuance of rights, warrants or options referred to in
Section 10.06(b) occurs or (ii) a distribution referred to in Section 10.06(c)
or 10.06(e) occurs where the fair market value of such distribution per share of
Common Stock (as determined by the Board of
43
Directors of the Company, which determination shall be conclusive evidence of
such fair market value) exceeds 10% of the Closing Price per share of Common
Stock on the Trading Day immediately preceding the date of declaration of such
distribution unless the Holders of the Securities may participate in the
transaction on a basis and with notice that the Board of Directors of the
Company determines to be fair and reasonable; or
(g) (x) the Company is party to a consolidation, merger, share
exchange, sale of all or substantially all of its assets or other similar
transaction, in each case pursuant to which the Common Stock is subject to
conversion into shares of stock, other securities or property (including cash)
pursuant to Section 10.12 and (y) the conversion of such Security occurs at any
time from and after the date that is 15 Business Days prior to the date of the
anticipated effective time of such transaction until and including the date that
is two Business Days before the actual date of such transaction.
In the case of the foregoing clauses (f)(i) and (ii), the Company must
notify the Holders at least 20 days prior to the Ex-Dividend Date for such
issuance or distribution. Once the Company has given such notice, Holders may
surrender their Securities for conversion at any time thereafter until the
earlier of the close of business on the Business Day prior to the Ex-Dividend
Date or the Company's announcement that such issuance or distribution will not
take place. This provision shall not apply if the Holder of a Security otherwise
participates in the issuance or distribution without conversion.
The "EX-DIVIDEND DATE" for any such issuance or distribution means the
date immediately prior to the commencement of "ex-dividend" trading for such
issuance or distribution on the American Stock Exchange or such other national
securities exchange or The Nasdaq Stock Market or similar system of automated
dissemination of quotations of securities prices on which the Common Stock is
then listed or quoted.
The number of shares of Common Stock issuable upon conversion of a
Security shall be determined by dividing the Principal Amount of the Security or
portion thereof surrendered for conversion by the Conversion Price in effect on
the Conversion Date. The initial Conversion Price is set forth in paragraph 8 of
the Securities and is subject to adjustment as provided in this Article 10.
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of a Security.
If a Security is called for redemption pursuant to Article 3, the right
to convert such Security shall terminate at the close of business on the second
Business Day before the redemption date for such Security (unless the Company
shall default in making the redemption payment then due, in which case the
conversion right shall terminate on the date such Default is cured and such
Security is redeemed). A Security in respect of which a Holder has delivered a
Purchase Notice pursuant to Section 3.08 or a Change in Control Purchase Notice
pursuant to Section 3.09 exercising the option of such Holder to require the
Company to repurchase such Security may be converted only if such Purchase
Notice or Change in Control Purchase Notice, as the case may be, is withdrawn by
a written notice of withdrawal delivered to the Paying Agent
44
prior to the close of business on the Business Day prior to the Purchase Date or
prior to the close of business on the Business Day prior to the Change in
Control Purchase Date, as the case may be, in accordance with Section 3.10.
A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities into Common Stock
and, upon such conversion, only to the extent such Securities are deemed to have
been converted into Common Stock pursuant to this Article 10.
The "SECURITY TRADING PRICE" per $1,000 in principal amount of
Securities on any date of determination means the average of the secondary
market bid quotations per $1,000 in principal amount of Securities obtained by
the Conversion Agent for $5,000,000 in principal amount of Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided that if at least three such bids cannot reasonably be obtained
by the Conversion Agent, but two such bids are obtained, then the average of the
two bids shall be used, and if only one such bid can reasonably be obtained by
the Conversion Agent, such one bid shall be used. If the Conversion Agent cannot
reasonably obtain at least one bid for $5,000,000 in principal amount of
Securities from a nationally recognized securities dealer or, in the reasonable
judgment of the Company, the bid quotations are not indicative of the secondary
market value of the Securities, then the Security Trading Price will be
determined in good faith by the calculation agent (which shall initially be the
Trustee unless the Trustee shall have appointed a calculation agent, which may
be any investment bank with a national or international reputation with
experience in such matters, including the Initial Purchasers or their respective
successors) taking into account in such determination such factors as it, in its
sole discretion after consultation with the Company, deems appropriate. The
Conversion Agent shall have no obligation to determine the Security Trading
Price unless the Company has requested such determination; and the Company shall
have no obligation to make such request unless a Holder of the Securities
provides the Company with reasonable evidence that the Security Trading Price
would be less than 95% of the product of the Closing Price per share of the
Common Stock and the number of shares of Common Stock issuable upon conversion
of $1,000 in principal amount of Securities (assuming satisfaction of conditions
to such conversion), at which time the Company shall instruct the Conversion
Agent to determine the Security Trading Price beginning on the next Trading Day
and on each successive Trading Day until the Security Trading Price is greater
than or equal to 95% of the product of the Closing Price per share of Common
Stock and the number of shares of Common Stock issuable upon conversion of
$1,000 in principal amount of Securities (assuming satisfaction of conditions to
such conversion).
Section 10.02. Conversion Procedure. To convert a Security, a Holder
must satisfy the requirements in paragraph 8 of the Securities and (i) complete
and manually sign the conversion notice on the back of the Security and deliver
such notice to the Conversion Agent, (ii) surrender the Security to the
Conversion Agent, (iii) furnish appropriate endorsements and transfer documents
if required by the Registrar or the Conversion Agent, (iv) pay any transfer or
other tax, if required by Section 10.04 and (v) if the Security is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. The date on which
the Holder satisfies all of the foregoing requirements is the "CONVERSION DATE".
As soon as practicable after the Conversion Date, the Company shall
45
deliver to the Holder through the Conversion Agent either (i) a certificate for
or (ii) a book-entry notation of the number of whole shares of Common Stock
issuable upon the conversion and cash in lieu of any fractional shares pursuant
to Section 10.05; provided, however, that in the event of a Principal Value
Conversion referred to below in this Section 10.02, the Company shall deliver to
the Holder through the Conversion Agent such cash and/or Common Stock as shall
be specified in the Principal Value Conversion Notice pertaining to such
Principal Value Conversion.
The person in whose name the certificate is registered shall be deemed
to be a stockholder of record on the Conversion Date; provided, however, that no
surrender of a Security on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the person or persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided, further, that such conversion shall be at the Conversion
Price in effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such person shall no longer be a Holder of such
Security.
No payment or adjustment will be made for accrued interest, if any, or
Liquidated Damages, if any, on a converted Security or for dividends or
distributions on shares of Common Stock issued upon conversion of a Security
(provided that the shares of Common Stock received upon conversion of Securities
shall continue to accrue Liquidated Damages, as applicable, in accordance with
the Registration Rights Agreement and shall be entitled to receive, at the next
interest payment date, any accrued and unpaid Liquidated Damages with respect to
the converted Securities), but if any Holder surrenders a Security for
conversion between the record date for the payment of an installment of interest
and the next interest payment date, then, notwithstanding such conversion, the
interest or Liquidated Damages, if any, payable on such interest payment date
shall be paid to the Holder of such Security on such record date. In such event,
such Security, when surrendered for conversion, must be accompanied by delivery
of a check payable to the Conversion Agent in an amount equal to the interest
and Liquidated Damages, if any, payable on such interest payment date on the
portion so converted. If such payment does not accompany such Security, the
Security shall not be converted; provided, however, that no such check shall be
required if such Security has been called for redemption on a redemption date
within the period between and including such record date and such interest
payment date, or if such Security is surrendered for conversion on the interest
payment date. If the Company defaults in the payment of interest or Liquidated
Damages, if any, payable on the interest payment date, the Conversion Agent
shall repay such funds to the Holder.
If a Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Securities converted.
46
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security equal in principal amount to the unconverted portion of the
Security surrendered.
If on the date of conversion of a Security pursuant to the 95% Trading
Condition the Closing Price per share of Common Stock is greater than the
Conversion Price, the Company may elect to pay to the Holder of such Security,
in lieu of issuance of Conversion Shares based on the Conversion Price, cash or
Common Stock or a combination of cash and Common Stock, at the Company's option,
with a value equal to the principal amount of the Security surrendered for
conversion as of such Conversion Date (a "PRINCIPAL VALUE CONVERSION"). The
Company shall notify the surrendering Holder of any Security whose conversion is
a Principal Value Conversion and the Trustee (such notice being a "PRINCIPAL
VALUE CONVERSION NOTICE") of such Principal Value Conversion by the second
Trading Day following the Conversion Date for such conversion whether the
Company shall pay to such Holder all or a portion of the principal amount of
such Security in cash, Common Stock or a combination of cash and Common Stock
and, if a combination, the percentages of the principal amount in respect of
which it will pay in cash or Common Stock. The Company may not change its
election with respect to the consideration (or components or percentages of
components thereof) to be paid upon a Principal Value Conversion once the
Company has given its Principal Value Conversion Notice to the Holder
surrendering such Security whose conversion is a Principal Value Conversion. Any
Common Stock to be delivered upon a Principal Value Conversion shall be valued
at the greater of (x) the Conversion Price on the Conversion Date for such
conversion and (y) the Closing Price per share of Common Stock on the third
Trading Day after such Conversion Date. The Company shall pay any portion of the
principal amount to be paid in cash in a Principal Value Conversion on the third
Trading Day after the Conversion Date for such conversion. With respect to any
portion of the principal amount to be paid in Common Stock in a Principal Value
Conversion, the Company shall deliver the Common Stock to the Holder of the
Security surrendered for conversion in such Principal Value Conversion on the
fourth Trading Day following the Conversion Date for such conversion.
Section 10.03. Adjustments Below Par Value. Before taking any action
which would cause an adjustment decreasing the Conversion Price so that the
shares of Common Stock issuable upon conversion of the Securities would be
issued for less than the par value of such Common Stock, the Company will take
all corporate action which may be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Conversion Price.
Section 10.04. Taxes on Conversion. If a Holder converts a Security,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon such conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any tax withholding required by law or regulations.
47
Section 10.05. Company to Provide Stock. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve, out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of all outstanding Securities
for shares of Common Stock. The shares of Common Stock or other securities
issued upon conversion of Securities bearing a Legend as provided in Section
2.06(f) shall bear a legend substantially in the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) THIS SECURITY AND THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE)
OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE."
No fractional shares of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Securities (or specified portions thereof to the extent permitted hereby) so
surrendered. If any fractional share of Common Stock would be issuable upon the
conversion of any Security or Securities, the Company shall make an adjustment
thereof in cash at the current market value thereof. For these purposes, the
current market value of a share of Common Stock shall be the Closing Price per
share of Common Stock on the day on which the Securities (or specified portions
thereof) are deemed to have been converted.
48
The Company covenants that all shares of Common Stock delivered upon
conversion of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and non-assessable and
shall be free from preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.
Section 10.06. Adjustment of Conversion Price. The conversion price
(the "CONVERSION PRICE") shall be that price set forth in paragraph 8 of the
form of Security attached hereto as Exhibit A and shall be adjusted from time to
time by the Company (without duplication) as follows:
(a) In case the Company shall (i) pay a dividend or other distribution
in shares of Common Stock or other Capital Stock to all holders of Common Stock,
(ii) subdivide its outstanding Common Stock into a greater number of shares,
(iii) combine its outstanding Common Stock into a smaller number of shares or
(iv) reclassify its outstanding Common Stock, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the Holder of any Security
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Capital Stock which it would have owned or have been entitled to
receive had such Security been converted immediately prior to the happening of
such event. An adjustment made pursuant to this subsection (a) shall become
effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of subdivision, combination or reclassification.
(b) In case the Company shall issue to all holders of its Common Stock,
rights, warrants or options entitling such holders (for a period commencing no
earlier than the record date described below and expiring not later than 60 days
after such record date) to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share less than the
current market price per share of Common Stock (as determined in accordance with
subsection (f) below) at the record date for the determination of stockholders
entitled to receive such rights, warrants or options, the Conversion Price in
effect immediately prior thereto shall be adjusted so that the Conversion Price
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares which the aggregate subscription or purchase price for
the total number of shares of Common Stock offered by the rights, warrants or
options so issued (or the aggregate conversion price of the convertible
securities offered by such rights, warrants or options) would purchase at such
current market price, and the denominator of which shall be the number of shares
of Common Stock outstanding on such record date plus the number of additional
shares of Common Stock offered by such rights, warrants or options (or into
which the convertible securities so offered by such rights, warrants or options
are convertible). Such adjustment shall be made successively whenever any such
rights, warrants or options are issued, and shall become effective immediately
after such record date. If at the end of the period during
49
which such rights, warrants or options are exercisable not all rights, warrants
or options shall have been exercised, the adjusted Conversion Price shall be
immediately readjusted to what it would have been upon application of the
foregoing adjustment substituting the number of additional shares of Common
Stock actually issued (or the number of shares of Common Stock issuable upon
conversion of convertible securities actually issued) for the total number of
shares of Common Stock offered (or the convertible securities offered).
(c) In case the Company shall distribute to all holders of its Common
Stock any evidences of its indebtedness, other securities (other than Common
Stock or Capital Stock) or other assets, or shall distribute to all holders of
its Common Stock, rights, warrants or options to subscribe for or purchase any
of its securities (excluding (i) rights, options and warrants referred to in
Section 10.06(b) above; (ii) those dividends, distributions, subdivisions and
combinations referred to in Section 10.06(a) above; and (iii) dividends and
distributions paid in cash referred to in Section 10.06(e) below, then in each
such case the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date of such distribution by a fraction, the numerator of which
shall be the current market price per share (as determined in accordance with
subsection (f) below) of the Common Stock on the record date mentioned below
less the fair market value on such record date (as determined by the Board of
Directors of the Company, whose determination shall be conclusive evidence of
such fair market value) of the portion of the evidences of indebtedness,
securities or assets so distributed or of such rights, warrants or options
issued, in each case as applicable to one share of Common Stock, and the
denominator of which shall be the current market price per share (as determined
in accordance with subsection (f) below) of the Common Stock on such record
date. Such adjustment shall become effective immediately after the record date
for the determination of stockholders entitled to receive such distribution.
(d) In case the Company or any Subsidiary of the Company makes a
payment to holders of Common Stock in respect of a tender or exchange offer of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors) that as of the last
time (the "EXPIRATION TIME") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it may be amended) exceeds the Closing Price on the
Trading Day next succeeding the Expiration Time, the Conversion Price shall be
decreased so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Expiration Time by a
fraction,
(i) the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Closing Price on the Trading
Day next succeeding the Expiration Time, and
(ii) the denominator of which shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration
payable to holders of Common Stock based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all
shares of Common Stock validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such
maximum being referred to as the "PURCHASED SHARES") and (y) the
product of the
50
number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Price on the Trading Day
next succeeding the Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price that would then be in effect if such tender or
exchange offer had not been made.
(e) In case the Company shall declare a cash dividend or cash
distribution to all or substantially all of the holders of Common Stock, the
Conversion Price shall be decreased so that the Conversion Price shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the record date for such dividend or distribution by a fraction,
(i) the numerator of which shall be the average of the Closing
Price for the three consecutive Trading Days ending on the Trading Day
immediately preceding the record date for such dividend or distribution
(the "PRE-DIVIDEND SALE PRICE"), minus the full amount of such cash
dividend or cash distribution applicable to one share of Common Stock
(the "DIVIDEND ADJUSTMENT AMOUNT"), and
(ii) the denominator of which shall be the Pre-Dividend Sale
Price,
such adjustment to become effective immediately after the record date for such
dividend or distribution; provided that if the numerator of the foregoing
fraction is less than $1.00 (including a negative amount), then in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion, in addition to the cash and Common
Stock issuable upon such conversion, the amount of cash such Holder would have
received had such Holder converted its Security solely into Common Stock at the
then applicable Conversion Price immediately prior to the record date for such
cash dividend or cash distribution. If such cash dividend or cash distribution
is not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such dividend or distribution
had not been declared.
(f) For the purpose of any computation under Section 10.06(b) and (c)
above, the "CURRENT MARKET PRICE PER SHARE" of Common Stock on any date shall be
deemed to be the average of the Closing Prices per share of Common Stock for 20
consecutive Trading Days commencing 30 Trading Days before the record date with
respect to any distribution, issuance or other event requiring such computation.
The "CLOSING PRICE" with respect to the Common Stock for any day shall mean the
closing sale price, regular way, per share of Common Stock on such day or, in
case no such sale of Common Stock takes place on such day, the average of the
reported closing bid and asked prices, regular way, per share of Common Stock in
each case on the American Stock Exchange, the New York Stock Exchange, the
Nasdaq Stock Market or other principal national or regional security exchange or
other quotation system on which the Common Stock is quoted or listed or admitted
to trading on such day, or, if the Common Stock is not so quoted or listed or
admitted to trading on any national or regional securities exchange or
51
quotation system, the average of the closing bid and asked prices per share of
Common Stock on the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if such average is not so available, determined in such
manner as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors for that purpose, or if not so
determinable as provided under any applicable alternative above, a price per
share of Common Stock determined in good faith by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive.
(g) If the rights provided for in the Company's rights agreement dated
as of September 21, 1998, as amended, (the "STOCKHOLDER RIGHTS PLAN") have
separated from the Company's Common Stock in accordance with the provisions of
the Stockholder Rights Plan so that the Holders of the Securities would not be
entitled to receive any rights in respect of Common Stock issuable upon
conversion of the Securities, the Conversion Price will be adjusted as provided
in paragraph (c) above, subject to readjustment in the event of the expiration,
termination or redemption of the rights. In lieu of any such adjustment, the
Company may amend its Stockholder Rights Plan to provide that upon conversion of
the Securities the Holders will receive, in addition to Common Stock issuable
upon such conversion, the rights which would have attached to such shares of
Common Stock if the rights had not become separated from the Common Stock under
the Company's Stockholder Rights Plan. To the extent that the Company adopts any
future rights plan, upon conversion of the Securities into Common Stock,
Securityholders will receive, in addition to Common Stock, the rights under the
future rights plan whether or not the rights have separated from the Common
Stock at the time of conversion and no adjustment to the Conversion Price will
be made in accordance with paragraph (c).
(h) In any case in which this Section 10.06 shall require that an
adjustment be made immediately following a record date established for purposes
of Section 10.06, the Company may elect to defer (but only until five Business
Days following the filing by the Company with the Trustee of the certificate
described in Section 10.10) issuing to the holder of any Security converted
after such record date the shares of Common Stock and other Capital Stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company issuable upon such conversion only on the
basis of the Conversion Price prior to adjustment; and, in lieu of the shares
the issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence of the right to
receive such shares.
(i) If after an adjustment a Holder of a Security upon conversion of
such Security may receive shares of two or more classes of Capital Stock of the
Company, the Conversion Price shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Article 10 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article 10.
Section 10.07. No Adjustment. No adjustment in the Conversion Price
shall be required unless the adjustment would require an increase or decrease of
at least 1% in the Conversion Price as last adjusted; provided, however, that
any adjustments which by reason of this Section 10.07 are not required to be
made shall be carried forward and taken into account in any
52
subsequent adjustment. All calculations under this Article 10 shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section
10.06 if Holders are permitted to participate in the transaction on a basis and
with notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction. Such participation by Holders may include participation upon
conversion; provided that an adjustment shall be made at such time as the
Holders are no longer entitled to participate.
No adjustment need be made for rights to purchase Common Stock or
issuances of Common Stock pursuant to any present or future Company plan for
reinvestment of dividends or interest payable on the Company's securities and
the investment of any additional optional amounts of shares of Common Stock
under any Company plan.
No adjustment need be made for a change in the par value or a change to
no par value of the Common Stock.
No adjustment need be made upon the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant to any present or
future Company employee, director or consultant benefit plan or program.
No adjustment need be made upon the issuance of any shares of Common
Stock pursuant to any option, warrant, right, or exercisable, exchangeable or
convertible security outstanding as of the date the Securities were first
issued.
To the extent that the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
Section 10.08. Equivalent Adjustments. In the event that, as a result
of an adjustment made pursuant to Section 10.06 above, the Holder of any
Security thereafter surrendered for conversion shall become entitled to receive
any shares of Capital Stock of the Company other than shares of its Common
Stock, thereafter the Conversion Price of such other shares so receivable upon
conversion of any Securities shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions with
respect to Common Stock contained in this Article 10.
Section 10.09. Adjustment for Tax Purposes. The Company shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by Section 10.06, as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares, distribution
of rights to purchase stock or securities, or a distribution or securities
convertible into or exchangeable for stock hereafter made by the Company to its
stockholders shall not be taxable.
Section 10.10. Notice of Adjustment. Whenever the Conversion Price is
adjusted, or Securityholders become entitled to other securities or due bills,
the Company shall promptly mail to Securityholders a notice of the adjustment
and file with the Trustee an Officers' Certificate briefly stating the facts
requiring the adjustment and the manner of computing it. The certificate
53
shall be conclusive evidence of the correctness of such adjustment and the
Trustee may conclusively assume that, unless and until such certificate is
received by it, no such adjustment is required.
Section 10.11. Notice of Certain Transactions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, warrants or options to subscribe for or purchase any
share of any class or any other rights, warrants or options; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value, or of any consolidation, merger, or share exchange to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, or winding-up of the
Company;
the Company shall cause to be filed with the Trustee and the Conversion Agent
and to be mailed to each Holder of Securities at its address appearing on the
list provided for in Section 2.05, as promptly as possible but in any event at
least ten days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights, warrants or options, or, if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are to be determined, or (y)
the date on which such reclassification, consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding-up is expected to become
effective or occur, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding-up. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, share exchange, transfer,
dissolution, liquidation or winding-up.
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share
Exchange or Sale on Conversion Privilege. If any of the following shall occur,
namely: (i) any reclassification or change of outstanding shares of Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination; (ii) any
consolidation, combination, merger or share exchange to which the Company is a
party other than a merger in which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a change
in name, or par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination) in, outstanding
shares of Common Stock; or (iii) any sale or conveyance of all or substantially
all of the assets of the Company, then the Company, or such
54
successor or purchasing corporation, as the case may be, shall, as a condition
precedent to such reclassification, change, consolidation, merger, share
exchange, sale or conveyance, execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right to convert such Security into the kind and amount of shares of Capital
Stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, share exchange, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon
conversion of such Security immediately prior to such reclassification, change,
consolidation, merger, share exchange, sale or conveyance. Such supplemental
indenture shall provide for adjustments of the Conversion Price which shall be
as nearly equivalent as may be practicable to the adjustments of the Conversion
Price provided for in this Article 10. If, in the case of any such
consolidation, merger, share exchange, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of Capital Stock or other securities and property
of a corporation other than the successor or purchasing corporation, as the case
may be, in such consolidation, merger, share exchange, sale or conveyance, then
such supplemental indenture shall also be executed by such other corporation and
shall contain such additional provisions to protect the interests of the Holders
of the Securities as the Board of Directors shall reasonably consider necessary
by reason of the foregoing. The provisions of this Section 10.12 shall similarly
apply to successive consolidations, mergers, share exchanges, sales or
conveyances. Notwithstanding the foregoing, a distribution by the Company to all
or substantially all holders of its Common Stock for which an adjustment to the
Conversion Price or provision for conversion of the Securities may be made
pursuant to Section 10.06 shall not be deemed to be a sale or conveyance of all
or substantially all of the assets of the Company for purposes of this Section
10.12.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 10.12, the Company shall promptly file with the Trustee
an Opinion of Counsel stating that such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate briefly stating the
reasons therefor, the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders of the Securities upon the
conversion of their Securities after any such reclassification, change,
consolidation, merger, share exchange, sale or conveyance, any adjustment to be
made with respect thereto and that all conditions precedent have been complied
with.
Section 10.13. Trustee's Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article 10 should be made, how it should
be made or what such adjustment should be made, but may accept as conclusive
evidence of the correctness of any such adjustment, and shall be protected in
relying upon, the Officers' Certificate with respect thereto which the Company
is obligated to file with the Trustee pursuant to Section 10.10. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the Company's failure to comply with any
provisions of this Article 10. Each Conversion Agent (other than the Company or
an Affiliate of the Company) shall have the same protection under this Section
10.13 as the Trustee.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 10.12, but may
55
accept as conclusive evidence of the correctness thereof, and shall be protected
in relying upon, the Officers' Certificate with respect thereto which the
Company is obligated to file with the Trustee pursuant to Section 10.12.
Section 10.14. Voluntary Reduction. The Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least 20 Trading Days or such longer period as may be required by law and
if the reduction is irrevocable during the period; provided that in no event may
the Conversion Price be less than the par value of a share of Common Stock.
Section 10.15. Simultaneous Adjustments. In the event that this Article
10 requires adjustments to the Conversion Price under more than one of Sections
10.06(c) and (d) and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.06(d) and, second, the provisions
of Section 10.06(c). If more than one event requiring adjustment pursuant to
Section 10.06 shall occur before completing the determination of the Conversion
Price for the first event requiring such adjustment, then the Board of Directors
(whose determination shall, if made in good faith, be conclusive) shall make
such adjustments to the Conversion Price (and the calculation thereof) after
giving effect to all such events as shall preserve for Securityholders the
Conversion Price protection provided in Section 10.06.
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 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(e) and (f)),
Liquidated Damages, if any, on the Securities 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
Purchase Notice, a Change in Control 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 a Purchase Notice, a Change
in Control 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
56
whether or not such failure to pay has become an 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 guarantee 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, on or interest,
and Liquidated Damages, if any, 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, on or interest (including Liquidated Damages, if any) 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
57
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 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 Securities, 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 Securities 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.
58
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, void, voidable or unenforceable 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 or state law or otherwise not being void, voidable or
unenforceable under any bankruptcy, reorganization, receivership, insolvency,
liquidation or other similar legislation or legal principles under any
applicable 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 Security
a notation of such Guarantee. If an officer of a Guarantor whose signature is on
this 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. A Guarantor may
consolidate with or merge with or into (or sell or otherwise dispose of all or
substantially all of its property and assets to) another Guarantor without
limitation, except to the extent such transaction is subject to Section 5.01
hereof. 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 a
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
59
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 dissolution of a
Guarantor, or 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 11.04
hereof) and in a transaction that does not result in a Default or an Event of
Default being in existence or continuing immediately thereafter, 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 any such release or discharge
shall occur only to the extent that all obligations of such Guarantor under all
of its guarantees of, and under all of its pledges of assets or other security
interests which secure, other Obligations of the Company, or any other
Subsidiary of the Company, shall also be released or discharged upon such sale
or other transfer. The Trustee shall deliver at the expense of the Company 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 Indentures 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 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.
60
Article 12
MISCELLANEOUS
Section 12.01. 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 the TIA, the required provision
shall control.
Section 12.02. Notices. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows, or
transmitted by facsimile transmission (confirmed orally) to the following
facsimile numbers:
if to the Company or any Guarantor, to:
Grey Wolf, Inc.
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
in either case, with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx Xx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
if to the Trustee, to:
JPMorgan Chase Bank
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
The Company, the Guarantors or the Trustee by notice given to the other
in the manner provided above may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication given to a Securityholder shall be mailed
to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
61
If the Company mails a notice or communication to the Securityholders,
it shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 12.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar, the Paying
Agent, the Conversion Agent and anyone else shall have the protection of TIA
Section 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company or the Guarantors to the Trustee to
take any action under this Indenture, the Company and the Guarantors shall
furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
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 eligible and qualified 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 case should know, that the certificate
or opinion or representations with respect to the matters upon which his or her
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company or such Guarantor stating the information on which counsel is relying
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 12.05. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(a) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
62
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such person, he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
Section 12.06. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 12.08. Legal Holidays. A "LEGAL HOLIDAY" is any day other than
a Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest or Liquidated Damages, if any, shall
accrue for the intervening period.
Section 12.09. Governing Law. THIS INDENTURE AND EACH NOTE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Section 12.10. 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 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 Securityholder 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. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 12.12. Multiple Originals. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
63
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.
THE COMPANY:
GREY WOLF, INC.
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
THE TRUSTEE:
JPMORGAN CHASE BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE GUARANTORS:
DI/PERFENSA INC.
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
DI ENERGY, INC.
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
GREY WOLF DRILLING COMPANY L.P.
By: Grey Wolf Holdings Company,
its Sole General Partner
By:
---------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
GREY WOLF INTERNATIONAL, INC.
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
GREY WOLF HOLDINGS COMPANY
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
GREY WOLF LLC
By: Grey Wolf Holdings Company,
its Sole Member
By:
---------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
MURCO DRILLING CORPORATION
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Executive
Vice President and
Chief Financial Officer
GREY WOLF MEXICO HOLDINGS LLC
By:
-------------------------------------
Xxxxx X. Xxxxxxxx, Manager
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $_____ PER $1,000 OF PRINCIPAL
AMOUNT AND THE ISSUE DATE IS MARCH 31, 2004. HOLDERS OF THIS SECURITY MAY OBTAIN
INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY
AND THE PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN
REQUEST FOR SUCH INFORMATION TO: GREY WOLF, INC., 00000 XXXXXXXX XXXXXX, XXXXX
000, XXXXXXX, XXXXX 00000, ATTN.: CHIEF FINANCIAL OFFICER, SUCH INFORMATION TO
BE MADE AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE,
PROMPTLY UPON REQUEST.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO GREY WOLF, 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 IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, 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
ARTICLE 2 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY, AND THE COMMON STOCK
DELIVERABLE UPON CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE
COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
A-1-1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION
OF THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-1-2
GREY WOLF, INC.
Floating Rate Contingent Convertible Senior Notes Due 2024
No.: CUSIP:
Issue Date: Principal Amount:
GREY WOLF, INC., a Texas corporation, promises to pay to Cede & Co. or
registered assigns, the Principal Amount as set forth on Schedule I hereto, on
April 1, 2024, subject to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place. This Security is convertible as specified
on the other side of this Security.
Interest Payment Dates: April 1, July 1, October 1 and January 1,
commencing July 1, 2004
Record Dates: March 15, June 15, September 15 or December 15,
commencing June 15, 2004
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: GREY WOLF, INC.
By:
--------------------------------
Name:
Title:
A-1-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
JPMORGAN CHASE BANK, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.
By:
-------------------------------
Authorized Signatory
Dated:
A-1-4
[FORM OF REVERSE SIDE OF NOTE]
GREY WOLF, INC.
Floating Rate Contingent Convertible Senior Notes Due 2024
1. Interest.
This Security will bear interest from March 31, 2004 or from the most
recent date to which interest has been paid or duly provided for, quarterly in
arrears on April 1, July 1, October 1 and January 1 of each year, subject to
Section 12.08 of the Indenture, commencing July 1, 2004. This Security will bear
interest from March 31, 2004 to but excluding July 1, 2004 at a rate of 1.06%
per annum. Beginning July 1, 2004, this Security will bear interest for each
quarterly period at a rate per annum equal to 3-month LIBOR minus 0.05%, reset
quarterly on the first day of such quarterly period (the "INTEREST ADJUSTMENT
DATE"). The Trustee will act as calculation agent ("CALCULATION AGENT") and will
determine the interest rate. The 3-month LIBOR applicable to any quarterly
period beginning on an April 1, July 1, October 1 or January 1 shall be 3-month
LIBOR on the second London banking day immediately preceding such April 1, July
1, October 1 or January 1 (the "INTEREST DETERMINATION Date"). Notwithstanding
any quarterly adjustments of the interest rate, the interest rate borne by the
Security will never be less than zero or more than 6.00% in any quarter. The
Company will pay interest on any overdue principal amount at the interest rate
borne by the Securities at the time such interest on the overdue principal
amount accrues, compounded quarterly, and it shall pay interest on overdue
installments of interest and Liquidated Damages, if any (without regard to any
applicable grace period), at the same interest rate, compounded quarterly.
Interest (including Liquidated Damages, if any) on the Securities will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
"LONDON BANKING DAY" means a day on which commercial banks are open for
business, including dealings in United States dollars, in London, England.
"3-MONTH LIBOR," as determined by the Calculation Agent, means with
respect to any Interest Determination Date:
(i) the rate for three-month deposits in United States dollars
commencing on the second London banking day succeeding such Interest
Determination Date that appears on the Moneyline Telerate Page 3750 as of 11:00
a.m., London time, on the Interest Determination Date, or
(ii) if no rate appears on the particular Interest Determination Date
on the Moneyline Telerate Page 3750, the rate calculated by the Calculation
Agent as the arithmetic mean of at least two offered quotations obtained by the
Calculation Agent after requesting the principal London offices of each of four
major reference banks in the London interbank market to provide the Calculation
Agent with its offered quotation for deposits in United States dollars for the
period of three months, commencing on the second London banking day succeeding
such Interest Determination Date, to prime banks in the London interbank market
at approximately 11:00 a.m., London time, on that Interest Determination Date
and in a principal amount that is representative for a single transaction in
United States dollars in that market at that time, or
A-1-5
(iii) if fewer than two offered quotations referred to in clause (ii)
are provided as requested, the rate calculated by the Calculation Agent as the
arithmetic mean of the rates quoted at approximately 11:00 a.m., New York time,
on the particular Interest Determination Date by three major banks in The City
of New York selected by the Calculation Agent for loans in United States dollars
to leading European banks for a period of three months commencing on the second
London banking day succeeding such Interest Determination Date, and in a
principal amount that is representative for a single transaction in United
States dollars in that market at that time, or
(iv) if the banks so selected by the Calculation Agent are not quoting
as mentioned in clause (iii), 3-month LIBOR in effect on the preceding Interest
Determination Date (or 1.06% per annum in the case of the Interest Determination
Date on July 1, 2004).
"MONEYLINE TELERATE PAGE 3750" means the display on Moneyline Telerate
(or any successor service) on such page (or any other page as may replace such
page on such service) or such other service or services as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying the London interbank rates of major banks for United States dollars.
2. Method of Payment.
The Company will pay interest and Liquidated Damages, if any, on this
Security (except defaulted interest) to the Person who is the registered Holder
of this Security at the close of business on March 15, June 15, September 15 or
December 15, as the case may be, next preceding the related interest payment
date. Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Redemption Price, Purchase Price, Change in
Control Purchase Price and the Principal Amount at Stated Maturity, as the case
may be, to the Holder who surrenders a Security to a Paying Agent to collect
such payments in respect of the Security. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay interest,
Liquidated Damages, if any, the Redemption Price, Purchase Price, Change in
Control Purchase Price and the Principal Amount at Stated Maturity, as the case
may be, by check or wire payable in such money; provided, however, that a Holder
holding Securities with an aggregate Principal Amount in excess of $1,000,000
will be paid by wire transfer in immediately available funds at the election of
such Holder. The Company may mail an interest check to the Holder's registered
address. Notwithstanding the foregoing, so long as this Security is registered
in the name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the Depositary or
its nominee.
3. Paying Agent, Conversion Agent and Registrar.
Initially, JPMorgan Chase Bank (the "TRUSTEE") will act as Paying
Agent, Conversion Agent and Registrar. The Company may appoint and change any
Paying Agent, Conversion Agent or Registrar without notice, other than notice to
the Trustee; provided that the Company will maintain at least one Paying Agent
in the State of New York, The City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company
A-1-6
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent or Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of March
31, 2004 (the "INDENTURE"), between the Company, the Guarantors and the Trustee.
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, as in
effect from time to time (the "TIA"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the Company limited
to up to $125,000,000 aggregate Principal Amount (which shall include one of the
Initial Purchasers' option to purchase $25,000,000 of additional Securities)
(subject to Section 2.07 of the Indenture). The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are not
redeemable prior to April 1, 2014. Beginning on April 1, 2014, the Securities
are redeemable as a whole, or from time to time in part, for cash in any
integral multiple of $1,000, at any time at the option of the Company for a
redemption price equal to 100% of the principal amount of the Securities being
redeemed together with accrued and unpaid interest and Liquidated Damages, if
any, thereon, up to but not including the Redemption Date (the "REDEMPTION
PRICE"); provided that, if the Redemption Date is on or after an interest record
date but on or prior to the related interest payment date, interest and
Liquidated Damages, if any, will be payable to the Holders in whose names the
Securities are registered at the close of business on the relevant record date.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Securities held by such Holder, in any integral multiple of $1,000, on April
1, 2014 and April 1, 2019 (each, a "PURCHASE DATE") at a purchase price per
Security equal to 100% of the aggregate Principal Amount of the Security (the
"PURCHASE PRICE"), together with accrued and unpaid interest and Liquidated
Damages, if any, thereon, up to but not including the Purchase Date (provided
that, if the Purchase Date is on or after an interest record date but on or
prior to the related interest payment date, accrued and unpaid interest, if any,
and Liquidated Damages, if any, will be payable to the Holders in whose names
the Securities are registered at the close of business on the relevant record
date) upon delivery of a Purchase Notice containing the information set forth in
the Indenture, together with the Securities subject thereto, at any time from
the opening of business on the date that is 20 Business Days prior to such
Purchase Date until the close of business on the Business Day prior to such
Purchase Date, and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture.
A-1-7
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder after the occurrence of a Change in Control of the Company
for a Change in Control Purchase Price equal to 100% of the Principal Amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, up to but not including the Change in Control Purchase Date which
Change in Control Purchase Price shall be paid in cash.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price, as the case may be, and accrued and unpaid interest and
Liquidated Damages, if any, of all Securities or portions thereof to be
purchased as of the Purchase Date or the Change in Control Purchase Date, as the
case may be, is deposited with the Paying Agent on or before the Business Day
following the Purchase Date or the Change in Control Purchase Date, interest and
Liquidated Damages, if any, will cease to accrue on such Securities (or portions
thereof) on and after such Purchase Date or Change in Control Purchase Date, and
the Holder thereof shall have no other rights as such other than the right to
receive the Purchase Price or Change in Control Purchase Price, as the case may
be, upon surrender of such Security.
7. Notice of Redemption.
Notice of redemption pursuant to paragraph 5 of this Security will be
mailed at least 20 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, immediately after such Redemption Date
interest and Liquidated Damages, if any, cease to accrue on such Securities or
portions thereof. Securities in denominations larger than $1,000 of Principal
Amount may be redeemed in part but only in integral multiples of $1,000 of
Principal Amount.
8. Conversion.
Subject to the provisions of Article 10 of the Indenture, a Holder of a
Note may convert such Note into shares of Common Stock of the Company if any of
the conditions specified in paragraphs (a) through (g) of Section 10.01 of the
Indenture is satisfied; provided, however, that if such Note is called for
redemption, the conversion right will terminate at the close of business on the
second Business Day before the redemption date of such Note (unless the Company
shall default in making the redemption payment when due, in which case the
conversion right shall terminate at the close of business on the date such
Default is cured and such Note is redeemed). The initial conversion price is
$6.51 per share, subject to adjustment under certain circumstances as described
in the Indenture (the "CONVERSION PRICE"). The number of shares issuable upon
conversion of a Note is determined by dividing the principal amount converted by
the Conversion Price in effect on the Conversion Date. In the event of a
conversion of a Note in a Principal Value Conversion, the Company has the option
to deliver cash and/or Common Stock to the Holder of the Note surrendered for
such conversion as provided in Section 10.02 of the
A-1-8
Indenture. Upon conversion, no adjustment for interest, if any, Liquidated
Damages, if any, or dividends will be made. No fractional shares will be issued
upon conversion; in lieu thereof, an amount will be paid in cash based upon the
current market price (as defined in the Indenture) of the Common Stock on the
date that the Securities are deemed to have been converted.
To convert a Note, a Holder must (a) complete and sign the conversion
notice set forth below and deliver such notice to the Conversion Agent, (b)
surrender the Note to the Conversion Agent, (c) furnish appropriate endorsements
and transfer documents if required by the Registrar or the Conversion Agent, (d)
pay any transfer or similar tax, if required and (e) if the Note is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. If a Holder
surrenders a Note for conversion between the record date for the payment of an
installment of interest and the next interest payment date, the Note must be
accompanied by payment of an amount equal to the interest and Liquidated
Damages, if any, payable on such interest payment date on the principal amount
of the Note or portion thereof then converted; provided, however, that no such
payment shall be required if such Note has been called for redemption on a
redemption date within the period between and including such record date and
such interest payment date, or if such Note is surrendered for conversion on the
interest payment date. A Holder may convert a portion of a Note equal to $1,000
or any integral multiple thereof.
A Note in respect of which a Holder has delivered a Purchase Notice or
a Change of Control Repurchase Notice exercising the option of such Holder to
require the Company to repurchase such Note as provided in Section 3.08 or
Section 3.09, respectively, of the Indenture may be converted only if such
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or a Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
A-1-9
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company, for
payment as general creditors unless an applicable abandoned property law
designates another person.
12. 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 aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company, the
Guarantors and the Trustee may amend the Indenture or the Securities (i) to
comply with Article 5 or Section 10.01 or Section 10.12 of the Indenture, (ii)
to cure any ambiguity, omission, defect or inconsistency, (iii) to make any
other change that does not adversely affect the rights of any Securityholder,
(iv) to add covenants, including applicable defeasance provisions relating
thereto, and Events of Default or to surrender any rights the Company has under
the Indenture that do not adversely affect the Holders of the Securities, (v) to
provide security for the Securities, (vi) to evidence and provide for the
acceptance of appointment under the Indenture by a successor or another Trustee,
(vii) to comply with the TIA or with any requirement of the SEC in connection
with the qualification of the Indenture under the TIA, (viii) to add or release
any Guarantor pursuant to the terms of the Indenture, and (ix) to release any
Guarantor pursuant to the terms of the Indenture other than as contemplated
under Article 11, provided it does not adversely affect the interests of the
Holders of the Securities in any material respect; provided that any amendment
made within 15 days after the date of the Indenture solely to conform the
provisions of the Indenture to the description of the Securities contained in
the Offering Memorandum will not be deemed to adversely affect the interests of
Holders of the Securities.
13. Defaults and Remedies.
Under the Indenture, Events of Default include, in summary form, (i)
default for 30 days in payment of any interest or Liquidated Damages, if any, on
any Securities; (ii) default in payment of the Principal Amount, Redemption
Price, Purchase Price or Change in Control Purchase Price, as the case may be,
in respect of the Securities when the same becomes due and payable; (iii)
failure by the Company to comply with other agreements in the Indenture or the
Securities, subject to notice and lapse of time; (iv) default by the Company or
its Subsidiaries in the payment at the final maturity thereof, after the
expiration of any applicable grace period, of principal of indebtedness for
money borrowed in the principal amount then outstanding in excess of
$10,000,000, or acceleration of any indebtedness in such principal amount so
that it becomes due and payable prior to the date on which it would otherwise
have become due and payable and such acceleration is not rescinded within 30
business days after notice to the Company in accordance with the Indenture; (v)
a Guarantee by a Guarantor that is a "significant subsidiary" as defined in Item
1-02(w) of Regulation S-X ceases to be or is asserted by the Company or any
A-1-10
Guarantor not to be in full force and effect (other than in accordance with the
terms of the Indenture and such Guarantee); and (vi) certain events of
bankruptcy or insolvency.
Securityholders 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 aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(i) or (ii) above) if it determines that withholding notice is in their
interests.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, 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.
15. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the Company
or a 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 Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
18. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
A-1-11
Grey Wolf, Inc.
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn.: Chief Financial Officer
A-1-12
------------------------------------------------------------------------------------------------------------------
ASSIGNMENT FORM CONVERSION NOTICE
------------------------------------------------------------------------------------------------------------------
To assign this Security, fill in the form below: To convert this Security into Common Stock of the
Company, check the box [ ]
I or we assign and transfer this Security to
To convert only part of this Security, state the
(Insert assignee's soc. sec. or tax ID no.) Principal Amount to be converted (which must be
$1,000 or an integral multiple of $1,000):
(Print or type assignee's name, address and zip code)
If you want the stock certificate made out in
and irrevocably appoint _____________________________ another person's name fill in the form below:
agent to transfer this Security on the books of the
Company. The agent may substitute another to act for ________________________________________________
him.
________________________________________________
(Insert the other person's soc. sec. tax ID no.)
________________________________________________
________________________________________________
________________________________________________
________________________________________________
(Print or type other person's name, address and
zip code)
Date: _________________________ Your Signature: ________________________________
(Sign exactly as your name
appears on the other
side of this Security)
Signature Guaranteed
_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By: _________________________________
Authorized Signatory
A-1-13
SCHEDULE I
GREY WOLF, INC.
Floating Rate Contingent Convertible Senior Notes Due 2024
Date Principal Amount Notation
---- ---------------- --------
A-1-14
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 (including Liquidated Damages, if any), on
the Securities, whether at Maturity, by acceleration, call for redemption, upon
a Purchase Notice, a Change in Control Offer, purchase or otherwise, (b) the due
and punctual payment of interest on the overdue principal of and interest on the
Securities 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 Securities 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 Maturity, by acceleration, call for redemption,
upon a Purchase Notice, a Change in Control Offer, purchase or otherwise.
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 maximum amount as
will, 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 its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any applicable federal or state law or not otherwise
being void, voidable or unenforceable under any applicable bankruptcy,
reorganization, receivership, liquidation or other similar legislation or legal
principles under any applicable federal 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.
Guarantors may be released from their Guarantees upon the terms and
subject to the conditions provided in the Indenture.
A-1-15
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 in the Indenture.
DI/PERFENSA INC.
By:________________________________
Name:______________________________
Title:_____________________________
DI ENERGY, INC.
By:________________________________
Name:______________________________
Title:_____________________________
GREY WOLF DRILLING COMPANY L.P.
By: Grey Wolf Holdings Company, its
Sole General Partner
By:________________________________
Name:______________________________
Title:_____________________________
GREY WOLF INTERNATIONAL, INC.
By:________________________________
Name:______________________________
Title:_____________________________
A-1-16
GREY WOLF HOLDINGS COMPANY
By:________________________________
Name:______________________________
Title:_____________________________
GREY WOLF LLC
By: Grey Wolf Holdings Company,
its Sole Member
By:________________________________
Name:______________________________
Title:_____________________________
MURCO DRILLING CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
GREY WOLF MEXICO HOLDINGS LLC
By:________________________________
Name:______________________________
Title:_____________________________
X-0-00
XXXXXXX X-0
[Form of Certificated Security]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $____ PER $1,000 OF PRINCIPAL
AMOUNT AND THE ISSUE DATE IS MARCH 31, 2004. HOLDERS OF THIS SECURITY MAY OBTAIN
INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY
AND THE PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN
REQUEST FOR SUCH INFORMATION TO: GREY WOLF, INC., 00000 XXXXXXXX XXXXXX, XXXXX
000, XXXXXXX, XXXXX 00000, ATTN.: CHIEF FINANCIAL OFFICER, SUCH INFORMATION TO
BE MADE AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE,
PROMPTLY UPON REQUEST.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK
DELIVERABLE UPON CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE
COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION
OF THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-2-1
GREY WOLF, INC.
Floating Rate Contingent Convertible Senior Notes Due 2024
No.: CUSIP:
Issue Date: Principal Amount:
GREY WOLF, INC., a Texas corporation, promises to pay to ______________
________________________________________________________________________________
or registered assigns, the Principal Amount of _______________________________ ,
on April 1, 2024, subject to the further provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place. This Security is convertible as
specified on the other side of this Security.
Interest Payment Dates: April 1, July 1, October 1 and January 1,
commencing July 1, 2004
Record Dates: March 15, June 15, September 15 or December 15,
commencing June 15, 2004
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: GREY WOLF, INC.
By: ___________________________________
Name:
Title:
A-2-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
JPMORGAN CHASE BANK, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.
By: _______________________________
Authorized Signatory
Dated:
A-2-3
[FORM OF REVERSE SIDE IS IDENTICAL TO EXHIBIT A-1]
A-2-4
EXHIBIT B
Transfer Certificate
In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the Securities Act of 1933, as amended (the
"SECURITIES ACT") (or any successor provision), the undersigned registered owner
of this Security hereby certifies with respect to $[ ] Principal Amount of the
above-captioned Securities presented or surrendered on the date hereof (the
"SURRENDERED SECURITIES") for registration of transfer, or for exchange or
conversion where the securities deliverable upon such exchange or conversion are
to be registered in a name other than that of the undersigned registered owner
(each such transaction being a "TRANSFER"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
[_] A transfer of the Surrendered Securities is made to the Company or
any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with Rule 144A
under the U.S. Securities Act of 1933, as amended (the "SECURITIES ACT"); or
[_] The transfer of the Surrendered Securities is to an effective
registration statement under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to another
available exemption from the registration requirement of the Securities Act;
and unless the box below is checked, the undersigned confirms that, to
the undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"AFFILIATE").
[_] The transferee is an Affiliate of the Company.
DATE:
_________________________________________
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary,
the title of the Person signing on behalf of such registered owner must be
stated.)
Signature Guaranteed
_________________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By: _____________________________________
Authorized Signatory
B-1
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
_______________, among [GUARANTOR] (the "NEW GUARANTOR"), a subsidiary of Grey
Wolf, Inc. (or its successor), a Texas corporation (the "COMPANY"), the Company,
the Guarantors (the "EXISTING GUARANTORS") under the Indenture referred to
below, and JPMorgan Chase Bank, a New York banking corporation, 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 __________ ___, 2004, providing for the issuance of an
aggregate principal amount of up to $125,000,000 (including one of the Initial
Purchasers' option to purchase $25,000,000 of additional Securities) of Floating
Rate Contingent Convertible Senior Notes due 2024 (the "SECURITIES");
WHEREAS Section 11.08 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 9.01 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
C-1
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.
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:_______________________________
GREY WOLF, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
C-2
