EXHIBIT 10.1
PLAN SUPPORT AGREEMENT
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This PLAN SUPPORT AGREEMENT (this "Agreement") is made and entered into as
of June 18, 2003, by and among (i) Petroleum Geo-Services ASA ("PGS"), (ii) the
persons identified on Schedule 1-A (collectively, the "Supporting Noteholders"),
(iii) the persons identified on Schedule 1-B (collectively, the "Supporting
TPrS"), (iv) the persons identified on Schedule 1-C (collectively, the
"Supporting Banks", together with the Supporting Noteholders and the Supporting
TPrS, the "Supporting Creditors"), and (v) the persons identified on Schedule
1-D (collectively, the "Supporting Shareholders", together with the Supporting
Noteholders, the Supporting TPrS and the Supporting Banks, the "Supporting Third
Parties"; PGS and the Supporting Third Parties, collectively, the "Parties" and
each individually, a "Party"), each of whom is a signatory to this Agreement.
RECITALS
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WHEREAS:
A. PGS issued from time to time the several series of notes described on
Schedule 2-A (collectively, the "Notes");
B. PGS guaranteed certain trust preferred securities, and certain PGS
affiliates entered into certain documentation, relating to the trust preferred
securities, described on Schedule 2-B (collectively, the "Trust Preferred
Securities");
C. PGS is a borrower under the credit facilities described on Schedule 2-C
(the "Bank Facilities");
D. PGS issued from time to time certain publicly traded ordinary shares
that currently trade on the Norwegian Stock Exchange (the "Shares", together
with the Notes, the Trust Preferred Securities, and the Bank Facilities, the
"Relevant Documents");
E. PGS is currently contemplating a restructuring (the "Restructuring") of
the financial obligations set forth in the Relevant Documents through the
prosecution of a chapter 11 case (the "Chapter 11 Case"; the court adjudicating
the Chapter 11 Case is referred to as the "Bankruptcy Court")
F. The Supporting Noteholders, Supporting Banks and Supporting TPrS have
formed an ad hoc committee, fairly chosen by such creditors, and representative
of all the creditor claims to be impaired pursuant to the Term Sheet (the "ad
hoc Committee"). The members of the ad hoc Committee are set forth on Schedule
1-E.
G. The Parties have reached an agreement in principle on the terms and
conditions for the Restructuring which agreement is summarized in that certain
"Petroleum Geo-Services ASA Summary of Proposed Terms for Balance Sheet
Restructuring" (the "Term Sheet") attached
hereto as Exhibit A; the terms and conditions set forth in the Term Sheet are
expressly incorporated herein and made a part hereof;
H. Each of the Parties acknowledges and agrees that the best way to proceed
to effectuate the Restructuring is to do so in a way that would:
1. maximize the value of PGS, its subsidiaries and all of their
operations for the benefit of all interested persons; and
2. minimize the disruption to PGS and its subsidiaries resulting from the
commencement of the Chapter 11 Case, by seeking to conclude the
Chapter 11 Case as quickly as possible;
I. The Parties desire to express to each other their mutual support and
commitment in respect of the matters discussed in the Term Sheet; and
J. In expressing such support and commitment, the Parties do not desire and
do not intend in any way to derogate from or diminish the solicitation
requirements of applicable securities and bankruptcy laws, the fiduciary duties
of PGS under Norwegian law or as a debtor in possession, or the fiduciary duties
of any Supporting Creditor who is appointed to the official committee of
unsecured creditors (the "Creditors' Committee") in the Chapter 11 Case.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1. Defined Terms. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Term Sheet.
2. Term Sheet Conditions. Without limiting the conditions set forth
herein, each Party's agreement to this Agreement and support for the Term Sheet
is expressly conditioned on satisfaction of each of the terms and conditions set
forth in this Agreement. To the extent any such conditions involve a time period
or an outside date for satisfaction, the Parties acknowledge and agree that time
is of the essence with respect to each such condition.
3. PGS Support. PGS believes that the implementation of the terms set
forth in the Term Sheet will best facilitate the Restructuring and that
consummation of the settlements described in the Term Sheet is in its best
interests and in the best interests of its creditors and other parties in
interest. Accordingly, PGS hereby expresses its intention to file and seek
confirmation of a plan of reorganization (the "PGS Plan") consistent with the
terms and provisions of the Term Sheet. Without limiting the foregoing, PGS
undertakes and commits, for so long as this Agreement remains in effect:
a. to initiate the Chapter 11 Case promptly upon fulfillment of the
conditions precedent to this Agreement, subject to obtaining sufficient
creditor support to implement the Restructuring;
b. to submit for, and use its reasonable best efforts to obtain at the
earliest practicable date, Bankruptcy Court approval of a disclosure
statement (as approved by the Bankruptcy Court, the "Disclosure Statement")
in form and substance reasonably satisfactory to the ad hoc Committee;
c. to use its reasonable best efforts to solicit the requisite votes
in favor of, and to obtain confirmation by the Bankruptcy Court at the
earliest practicable date of, the PGS Plan consistent with the Term Sheet
and otherwise in form and substance reasonably satisfactory to the ad hoc
Committee and approval by the Bankruptcy Court of the settlements set forth
in the Term Sheet;
d. subject to any requirements under Norwegian law, not to pursue,
propose or support, or encourage the pursuit, proposal or support of, any
plan of reorganization for PGS, or any PGS subsidiary or affiliate, that is
not consistent with the Term Sheet and the PGS Plan (for the avoidance of
doubt, nothing in this Agreement shall in any way limit or restrict PGS
from filing a Norwegian composition proceeding);
e. to otherwise use its reasonable best efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things,
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by the Term
Sheet and by the PGS Plan at the earliest practicable date (including
opposing any appeal of the order confirming the PGS Plan);
f. to convene one or more general meetings of shareholders of PGS,
either by annual general meeting or at an extraordinary general meeting,
and propose and recommend the shareholder resolutions necessary to
implement the Restructuring, including, but not limited to a resolution to
decrease and/or increase, as appropriate, the share capital of PGS, a
resolution to issue the new ordinary shares, a resolution to amend the
articles of association of PGS, a resolution to change the composition of
the board of directors of PGS and such other resolutions as may be
reasonably required to implement the Term Sheet;
g. support and otherwise use their reasonable best efforts to have the
ad hoc Committee recognized and appointed by the United States Trustee for
the Southern District of New York (the "US Trustee") as the Creditors'
Committee in the Chapter 11 Case pursuant to 11 U.S.C. ss. 1102(b); and
h. to pay, or procure the payment of, before the filing of the Chapter
11 Case, all reasonable prepetition fees and expenses of PGS, the
Supporting Third Parties and the Indenture Trustee for the Noteholders and
the Indenture Trustee for the TPrS (collectively, the "Indenture Trustees")
relating to the Restructuring, and of their legal and financial advisors
relating to the Restructuring, outstanding at the time of such filing
and to undertake in the PGS Plan to pay, or procure the payment of, all
reasonable postpetition fees and expenses of PGS, the Supporting Third
Parties and the Indenture Trustees in the Chapter 11 Case, and of their
legal and financial advisors in the Chapter 11 Case, upon the consummation
of the PGS Plan;
in all events, expressly subject to the exercise by PGS and its officers and
directors of their respective fiduciary duties. Except with respect to the
payment of prepetition fees set forth in paragraph 3.h., the commitment set
forth in 3.a. is a condition precedent to each and every other commitment set
forth in this paragraph 3.
4. Supporting Third Parties' Claims and Support. Each Supporting Noteholder
represents and warrants, on a several but not joint basis, that, as of the date
hereof, it is the legal or beneficial holder of, or holder of investment
authority over, the Notes identified on its signature page hereto (collectively,
such Supporting Noteholder's "Relevant Notes") and has or will have the
authority to vote or direct the voting of claims relating to the Relevant Notes.
Each Supporting TPrS represents and warrants, on a several but not joint basis,
that, as of the date hereof, it is the legal or beneficial holder of, or holder
of investment authority over, the Trust Preferred Securities identified on its
signature page hereto (collectively, such Supporting TPrS' "Relevant Trust
Preferred Securities") and has or will have the authority to vote or direct the
voting of claims relating to the Relevant Trust Preferred Securities. Each
Supporting Bank represents and warrants, on a several but not joint basis, that,
as of the date hereof, it is the legal or beneficial holder of claims pursuant
to the Bank Facilities identified on its signature page hereto (collectively,
such Supporting Bank's "Relevant Debt") and has or will have the authority to
vote or direct the voting of claims relating to the Relevant Debt. Each
Supporting Shareholder represents and warrants, on a several but not joint
basis, that, as of the date hereof, it is the legal or beneficial holder of the
number of shares of PGS identified on its signature page hereto (collectively,
such Supporting Shareholder's "Relevant Shares"; all Supporting Third Parties'
Relevant Notes, Relevant Trust Preferred Securities, Relevant Debt and Relevant
Shares, collectively, the "Relevant Interests")) and has or will have the
authority to vote or direct the voting of Relevant Shares. Each Supporting Third
Party believes that consummation of the PGS Plan consistent with the Term Sheet
is in its best interests. Accordingly, each Supporting Third Party will support
the PGS Plan consistent with the terms and conditions of this Agreement
(including, without limitation, those contained in paragraph 8 relating to the
Backstop Agreement (as defined in paragraph 8 below)). Without limiting the
foregoing, each Supporting Third Party commits to, for so long as this Agreement
remains in effect:
a. support the PGS Plan and use its reasonable best efforts to
facilitate the filing and confirmation of the PGS Plan at the earliest
practicable date;
b. not pursue, propose, support, vote to accept or encourage the
pursuit, proposal or support of, any chapter 11 plan, or other
restructuring or reorganization for PGS, or any PGS subsidiary or
affiliate, directly or indirectly in any jurisdiction, that is not
consistent with the Term Sheet and the PGS Plan;
c. not, nor encourage any other person or entity, to interfere with,
delay, impede, appeal or take any other negative action, directly or
indirectly, in any respect regarding acceptance or implementation of the
PGS Plan;
d. not commence any proceeding (including any bankruptcy (konkurs)
under Norwegian law), or prosecute any objection to oppose or object to the
PGS Plan or to the Disclosure Statement, and not to take any action that
would delay approval or confirmation, as applicable, of the Disclosure
Statement and the PGS Plan; provided, however, that the Supporting Third
Party may object to the disclosure statement solely on the basis that it
does not contain adequate information as required by section 1125 of the
Bankruptcy Code; e. support and use its reasonable best efforts to have the
ad hoc Committee recognized and appointed by the US Trustee as the
Creditors' Committee in the Chapter 11 Case pursuant to 11 U.S.C. ss.
1102(b);
f. only in the case of the Supporting Banks and any Supporting
Noteholders who are lenders under the Bank Facilities, to agree to abstain
from exercising any rights in any jurisdiction to enforce any default under
the Bank Facilities that may have matured, to abstain from directing or
voting to direct the agent(s) under the Bank Facilities from exercising any
such rights, to direct the agent(s) under the Bank Facilities to not permit
the exercise of any such rights, and to vote in the consortium against any
proposal to take any enforcement action ;
g. only in the case of the Supporting Shareholders, to vote in favor
of any resolutions put forward in a general meeting of shareholders of PGS,
as required pursuant to paragraph 3.f., relating to the implementation of
the Restructuring;
h. to the extent it is the holder of one or more 8.28% First Preferred
Mortgage Notes Due 2011 issued pursuant to that certain Indenture, dated as
of May 1, 1996, as amended, among Oslo Seismic Services, Inc., Oslo
Explorer PLC, Oslo Challenger PLC, PGS and United States Trust Company of
New York, as indenture trustee (the "Oslo Seismic Notes"), (i) shall not
take any action, or direct the indenture trustee thereof to take any
action, contrary to those actions set forth above in this paragraph 4; and
(ii) shall not transfer its holdings of the Oslo Seismic Notes unless the
transferee agrees to be bound by this Agreement;
i. in the event PGS files for a forced composition (tvangsakkord)
under Norwegian law, to vote in favor of solutions proposed by PGS to
successfully conclude such proceedings under Norwegian law, provided that
such solutions reasonably comply with the commercial terms of this
Agreement and are recommended by the ad hoc Committee;
j. to support consummation of the Backstop Agreement; and
k. with respect to and to the extent it is the legal or beneficial
holder of, or holder of investment authority over any claims against or
interests in PGS, or any of its affiliates, support the PGS Plan and not
take any action inconsistent with the purposes of this Agreement;
in each case consistent with the terms and provisions of the Term Sheet and this
Agreement; provided, however, that notwithstanding anything herein to the
contrary, if any Supporting Creditor is appointed to and serves on the
Creditors' Committee, the terms of this Agreement shall not be construed to
limit such Supporting Creditor's exercise of its fiduciary duties in its role as
a member of the Creditors' Committee, and any exercise of such fiduciary duties
shall not be deemed to constitute a breach of the terms of this Agreement.
5. Acknowledgement.
a. No Solicitation. While the Supporting Third Parties commit herein
to support the PGS Plan and it is their intention to vote in favor of the
PGS Plan, this Agreement is not and shall not be deemed to be a
solicitation for consent to the PGS Plan. The acceptance of the Supporting
Third Parties will not be solicited until the Supporting Third Parties have
received the Disclosure Statement and the related ballots in forms approved
by the Bankruptcy Court. The foregoing shall in no way limit any Party's
rights under paragraph 19.
b. No Norwegian Filing. Each Supporting Third Party hereby
acknowledges that PGS intends to file the Chapter 11 Case without
concurrently filing for (a) voluntary composition (gjeldsforhandlinger),
(b) forced composition (tvangsakkord) or (c) bankruptcy (konkurs) under
Norwegian law (each of (a), (b) and (c) being a "Norwegian Filing") and
accordingly each Supporting Third Party agrees that: (i) PGS does so with
its consent (and this Agreement shall be evidence of such consent for the
purposes of section 283a, first paragraph, item (2), of the Criminal Act
(Straffeloven) of May 22, 1902 of the Kingdom of Norway); and (ii) it will
not seek to hold the directors or officers of PGS personally liable
(whether under the Public Limited Companies Act of 1997 of the Kingdom of
Norway or otherwise) for any loss that it, or any other creditor of PGS,
may suffer as a result of PGS so filing the Chapter 11 Case and thereafter
pursuing confirmation and consummation of the PGS Plan without concurrently
making a Norwegian Filing and/or as a result of the confirmation and
consummation of the PGS Plan (or assist any other creditor of PGS to do the
same) and/or for not making a Norwegian Filing as of the date hereof or
during the period this Agreement is effective and/or for making a Norwegian
Filing during the effective period of this Agreement. PGS agrees to
indemnify and hold harmless each Supporting Third Party, and their
respective affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (each an "Indemnified Person") from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, charges,
expenses and disbursements (including any reasonable attorney's fees and
expenses) of any kind or nature whatsoever that may at any time be imposed
on, incurred by or asserted against any such Indemnified Person in any way
relating to or arising out of or in connection with any acknowledgment or
consent provided in this paragraph 5.b.
c. Full Satisfaction of Claims. Each Supporting Third Party
acknowledges and agrees that, upon consummation of the PGS Plan and subject
to the terms of the PGS Plan, the distributions to and treatment of each
such Supporting Third Party under the PGS Plan shall be in full and
complete satisfaction of any and all rights that it may have in respect of
its Relevant Interest and PGS shall be released and discharged from any and
all further obligations in respect of such Relevant Interests.
d. Norwegian Filing. Subject to the provisions of paragraph 10.f. of
this Agreement, the Parties acknowledge and agree that if, in the opinion
of PGS, a forced composition filing (tvangsakkord) under Norwegian law is
required or appropriate (such filing events may include, without
limitation, situations where (i) the implementation of the Restructuring
under Chapter 11 is not feasible or possible, (ii) PGS is under an
obligation under Norwegian law to file for such a composition, (iii) such a
composition filing may serve as a defense against a hostile creditor action
against PGS in Norway or elsewhere, and (iv) the implementation of the
Restructuring through Chapter 11 would be better accomplished with a
simultaneous or subsequent such composition filing), then (1) the Parties
will cooperate for such a filing to take place to implement the terms of
this Agreement, as far as applicable and possible, and (2) PGS will notify
the ad hoc Committee three business days in advance of such a composition
filing, unless such notification is impossible or otherwise would be
unreasonable under the circumstances. Nothing in this Agreement shall limit
or restrict PGS from filing for forced composition (tvangsakkord) under
Norwegian law.
6. Limitations on Transfer. Each Supporting Third Party hereby agrees not
to (a) sell, transfer, assign, pledge, or otherwise dispose, directly or
indirectly their right, title or interest in respect of the Relevant Interests,
in whole or in part, or any interest therein (collectively, the "Relevant
Claims"), or (b) grant any proxies, deposit any of its claims into a voting
trust, or enter into a voting agreement with respect to any such Relevant Claim
(clauses (a) and (b), collectively, a "Transfer") unless the recipient of such
Relevant Claim (a "Transferee") agrees in writing (such writing, a "Transferee
Acknowledgment"), prior to such Transfer, to be bound by this Agreement in its
entirety without revisions (including with respect to any and all claims or
interests it already may hold against or in PGS prior to such Transfer) and to
be bound by that certain side letter dated the date hereof among the parties
hereto. Upon the execution of the Transferee Acknowledgment, the Transferee
shall be deemed to constitute a Supporting Noteholder, a Supporting TPrS, a
Supporting Bank, or a Supporting Shareholder, as the case may be. Any Transfer
that does not comply with this paragraph shall be void ab initio. In the event
of a Transfer, the transferor shall, within three business days, provide written
notice of such transfer to PGS, together with a copy of the Transferee
Acknowledgment. No Supporting Bank, Supporting TPrS, Supporting Noteholder or
Supporting Shareholder may create any subsidiary
or affiliate for the sole purpose of acquiring any Bank Facilities, Trust
Preferred Securities, Notes, or Shares without first causing such subsidiary or
affiliate to become a party hereto, and a party to that certain side letter
referred to in the first sentence of this paragraph 6, as a Supporting Bank,
Supporting TPrS, Supporting Noteholder or a Supporting Shareholder, as the case
may be.
7. Further Acquisition of Notes, Trust Preferred Securities, Shares and
Bank Facilities. This Agreement shall in no way be construed to preclude any
Supporting Third Party from acquiring additional Notes, Trust Preferred
Securities, Shares or claims in respect of the Bank Facilities. However, any
such Notes, Trust Preferred Securities, Shares and claims so acquired shall,
whether or not the Supporting Third Party holds any Relevant Interests at the
time of the acquisition, automatically be deemed to be "Relevant Interests" and
to be subject to all of the terms of this Agreement hereof.
8. Backstop Agreement. The Parties acknowledge and agree that the
agreement, the terms of which are to be negotiated and agreed with the
Supporting Shareholders, governing the terms of the participation by the
Supporting Shareholders in the backstop of the equity purchase as contemplated
by Section D of the Term Sheet (the "Backstop Agreement") shall include the
following provisions: (i) each Supporting Shareholder shall purchase a number of
ordinary shares of PGS as reorganized under the PGS Plan (the "New Shares")
equivalent to at least 25% of its commitment, with the total commitment of the
Supporting Shareholders aggregating 30% of the New Shares (the "Committed
Shares"); (ii) all holders of Shares (including Supporting Shareholders) shall
have the right to purchase a number of New Shares equaling its pro rata interest
of the remaining 75% of the Committed Shares (after giving effect to paragraph
8.i., such pro rata interest to be calculated as the quotient of the number of
Shares held by the holder on a cut-off date (the "Cut-off Date") to be
determined and the total number of Shares issued and outstanding on the Cut-off
Date; (iii) any Committed Shares not purchased in accordance with paragraph
8.ii. by holders of Shares other than the Supporting Shareholders shall be
purchased by the Supporting Shareholders; (iv) any acceptances of the offered
New Shares without payment (or proper payment arrangements) at the time of
acceptance shall be rejected; (v) the right to purchase Committed Shares shall
not be transferable, the purchase right can only be exercised for the number of
Committed Shares calculated under paragraph 8.ii, and no over-subscription of
New Shares shall be allowed; (v) the rights offering shall be communicated (to
the extent permitted and by and in the manner required in the relevant
jurisdiction(s)) to all holders of Shares as of the Cut-off Date, with the
notice specifying the period the rights offering shall be held open and that
payment shall be required to be made at the time such holder exercises its right
of acceptance.
9. Condition to each Party's Obligations. Each Party's obligations under
this Agreement are subject to the execution of this Agreement by each of the
following persons:
(i) PGS;
(ii) the Supporting Noteholders who shall represent not less than 56%
in principal amount outstanding of the Notes;
(iii) the Supporting TPrS;
(iv) the Supporting Shareholders; and
(v) the Supporting Banks, (a) who shall include (1) all of the
members of the steering committee of the Bank Facilities, and (2)
each of the Supporting Noteholders that also hold positions in
the Bank Facilities, and (b) who shall represent not less than
50% in principal amount outstanding under each of the Bank
Facilities.
10. Termination Events. The occurrence of each of the following events
shall constitute a "Termination Event":
a. PGS' Chapter 11 Case (other than an involuntary bankruptcy case for
which an order for relief has not been entered) shall have been dismissed
or converted to a case under chapter 7 of the Bankruptcy Code;
b. on or prior to the date of the commencement of the Chapter 11 Case,
the Backstop Agreement has not been executed in form and substance
satisfactory to PGS and the ad hoc Committee;
c. any court (including the Bankruptcy Court or any court in any
jurisdiction outside of the United States of America) shall declare, in a
final, non-appealable, order, this Agreement to be unenforceable;
d. the most current PGS Plan and the Disclosure Statement on file with
the Bankruptcy Court (and any amendments, supplements and documents related
to such pleadings) shall not be consistent with the Term Sheet or otherwise
in form and substance reasonably satisfactory to both a simple majority in
number of the Supporting Noteholders that are members of the ad hoc
Committee and at least one Supporting Bank that is a member of the ad hoc
Committee (such a Supporting Bank and each such Supporting Noteholder, from
time to time, collectively, the "Special ad hoc Committee Members"), ;
e. the earlier of (i) January 9, 2004, or such later date as
contemplated by paragraph 11.a. and (ii) the date of consummation of the
PGS Plan;
f. any insolvency related proceedings with respect to PGS, or any of
its subsidiaries or affiliates, are filed by or assented to by PGS or any
of its subsidiaries or affiliates in any jurisdiction other than the
Bankruptcy Court without the express written consent of the ad hoc
Committee;
g. the failure by PGS to obtain the requisite shareholder votes
necessary to implement the Restructuring as contemplated in the Term Sheet
and the PGS Plan;
h. [intentionally omitted]
i. Umoe Invest AS, as a Supporting Shareholder, holds fewer Shares
than the amount set forth on its signature page attached hereto and made a
part hereof; and
j. unless waived in writing by the Required Parties (defined below),
any representation or warranty of any Party made or deemed made herein is
incorrect in any material respect on or as of the date made or deemed made
and such default (unless it is a willful misrepresentation) shall continue
unremedied for a period of thirty (30) days after the earlier of (i) the
date upon which the relevant Party knew of such failure or (ii) the date
upon which written notice thereof is given by any Party to the other
Parties hereto.
11. Termination of this Agreement. Upon the occurrence of a Termination
Event, this Agreement shall terminate as follows:
a. immediately upon the occurrence of the Termination Event set forth
in paragraph 10.e. unless, prior to the expiration of the date referenced
therein, such date is extended in writing by each of (i) PGS, (ii) the
Special ad hoc Committee Members, and (iv) the holders of a simple majority
in number of the Relevant Shares (the "Required Shareholders,"
collectively, with PGS and the Special ad hoc Committee Members, the
"Required Parties");
b. upon the occurrence, and following written notice by either PGS or
the Special ad hoc Committee Members of such occurrence, of any of the
Termination Events set forth in paragraphs 10.a., 10.b., 10.c., 10.d.,
10.f., 10.i., or 10.j. of this Agreement (provided that (i) a breaching
party shall not be entitled to terminate this Agreement on account of its
own breach of paragraphs 10.i. and 10.j. of this Agreement, and (ii) PGS
shall be entitled to a 10-day grace period following receipt of a
termination notice pursuant to paragraphs 10.b. and 10.d. to cure any such
alleged Termination Event); or
c. 30 calendar days after the occurrence of the Termination Event
described in paragraph 10.g. of this Agreement, unless either (i) the
occurrence of the event giving rise to the Termination Event is no longer
continuing on such 30th day or (ii) the Special ad hoc Committee Members
shall have waived in writing such Termination Event.
12. Effect of Termination. Upon termination of this Agreement pursuant to
paragraphs 10 and 11, all obligations hereunder shall terminate and shall be of
no further force and effect; provided however, that any claim for breach of this
Agreement, other than a claim for breach of the representation set out in
paragraph 13.f., shall survive termination and all rights and remedies with
respect to such claims shall not be prejudiced in any way; but provided further,
that the breach of this Agreement by one or more Supporting Third Parties shall
not create any rights or remedies against any non-breaching Supporting Third
Party unless such non-breaching Supporting Third Party has participated in or
aided and abetted the breach by the breaching Supporting Third Party/Parties.
Except as set forth above in this paragraph 12 and for the obligations set forth
in paragraphs 5.b., 5.c. (with respect to paragraph 5.c. only, solely after the
consummaton of the PGS Plan and not a termination of this Agreement), and 14
hereof, upon such termination or upon consummation of the PGS Plan, any
obligations of the non-breaching Parties set forth in this Agreement shall be
null and void ab initio and all claims, causes of action, remedies, defenses,
setoffs, rights or other benefits of such non-breaching Parties shall be
fully preserved without any estoppel, evidentiary or other effect of any kind or
nature whatsoever.
13. Representations and Warranties. PGS and each Supporting Third Party, on
a several but not joint basis, represents and warrants to each other Party that
the following statements are true, correct and complete as of the date hereof
and to the extent applicable to such party:
a. Corporate Power and Authority. If not a natural person, it is duly
organized, validly existing, and, if applicable, in good standing under the
laws of the jurisdiction of its organization, and has all requisite
corporate, partnership or other power and authority to enter into this
Agreement and to carry out the transactions contemplated by, and perform
its respective obligations under, this Agreement.
b. Authorization. If not a natural person, the execution and delivery
of this Agreement and the performance of its obligations hereunder have
been duly authorized by all necessary corporate, partnership or other
action on its part.
c. Binding Obligation. This Agreement has been duly executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with the terms hereof.
d. No Conflicts. The execution, delivery and performance by it (when
such performance is due) of this Agreement do not and shall not (i) violate
any provision of law, rule or regulation applicable to it, or, if
applicable, any of its subsidiaries or its certificate of incorporation or
bylaws or other organizational documents or those of any of its
subsidiaries or (ii) except with respect to PGS, conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation to which it or, if
applicable, any of its subsidiaries is a party.
e. Adequate Information. Although none of the Parties intends that
this Agreement should constitute, and they each believe it does not
constitute, a solicitation and acceptance of the PGS Plan, they each
acknowledge and agree that, regardless of whether its Relevant Interests
constitute "securities" within the meaning of the Securities Act of 1933,
(i) each of the Supporting Third Parties is an "accredited investor" as
such term is defined in Rule 501(a) of the Securities Act of 1933 and, in
the case of Supporting Creditors, a "qualified institutional buyer" as such
term is defined in Rule 144A of the Securities Act of 1933 and (ii)
adequate information was provided by PGS and its affiliates to each
Supporting Third Party in order to enable it to make an informed decision
such that, were this Agreement to be construed as or deemed to constitute
such a solicitation and acceptance, such solicitation was (i) in compliance
with any applicable nonbankruptcy law, rule, or regulation governing the
adequacy of disclosure in connection with such solicitation, or (ii) if
there is not any such law, rule, or regulation, solicited after disclosure
to such holder of "adequate information" as such term is defined in section
1125(a) of the Bankruptcy Code.
f. Accuracy of Information. Accuracy of Information Provided. PGS
represents that, to the best of their knowledge, after reasonable inquiry,
(i) information provided to the Supporting Creditors by PGS in connection
with the Restructuring, including without limitation, the Business Plan
(defined below), does not contain any material misstatement of fact, nor
does it fail to state a fact necessary to make the information not
materially misleading and (ii) the statements made by PGS in the various
representations set forth herein are true and accurate.
g. Operation of Business Pending Chapter 11 Filing. PGS represents
that pending the Chapter 11 filing, PGS undertakes, to the extent within
PGS' control and except as otherwise agreed to by the ad hoc Committee, to
operate the business of PGS and its subsidiaries in material compliance
with that certain business plan provided to the Supporting Creditors dated
on or about January 15, 2003 (the Business Plan"), except as otherwise
disclosed in the press release announcing this Agreement.
14. Confidentiality. PGS and each Supporting Third Party agrees to use its
reasonable best efforts to maintain the confidentiality of (a) the individual
identities of the Supporting Third Parties and (b) the individual holdings of
the Supporting Third Parties; provided, however, that such information may be
disclosed (i) to the Parties' respective directors, trustees, executives,
officers, auditors, and employees and financial and legal advisors or other
agents (collectively referred to herein as the "Representatives" and
individually as a "Representative"), (ii) to persons in response to, and to the
extent required by, (x) any subpoena, or other legal process or other disclosure
required by law or (y) the National Association of Insurance Commissioners, any
bank regulatory agency or any other regulatory agency or authority. If any Party
or its Representative receives a subpoena or other legal process as referred to
in clause (ii)(x) above in connection with the Agreement, such Party shall
provide the other Parties with prompt written notice of any such request or
requirement, to the fullest extent permissible and practicable under the
circumstances, so that the other Parties may seek a protective order or other
appropriate remedy or waiver of compliance with the provisions of this
Agreement. Notwithstanding the provisions in this paragraph 14, (i) PGS may
disclose (a) the existence of and nature of support evidenced by this Agreement
in one or more public releases that have first been sent to counsel for the
Supporting Noteholders and counsel for the Supporting Banks for review and
comment, and (b) in the context of any such releases, the aggregate holdings of
the Supporting Third Parties (but, as indicated above, not their identities or
their individual holdings), (ii) any Party hereto may disclose the identities of
the Parties hereto and their individual holdings in any action to enforce this
Agreement or in an action for damages as a result of any breaches hereof, (iii)
any Party hereto may disclose, to the extent consented to in writing by a
Supporting Third Party, such consenting Supporting Third Party's identity and
individual holdings and (iv) to the extent required by the Bankruptcy Code,
Bankruptcy Rules, Local Rules of the Bankruptcy Court or other applicable rules,
regulations or procedures of the Bankruptcy Court or the Office of the United
States Trustee, PGS may disclose the individual identities of the Supporting
Third Parties in a writing that has first been sent to counsel for the
Supporting Noteholders and counsel for the Supporting Banks for review and
comment on such notice that is reasonable under the circumstances.
15. Preparation of Restructuring Documents. Notwithstanding anything to the
contrary contained in this Agreement, including specifically any obligation of a
Party to use efforts to cause an event to occur by the "earliest practical
date," the obligations of the Parties hereunder shall be expressly subject to
the preparation of definitive documents relating to the transactions
contemplated by this Agreement and the Term Sheet, including without limitation,
(a) the PGS Plan, the Disclosure Statement, the order confirming the PGS Plan,
and any related ballots, releases and settlement documents, (b) all other
agreements, instruments, orders or other documents necessary or appropriate to
consummate the transactions contemplated by this Agreement, the Term Sheet or
the PGS Plan, and (c) any "first day" orders and motions; each of the documents
referred to in subparagraphs (a), (b) and (c) of this paragraph 15 must be
reasonably acceptable to the ad hoc Committee.
16. Amendment or Waiver. Except as otherwise specifically provided herein,
this Agreement may not be modified, amended or supplemented without the prior
written consent of the Required Parties. No waiver of any of the provisions of
this Agreement shall be deemed or constitute a waiver of any other provision of
this Agreement, whether or not similar, nor shall any waiver be deemed a
continuing waiver.
17. Notices. Any notice required or desired to be served, given or
delivered under this Agreement shall be in writing, and shall be deemed to have
been validly served, given or delivered if provided by personal delivery, or
upon receipt of fax delivery, as follows:
a. if to PGS, to Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxx & Xxxxxxxxx, 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, fax: 000-000-0000;
b. if to the Supporting Noteholders or the ad hoc Committee, to
Xxxxxxx X. Xxxxx, Xxxxxxx XxXxxxxxx LLP, Xxx Xxxxx Xxxxxx, Xxxxxxxx, XX
00000, fax: 000-000-0000;
c. if to the Supporting TPrS, to Xxxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx &
Xxxxxxx LLC, 0000 X Xx., XX, Xxxx Xxxxx - 000, Xxxxxxxxxx XX 00000, fax:
000-000-0000, and
d. if to the Supporting Banks, to Xxxxx X. X. Xxxxxxx, Xxxxx & Xxxxx,
Xxx Xxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx, fax: x00 (000) 000-0000;
and
e. if to any Supporting Shareholder, to the name and address set forth
on the relevant signature page below for such Supporting Shareholder.
18. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ANY CONFLICTS OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION. By its execution and delivery of this
Agreement, each of the Parties hereto hereby irrevocably and unconditionally
agrees for itself that any legal action, suit or proceeding against it with
respect to any matter under or arising out of or in connection with this
Agreement or for
recognition or enforcement of any judgment rendered in any such action, suit or
proceeding, may be brought in the United States District Court for the Southern
District of New York. By execution and delivery of this Agreement, each of the
Parties hereto irrevocably accepts and submits itself to the nonexclusive
jurisdiction of each such court, generally and unconditionally, with respect to
any such action, suit or proceeding, and waives any objection it may have to
venue or the convenience of the forum. Notwithstanding the foregoing consent to
New York jurisdiction, upon the commencement of the Chapter 11 Case, each of the
Parties hereto hereby agrees that the Bankruptcy Court shall have exclusive
jurisdiction of all matters arising out of or in connection with this Agreement.
19. Specific Performance. This Agreement, including without limitation the
Parties' agreement herein to support the PGS Plan and to facilitate its
confirmation, is intended as a binding commitment enforceable in accordance with
its terms. It is understood and agreed by each of the Parties hereto that money
damages would not be a sufficient remedy for any breach of this Agreement by any
Party and each non-breaching Party shall be entitled to specific performance and
injunctive or other equitable relief as a remedy of any such breach.
20. Cooperation. Each Party shall cooperate with the other Parties to do or
cause to be done all things as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purpose of this
Agreement and shall not take any action contrary to the essential intent and
principles of this Agreement.
21. Resignation or Removal of ad hoc Committee Members/Substitution of the
Creditors' Committee. If a Supporting Bank or a Supporting Noteholder or either
of the Trustees, as the case may be, that is a member of the ad hoc Committee
resigns or for any other reason is removed as a member of such Committee, the
remaining Supporting Noteholders (in the case of resignation or removal of a
Supporting Noteholder or any of the Trustees) or the remaining Supporting Banks
(in the case of resignation or removal of a Supporting Bank) on the ad hoc
Committee shall be entitled to select a replacement for such resigning member,
provided such replacement agrees to be bound by the terms of this Agreement. At
any time following the formation of the Creditors' Committee, upon the agreement
in writing by the Creditors' Committee to be bound by this Agreement and on
written notice to PGS, the ad hoc Committee may elect to have the Creditors'
Committee substituted in place of the ad hoc Committee in this Agreement and
whereafter the Creditors' Committee shall automatically have all the rights and
obligations of the ad hoc Committee pursuant to this Agreement. Following any
such election, the ad hoc Committee shall be deemed dissolved and the Creditors'
Committee shall send notice of such dissolution to PGS.
22. Voting. Except as otherwise expressly provided herein, all votes of the
ad hoc Committee or the Creditors' Committee (following substitution pursuant to
paragraph 21 above) under this Agreement shall be made by a simple majority vote
of all of the members of the ad hoc Committee or Creditors' Committee at the
time, as the case may be, unless the context clearly indicates otherwise.
23. Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
24. Interpretation. This Agreement is the product of negotiations of the
Parties, and in the enforcement or interpretation hereof, is to be interpreted
in a neutral manner, and any presumption with regard to interpretation for or
against any Party by reason of that Party having drafted or caused to be drafted
this Agreement, or any portion hereof, shall not be effective in regard to the
interpretation hereof.
25. Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of the Parties and their respective successors, assigns (including,
but not limited to, Transferees under paragraph 6 above), heirs, executors,
administrators and representatives.
26. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and no other
person or entity shall be a third-party beneficiary hereof.
27. No Waiver of Participation and Reservation of Rights. Except as
expressly provided in this Agreement and in any amendment among the Parties,
nothing herein is intended to, or does, in any manner waive, limit, impair or
restrict the ability of each of the Parties to protect and preserve its rights,
remedies and interests, including without limitation, its claims against any of
the other Parties (or their respective affiliates or subsidiaries) or its full
participation in any bankruptcy case filed by PGS or any of its affiliates and
subsidiaries. If the transactions contemplated by this Agreement or in the PGS
Plan are not consummated, or if this Agreement is terminated for any reason, the
Parties fully reserve any and all of their rights.
28. No Admissions. This Agreement shall in no event be construed as or be
deemed to be evidence of an admission or concession on the part of any Party of
any claim or fault or liability or damages whatsoever. Each of the Parties
denies any and all wrongdoing or liability of any kind and does not concede any
infirmity in the claims or defenses which it has asserted or could assert.
29. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same Agreement. Delivery of an executed signature page of
this Agreement by facsimile shall be effective as delivery of a manually
executed signature page of this Agreement.
30. Representation by Counsel. Each Party acknowledges that it has been
represented by, or provided a reasonable period of time to obtain access to and
advice by, counsel with this Agreement and the transactions contemplated herein.
Accordingly, any rule of law or any legal decision that would provide any Party
with a defense to the enforcement of the terms of this Agreement against such
Party based upon lack of legal counsel shall have no application and is
expressly waived.
31. Entire Agreement. This Agreement and the exhibits and schedules hereto,
including, without limitation, the Term Sheet, constitute the entire agreement
between the Parties and supersedes all prior and contemporaneous agreements,
representations, warranties and understandings of the Parties, whether oral,
written or implied, as to the subject matter hereof.
32. Several not Joint. The agreements, representations and obligations of
the Parties under this Agreement are, in all respects, several and not joint
32. Tax Shelter Regulations. Notwithstanding anything herein to the
contrary, any Party to this Agreement (and any employee, representative, or
other agent of any Party to this Agreement) may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by the Term Sheet or the PGS Plan and all materials of
any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure; provided, however, that no
Party (nor any employee, representative or other agent thereof) shall disclose
(A) any information that is not relevant to an understanding of the tax
treatment of the transactions contemplated by the Term Sheet or the PGS Plan,
including the identity of any Party to this Agreement (or its employees,
representatives or agents) or other information that could lead any person to
determine such identity or (B) any information to the extent such disclosure
could result in a violation of any federal or state securities laws.
[Remainder of page intentionally blank; remaining pages are signature
pages.]
FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
PETROLEUM GEO-SERVICES ASA
SUMMARY OF PROPOSED TERMS FOR BALANCE SHEET RESTRUCTURING
The following (this "Term Sheet") is an outline of (i) the key terms and
provisions of a plan of reorganization (the "Restructuring") for Petroleum
Geo-Services ASA ("PGS") and (ii) in connection therewith, the key terms for the
resolution, settlement and treatment under such plan or plans of, among other
things, the claims and causes of action (as defined and described more fully
below) of the Noteholders, Banks, Trust Preferreds and PGS Equity Holders.
This Term Sheet is subject to finalization and execution of a Plan Support
Agreement (the "PSA") to which this Term Sheet is intended to be attached as
Exhibit A. This Term Sheet is not intended to be legally binding upon any party
until execution of the PSA. Upon execution of the PSA, this Term Sheet is
intended to be binding on the signatories to the PSA in accordance with, and
subject to, the terms of the PSA. No vote in favor of any PGS plan, whether or
not it includes the terms and conditions set forth herein, is being solicited by
or agreed to by this Term Sheet.
Notwithstanding anything to the contrary in the foregoing, this Term Sheet is
being provided as part of settlement discussions and, as a result, shall be
treated as such pursuant to Federal Rule of Evidence 408 and all bankruptcy and
state law equivalents.
Parties
PGS: Petroleum Geo-Services ASA
Noteholders: Holders of PGS's $250m 6 1/4% notes due 2003, $360m 7
1/2% notes due 2007, $200m 65/8% notes due 2008, $450m
71/8% notes due 2028 and $200m 8.15% notes due 2029
(the "Notes")
Banks: Banks under PGS's $250m bridge facility and $430m
revolving credit facility (the "Bank Facilities")
Trust Holders of $144.750m PGS Trust I trust preferred
Preferreds: securities. (PGS Trust I holds as its only asset
$148.169m junior subordinated debt securities issued by
PGS) PGS Equity Pre-Restructuring holders of ordinary
shares in PGS Holders: (including ADR holders) [record
date to be determined]
Noteholders and Banks (the "Holders") will receive equity and debt
consideration as set out in Package A and Package B below. Holders may
freely elect to allocate their claim between Package A or Package B or
a combination of both. To the extent Package B is oversubscribed (i.e.
Holders of claims consisting of more than $1.46 billion elect Package
B), then:
(1) the amount of Term Loan distributed to the Holders to the extent
that they select Package A would be reduced to an amount equal to
the amount of Holder's claims electing for Package A multiplied
by 475/680 (the "Issued Term Loan").
(2) the amount of Senior A Notes issued under Package B to be
distributed to the Holders to the extent that they select Package
B would be increased to an amount equal to $350m (amount issued
assuming a full subscription of Package B) plus the amount of
unissued Package A Debt ($475m less the Issued Term Loan)
multiplied
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
by 400/475. In addition to this amount of Senior A
Notes, Package B will consist of $250 million of Senior B Notes,
$85 million of net cash proceeds of the offering to the Equity
Investors and 61% of the ordinary share capital of PGS
immediately after PGS's plan of reorganisation under chapter 11
becomes effective ("Completion"), all to be distributed pro rata
to the Holders of Package B.
To the extent Package A is oversubscribed (i.e. Holders of claims
consisting of more than $680 million elect Package A), then:
(1) The amount of Senior A Notes and Senior B Notes to be distributed
to the Holders electing Package B would be reduced to an amount
equal to the amount of claims electing Package B multiplied by
350/1460 and 250/1460 for the Senior A and B Notes respectively.
(2) The amount of Term Loan issued under Package A to be distributed
to the Holders electing Package A would be increased by the
combined reduction in the principal amount of Senior A Notes and
Senior B Notes to be distributed multiplied by 475/400.
A. Package A
Term Loan
---------
Borrower: PGS
Amount: Up to $475m (subject to oversubscription arrangements
as described above)
Facility type: Senior term loan facility
Guarantors: Facility to be unsecured. All direct and indirect
Material Subsidiaries (as defined below) of PGS (to the
extent legally and contractually possible and to the
extent reasonable in the context of a cost/benefit
analysis of providing any such guarantee) to guarantee
the facility. A "Material Subsidiary" is a subsidiary
which owns 10% or more of the consolidated assets of
the group or contributes 10% or more of the
consolidated revenue of the group
Interest: LIBOR plus a margin of 1.15% per annum plus mandatory
costs (if any).
Repayment: Subject to a cap of $40m on aggregate annual
repayments, the facility to be repaid by semi-annual
repayments equal to 3.684% of the face amount of Term
Loan (i.e. $35m per year assuming $475m of Term Loan)
with a final balloon repayment of all amounts then
outstanding due 8 years after Completion.
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
Prepayment Majority lenders (i.e., 66?%) shall have option to
option on require prepayment of the Term Loan in full on
change of change of control (where a person or persons acting
control: in concert acquire 51% or more of the voting stock of
PGS) if the credit rating (as rated by Standard & Poors
and Moodys) of the new entity and, where applicable,
the new entity's parent or holding company, is less
than the credit rating of PGS immediately prior to the
change of control, provided that no such prepayment
event will arise where the credit rating of new entity
is at least BB/Ba2.
Optional On five business day's notice at par and without
Prepayment: penalty or premium but subject to break costs (to be
based on standard Loan Market Association definition).
Other terms: See section G.
Limitation of In the event of a PGS insolvency prior to the final
liability on repayment date, the liability of PGS to the Holders
insolvency: under the Term Loan will be limited to the net present
value of the Term Loan (as opposed to the par value of
the Term Loan) at the date of such insolvency, with the
net present value being calculated on the basis of a
discount rate of 9%.
Governing Law: English
B. Package B
Upon Completion, and following the purchase described in D below,
Package B will consist of Senior A Notes, Senior B Notes, $85 million
of net cash proceeds of the offering to Equity Investors and 91% of the
ordinary share capital of PGS upon Completion (subject to adjustment as
described in Section D).
Senior A Notes
--------------
Issuer: PGS
Amount: $350m (but can be increased to up to $750m depending on
how many Holders elect for Package A and B)
Interest: 10% per annum
Final repayment 7 years after Completion.
date:
Call Notes not callable in first 4 years; thereafter
Protection: notes may be called in whole or in part subject to a
premium equalling half the coupon in year 5, with the
premium reducing rateably thereafter each year until
maturity.
Senior B Notes
--------------
Issuer: PGS
Amount: $250m
Interest: 8% per annum
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
Call Option: Notes callable in first year at 103, 102 in the second
year; and 101% during the third year. On maturity the
Notes can be redeemed at 100%
Final repayment 3 years after Completion
date:
Terms common to Senior A Notes and Senior B Notes:
Guarantors: Senior A Notes and Senior B Notes to be unsecured. All
direct and indirect Material Subsidiaries of PGS (to
the extent legally and contractually possible and to
the extent reasonable in the context of a cost/benefit
analysis of providing any such guarantee) to guarantee
the facility.
Ordinary Upon Completion, Holders who have elected for (or
Shares: have otherwise been allocated) Package B receive
ordinary shares equalling 91% of the ordinary share
capital of PGS as composed immediately
post-Restructuring (subject to adjustment as described
in Section D and as provided for in the underwriting
agreement to be made between the Equity Investors and
the Holders).
Change of Change of control (i.e., where a person or persons
Control Put: acting in concert acquire 51% or more of the voting
stock of PGS) put option at 101% plus accrued but
unpaid interest.
Governing Law: New York
Other terms: See Section G
C. Trust Preferreds
If the Trust Preferreds voting as a class vote in favour of the
Restructuring then the obligations owed to the Trust Preferreds will be
satisfied fully and finally by a gift of, or other receipt of, ordinary
shares in PGS of 5% of the ordinary share capital (as such share capital
is composed immediately post-Restructuring). The gift will be implemented
though a conversion of the claims of the Trust Preferred into ordinary
shares. If the Trust Preferreds do not vote in favor of the Restructuring,
then the Package B Holders will retain the 5% which would otherwise have
been gifted and the Trust Preferreds will receive nothing.
D. PGS Equity Holders
If PGS Equity Holders vote in favour of the Restructuring then, on
Completion, PGS Equity Holders will receive a gift of, or otherwise
receive, 4% of ordinary share capital of PGS (as such share capital is
composed immediately post-Restructuring). The gift will be implemented
through a mechanism to be agreed.
PGS Equity Holders will also have the right on Completion to buy from the
Package B Holders (mechanics to be agreed) for $85m in cash (net of any
underwriting or other fees) such number of ordinary shares issued to the
Package B Holders under Section B above which, when added to the ordinary
shares gifted to the PGS Equity Holders under the above paragraph, would
result in the PGS Equity Holders owning 34% of the ordinary share capital
of PGS immediately after Completion (this right being backstopped by
certain
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
major PGS Equity Holders (the "Equity Investors") and or their
affiliates on terms to be agreed who will take up these rights in lieu of
any PGS Equity Holders who do not wish to do so). For the avoidance of
doubt the rights of the PGS Equity Holders to obtain 34% of the ordinary
share capital under this paragraph will not be affected by changes to
Holders' allocations as a result of any over- or under-subscription of
Term Loan.
Individual Package B Holders will have the option to designate whether
they wish to sell their equity to PGS Equity Holders/Equity Investors, in
which case, to the extent possible, the equity of such Package B Holders
will be sold to the PGS Equity Holders/Equity Investors first, with any
shortfall being made up by non-designating Package B Holders selling their
equity pro rata.
E. Other Creditors of PGS
For the avoidance of doubt all other creditors of PGS and the group
(including trade creditors, lessors (including UK defeased lessors), PGS
Multi Client Seismic preferred securities holders, Oslo Seismic
noteholders and contingent creditors) will be unimpaired by the
Restructuring, unless otherwise agreed.
F. Miscellaneous Provisions
Interest on the Bank All accrued and unpaid interest through the
Facilities and Notes: chapter 11 filing date, including any pro rata
portion of interest accrued to the Noteholders
and the Banks but not then due, will be paid to
the Noteholders and the Banks to bring them both
current as at the filing date.
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
Board composition: A new board of directors of PGS will be elected
on Completion.
The composition of the board of PGS will be
structured such that the Holders of Package B
debt will be entitled to select a simple
majority of the board members (after inclusion
of any employee representatives required under
Norwegian law, if any), while the PGS Equity
Holders will be entitled to select the
remaining shareholder elected board members
(being a minimum of 2 to be selected). The
Package B Holders will still be entitled to
select a simple majority as set forth above).
Any change of the board composition (except
for board members selected by employees, if
any) during the first 2 years after
Completion other than the replacement of a
director by a personal deputy appointed at
the shareholders meeting approving the
initial board, will require a 66?%
shareholder vote (calculated on the basis
of those voting), and the Company's
Articles of Association shall be amended
accordingly.
At least one of the directors to be
selected by PGS Equity Holders will be Mr.
Ulltveit-Moe (subject to Mr. Ulltveit-Moe
not objecting, withdrawing or being unable
to serve as a director for any reason), who
will also be the chairman of the board and
elected as such by the general meeting. To
the extent that the general meeting voting
for confirmation of the Restructuring does
not select Mr. Ulltveit-Moe as chairman, or
Mr. Ulltveit-Moe is unable to serve for one
of the reasons set forth above, this shall
not effect the terms of this Term Sheet or
the PSA, however, Holders who have elected
for Package B and who have executed or are
bound by a PSA will, if legally possible,
procure the calling of a new general
meeting to elect Mr. Ulltveit-Moe to be
chairman (and will themselves vote in
favour of such election).
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
Major Transactions: Any Major Transactions (defined below) will
require, during the first two years after
Completion, the board vote of the board
members nominated by the PGS Equity Holders
and the general meeting of PGS will
instruct the board accordingly.
"Major Transactions" mean:
a) any single sale of assets, or series
of sales of assets, in any calendar
year, in excess of $100m, and not
otherwise requiring 66?% shareholder
approval;
b) changes to PGS's key executive
management (to be defined);
c) new financings or borrowings over $25
million;
d) application of Major Proceeds;
e) material acquisitions (to be
defined);
f) proposals to change the articles of
association of PGS; and
g) proposals for issuance of new equity
or equity like securities.
Management Incentive To be determined post-Restructuring by the
Plan: new board of PGS. Any issuance of equity or
warrants will require a 66?% shareholder vote
(calculated on the basis of those voting).
Atlantic Power and If Atlantic Power or Atlantis proceeds are
Atlantis Sale Proceeds: received prior to Completion then such proceeds
will be included in the calculation of Excess
Cash (see below).
If any Atlantic Power proceeds are received
after the earlier of (i) Completion or (ii) 31
October 2003 then such proceeds shall be
included in Major Proceeds.
If any Atlantis proceeds are received after the
earlier of (i) Completion or (ii) 31 October
2003, then a pro rata share of 90% of such
proceeds will be paid to the Package A Holders
as an additional recovery under the section
entitled "Cash recovery on Completion" below
(i.e., the aggregate of each Holders outstanding
Bank Facilities and Notes electing Package A
divided by $2.14 billion and multiplied by 90%),
and the remainder will be included in Major
Proceeds.
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
Cash recovery on At Completion PGS to pay to the Banks and the
Completion: Noteholders any cash of the group in excess of
$50m ("Excess Cash") at the month end prior to
Completion or (if earlier) 31 October 2003 as an
additional recovery (such payment being made pro
rata to the Banks and the Noteholders in respect
of face values of the Bank Facilities and the
Notes).
Excess Cash at the time of Completion shall be
calculated on a basis consistent with both the
"CASH AVAILABLE - ACCUMULATED" row in the
liquidity reports as previously provided and
with the Conduct of Business paragraph below.
This calculation will be subject to adjustment
in respect of any abnormal contingencies or
balances (excluding exceptional tax liabilities
payable within 6 months of Completion) and will
be calculated after payment of all fees and
expenses payable by PGS in relation to the
Restructuring (including those required to be
paid by PGS as described below) and
establishment of the reserve account referred to
below.
A reserve account of $30m shall be established
by PGS, the balance of which shall be applied
from time to time against abnormal contingencies
(including exceptional tax liabilities). To the
extent that any balance remains 6 months after
Completion then upon a vote of a simple majority
of the board, such proceeds will be paid to
those Holders who receive an additional recovery
under the section entitled "Cash recovery on
Completion" below as a further recovery.
If Completion has not occurred by 31 October
2003, then the additional recovery shall include
a payment of $6m for each complete month during
the period from 31 October 2003 to Completion on
account of interest which would have been
payable by PGS if Completion had occurred on 31
October 2003, provided that such payment shall
not be made to the extent that it would reduce
cash of the group to $50m or less.
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EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
The calculation of Excess Cash shall include any
cash held as collateral for bid/performance
bonds ("Bonds") which the Company will release
at Completion. The Company will release such
cash collateral by replacing Bonds or cash
collateral with new Bonds at Completion using
either (A) a secured US$40 million 364 day
letter of credit facility which the Banks agree
in principle to make available to subsidiaries
of PGS or (B) any equivalent facility provided
by other banks or financial institutions. If PGS
requires a DIP facility to provide the Bonds
during the chapter 11, PGS intends to seek such
DIP facility from the Banks, provided that the
Banks are prepared to provide such a DIP
facility on commercially competitive terms. PGS
will seek an exit facility if necessary on the
same terms.
Excess Cash Adjustment: Following completion of the
audit of PGS's financial year 2003 figures, and
after review by PwC, an adjustment will be made,
subject to agreeing an appropriate de minimis
threshold, to the Excess Cash additional
recovery calculated above to reconcile that
additional recovery to the additional recovery
that would otherwise have been payable had it
instead been calculated based on the pro rata
amount of the actual "TOTAL RECEIPTS" for
financial year 2003 (e.g. 10/12 of the TOTAL
RECEIPTS figure if the Excess Cash additional
recovery were calculated as at 31 October 2003).
Following such calculation, any such amount
payable (subject to the de minimus threshold)
will be paid to the Holders of record of the
Bank Facilities and the Notes as at the date of
Completion, on a pro rata basis.
Conduct of Business: PGS will operate its business in
the ordinary course prior to the Completion,
including but not limited to, (i) no
distributions or payments to be made to
shareholders, affiliates, directors or employees
outside the ordinary course of business or other
than in accordance with terms of existing
contractual arrangements or terms of new arms'
length contractual arrangements and (ii) the
Group shall manage its working capital on a
basis consistent with its historic customary
practice (subject to any change thereto required
by customers/vendors due to the Group's
financial condition and the implementation of
the Restructuring).
This undertaking shall not restrict the payment
of bonuses to management members (but not
directors) on signing of the PSA and/or on
Completion which, in aggregate, do not exceed
$2m.
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EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
Fees and expenses of For the account of PGS and payable in full
parties: on Completion. Such fees and expenses shall
include the reasonable fees and expenses of the
indenture trustee for the Noteholders and Trust
Preferreds incurred pursuant to their respective
indentures. For the avoidance of doubt, Excess
Cash shall be calculated after all such fees and
expenses have been paid.
Releases: If the Restructuring is to be implemented solely
by way of a Chapter 11 filing in the United
States then those Noteholders, Banks and Trust
Preferreds who agree to vote in favour of such
Restructuring prior to such filing will agree
that:
(a) PGS makes such a filing with their
consent; and
(b) they will not seek to hold the current
directors of PGS personally liable
(whether under the Norwegian Public
Limited Companies Act or otherwise) for
any loss they, or any other creditor of
PGS, may suffer (or be alleged to suffer)
as a result of PGS making such a filing
without concurrently making an equivalent
filing under Norwegian law or as a result
of the Restructuring being implemented (or
assist any other creditor of PGS to do the
same).
Equivalent "hold harmless" and/or release
provisions by the creditors in favour of the
directors will also be included in the
documentation relating to Completion with the
intention that all impaired creditors will be
bound by such provisions.
On Completion, and as part of the Restructuring
documentation, PGS will release the Noteholders,
the Banks and the Trust Preferreds (if they
voted in favor of the Restructuring) from any
causes of action it may have against them.
Listing: The ordinary shares to be listed in Norway and,
as soon as practicable after Completion taking
account of relevant listing requirements in the
US. PGS will provide customary investor
relations support to US investors
post-Completion. Other listing venues to be
reasonably agreed.
Rating: Senior A Notes and Senior B Notes to carry
ratings from Standard & Poors and Moodys.
G. Other terms applicable to the Term Loan, Senior A Notes and/or
Senior B Notes
Positive covenants: Similar covenants to those in existing
$430m revolving facility, to include:
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FINAL DRAFT
EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
(a) provision of financial statements and
miscellaneous information (including SEC
filings, if applicable)
(b) certification of no event of default
(c) notification of events of default(and
potential events of default)
(d) maintenance of corporate existence and
authorisations
(e) maintenance of insurance
(f) maintenance of pari passu ranking
(h) compliance with environmental laws
Negative covenants: Similar covenants to those in existing
$430m revolving facility, to include:
(a) negative pledge (with exceptions as per
$430m revolving facility, but also to
include ability to give security for a
$70m working capital facility, provided
that the Holders are given a right of
first refusal to provide such working
capital facility)
(b) restriction on sale and leasebacks (with
exceptions as per $430m revolving
facility)
(c) restriction on asset dispositions (Senior
A Notes and Senior B Notes only) (with
exceptions as per $430m revolving
facility)
(d) restriction on subsidiary borrowing (with
exceptions as per $430m revolving facility
but also to include borrowing under $70m
working capital facility and facilities
for provision of up to $40m of Bonds on an
unsecured/uncollateralised basis)
(e) no material change of business
(f) restrictions on project companies and
projects (with exceptions as per $430m
revolving facility).
Additional covenants (a) restriction on consolidations and
not existing in $430m mergers to be agreed (Senior A Notes
revolving facility and Senior B Notes only)
(b) limitation on transactions with affiliates
(with certain exceptions to be agreed)
(Senior A Notes and Senior B Notes only)
(c) restriction on dividends - no dividends to
be paid by PGS until the earlier of 3
years or repayment of Senior B Notes;
thereafter dividends payable subject to a
basket based on 50% of the sum of net
income plus depreciation and amortisation
and otherwise as permitted under Norwegian
law. Upstream dividends by wholly-owned
subsidiaries
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EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
of PGS to PGS will be permitted.
(d) restriction on incurrence of indebtedness,
provided PGS may incur additional
indebtedness if on date of such incurrence
total debt / EBITDA ratio would be less
than 3.75 to 1.0 (the "Debt/EBITDA
Ratio"), calculated on a pro forma basis
after giving effect to all incurrences and
repayments of indebtedness to occur on or
substantially concurrently with such
incurrence, provided that such
indebtedness shall not exceed $1.5 billion
("Cap") in aggregate (which number
includes the working capital facility not
to exceed $70m, and any facility for
provision of up to $40m of Bonds as
described in (i) and (ii) below).
Notwithstanding the aforementioned, PGS
shall be permitted to incur incremental
indebtedness including (i) a working
capital facility not to exceed $70
million; (ii) facilities for provision of
up to $40m of Bonds on an
unsecured/uncollateralised basis; (iii)
project company and project debt
("Excluded Indebtedness"); (iv)
refinancing indebtedness; and (v) other
permitted indebtedness the incurrence of
which is necessary for the Company to
operate in the ordinary course. When
calculating the total debt for the
Debt/EBITDA Ratio and compliance with the
Cap, indebtedness falling within the
definition of Excluded Indebtedness shall
not be included. For the avoidance of
doubt, EBITDA as used above will be EBITDA
calculated before any investment in
multi-client libraries.
The proceeds derived from the sale of any assets
of PGS or any of its subsidiaries (including the
proceeds from the Atlantic and Atlantis sales)
in excess of $100m ("Major Proceeds") per annum
shall be used, at the sole discretion of PGS, to
either (i) (a) purchase Term Loan in the open
market, (b) purchase the Senior A and B Notes in
the open market; (c) submit a tender offer for
the purchase of the Senior A and B Notes, and/or
(d) pay down the Term Loan, on a pro rata basis
vis a vis the Term Loan and the Senior A and B
Notes; or (ii) reinvest in PGS or its
subsidiaries in a qualified manner within 12
months from receipt of the Major Proceeds.
Notwithstanding the aforementioned, individual
Package A Holders, following written notice by
PGS that it intends to apply all or part of such
Major Proceeds to reduce Package B debt, and
following reasonable written notice to PGS,
shall be entitled to demand that they receive a
pro rata share of any Major Proceeds being used
to pay down Package B
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EXHIBIT A TO PLAN SUPPORT AGREEMENT
PRIVATE AND CONFIDENTIAL
debt, in which case such electing Package A Term
Loan holder will receive a payment calculated
based on the net present value of their pro rata
share of the Term Loan (as opposed to the par
value of the Term Loan) at the date of the
distribution of such proceeds, with the net
present value being calculated on the basis of a
discount rate of 9%.
For the avoidance of doubt, any proceeds
received by PGS prior to the earlier of
Completion or 31 October 2003 will not be
included in Major Proceeds.
Financial covenants: None
Events of default: Similar events of default to those in existing
$430m revolving facility, to include:
(a) For the Term Loan: non-payment (with 3 day
grace period where non-payment of
principal caused due to technical problems
and 3 day grace period for non-payment of
interest)
(b) For the Senior A Notes and Senior B Notes:
non-payment (with 30 day grace period
where non-payment of principal caused due
to technical problems and 30 day grace
period for non-payment of interest)
(c) acceleration of other indebtedness in
excess of $20m in aggregate
(d) judgements entered in excess of $20m in
aggregate (unless covered by insurance
and/or subject to carve-out for bona fide
appeals)
(e) insolvency (with carve out for proceedings
dismissed within a specified time period)
Default interest: Applicable non-default
interest rate plus 2%.
H. Debt Maturity Extension
Holders of the Bank Facilities who sign a plan support agreement will agree to
forbear from exercising any remedies in any jurisdiction on any Bank Facility
prior to Completion.
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