-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I0eAjPDrw0MyJ1TqsfqFuq4tqXwL3J8U79P25+PBaogGJnUEb+ioLePvaZKII2kQ Kpps26VBI+K6a+K1uU5NDw== 0000950129-99-003825.txt : 19990823 0000950129-99-003825.hdr.sgml : 19990823 ACCESSION NUMBER: 0000950129-99-003825 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 19990820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEITEL INC CENTRAL INDEX KEY: 0000750813 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 760025431 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-85671 FILM NUMBER: 99696896 BUSINESS ADDRESS: STREET 1: 50 BRIAR HOLLOW LN STREET 2: WEST BLDG 7TH FLR CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 7138818900 MAIL ADDRESS: STREET 1: 50 BRIAR HOLLOW LANE WEST STREET 2: 7TH FLOOR CITY: HOUSTON STATE: TX ZIP: 77027 FORMER COMPANY: FORMER CONFORMED NAME: SEISMIC ENTERPRISES INC DATE OF NAME CHANGE: 19870814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEITEL CAPITAL TRUST I CENTRAL INDEX KEY: 0001093416 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-85671-01 FILM NUMBER: 99696897 BUSINESS ADDRESS: STREET 1: 50 BRIAR HOLLOW LAND STREET 2: 7TH FLOOR WEST CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 7138818900 MAIL ADDRESS: STREET 1: 50 BRIAR HOLLOW LANE STREET 2: 7TH FLOOR WEST CITY: HOUSTON STATE: TX ZIP: 77027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEITEL CAPITAL TRUST II CENTRAL INDEX KEY: 0001093417 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-85671-02 FILM NUMBER: 99696898 BUSINESS ADDRESS: STREET 1: 50 BRIAR HOLLOW LAND STREET 2: 7TH FLOOR WEST CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 7138818900 MAIL ADDRESS: STREET 1: 50 BRIAR HOLLOW LANE STREET 2: 7TH FLOOR WEST CITY: HOUSTON STATE: TX ZIP: 77027 S-3 1 SEITEL, INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1999 REGISTRATION NO. 333- 333- -01 333- -02 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 --------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- SEITEL, INC. SEITEL CAPITAL TRUST I SEITEL CAPITAL TRUST II (Exact name of Registrant as specified in its charter) DELAWARE 76-00254341 DELAWARE APPLIED FOR DELAWARE APPLIED FOR (State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.) Organization)
50 BRIAR HOLLOW LANE PAUL A. FRAME 7TH FLOOR WEST SEITEL, INC. HOUSTON, TEXAS 77027 50 BRIAR HOLLOW LANE (713) 881-8900 7TH FLOOR WEST (Address, including zip code, and telephone number, HOUSTON, TEXAS 77027 including area code, (713) 881-8900 of Registrant's principal executive offices) (Name, address, including zip code, and telephone number, including area code, of agent for service)
--------------------- Copies to: W. MARK YOUNG GARDERE WYNNE SEWELL & RIGGS, L.L.P. 1000 LOUISIANA, SUITE 3400 HOUSTON, TEXAS 77002-5007 (713) 276-5864 --------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable after the effective date of this registration statement, as determined by market conditions. If the securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: [X] If this form is filed to registered additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. [ ] - --------------------- If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the offering. [ ] - --------------------- If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: [ ] - --------------------- --------------------- CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE REGISTRATION FEE(2) - --------------------------------------------------------------------------------------------------------------------------------- Senior Debt Securities(3).............. - --------------------------------------------------------------------------------------------------------------------------------- Subordinated Debt Securities(3)........ - --------------------------------------------------------------------------------------------------------------------------------- Common Stock(4)........................ - --------------------------------------------------------------------------------------------------------------------------------- Preferred Stock(4)..................... - --------------------------------------------------------------------------------------------------------------------------------- Preferred Securities of Seitel Capital Trust I.............................. - --------------------------------------------------------------------------------------------------------------------------------- Preferred Securities of Seitel Capital Trust II............................. - --------------------------------------------------------------------------------------------------------------------------------- Guarantees of Preferred Securities of Seitel Capital Trust I by Seitel, Inc.(5).............................. - --------------------------------------------------------------------------------------------------------------------------------- Guarantees of Preferred Securities of Seitel Capital Trust II by Seitel, Inc.(5).............................. - --------------------------------------------------------------------------------------------------------------------------------- Junior subordinated Debentures of Seitel, Inc.(6)...................... - --------------------------------------------------------------------------------------------------------------------------------- Total.......................... $200,000,000 100% $200,000,000 $55,600 - --------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------
(1) The proposed maximum price per unit will be determined from time to time by the Registrant in connection with the issuance by the Registrant of the securities registered hereunder. (2) The registration fee has been calculated pursuant to Rule 457(o) under the Securities Act. (3) If any Senior Debt Securities and Subordinated Debt Securities are issued at an original issue discount, then the offering price shall be in the greater principal amount as shall result in an aggregate initial offering price not to exceed $200,000,000 less the dollar amount of any securities previously issued hereunder. (4) Also includes such indeterminate number of shares of Preferred Stock or Common Stock as may be issued upon conversion or exchange for any Debt Securities or Preferred Securities that provide for conversion or exchange into Preferred Stock or Common Stock. No separate consideration will be received for the Preferred Stock or Common Stock issuable upon conversion of or in exchange for such securities. (5) This Registration Statement is deemed to cover the Junior Subordinated Debentures of Seitel, Inc., the rights of holders of Junior Subordinated Debentures of Seitel, Inc. under the Indenture, and the rights of holders of the Preferred Securities under the Declaration and the Guarantee entered into by Seitel, Inc. No separate consideration will be received for the Guarantee. In accordance with Rule 457(n), no separate registration fee is required for the Guarantee. (6) The Junior Subordinated Debentures will be purchased by Seitel Capital Trust I or Seitel Capital Trust II with the proceeds of the sale of the Preferred Securities. Such securities may later be distributed by Seitel Capital Trust I or Seitel Capital Trust II upon their dissolution and the distribution of their assets for no additional consideration to the holders of the Preferred Securities. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 EXPLANATORY NOTE The registration statement contains two forms of prospectuses to be used in connection with offerings of the following securities: (1) Preferred Securities of Seitel Capital Trust I or Seitel Capital Trust II, junior subordinated debt securities of Seitel, Inc. and the guarantees of Seitel, Inc. of the preferred securities that may be issued by Seitel Capital Trust I or Seitel Capital Trust II; and (2) Senior Debt Securities, Subordinated Debt Securities, Common Stock and Preferred Stock of Seitel, Inc. 3 SUBJECT TO COMPLETION -- AUGUST 20, 1999 PROSPECTUS - -------------------------------------------------------------------------------- $200,000,000 SEITEL, INC. Junior Subordinated Debt Securities SEITEL CAPITAL TRUST I SEITEL CAPITAL TRUST II Trust Preferred Securities fully and unconditionally guaranteed, as described herein, by SEITEL, INC. - -------------------------------------------------------------------------------- CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 6. We will provide additional terms of our securities in one or more supplements to this prospectus. You should read this prospectus and the related prospectus supplement carefully before you invest in our securities. This prospectus may not be used to offer and sell our securities unless accompanied by a prospectus supplement. THE OFFERING Trust Preferred Securities The trusts may offer from time to time preferred securities representing undivided beneficial interests in the assets of the issuing trust. The trusts will use the proceeds from the sale of their preferred securities to purchase Seitel's junior subordinated debt securities. Junior Subordinated Debt Securities Seitel may offer from time to time its junior subordinated debt securities to the trusts. These debt securities will be unsecured and subordinate and junior in right of payment to Seitel's senior debt. These debt securities may be distributed to holders of the trust preferred securities if and when a trust is dissolved. The junior subordinated debt securities may be convertible into Seitel's shares. Guarantee Seitel will guarantee on a subordinated basis the trusts' payment obligations on the preferred securities as described in this prospectus and the prospectus supplement. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is , 1999 THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. 4 TABLE OF CONTENTS About This Prospectus....................................... 3 Summary Information -- Q&A.................................. 4 Risk Factors................................................ 6 Risk Factors Relating to Seitel's Business................ 6 - Seitel's business could be adversely affected by low oil and gas prices.......................................... 6 - Seitel invests significant amounts of money in acquiring and processing seismic data for its data library with only partial underwriting of the costs by customers..... 6 - Because Seitel's business is concentrated in the U.S. Gulf Coast and Canada, it could be adversely affected by developments in the oil and gas business that affect these areas............................................. 6 - The amounts Seitel amortizes from its data library each period may fluctuate, and these fluctuations can affect its reported results of operations...................... 6 - Drilling hazards and dry holes could affect Seitel's oil and gas activities...................................... 7 - Seitel's debt agreements may limit its flexibility in responding to changing market conditions or in pursuing business opportunities.................................. 7 - Extensive governmental regulation of Seitel's business affects its daily operations............................ 7 - Loss of key personnel could adversely affect Seitel's business................................................ 7 - Seitel's business could be adversely affected by its year 2000 risks......................................... 8 Risk Factors Relating to Seitel's Debt Securities......... 8 - Seitel is a holding company and depends on its subsidiaries for funds.................................. 8 - Seitel can issue more debt.............................. 8 Risk Factors Relating to Seitel's Common Stock............ 8 - Sales of substantial amounts of Seitel's common stock eligible for future sale may cause a significant decline in the market price of its common stock................. 8 Forward-Looking Information................................. 8 Use of Proceeds............................................. 9 Ratio of Earnings to Fixed Charges.......................... 9 The Trusts.................................................. 10 Description of the Preferred Securities..................... 12 Description of the Preferred Securities Guarantees.......... 14 Description of the Junior Subordinated Debt Securities...... 17 Plan of Distribution........................................ 24 Legal Matters............................................... 25 Experts..................................................... 26 Where You Can Find More Information......................... 26 Information We Incorporate by Reference..................... 26
THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION WE HAVE PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS ACCURATE ONLY AS OF THE DATE ON THE FRONT OF THE DOCUMENT AND THAT ANY INFORMATION WE HAVE INCORPORATED BY REFERENCE IS ACCURATE ONLY AS OF THE DATE OF THE DOCUMENT INCORPORATED BY REFERENCE. 2 5 ABOUT THIS PROSPECTUS This prospectus is part of a "shelf" registration statement we have filed with the SEC. The registration statement also includes a prospectus under which Seitel may offer from time to time its senior debt securities, subordinated debt securities, preferred stock and common stock. Under the shelf process, we may offer any combination of the securities described in these two prospectuses in one or more offerings with a total initial offering price of up to $200,000,000. This prospectus provides you with a general description of the preferred securities to be issued by the trusts, the junior subordinated debt securities to be issued by Seitel and Seitel's guarantee. Each time we use this prospectus to sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. Please carefully read this prospectus and the prospectus supplement together with the additional information described under the heading "Where You Can Find More Information." We have not included separate financial statements of the trusts in this prospectus. We do not consider these financial statements to be material to holders of the preferred securities because: - each trust is a newly created special purpose entity; - neither trust has any operating history or independent operations; and - neither trust is engaged in, nor will it engage in, any activity other than issuing preferred and common securities, investing in and holding Seitel's junior subordinated debt securities and engaging in related activities. Furthermore, Seitel's obligations under the junior subordinated debt securities, the associated indenture, the declarations of trust and the guarantees provide a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due on the preferred securities. In addition, we do not expect that the trusts will file reports with the SEC under the Securities Exchange Act of 1934. 3 6 SUMMARY INFORMATION -- Q&A This summary provides a brief overview of the key aspects of Seitel, the trusts, the junior subordinated debt securities and the preferred securities. The term "trust" refers to the Seitel Capital Trust for the specific transaction. This summary does not contain all information that is important to you. We encourage you to carefully read this prospectus and the prospectus supplement to understand fully the terms of the preferred securities that are important to you in making a decision about whether to invest. WHAT ARE THE PREFERRED SECURITIES? Each preferred security represents an undivided beneficial interest in the assets of a trust. Each preferred security will entitle the holder to receive cash distributions as described in this prospectus and the prospectus supplement. WHO ARE THE TRUSTS? Each of Seitel Capital Trust I and Seitel Capital Trust II is a Delaware business trust. The principal office of each trust is c/o Seitel, Inc., 50 Briar Hollow Lane, 7th Floor, West Building, Houston, Texas 77027, and the telephone number is (713) 881-8900. Seitel or one of its subsidiaries will own all common securities of each trust. Each trust will use the proceeds from the sale of the preferred securities and the common securities to purchase a series of Seitel's junior subordinated debt securities with the same financial terms as the preferred securities. The trusts exist only to issue the preferred and common securities, invest in and hold Seitel's junior subordinated debt securities and engage in related activities. There are five trustees of each trust. Three of them, referred to as regular trustees, are officers or employees of Seitel or one of its subsidiaries. The First National Bank of Chicago will act as the property trustee of each trust, and Bank One Delaware, Inc. will act as the Delaware trustee. We will provide in the prospectus supplement additional information about the issuing trust. WHO IS SEITEL? Seitel is a leading provider of seismic data and related geophysical services and expertise to the petroleum industry. Its business includes: - licensing seismic data. Seitel believes it has the largest independent seismic data library marketed publicly in North America. Oil and gas companies use the data to explore for new oil and gas reserves and to develop existing oil and gas reservoirs. - participating in petroleum exploration and development projects as a working interest owner. As a working interest owner of mineral interests, Seitel shares costs and revenues of oil and gas exploration and production projects with other oil and gas companies. Seitel combines its seismic resources and related geophysical technologies with the geology and engineering expertise and land positions of selected petroleum producers in these projects. Seitel's principal executive offices are located at 50 Briar Hollow Lane, 7th Floor, West Building, Houston, Texas 77027, and its phone number is (713) 881-8900. WHEN WILL YOU RECEIVE DISTRIBUTIONS ON THE PREFERRED SECURITIES? The trust's only source of cash to make payments on the preferred securities are payments on the junior subordinated debt securities it purchases from Seitel. If you purchase the preferred securities, you are entitled to receive cash distributions at the rate specified in the prospectus supplement. Unless we inform you otherwise in the prospectus supplement, distributions will accumulate from the date the trust issues the preferred securities and will be paid in arrears on the dates we specify in the prospectus supplement. We may, however, defer distributions as described below. WHEN WILL PAYMENT OF YOUR DISTRIBUTIONS BE DEFERRED? If Seitel defers interest payments on the junior subordinated debt securities, the trust will defer distributions on the preferred securities. We will describe in the prospectus supplement any rights to defer distributions on the preferred securities by extending the interest payment period on the junior subordinated debt securities. 4 7 During any deferral period, except as described on page 15, Seitel will not be permitted to: - declare or pay a dividend on its common stock or preferred stock; - redeem, purchase, acquire or make a distribution or liquidation payment on any of its common stock or preferred stock; - make a payment on or repay, repurchase or redeem any debt that ranks equally with or junior to the junior subordinated debt securities; or - make a guarantee payment on any guarantee by Seitel of the debt of any of its subsidiaries if that guarantee ranks equally with or junior to the junior subordinated debt securities. WHAT IS SEITEL'S GUARANTEE OF THE PREFERRED SECURITIES? Under the preferred securities guarantee, Seitel will irrevocably and unconditionally guarantee on a subordinated basis that if it makes a payment on the junior subordinated debt securities to the trust but, for any reason, the trust does not make the corresponding distribution or redemption payment to the holders of the preferred securities, then Seitel will make the payments directly to the holders of the preferred securities. Seitel's obligations under the preferred securities guarantee are subordinated as described beginning on page 16. The following obligations of Seitel taken together will provide a full and unconditional guarantee on a subordinated basis of payments due on the preferred securities: - its obligations to make payments on the junior subordinated debt securities; - its obligations under the preferred securities guarantee; and - its obligations under the amended and restated declaration of trust of the trust, which establishes the terms of the trust. WHEN COULD THE JUNIOR SUBORDINATED DEBT SECURITIES BE DISTRIBUTED TO YOU? Unless we inform you otherwise in the prospectus supplement, the holder of the common securities has the right to dissolve the trust at any time. If the trust is dissolved, after satisfaction of the trust's creditors, the trust may distribute junior subordinated debt securities on a proportionate basis to the holders of preferred and common securities. WILL THE PREFERRED SECURITIES BE LISTED ON A STOCK EXCHANGE? If specified in the prospectus supplement, we will apply to list the preferred securities on the New York Stock Exchange. WILL HOLDERS OF THE PREFERRED SECURITIES HAVE ANY VOTING RIGHTS? Generally, the holders of the preferred securities will not have any voting rights. 5 8 RISK FACTORS You should carefully consider the following risk factors together with the other information contained in this prospectus, any accompanying prospectus supplement and the information we have incorporated by reference. The risks and uncertainties described below are not the only ones relating to these securities or facing Seitel. Additional risks and uncertainties not presently known to us or that we currently do not believe are material may also impair Seitel's business operations. If any of the following risks actually occur, Seitel's business, financial condition or results of operations could be materially adversely affected. In this case, the trading price of the preferred securities or the junior subordinated debt securities could decline and you may lose all or part of your investment. RISK FACTORS RELATING TO SEITEL'S BUSINESS Seitel's business could be adversely affected by low oil and gas prices. Seitel's seismic business depends upon exploration, development and production spending by oil and gas companies. Overall conditions in the oil and gas industry have deteriorated in 1998 and early 1999 as a result of relatively low oil and gas prices. While demand for Seitel's seismic data has remained strong, low oil and gas prices could result in decreased demand for Seitel's seismic data. Although oil and gas prices have increased recently, any future decline could result in decreased revenues from Seitel's oil and gas exploration and production business. Seitel invests significant amounts of money in acquiring and processing seismic data for its data library with only partial underwriting of the costs by customers. Seitel invests significant amounts of money in acquiring and processing new seismic data to add to its data library. Although Seitel generally obtains customer commitments covering in excess of 60% of the costs of acquiring and processing this data, Seitel assumes the risk that it will not be able to fully recover its portion of the costs through future licensing of the data. The amounts of these future data licensing fees are uncertain and depend on a variety of factors, including the market prices of oil and gas, customer demand for seismic data in Seitel's library, availability of similar data from competitors, and governmental regulations affecting oil and gas exploration. Many of these factors are beyond Seitel's control. In addition, the timing of these sales can vary greatly from period to period. Technological or regulatory changes or other developments could adversely affect the value of the data. Because Seitel's business is concentrated in the U.S. Gulf Coast and Canada, it could be adversely affected by developments in the oil and gas business that affect these areas. Most of the seismic data in Seitel's seismic data library covers areas along the U.S. Gulf Coast, offshore in the U.S. Gulf of Mexico or in Canada. Also, most of Seitel's existing interests in oil and gas properties are located along the coast of the U.S. Gulf of Mexico. Because of this geographic concentration, Seitel's results of operations could be adversely affected by events relating primarily to one of these regions even if conditions in the oil and gas industry worldwide were favorable. Some examples of possible events that would adversely affect the U.S. Gulf Coast region would be changes in governmental regulations adversely affecting offshore drilling in the U.S. Gulf of Mexico, shortages of drilling or other necessary equipment in this region, or increases in gas transportation costs from this region to the Northeastern U.S. where much of the gas produced in this region is consumed. The amounts Seitel amortizes from its data library each period may fluctuate, and these fluctuations can affect its reported results of operations. Seitel amortizes the cost of its multi-client data library based in part on its estimates of future sales of data. These estimates are imprecise and may vary from period to period depending upon market developments and Seitel's expectations. Substantial changes in amortization rates can have a significant effect on Seitel's reported results of operations. 6 9 Drilling hazards and dry holes could affect Seitel's oil and gas activities. Seitel may not discover commercial quantities of oil and gas when it participates in drilling wells. Seitel's oil and gas operations could be adversely affected by the occurrence of drilling hazards. These include: - cratering; - explosions; - uncontrollable flows of oil, gas or well fluids; - fires; - pollution; and - other environmental risks. Some of these hazards can cause personal injury and loss of life, severe damage to and destruction of property and equipment, environmental damage and suspension of operations. Seitel does not act as operator in its oil and gas drilling business and depends on its partners to minimize these operating risks. Seitel's debt agreements may limit its flexibility in responding to changing market conditions or in pursuing business opportunities. Seitel's debt agreements contain restrictions and requirements relating to, among other things: - additional borrowing; - maintaining financial ratios; - granting liens on its assets; - selling assets; - paying dividends; and - merging. These restrictions and requirements may limit Seitel's flexibility in responding to changing market conditions or in pursuing business opportunities that it believes would have a positive effect on its business. Extensive governmental regulation of Seitel's business affects its daily operations. Seitel's seismic data customers are subject to extensive governmental regulation. In addition, Seitel's oil and gas exploration and production operations are subject to regulations. These regulations, among other things: - govern environmental quality and pollution control; and - limit rates of production. New laws or regulations or changes to existing laws or regulations affecting the oil and gas industry could reduce customer demand for Seitel's seismic data or increase the operating costs of Seitel's oil and gas business. Loss of key personnel could adversely affect Seitel's business. Seitel depends on a relatively small group of management and technical personnel. The loss of one or more of these individuals could have a material adverse effect on Seitel's business. 7 10 Seitel's business could be adversely affected by its year 2000 risks. Seitel uses computer systems, specialized software, embedded processors and related technologies for revenue-generating activities. Seitel has assessed its computer-related systems to ensure that they will be able to recognize and process date-sensitive information properly as the year 2000 approaches. Systems that do not properly recognize and process this information could generate erroneous data or even fail. Seitel has not completed its year 2000 assessment of its suppliers, service providers and customers and Seitel cannot assure you that all its systems and applications will continue without interruption due to the year 2000 problem. If some of these systems and applications do not comply in a timely manner and if Seitel cannot develop adequate contingency plans, the year 2000 issue could have a material adverse effect on Seitel's operations. RISKS RELATING TO SEITEL'S DEBT SECURITIES Seitel is a holding company and depends on its subsidiaries for funds. Seitel is a holding company that owns subsidiary companies. Seitel's subsidiary companies conduct substantially all of its business. This structure results in two principal risks: - Seitel's subsidiaries may be restricted by contractual provisions or applicable laws from providing it the cash that it needs to pay parent company debt service obligations, including payments on the junior subordinated debt securities; and - in any liquidation, reorganization or insolvency proceeding involving Seitel, your claim as a holder of trust preferred securities, which represents in effect an interest in junior subordinated debt securities, will be effectively junior to the claims of holders of any indebtedness or preferred stock of Seitel's subsidiaries. Seitel can issue more debt. The indentures relating to the debt securities that Seitel may issue under this prospectus and the other prospectus included in this registration statement do not limit or restrict the amount of other indebtedness or securities that Seitel or its subsidiaries can issue. RISKS RELATING TO SEITEL'S COMMON STOCK Sales of substantial amounts of Seitel's common stock eligible for future sale may cause a significant decline in the market price of its common stock. Seitel has issued options, warrants and other rights to its directors and executive officers for approximately 5.6 million shares of its common stock. These options, warrants and other rights may be exercised within 60 days of the date of this prospectus. Most of these shares may be sold immediately upon exercise. Sales of substantial amounts of common stock, including shares issued upon the exercise of stock options or warrants, or the perception that sales of substantial amounts of common stock could occur, could adversely affect the market price for Seitel's common stock. FORWARD-LOOKING INFORMATION Some of the statements contained in this prospectus under the caption "Risk Factors," and some of the statements included in the documents that we have incorporated by reference, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements: - address activities, events or developments that we expect, believe, anticipate or estimate will or may occur in the future; - are based on assumptions and analyses that we have made and that we believe are reasonable under the circumstances when made; and 8 11 - are based on many risks, uncertainties and other factors, most of which are beyond our control. Any one of these factors, or a combination of these factors, could materially affect Seitel's future results of operations and whether the forward-looking statements ultimately prove to be accurate. These forward looking statements are not guarantees of Seitel's future performance, and its actual results and future developments may differ materially from those projected in the forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this prospectus, any prospectus supplement and the documents we have incorporated by reference. We will not update these statements unless the securities laws require us to do so. Please read "Risk Factors." USE OF PROCEEDS Unless we inform you otherwise in the prospectus supplement, Seitel will use the net proceeds from the sale of securities for general corporate purposes. These purposes may include: - repayments or refinancings of debt; - working capital; - capital expenditures; - investments in its multi-client data library; - investments in oil and gas properties; - acquisitions; and - repurchases or redemptions of debt securities. Each trust will use all proceeds from the sale of the preferred securities and the common securities to purchase Seitel's junior subordinated debt securities. RATIO OF EARNINGS TO FIXED CHARGES Seitel's consolidated ratio of earnings to fixed charges for the periods shown is as follows:
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED -------------------------------- JUNE 30, 1994 1995 1996 1997 1998 1999 ---- ---- ---- ---- ---- ---------------- Ratio of earnings to fixed charges.......... 5.0x 4.4x 5.0x 7.6x 5.0x 2.1x
For purposes of calculating the ratio of earnings to fixed charges, "earnings" means income from continuing operations before extraordinary losses, plus income taxes and fixed charges (exclusive of capitalized interest), less undistributed earnings of less than 50% owned affiliates. Fixed charges include (1) interest on indebtedness, including capitalized interest, (2) amortization of deferred financing costs and (3) that portion of lease expense that is deemed to be representative of an interest factor. The ratio includes amounts from Seitel and all of Seitel's majority-owned subsidiaries. Included in earnings for the six months ended June 30, 1999 was a nonrecurring $7.8 million impairment of Seitel's investment in Eagle Geophysical. If this item had not been included, the ratio of earnings to fixed charges for the six months ended June 30, 1999 would have been 3.1x. Nonrecurring items included in 1997 earnings were a $29.2 million gain relating to Seitel's spin-off of Eagle Geophysical, a $9.6 million write-down of Seitel's oil and gas properties and a $4.1 million loss relating to Seitel's repayment of debt in the form of a volumetric production payment. If these items had not been included, the ratio of earnings to fixed charges for 1997 would have been 5.4x. 9 12 THE TRUSTS Each of the trusts is formed under the Delaware Business Trust Act and will be governed by a declaration of trust among the trustees of each trust, Seitel and one of its subsidiaries. Each declaration will be qualified under the Trust Indenture Act of 1939. We have summarized selected provisions of the declarations below. This summary is not complete. For a complete description, we encourage you to read the applicable form of declaration, which we have filed with the SEC. Please read "Where You Can Find More Information." The address of the principal office of each trust is c/o Seitel, Inc., 50 Briar Hollow Lane, 7th Floor, West Building, Houston, Texas 77027, and the telephone number of each trust at that address is (713) 881-8900. SECURITIES OF EACH TRUST When a trust issues its preferred securities, you and the other holders of the preferred securities will own all of the issued and outstanding preferred securities of the trust. Seitel or one of its subsidiaries will acquire all of the issued and outstanding common securities of each trust, representing an undivided beneficial interest in the assets of each trust of up to 3%. The preferred securities will be substantially identical to the common securities and will rank equally with the common securities, except that: - if an event of default under the declaration of trust occurs and is continuing, the holders of preferred securities will have the right to receive payments before the holders of the common securities receive payments; and - the holders of common securities have the exclusive right to appoint, remove or replace the trustees and to increase or decrease the number of trustees. Each trust will exist primarily for the purposes of: - issuing its preferred and common securities; and - investing the proceeds from the sale of its securities in Seitel's junior subordinated debt securities; and - engaging in only such other activities as are necessary, convenient or incidental to issuing its securities and purchasing and holding Seitel's junior subordinated debt securities. The rights of the holders of the preferred securities of a trust, including economic rights, rights to information and voting rights, will be contained in and governed by the applicable declaration of trust, the Delaware Business Trust Act and the Trust Indenture Act of 1939. POWERS AND DUTIES OF TRUSTEES The number of trustees of each trust will initially be five. Three of the trustees will be individuals who are officers or employees of Seitel or one of its subsidiaries. The fourth trustee will be The First National Bank of Chicago, which will serve as the property trustee under the declaration of trust for purposes of the Trust Indenture Act of 1939. The fifth trustee will be Bank One Delaware, Inc., which has its principal place of business in the State of Delaware. The property trustee will own and hold for your benefit Seitel's junior subordinated debt securities purchased by a trust. The property trustee will also: - generally exercise the rights, powers and privileges of a holder of junior subordinated debt securities; - maintain exclusive control of a segregated non-interest bearing bank account to hold all payments on the junior subordinated debt securities; and 10 13 - promptly make distributions to the holders of the trust securities out of funds from the property account. The First National Bank of Chicago, acting in its capacity as guarantee trustee, will hold for your benefit a preferred securities guarantee, which will be separately qualified under the Trust Indenture Act of 1939. Because Seitel or one of its subsidiaries will own all of the common securities of each trust, Seitel or that subsidiary will have the exclusive right to appoint, remove or replace trustees and to increase or decrease the number of trustees. In most cases, there will be at least five trustees. The term of a trust will be described in the applicable prospectus supplement, but may dissolve earlier as provided in the applicable declaration of trust. The duties and obligations of the trustees of a trust will be governed by the declaration of that trust, the Delaware Business Trust Act and the Trust Indenture Act of 1939. BOOKS AND RECORDS The books and records of each trust will be maintained at the principal office of the trust and will be open for inspection by each holder of preferred securities of the trust or any authorized representative for any purpose reasonably related to the holder's interest in the trust during normal business hours. THE PROPERTY TRUSTEE The property trustee, for the benefit of the holders of the trust securities, generally will exercise all rights under the indenture for the holders of the junior subordinated debt securities deposited in the trust as trust assets, including the right to enforce Seitel's obligations under the junior subordinated debt securities upon the occurrence of an event of default under the indenture. If Seitel extends the interest payment period for the related junior subordinated debt securities held by a trust and, as a result, the trust does not make distributions, the property trustee will not be able to enforce the payment of distributions on the preferred securities until an event of default under the declaration of trust has occurred. If an event of default under the declaration of trust has occurred and is continuing, then the holders of at least a majority of outstanding preferred securities of a trust may direct the property trustee for such trust or the guarantee trustee, as the case may be, to enforce the available remedies under the related declaration of trust and preferred securities guarantee. If the property trustee fails to enforce its rights under the applicable series of junior subordinated debt securities, you may provide written notice to the property trustee that you will enforce those rights and, 30 days after submitting that request, you may enforce those rights directly against Seitel without first instituting any legal proceeding against the property trustee or any other person. If an event of default under the applicable declaration of trust has occurred and is continuing and results from Seitel's failure to make payments on the applicable series of junior subordinated debt securities when due, then you may directly institute a proceeding to enforce payment of the principal of, any premium or interest on or any additional amounts payable with respect to the applicable series of junior subordinated debt securities in an amount corresponding to the aggregate liquidation amount of your preferred securities. If you bring any such direct action, Seitel will be entitled to your rights under the applicable declaration of trust to the extent of any payment made by Seitel to you. EXCEPT AS EXPRESSLY PROVIDED IN THE PRECEDING SENTENCES OR IN THE APPLICABLE PROSPECTUS SUPPLEMENT, YOU WILL NOT BE ABLE TO EXERCISE DIRECTLY ANY OTHER REMEDY AVAILABLE TO THE HOLDERS OF THE APPLICABLE SERIES OF JUNIOR SUBORDINATED DEBT SECURITIES. EVENTS OF DEFAULT If an event of default under the junior subordinated debt indenture occurs and is continuing, an event of default under the related declaration of trust will occur and be continuing. In that case, each declaration of trust provides that the holders of common securities will waive any such event of default under the 11 14 declaration of trust until all events of default under the declaration of trust relating to the preferred securities of the trust have been cured, waived or otherwise eliminated. Until all events of default under the declaration of trust relating to the preferred securities have been cured, waived or otherwise eliminated, the property trustee will act solely on behalf of the holders of the preferred securities, and only the holders of the preferred securities will have the right to direct the property trustee as to some matters under the declaration and under the indenture relating to the junior subordinated debt securities. If the holders of the preferred securities of a trust waive any event of default under the declaration of trust as provided in the declaration, the holder of the common securities will also be bound by the waiver without any further act, vote or consent. The property trustee will notify you of any notice of default relating to the junior subordinated debt securities, unless the default has been cured before the giving of the notice or the property trustee in good faith determines that the withholding of the notice is in your interests. DEBTS AND OBLIGATIONS In each declaration of trust, Seitel has agreed to pay all debts and obligations, other than payments on the related trust securities, and all costs and expenses of the applicable trust, including the fees and expenses of its trustees and any taxes and all costs and expenses of the trust. Seitel will not pay withholding taxes of the trust except to the extent we describe in the prospectus supplement. Seitel's obligations under each declaration of trust will benefit, and will be enforceable by, any person to whom any of these debts, obligations, costs, expenses and taxes are owed whether or not a creditor has received notice of Seitel's contractual obligation. Any creditor may enforce these obligations directly against Seitel, and Seitel has irrevocably waived any right or remedy to require that any creditor take any action against any trust or any other person before proceeding against Seitel. Seitel will be subrogated to all rights of a trust relating to any amounts paid to any creditor by Seitel. DESCRIPTION OF THE PREFERRED SECURITIES TERMS Each trust may issue only one series of preferred securities. The terms of the preferred securities will include those stated in the amended and restated declaration of trust and those made a part of that declaration by the Trust Indenture Act of 1939. For a complete description of the preferred securities, we encourage you to read the prospectus supplement and the amended and restated declaration of trust, a form of which we have filed with the SEC. Please read "Where You Can Find More Information." Seitel will guarantee the preferred securities on a subordinated basis to the extent described under "Description of the Preferred Securities Guarantees." The prospectus supplement relating to preferred securities being offered will include specific terms relating to the offering. These terms will include some or all of the following: - the designation of the preferred securities; - the number of preferred securities issued by the trust; - the annual distribution rate, the distribution payment dates, the record dates for distribution payments and the additional amounts, if any, that may be payable with respect to the preferred securities; - whether distributions will be cumulative and compounding and, if so, the dates from which distributions will be cumulative or compounded; - the amounts that will be paid out of the assets of the trust to the holders of preferred securities upon dissolution, winding-up or termination of the trust; - any repurchase or redemption provisions; 12 15 - any additional voting rights of the preferred securities; - terms for any conversion or exchange of the junior subordinated debt securities or the preferred securities into other securities; and - any rights to defer distributions on the preferred securities by extending the interest payment period on the junior subordinated debt securities. We also will describe in the prospectus supplement the material United States federal income tax considerations applicable to any offering of preferred securities. VOTING You will have limited voting rights, relating only to the modification of the preferred securities and the exercise of a trust's rights as holder of the junior subordinated debt securities and the preferred securities guarantee. You will not be able to appoint, remove or replace, or to increase or decrease the number of, trustees, because these rights will be vested exclusively in the holder of the common securities of the trust. DISTRIBUTIONS Under each declaration, the property trustee must make distributions on the preferred securities of a trust to the extent that the property trustee has cash on hand in the applicable property account to permit this payment. The only funds available for distribution to the holders of the preferred securities of a trust will be those received by the property trustee on the junior subordinated debt securities. If Seitel does not make payments on the junior subordinated debt securities, the property trustee will not make corresponding distributions on the preferred securities. Under each declaration, if and to the extent Seitel does make payments on the junior subordinated debt securities, the property trustee will be obligated to make distributions on the trust securities of the trust on a pro rata basis. Seitel will guarantee payment of distributions on the preferred securities of a trust as and to the extent described under "Description of the Preferred Securities Guarantees." A preferred securities guarantee covers distributions and other payments on the applicable preferred securities only if and to the extent that Seitel has made a payment to the property trustee on the applicable junior subordinated debt securities. If an event of default under the related declaration has occurred and is continuing, any funds available to make payments will be paid first to you and the other holders of the preferred securities pro rata based on the aggregate liquidation amount of preferred securities held by you and other holders in relation to the aggregate liquidation amount of all the outstanding preferred securities. In that case, the holder of common securities of a trust would receive payments only after satisfaction of all amounts owed to the holders of preferred securities. RECORD HOLDERS The trustees of a trust may treat the registered owners of the preferred securities as the holders for purposes of receiving distributions and for all other purposes. Preferred securities will be issued in fully registered form. Unless we inform you otherwise in a prospectus supplement, preferred securities will be represented by one or more global certificates registered on the books and records of the trust in the name of a depositary or its nominee. Under each declaration: - the trust and its trustees will be entitled to deal with the depositary for all purposes, including the payment of distributions and receiving approvals, votes or consents under the related declaration. Except for provisions in the related declaration dealing with the issuance of definitive certificates representing the preferred securities, the trust and its trustees will not have any obligation to persons owning a beneficial interest in preferred securities registered in the name of and held by the depositary or its nominee; and 13 16 - the rights of beneficial owners of preferred securities will be exercised only through the depositary and will be limited to those established by law and agreements with the depositary and its participants. The depositary will receive all notices and communications to, and all distributions on, preferred securities that are registered in the name of and held by a depositary or its nominee. Seitel will disclose in the applicable prospectus supplement the specific terms of the depositary arrangement for the preferred securities of a trust. DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES Seitel will fully and unconditionally guarantee on a subordinated basis payments on the preferred securities as described in this section. This guarantee covers the following payments: - periodic cash distributions on the preferred securities out of funds held by the property trustee of the trust; - payments on liquidation of each trust; and - payments on redemption of preferred securities of each trust. The First National Bank of Chicago, as guarantee trustee, will hold the guarantee for the benefit of the holders of preferred securities. We have summarized selected provisions of the guarantees below. This summary is not complete. For a complete description, we encourage you to read the guarantee, a form of which we have filed with the SEC. Please read "Where You Can Find More Information." Seitel will irrevocably and unconditionally agree to pay you in full the following amounts to the extent not paid by the trust: - any accumulated and unpaid distributions and any additional amounts with respect to the preferred securities and any redemption price for preferred securities called for redemption by the trust, if and to the extent that Seitel has made corresponding payments on the junior subordinated debt securities to the property trustee of the trust; and - payments upon the dissolution, winding-up or termination of the trust equal to the lesser of: - the liquidation amount plus all accumulated and unpaid distributions and additional amounts on the preferred securities to the extent the trust has funds legally available for those payments and - the amount of assets of the trust remaining legally available for distribution to the holders of preferred securities in liquidation of the trust. Seitel will not be required to make these liquidation payments if: - the trust distributes the junior subordinated debt securities to the holders of preferred securities in exchange for their preferred securities; or - the trust redeems the preferred securities in full upon the maturity or redemption of the junior subordinated debt securities. Seitel may satisfy its obligation to make a guarantee payment either by making payment directly to the holders of preferred securities or by causing the applicable trust to make the payment to them. Each guarantee is a guarantee from the time of issuance of the applicable series of preferred securities. THE GUARANTEE ONLY COVERS, HOWEVER, DISTRIBUTIONS AND OTHER PAYMENTS ON PREFERRED SECURITIES IF AND TO THE EXTENT THAT SEITEL HAS MADE CORRESPONDING PAYMENTS ON THE JUNIOR SUBORDINATED DEBT SECURITIES TO THE APPLICABLE PROPERTY TRUSTEE. IF SEITEL DOES NOT MAKE THOSE CORRESPONDING PAYMENTS ON THE JUNIOR 14 17 SUBORDINATED DEBT SECURITIES, THE TRUST WILL NOT HAVE FUNDS AVAILABLE FOR PAYMENTS AND THAT TRUSTEE WILL NOT MAKE DISTRIBUTIONS ON THE PREFERRED SECURITIES. Seitel's obligations under the declaration of trust for each trust, the guarantees, the junior subordinated debt securities and the associated indenture taken together will provide a full and unconditional guarantee on a subordinated basis of payments due on the preferred securities. COVENANTS OF SEITEL In each guarantee, Seitel will agree that, as long as any preferred securities issued by the applicable trust are outstanding, Seitel will not make the payments and distributions described below if: - it is in default on its guarantee payments or other payment obligations under the related guarantee; - any event of default under the applicable declaration of trust has occurred and is continuing; or - Seitel has elected to defer payments of interest on the related junior subordinated debt securities by extending the interest payment period and that deferral period is continuing. In these circumstances, Seitel will agree that it will not: - declare or pay any dividends on its common stock or preferred stock or redeem, purchase, acquire or make a distribution or liquidation payment with respect to its common stock or preferred stock other than: - dividends or distributions in its common stock or preferred stock or options, warrants, rights to subscribe for or purchase its common stock or preferred stock; - transactions relating to a stockholders' rights plan; - as a result of a reclassification of its share capital or the exchange or conversion of one class or series of its share capital for another class or series of its share capital; - the payment of accrued dividends and the purchase of fractional share interests upon conversion or exchange of preferred stock; and - purchases of its common stock or preferred stock related to benefit plans, dividend reinvestment plans or stock purchase plans; - make any payments on or repay, repurchase or redeem any debt security that ranks equally with or junior to the junior subordinated debt securities; and - make any guarantee payments on any guarantee by Seitel of the debt security of any of its subsidiaries, other than a payment under a guarantee related to a series of the trust preferred securities, if that guarantee ranks equally with or junior to the junior subordinated debt securities. In addition, as long as preferred securities issued by any trust are outstanding, Seitel will agree that it will: - remain the sole direct or indirect owner of all the outstanding common securities of that trust, except as permitted by the applicable declaration of trust; - permit the common securities of that trust to be transferred only as permitted by the declaration of trust; and - use reasonable efforts to cause that trust to continue to be treated as a grantor trust that is not a foreign trust for United States federal income tax purposes, except in connection with a distribution of junior subordinated debt securities to the holders of preferred securities as provided in the declaration of trust, in which case the trust would be dissolved. 15 18 AMENDMENTS AND ASSIGNMENT Seitel and the guarantee trustee may amend each guarantee without the consent of any holder of preferred securities if the amendment does not adversely affect the rights of the holders in any material respect. In all other cases, Seitel and the guarantee trustee may amend each guarantee only with the prior approval of the holders of at least a majority of outstanding preferred securities issued by the applicable trust. The manner in which Seitel will obtain that approval will be described in the prospectus supplement. Seitel may assign its obligations under the guarantees only in connection with a consolidation, merger or asset sale involving Seitel permitted under the indenture governing the junior subordinated debt securities. TERMINATION OF THE GUARANTEE A guarantee will terminate upon: - full payment of the redemption price of all preferred securities of the applicable trust; - distribution of the junior subordinated debt securities, or any securities into which those debt securities are convertible, to the holders of the preferred securities and common securities of that trust in exchange for all the securities issued by that trust; or - full payment of the amounts payable upon liquidation of that trust. Each guarantee will, however, continue to be effective or will be reinstated if any holder of preferred securities must repay any amounts paid on those preferred securities or under the guarantee. STATUS OF THE GUARANTEE Seitel's obligation under each guarantee to make guarantee payments will be: - unsecured; - subordinated and junior in right of payment to all its senior liabilities; and - senior to capital stock issued by Seitel. Seitel's obligations under each guarantee will rank equally with obligations under other guarantee agreements that Seitel may enter into from time to time if both: - the agreements are in substantially the form of the preferred securities guarantee and provide for comparable guarantees by Seitel of payment on preferred securities issued by other trusts or financing vehicles of Seitel; and - the debt relating to those preferred securities is junior subordinated, unsecured indebtedness of Seitel. Seitel's obligations under each guarantee will be effectively junior to all debt and preferred stock of its subsidiaries. BY YOUR ACCEPTANCE OF THE PREFERRED SECURITIES, YOU AGREE TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE RELATED GUARANTEE. Each guarantee will be deposited with the guarantee trustee to be held for your benefit. The guarantee trustee will have the right to enforce the guarantee on your behalf. In most cases, the holders of a majority of outstanding preferred securities issued by the applicable trust will have the right to direct the time, method and place of: - conducting any proceeding for any remedy available to the applicable guarantee trustee; or - exercising any trust or other power conferred upon that guarantee trustee under the applicable guarantee. 16 19 Each guarantee will constitute a guarantee of payment and not merely of collection. This means that the guarantee trustee may institute a legal proceeding directly against Seitel to enforce the payment rights under the guarantee without first instituting a legal proceeding against any other person or entity. If the guarantee trustee fails to enforce the guarantee or Seitel fails to make a guarantee payment, you may institute a legal proceeding directly against Seitel to enforce your rights under that guarantee without first instituting a legal proceeding against the applicable trust, the guarantee trustee or any other person or entity. PERIODIC REPORTS UNDER GUARANTEE Seitel will be required to provide annually to the guarantee trustee a statement as to its performance of its obligations and its compliance with all conditions under the guarantee. DUTIES OF GUARANTEE TRUSTEE The guarantee trustee normally will perform only those duties specifically set forth in the applicable guarantee. The guarantee does not contain any implied covenants. If a default occurs on a guarantee, the guarantee trustee will be required to use the same degree of care and skill in exercise of its powers under the guarantee as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. The guarantee trustee will exercise any of its rights or powers under the guarantee at the request or direction of holders of the applicable series of preferred securities only if it is offered security and indemnity satisfactory to it. GOVERNING LAW New York law will govern the guarantees. DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES Seitel may issue to a trust from time to time one or more series of junior subordinated debt securities under an indenture between it and The First National Bank of Chicago, as indenture trustee. The indenture does not limit the amount of debt securities that Seitel may issue under the indenture or the amount of additional debt that Seitel or any of its subsidiaries may incur. Seitel will issue only one series of junior subordinated debt securities to each trust. We have summarized selected provisions of the indenture and the junior subordinated debt securities below. This summary is not complete. For a complete description, we encourage you to read the indenture, a form of which we have filed with the SEC. Please read "Where You Can Find More Information." RANKING The junior subordinated debt securities will be the unsecured junior subordinated obligations of Seitel. In any liquidation, reorganization or insolvency proceeding involving Seitel, the rights of Seitel and its creditors, including the holders of junior subordinated debt securities, will be effectively junior to the claims of holders of any debt or preferred stock of Seitel's subsidiaries. For a more detailed description of the subordination provisions of the junior subordinated debt securities, please read "-- Subordination" below. 17 20 SUBSEQUENT DISTRIBUTION TO HOLDERS OF TRUST SECURITIES If Seitel issues junior subordinated debt securities to a trust in connection with the issuance of preferred and common securities by that trust, those junior subordinated debt securities subsequently may be distributed to the holders of the preferred and common securities either: - upon the dissolution of the trust; or - upon the occurrence of events that we will describe in the prospectus supplement. TERMS The prospectus supplement will include specific terms relating to the junior subordinated debt securities. These terms will include some or all of the following: - the designation of the securities; - the total principal amount of the securities; - the purchase price of and any premium on the securities; - the date or dates, if any, on which the principal of the securities will be payable and the right to shorten, extend or defer the dates; - the interest rate, whether fixed or variable, the date from which interest will accrue, interest payment dates and record dates for interest payments; - any right to extend or defer the interest payment periods and the duration of the extension; - whether interest payments will be cumulative and compounding and, if so, the dates from which interest payments will be so cumulative or compounded; - any provisions for redemption; - any provisions that would obligate Seitel to redeem or purchase the securities; - any provisions for exchange, conversion or prepayment of the securities; - whether and under what circumstances Seitel will pay any additional amounts on the securities and whether Seitel will have the option to redeem the securities rather than pay the additional amounts; - whether payments on the securities will be made without deduction for taxes, assessments or governmental charges; - the form of the securities; - any changes or additions to the events of default or covenants described in this prospectus; - whether Seitel will issue the securities in the form of one or more global securities and the identity of any depositary; - the places where you can receive any payments on the securities, present the securities for registration of transfer or exchange and make any notices and demands to Seitel concerning the securities; - the portion of the principal amount of the securities that will be payable if the maturity is accelerated, if other than the entire principal amount; - any additional means of defeasance of the securities, any additional conditions or limitations to defeasance of the securities or any changes to those conditions or limitations; and - the identity of any paying agent. Seitel will issue the junior subordinated debt securities in fully registered form without coupons. 18 21 Holders of junior subordinated debt securities may present them for exchange and for transfer as described in the indenture and the prospectus supplement. Seitel will not charge a service charge for any registration of transfer or exchange of the debt securities. Seitel may, however, require the payment of any tax or other governmental charge payable for that registration. Seitel may sell the junior subordinated debt securities at a discount, which may be substantial, below their stated principal amount. These debt securities may bear no interest or interest at a rate that at the time of issuance is below market rates. We will describe in the prospectus supplement any material United States federal income tax consequences and other special considerations. SUBORDINATION Payment of principal of, any premium and interest on the junior subordinated debt securities will generally be subordinated and junior in right of payment to the prior payment in full of all senior debt of Seitel. The subordinated indenture generally provides that no payment of principal, any premium or interest on the junior subordinated debt securities may be made if Seitel fails to pay the principal, premium, interest or any other amounts on any senior debt when due, whether at maturity or acceleration of maturity. This restriction on payment will continue until the default has been cured or waived or has ceased to exist or until Seitel has discharged or paid the senior debt in full. If the maturity of the junior subordinated debt securities is accelerated, Seitel will make no payments on those debt securities until the holders of all senior debt are paid all principal, premium and interest then due in full, including any amounts due upon acceleration. If Seitel pays any amount or distributes any assets to creditors in a liquidation, dissolution, reorganization, bankruptcy or any similar proceeding, all senior debt will be paid first before any payment is made on the junior subordinated debt securities. The subordination does not affect Seitel's obligation, which is absolute and unconditional, to pay, when due, principal of, premium, if any, and interest on the junior subordinated debt securities. In addition, the subordination does not prevent the occurrence of any default under the indenture. The indenture will not limit the amount of senior debt that Seitel may incur. As a result of the subordination of the junior subordinated debt securities, if Seitel became insolvent, holders of junior subordinated debt securities may receive less on a proportionate basis than other creditors. Unless we inform you otherwise in the prospectus supplement, the term "senior debt" means the principal of and any premium and interest on "debt" of Seitel, but excludes any debt that: - is without recourse; and - states that it is subordinated to or ranks equal with the junior subordinated debt securities. Unless we inform you otherwise in the prospectus supplement, the term "debt" of a person means: - indebtedness for borrowed money; - obligations evidenced by bonds, debentures, notes or similar instruments; - undrawn obligations relating to letters of credit or similar instruments, other than standby letters of credit and bid or performance bonds issued in the ordinary course of business; - reimbursement obligations relating to drawn letters of credit and similar instruments described in the preceding item if the drawing is reimbursed within 30 business days following demand for reimbursement; - obligations to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business; - capitalized lease obligations; 19 22 - debt of a third party secured by a lien on any asset of that person; - debt of others guaranteed by that person to the extent of the guarantee; and - obligations for claims under derivative products. INDENTURE EVENTS OF DEFAULT The following are events of default with respect to a series of junior subordinated debt securities: - failure to pay interest or any additional amounts on that series of securities for 30 days, unless Seitel has validly extended the interest payment period; - failure to pay principal of or any premium on that series of securities when due; - failure to deposit any sinking fund payment for 30 days; - failure to comply in any material respect with any other covenant or agreement in the indenture for that series of securities, other than an agreement, covenant or provision that is included in the indenture solely for the benefit of other series of junior subordinated debt securities, for 90 days after written notice by the indenture trustee or by the holders of at least 25% in principal amount of the outstanding securities of that series; and - bankruptcy, insolvency or reorganization events. If an event of default for any series of junior subordinated debt securities occurs and is continuing, the indenture trustee or the holders of at least 25% in principal amount of the junior subordinated debt securities of the series affected by the default may declare the principal of those securities to be due and payable. That declaration of acceleration will occur automatically if the event of default relates to bankruptcy, insolvency or reorganization events. The holders of a majority in principal amount of the outstanding junior subordinated debt securities of the series affected by the default may rescind the accelerated payment requirement and waive the default if Seitel: - has cured the default; and - has deposited with the indenture trustee an amount sufficient to pay all matured installments of principal and any premium, except those caused by the acceleration, and any interest and additional amounts. If required by the declaration of trust, any rescission may be subject to the consent of the holders of the preferred securities and common securities. In most cases, holders of a majority in principal amount of the outstanding junior subordinated debt securities of a series may direct the time, method and place of: - conducting any proceeding for any remedy available to the indenture trustee; or - exercising any trust or power conferred on the indenture trustee with respect to that series. The holders of a majority in principal amount of the outstanding junior subordinated debt securities of a series may waive any past default with respect to those securities. Those holders may waive any default in the payment of principal, premium, interest or any additional amounts, however, only if Seitel: - has cured the default; and - has deposited with the indenture trustee an amount sufficient to pay all matured installments of principal and any premium, except those caused by acceleration, and any interest and additional amounts. 20 23 In addition, those holders may not waive any call for redemption of the junior subordinated debt securities of that series. The indenture requires Seitel to file annually with the indenture trustee a certificate as to its compliance with the conditions and covenants contained in the indenture. An event of default under the indenture for a series of junior subordinated debt securities will constitute an event of default under the declaration of trust for the applicable series of preferred securities. A holder of preferred securities may directly institute a proceeding against Seitel for enforcement of payment to that holder of its pro rata share of principal, premium, interest or any additional amounts if: - an event of default under the applicable declaration of trust has occurred and is continuing; and - that event of default is attributable to Seitel's failure to pay principal, any premium, interest or additional amounts on the applicable series of junior subordinated debt securities when due. In any such proceeding, Seitel will be subrogated to the rights of the holder under the applicable declaration of trust to the extent of any payment Seitel makes to the holder in the proceeding. Except as described in the preceding sentences or in the prospectus supplement, the holders of preferred securities will not be able to exercise directly any other remedy available to the holders of the junior subordinated debt securities. MODIFICATION OF THE INDENTURE Seitel and the indenture trustee may amend or supplement the indenture if the holders of a majority in principal amount of the outstanding junior subordinated debt securities of all series issued under the indenture and affected by the amendment or supplement, acting as one class, consent to it. Without the consent of the holder of each junior subordinated debt security affected, however, no amendment or supplement may: - extend the fixed maturity of the security; - reduce the principal amounts of the security; - reduce the rate of or extend the time for payment of interest on the security; - reduce any premium payable on the redemption of the security; - reduce the amount of securities whose holders must consent to an amendment, supplement or waiver; - impair the holder's right to receive payments on the security or to institute suit for the enforcement of any payment on the security; - make any change in this provision for modification; - change any obligation to pay additional amounts on any security; and - impair the right of any holder to convert or exchange a security for any other security, if the securities are so convertible or exchangeable. Seitel and the indenture trustee may amend or supplement the indenture without the consent of any holders of junior subordinated debt securities: - to provide for the assumption of Seitel's obligations under the indenture by a successor upon any merger, consolidation or asset transfer; - to add covenants, restrictions, conditions, defaults or provisions for the protection of the holders of the securities; - to cure any ambiguity or to correct or supplement any defect or inconsistency; 21 24 - to change any provision of the indenture effective after there are no outstanding securities of any series entitled to the benefit of that provision; - to provide for the issuance of securities in coupon form; - to provide for the acceptance of a successor or another trustee; - to qualify or maintain the qualification of the indenture under the Trust Indenture Act of 1939; - to establish the form or terms of a series of securities; and - to make any change that does not adversely affect the rights of any holder of securities in any material respect. BOOK-ENTRY AND SETTLEMENT Seitel may issue the junior subordinated debt securities of a series in the form of one or more global debt securities that would be deposited with a depositary or its nominee identified in the prospectus supplement. The prospectus supplement will describe: - any circumstances under which beneficial owners may exchange their interests in a global debt security for certificated junior subordinated debt securities of the same series with the same total principal amount and the same terms; - the manner in which Seitel will pay principal of and any premium and interest on a global debt security; and - the terms of any depositary arrangement and the rights and limitations of owners of beneficial interests in any global debt security. CONSOLIDATION, MERGER AND SALE Seitel has agreed that it will consolidate with or merge into any entity or transfer or dispose of all or substantially all of its assets to any entity only if: - Seitel is the continuing corporation; or - if Seitel is not the continuing corporation, the successor is organized and existing under the laws of any United States jurisdiction and assumes all of Seitel's obligations under the indenture and the junior subordinated debt securities; and - in either case, immediately after giving effect to the transaction, no default or event of default would occur and be continuing. DEFEASANCE AND DISCHARGE When we use the term defeasance, we mean discharge from the obligations under the indenture. Seitel will be discharged from its obligations with respect to the junior subordinated debt securities of a series if: - Seitel deposits with the indenture trustee funds or government securities sufficient to make payments on the junior subordinated debt securities of that series on the dates those payments are due and payable; - no event or condition under the subordination provisions described above prevents Seitel from making payments on the debt securities of that series on the date of the deposit; and - other specified conditions are satisfied. Unless we inform you otherwise in the prospectus supplement, Seitel also will be required to deliver to the indenture trustee an opinion of counsel that the deposit and related defeasance would not cause the 22 25 holders of the junior subordinated debt securities to recognize income, gain or loss for United States federal income tax purposes. In addition, the indenture will cease to be of further effect with respect to junior subordinated debt securities of a series when either: - Seitel has paid the principal of, any premium and interest on and any additional amounts payable with respect to all the outstanding debt securities of that series when due; - Seitel has delivered all outstanding debt securities of that series to the indenture trustee for cancellation; or - all of the following occur: (1) all outstanding debt securities of that series not delivered to the indenture trustee for cancellation have become due and payable, will become due and payable within one year or are to be called for redemption within one year; (2) Seitel deposits with the indenture trustee funds or government securities sufficient to make payments on the junior subordinated debt securities of that series on the dates those payments are due and payable; and (3) Seitel has delivered to the trustee other documents required by the indenture, including an officers' certificate and an opinion of counsel. For this provision to apply, Seitel also must pay all other sums payable by it under the indenture. If Seitel defeases a series of junior subordinated debt securities or if the indenture ceases to be of further effect with respect to a series of junior subordinated debt securities, the holders of those debt securities will not be entitled to the benefits of the indenture, except for those benefits relating to: - Seitel's obligations: - to register the transfer or exchange of debt securities; - to replace stolen, lost or mutilated debt securities; - to maintain paying agencies and hold moneys for payment in trust; - if the debt securities are convertible into other securities, to deliver those securities upon conversion; - the rights of the holders of debt securities to receive payments when due, but not upon acceleration; - the rights, obligations and duties of the trustee; and - the rights of the holders of debt securities to payment from property deposited with the trustee. GOVERNING LAW New York law will govern the indenture and the junior subordinated debt securities. INFORMATION ABOUT THE INDENTURE TRUSTEE The First National Bank of Chicago will be the trustee under the indenture. Its address is 1 North State Street, 9(th) Floor, Chicago, Illinois 60602. If an event of default occurs and is continuing, the trustee will be required to use the degree of care and skill of a prudent person in the conduct of his own affairs. The trustee will become obligated to exercise any of its powers under the indenture at the request of any of the holders of any junior subordinated debt securities only after those holders have offered the trustee indemnity reasonably satisfactory to it. 23 26 The indenture contains limitations on the right of the trustee, if the trustee becomes one of Seitel's creditors, to obtain payment of claims or to realize on some property received for any of those claims, as security or otherwise. The trustee is permitted to engage in other transactions with Seitel. If the trustee acquires any conflicting interest, however, it must eliminate that conflict or resign within 90 days after ascertaining that it has a conflicting interest and after the occurrence of a default under the indenture, unless that default has been cured, waived or otherwise eliminated within the 90-day period. The trustee acts as agent for and a lender under Seitel's $75 million revolving credit facility. We expect that the trustee will act as the trustee under Seitel's indentures in connection with any offering by Seitel of its debt securities. Please read "About This Prospectus." ASSIGNMENT Seitel may at any time assign any of its rights or obligations under the indenture to an affiliate. Seitel will, however, remain liable for all its obligations. Seitel also may assign the indenture to a successor in a merger, consolidation or asset sale involving Seitel permitted under the indenture. PLAN OF DISTRIBUTION We may sell the offered securities in and outside the United States (1) through underwriters or dealers, (2) directly to purchasers or (3) through agents. The prospectus supplement will include the following information: - the terms of the offering; - the names of any underwriters or agents; - the name or names of any managing underwriter or underwriters; - the purchase price of the securities from us; - the net proceeds to us from the sale of the securities; - any delayed delivery arrangements; - any underwriting discounts, commissions and other items constituting underwriters' compensation; - any initial public offering price; - any discounts or concessions allowed or reallowed or paid to dealers; and - any commissions paid to agents. SALE THROUGH UNDERWRITERS OR DEALERS If we use underwriters in the sale, the underwriters will acquire the securities for their own account. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless we inform you otherwise in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to some conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include overallotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, which means that selling concessions allowed to syndicate members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if 24 27 the offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, the underwriters may discontinue these activities at any time. If we use dealers in the sale of securities, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. We will include in the prospectus supplement the names of the dealers and the terms of the transaction. DIRECT SALES AND SALES THROUGH AGENTS We may sell the securities directly. In this case, no underwriters or agents would be involved. We may also sell the securities through agents we designate from time to time. In the prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions payable by us to the agent. Unless we inform you otherwise in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment. We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act of 1933 with respect to any sale of those securities. We will describe the terms of any such sales in the prospectus supplement. DELAYED DELIVERY CONTRACTS If we so indicate in the prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The prospectus supplement will describe the commission payable for solicitation of those contracts. GENERAL INFORMATION We may have agreements with the agents, dealers and underwriters to indemnify them against some civil liabilities, including liabilities under the Securities Act of 1933, or to contribute with respect to payments that the agents, dealers or underwriters may be required to make. Agents, dealers and underwriters may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses. LEGAL MATTERS Richards, Layton & Finger, P.A., our special Delaware counsel, will issue opinions about the legality of the preferred securities, the enforceability of the applicable declaration of trust and the creation of the trusts for us. Gardere Wynne Sewell & Riggs, L.L.P., our special counsel, will issue opinions about the legality of Seitel's guarantees, shares and junior subordinated debt securities for us. Any underwriters will be advised about other issues relating to any offering by their own legal counsel. 25 28 EXPERTS The financial statements of Seitel, Inc. included in the annual report on Form 10-K for the year ended December 31, 1998, and incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said report. Some of the information regarding Seitel's oil and gas reserves that we have incorporated by reference into this prospectus is derived from Forrest A. Garb & Associates, Inc.'s reserve report dated January 1, 1999. We have included this information in reliance upon Forrest A. Garb & Associates, Inc. as experts with respect to these matters. WHERE YOU CAN FIND MORE INFORMATION Seitel files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements or other information filed by Seitel at the SEC's public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Seitel's filings with the SEC are also available to the public from commercial document retrieval services and at the SEC's web site at "http://www.sec.gov." This prospectus is part of a registration statement we have filed with the SEC relating to the securities we may offer. As permitted by SEC rules, this prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits and schedules we file with the SEC. You may refer to the registration statement, the exhibits and schedules for more information about us and our securities. The registration statement, exhibits and schedules are available at the SEC's Public Reference Room. INFORMATION WE INCORPORATE BY REFERENCE The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information we incorporate by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings Seitel may make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934. The documents we incorporate by reference are: - Seitel's Annual Report on Form 10-K, as amended by Seitel's Form 10-K/A, for the year ended December 31, 1998. - Seitel's Quarterly Report on Form 10-Q, as amended by Seitel's Form 10-Q/A, for the three months ended March 31, 1999, and Seitel's Quarterly Report on Form 10-Q for the three months ended June 30, 1999. - Seitel's Current Report on Form 8-K dated February 16, 1999. - The description of Seitel's common stock contained in its Registration Statement on Form 8-A, dated March 27, 1991 (Registration Number 0-14488). 26 29 You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Seitel, Inc. Investor Relations 50 Briar Hollow Lane 7th Floor, West Building Houston, Texas 77027 (713) 881-8900 27 30 SUBJECT TO COMPLETION -- AUGUST 20, 1999 PROSPECTUS - -------------------------------------------------------------------------------- $200,000,000 SEITEL, INC. Senior Debt Securities Subordinated Debt Securities Common Stock Preferred Stock - -------------------------------------------------------------------------------- CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4. We will provide additional terms of our securities in one or more supplements to this prospectus. You should read this prospectus and the related prospectus supplement carefully before you invest in our securities. This prospectus may not be used to offer and sell our securities unless accompanied by a prospectus supplement. THE OFFERING We may offer from time to time: - senior debt securities; - subordinated debt securities; - common stock; and - preferred stock. Our common stock is listed on the New York Stock Exchange under the symbol "SEI". Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is , 1999 THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. 31 TABLE OF CONTENTS About this Prospectus....................................... 3 About Seitel................................................ 3 Risk Factors................................................ 4 Risk Factors Relating to Our Business..................... 4 - Our business could be adversely affected by low oil and gas prices.............................................. 4 - We invest significant amounts of money in acquiring and processing seismic data for our data library with only partial underwriting of the costs by customers.......... 4 - Because our business is concentrated in the U.S. Gulf Coast and Canada, we could be adversely affected by developments in the oil and gas business that affect these areas............................................. 4 - The amounts we amortize from its data library each period may fluctuate, and these fluctuations can affect our reported results of operations...................... 4 - Drilling hazards and dry holes could affect our oil and gas activities.......................................... 5 - Our debt agreements may limit our flexibility in responding to changing market conditions or in pursuing business opportunities.................................. 5 - Extensive governmental regulation of our business affects our daily operations............................ 5 - Loss of key personnel could adversely affect our business................................................ 5 - Our business could be adversely affected by our year 2000 risks.............................................. 5 Risk Factors Relating to Our Debt Securities.............. 6 - We are a holding company and depend on our subsidiaries for funds............................................... 6 - We can issue more debt.................................. 6 Risk Factors Relating to Our Common Stock - Sales of substantial amounts of our common stock eligible for future sale may cause a significant decline in the market price of our common stock................. 6 Forward-Looking Information................................. 6 Use of Proceeds............................................. 7 Ratio of Earnings to Fixed Charges.......................... 7 Description of Debt Securities.............................. 7 Description of Capital Stock................................ 15 Plan of Distribution........................................ 17 Legal Matters............................................... 18 Experts..................................................... 19 Where You Can Find More Information......................... 19 Information We Incorporate by Reference..................... 19
THIS PROSPECTUS IS PART OF A REGISTRATION STATEMENT WE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. YOU SHOULD RELY ONLY ON THE INFORMATION WE HAVE PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH ADDITIONAL OR DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT IS ACCURATE ONLY AS OF THE DATE ON THE FRONT OF THE DOCUMENT AND THAT ANY INFORMATION WE HAVE INCORPORATED BY REFERENCE IS ACCURATE ONLY AS OF THE DATE OF THE DOCUMENT INCORPORATED BY REFERENCE. 2 32 ABOUT THIS PROSPECTUS This prospectus is part of a "shelf" registration statement we have filed with the Securities and Exchange Commission. The registration statement also includes a prospectus under which Seitel Capital Trust I and Seitel Capital Trust II, two of our subsidiaries, may offer from time to time preferred securities guaranteed by us and we may offer our related junior subordinated debt securities. Under the shelf process, we may offer any combination of the securities described in these two prospectuses in one or more offerings with a total initial offering price of up to $200,000,000. This prospectus provides you with a general description of the senior debt securities, subordinated debt securities, common stock and preferred stock we may offer. Each time we use this prospectus to offer securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. Please carefully read this prospectus and the prospectus supplement together with the additional information described under the heading "Where You Can Find More Information." ABOUT SEITEL We are a leading provider of seismic data and related geophysical services and expertise to the petroleum industry. Our business includes: - licensing seismic data. We believe that we have the largest independent seismic data library marketed publicly in North America. Oil and gas companies use our data to explore for new oil and gas reserves and to develop existing oil and gas reservoirs. - participating in petroleum exploration and development projects as a working interest owner. As a working interest owner of mineral interests, we share costs and revenues of oil and gas exploration and production projects with other oil and gas companies. We combine our seismic resources and related geophysical technologies with the geology and engineering expertise and land positions of selected petroleum producers in these projects. Our principal executive offices are located at 50 Briar Hollow Lane, 7th Floor, West Building, Houston, Texas 77027, and our phone number is (713) 881-8900. 3 33 RISK FACTORS You should carefully consider the following risk factors together with the other information contained in this prospectus, any accompanying prospectus supplement and the information we have incorporated by reference. The risks and uncertainties described below are not the only ones relating to these securities or facing our company. Additional risks and uncertainties not presently known to us or that we currently do not believe are material may also impair our business operations. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. In this case, the trading price of the securities could decline and you may lose all or part of your investment. RISK FACTORS RELATING TO OUR BUSINESS Our business could be adversely affected by low oil and gas prices. Our seismic business depends upon exploration, development and production spending by oil and gas companies. Overall conditions in the oil and gas industry have deteriorated in 1998 and early 1999 as a result of relatively low oil and gas prices. While demand for our seismic data has remained strong, low oil and gas prices could result in decreased demand for our seismic data. Although oil and gas prices have increased recently, any future decline could result in decreased revenues from our oil and gas exploration and production business. We invest significant amounts of money in acquiring and processing seismic data for our data library with only partial underwriting of the costs by customers. We invest significant amounts of money in acquiring and processing new seismic data to add to our data library. Although we generally obtain customer commitments covering in excess of 60% of the costs of acquiring and processing this data, we assume the risk that we will not be able to fully recover our portion of the costs through future licensing of the data. The amounts of these future data licensing fees are uncertain and depend on a variety of factors, including the market prices of oil and gas, customer demand for seismic data in our library, availability of similar data from competitors, and governmental regulations affecting oil and gas exploration. Many of these factors are beyond our control. In addition, the timing of these sales can vary greatly from period to period. Technological or regulatory changes or other developments could adversely affect the value of the data. Because our business is concentrated in the U.S. Gulf Coast and Canada, it could be adversely affected by developments in the oil and gas business that affect these areas. Most of the seismic data in our seismic data library covers areas along the U.S. Gulf Coast, offshore in the U.S. Gulf of Mexico or in Canada. Also, most of our existing interests in oil and gas properties are located along the coast of the U.S. Gulf of Mexico. Because of this geographic concentration, our results of operations could be adversely affected by events relating primarily to one of these regions even if conditions in the oil and gas industry worldwide were favorable. Some examples of possible events that would adversely affect the U.S. Gulf Coast region would be changes in governmental regulations adversely affecting offshore drilling in the U.S. Gulf of Mexico, shortages of drilling or other necessary equipment in this region, or increases in gas transportation costs from this region to the Northeastern U.S. where much of the gas produced in this region is consumed. The amounts we amortize from our data library each period may fluctuate, and these fluctuations can affect our reported results of operations. We amortize the cost of our multi-client data library based in part on our estimates of future sales of data. These estimates are imprecise and may vary from period to period depending upon market developments and our expectations. Substantial changes in amortization rates can have a significant effect on our reported results of operations. 4 34 Drilling hazards and dry holes could affect our oil and gas activities. We may not discover commercial quantities of oil and gas when we participate in drilling wells. Our oil and gas operations could be adversely affected by the occurrence of drilling hazards. These include: - cratering; - explosions; - uncontrollable flows of oil, gas or well fluids; - fires; - pollution; and - other environmental risks. Some of these hazards can cause personal injury and loss of life, severe damage to and destruction of property and equipment, environmental damage and suspension of operations. We do not act as operator in our oil and gas drilling business and depend on our partners to minimize these operating risks. Our debt agreements may limit our flexibility in responding to changing market conditions or in pursuing business opportunities. Our debt agreements contain restrictions and requirements relating to, among other things: - additional borrowing; - maintaining financial ratios; - granting liens on our assets; - selling assets; - paying dividends; and - merging. These restrictions and requirements may limit our flexibility in responding to changing market conditions or in pursuing business opportunities that we believe would have a positive effect on our business. Extensive governmental regulation of our business affects our daily operations. Our seismic data customers are subject to extensive governmental regulation. In addition, our oil and gas exploration and production operations are subject to regulations. These regulations, among other things: - govern environmental quality and pollution control; and - limit rates of production. New laws or regulations or changes to existing laws or regulations affecting the oil and gas industry could reduce customer demand for our seismic data or increase the operating costs of our oil and gas business. Loss of key personnel could adversely affect our business. We depend on a relatively small group of management and technical personnel. The loss of one or more of these individuals could have a material adverse effect on our business. Our business could be adversely affected by our year 2000 risks. We use computer systems, specialized software, embedded processors and related technologies for revenue-generating activities. We have assessed our computer-related systems to ensure that they will be 5 35 able to recognize and process date-sensitive information properly as the year 2000 approaches. Systems that do not properly recognize and process this information could generate erroneous data or even fail. We have not completed our year 2000 assessment of our suppliers, service providers and customers and we cannot assure you that all our systems and applications will continue without interruption due to the year 2000 problem. If some of these systems and applications do not comply in a timely manner and if we cannot develop adequate contingency plans, the year 2000 issue could have a material adverse effect on our operations. RISKS RELATING TO OUR DEBT SECURITIES We are a holding company and depend on our subsidiaries for funds. We are a holding company that owns subsidiary companies. Our subsidiary companies conduct substantially all of our business. This structure results in two principal risks: - our subsidiaries may be restricted by contractual provisions or applicable laws from providing it the cash that it needs to pay parent company debt service obligations, including payments on the senior debt securities or the subordinated debt securities; and - in any liquidation, reorganization or insolvency proceeding involving our company, your claim as a holder of our debt securities will be effectively junior to the claims of holders of any indebtedness or preferred stock of our subsidiaries. We can issue more debt. The indentures relating to the debt securities that we may issue under this prospectus and the other prospectus included in this registration statement do not limit or restrict the amount of other indebtedness or securities that we or our subsidiaries can issue. RISKS RELATING TO OUR COMMON STOCK Sales of substantial amounts of our common stock eligible for future sale may cause a significant decline in the market price of our common stock. We have issued options, warrants and other rights to our directors and executive officers for approximately 5.6 million shares of common stock. These options, warrants and other rights may be exercised within 60 days of the date of this prospectus. Most of these shares may be sold immediately upon exercise. Sales of substantial amounts of common stock, including shares issued upon the exercise of stock options or warrants, or the perception that sales of substantial amounts of common stock could occur, could adversely affect the market price for our common stock. FORWARD-LOOKING INFORMATION Some of the statements contained in this prospectus under the caption "Risk Factors," and some of the statements included in the documents that we have incorporated by reference, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements: - address activities, events or developments that we expect, believe, anticipate or estimate will or may occur in the future; - are based on assumptions and analyses that we have made and that we believe are reasonable under the circumstances when made; and - are based on many risks, uncertainties and other factors, most of which are beyond our control. Any one of these factors, or a combination of these factors, could materially affect our future results of operations and whether the forward-looking statements ultimately prove to be accurate. These forward 6 36 looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this prospectus, any prospectus supplement and the documents we have incorporated by reference. We will not update these statements unless the securities laws require us to do so. Please read "Risk Factors." USE OF PROCEEDS Unless we inform you otherwise in the prospectus supplement, we will use the net proceeds from the sale of securities for general corporate purposes. These purposes may include: - repayments or refinancings of debt; - working capital; - capital expenditures; - investments in our multi-client data library; - investments in oil and gas properties; - acquisitions; and - repurchases or redemptions of debt securities. RATIO OF EARNINGS TO FIXED CHARGES Our consolidated ratio of earnings to fixed charges for the periods shown is as follows:
YEARS ENDED DECEMBER 31, SIX MONTHS ENDED -------------------------------- JUNE 30, 1994 1995 1996 1997 1998 1999 ---- ---- ---- ---- ---- ---------------- Ratio of earnings to fixed charges.......... 5.0x 4.4x 5.0x 7.6x 5.0x 2.1x
For purposes of calculating the ratio of earnings to fixed charges, "earnings" means income from continuing operations before extraordinary losses, plus income taxes and fixed charges (exclusive of capitalized interest), less undistributed earnings of less than 50% owned affiliates. Fixed charges include (1) interest on indebtedness, including capitalized interest, (2) amortization of deferred financing costs and (3) that portion of lease expense that is deemed to be representative of an interest factor. The ratio includes amounts from Seitel and all of Seitel's majority-owned subsidiaries. Included in earnings for the six months ended June 30, 1999 was a nonrecurring $7.8 million impairment of our investment in Eagle Geophysical. If this item had not been included, the ratio of earnings to fixed charges for the six months ended June 30, 1999 would have been 3.1x. Nonrecurring items included in 1997 earnings were a $29.2 million gain relating to our spin-off of Eagle Geophysical, a $9.6 million write-down of our oil and gas properties and a $4.1 million loss relating to our repayment of debt in the form of a volumetric production payment. If these items had not been included, the ratio of earnings to fixed charges for 1997 would have been 5.4x. DESCRIPTION OF DEBT SECURITIES The debt securities covered by this prospectus will be our general unsecured obligations. We will issue senior debt securities under an indenture between us and The First National Bank of Chicago, as trustee, that we will enter into before we issue any of these securities. We will issue subordinated debt securities under an indenture between us and The First National Bank of Chicago, as trustee, that we will enter into before we issue any of these securities. These indentures will be substantially identical, except for the 7 37 provisions relating to subordination and covenants. Please read "-- Provisions Applicable Solely to Senior Debt Securities" and "-- Provisions Applicable Solely to Subordinated Debt Securities." We have summarized selected provisions of the indentures and the debt securities below. This summary is not complete. For a complete description, we encourage you to read the applicable indenture, which we have filed with the SEC. Please read "Where You Can Find More Information." In this summary description of the debt securities, all references to us mean Seitel, Inc. only, unless we state otherwise or the context clearly indicates otherwise. PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES Terms. Neither the senior indenture nor the subordinated indenture will limit the amount of debt that we may issue under that indenture. We may issue debt securities under the indentures from time to time in one or more series, each in an amount we authorize prior to issuance. Unless we inform you otherwise in the prospectus supplement, the indentures and the debt securities will not limit or restrict: - the amount of other indebtedness or securities that we or our subsidiaries may incur or issue; - transactions between us and our affiliates; - the payment of dividends and other distributions by us to our stockholders; - our making investments and capital expenditures, including investments in our multi-client library; - the transfer of assets by us to our subsidiaries; - the sale of assets, unless that sale is for all or substantially all our assets; and - the repurchase or redemption of our debt or equity securities. The prospectus supplement relating to any series of debt securities being offered will include specific terms relating to the offering. These terms will include some or all of the following: - whether the debt securities will be senior or subordinated debt securities; - the title of the debt securities; - the total principal amount of the debt securities; - whether we will issue the debt securities in the form of one or more global securities and whether we will issue any global securities in temporary or permanent global form; - the date or dates on which the principal of and any premium on the debt securities will be payable; - any interest rate, whether fixed or variable, the date from which interest will accrue, interest payment dates and record dates for interest payments; - the place or places where payments on the debt securities will be payable; - any provisions for redemption or early repayment; - any provisions that would obligate us to redeem, purchase or repay the debt securities prior to maturity; - the denominations in which we will issue the debt securities; - the portion of the principal amount of the debt securities that will be payable if the maturity is accelerated, if other than the entire principal amount; - any additional means of defeasance of the debt securities, any additional conditions or limitations to defeasance of the debt securities or any changes to those conditions or limitations; 8 38 - any changes or additions to the events of default or covenants described in this prospectus; - any restrictions or other provisions relating to the transfer or exchange of the debt securities; - whether payments on the debt securities will be made without deduction for taxes, assessments or governmental charges; and - any terms for the conversion or exchange of the debt securities for other securities issued by us or any other entity. We may sell the debt securities at a discount, which may be substantial, below their stated principal amount. These debt securities may bear no interest or interest at a rate that at the time of issuance is below market rates. We will describe in the prospectus supplement any material United States federal income tax consequences and other special considerations. Consolidation, Merger and Sale of Assets. We have agreed that we will consolidate with or merge into any entity or transfer or dispose of all or substantially all of our assets to any entity only if: - we are the continuing corporation; or - if we are not the continuing corporation, the successor is organized and existing under the laws of any United States jurisdiction and assumes all our obligations under the indentures and the debt securities; and - in either case, immediately after giving effect to the transaction, no default or event of default would occur and be continuing. Events of Default. Unless we inform you otherwise in the prospectus supplement, the following are events of default with respect to a series of debt securities: - our failure to pay interest or any additional amounts on that series of debt securities for 30 days; - our failure to pay principal of or any premium on that series of debt securities when due; - our failure to deposit any mandatory sinking fund payment for 30 days; - our failure to comply with any of our covenants or agreements in that series of debt securities or the indenture for that series, other than an agreement, covenant or provision that we have included in the applicable indenture solely for the benefit of other series of debt securities, for 90 days after written notice by the trustee or by the holders of at least 25% in principal amount of the outstanding debt securities of the series affected by that failure; and - bankruptcy, insolvency or reorganization events. Depending on the terms of our other indebtedness, an event of default under an indenture may give rise to cross defaults on our other indebtedness. If a default or an event of default for any series of debt securities occurs, is continuing and is known to the trustee, the trustee will notify the holders of those debt securities within 90 days after it occurs. The trustee may withhold notice of any default or event of default, except in any payment on the debt securities, if the trustee in good faith determines that withholding notice is in the interest of the holders of the debt securities. If an event of default for any series of debt securities occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the outstanding debt securities of the series affected by the default may declare the principal of and all accrued and unpaid interest on those debt securities to be due and payable. If an event of default relating to bankruptcy, insolvency or reorganization occurs and is continuing, the principal of and interest on all the debt securities will become immediately due and payable without any action on the part of the applicable trustee or any holder. The holders of a majority in principal amount of the outstanding debt securities of the series affected by the default may in some cases rescind the accelerated payment requirement. 9 39 A holder of a debt security of any series may pursue any remedy under the applicable indenture only if: - the holder gives the applicable trustee written notice of a continuing event of default for that series; - the holders of at least 25% in principal amount of the outstanding debt securities of that series make a written request to the applicable trustee to pursue the remedy; - the holder or holders offer to the trustee indemnity reasonably satisfactory to it; - the trustee fails to act for a period of 60 days after receipt of notice and offer of indemnity; and - during that 60-day period, the holders of a majority in principal amount of the debt securities of that series do not give the trustee a direction inconsistent with the request. This provision does not, however, affect the right of a holder of a debt security to sue for enforcement of any overdue payment. In most cases, holders of a majority in principal amount of the outstanding debt securities of a series may direct the time, method and place of: - conducting any proceeding for any remedy available to the applicable trustee; and - exercising any trust or power conferred on the applicable trustee relating to or arising under an event of default. Each indenture requires us to file annually with the applicable trustee a written statement as to our compliance with the covenants contained in that indenture. Modification and Waiver. We may amend or supplement each indenture if the holders of a majority in principal amount of the outstanding debt securities of all series issued under the indenture and affected by the amendment or supplement, acting as one class, consent to it. Without the consent of the holder of each debt security affected, however, no amendment or supplement may: - reduce the rate of or change the time for payment of interest on any debt security; - reduce the principal of, premium on or any mandatory sinking fund payment for any debt security; - change the stated maturity of any debt security; - reduce the amount of the principal of an original issue discount security that would be due and payable upon a declaration of acceleration of the maturity of that debt security; - reduce any premium payable on the redemption of any debt security or change the time at which any debt security may or must be redeemed; - change any obligation to pay additional amounts on any debt security; - make payments on any debt security payable in any currency or currency unit other than as originally stated in that debt security; - impair the holder's right to institute suit for the enforcement of any payment on any debt security; - make any change in the percentage of principal amount of debt securities necessary to waive compliance with some provisions of the applicable indenture or to make any change in this provision for modification; - waive a continuing default or event of default regarding any payment on any debt security; or - with respect to the subordinated indenture, modify the provisions relating to the subordination of any subordinated debt security in a manner adverse to the holder of that security. 10 40 We may amend or supplement each indenture without the consent of any holders of debt securities: - to cure any ambiguity, omission, defect or inconsistency; - to provide for the assumption of our obligations under the indenture by a successor upon any merger, consolidation or asset transfer; - to provide for uncertificated debt securities in addition to or in place of certificated debt securities; - to provide any security for any series of debt securities; - to comply with any requirement to effect or maintain the qualification of the indenture under the Trust Indenture Act of 1939; - to add covenants that would benefit the holders of any debt securities or to surrender any rights we have under the indenture; - to add events of default with respect to any debt securities; - to make any change that does not adversely affect any outstanding debt securities of any series in any material respect; - to facilitate the defeasance or discharge of any series of debt securities if that change does not adversely affect the holders of debt securities of that series or any other series under the indenture in any material respect; and - to provide for the acceptance of a successor or another trustee. The holders of a majority in principal amount of the outstanding debt securities of any series may waive compliance by us with any provision of the indenture with respect to those debt securities. Those holders may not, however, waive any default or event of default in any payment on any debt security or compliance with a provision that cannot be amended or supplemented without the consent of each holder affected. Original Issue Discount. In determining whether the holders of the required principal amount of debt securities have concurred in any direction, amendment, supplement, waiver or consent the principal amount of an original issue discount security will be the principal amount that would be due and payable upon acceleration of the maturity of that debt security. Defeasance. When we use the term defeasance, we mean discharge from some or all of our obligations under an indenture. If we deposit with the applicable trustee funds or government securities sufficient to make payments on the debt securities of a series on the dates those payments are due and payable, then, at our option, either of the following will occur: - we will be discharged from our obligations with respect to the debt securities of that series ("legal defeasance"); or - we will no longer have any obligation to comply with the restrictive covenants under the applicable indenture, the related events of default will no longer apply to us but some of our other obligations under the indenture and the debt securities of that series, including our obligation to make payments on those debt securities, will survive ("covenant defeasance"). If we elect legal defeasance of a series of debt securities, the holders of the debt securities of the series affected will not be entitled to the benefits of the applicable indenture, except for our obligations: - to register the transfer or exchange of debt securities; - to replace stolen, lost or mutilated debt securities; and - to maintain paying agencies and hold moneys for payment in trust. 11 41 Unless we inform you otherwise in the prospectus supplement, we will be required to deliver to the applicable trustee an opinion of counsel that the deposit and related defeasance would not cause the holders of the debt securities to recognize income, gain or loss for United States federal income tax purposes. In addition, unless we inform you otherwise in the prospectus supplement, each indenture will cease to be of further effect with respect to debt securities of a series, subject to exceptions relating to compensation and indemnity of the applicable trustee and repayment to us of excess money or securities, when: - either: (1) all outstanding debt securities of that series have been delivered to that trustee for cancellation; or (2) all outstanding debt securities of that series not delivered to the trustee for cancellation either: - have become due and payable; - will become due and payable at their stated maturity within one year; or - are to be called for redemption within one year; and we have deposited with the trustee funds or government securities in trust sufficient to pay and discharge the entire indebtedness on the debt securities of that series when due; - we have paid all other sums payable by us with respect to those debt securities; and - we have delivered to the trustee other documents required by the indenture, including an officers' certificate and an opinion of counsel. Governing Law. New York law will govern the indentures and the debt securities. The Trustee. The First National Bank of Chicago is the trustee under each indenture. Its address is 1 North State Street, 9th Floor, Chicago, Illinois 60602. We have initially appointed the trustee as the registrar and paying agent under each indenture. If an event of default occurs and is continuing, the trustee will be required to use the degree of care and skill of a prudent person in the conduct of his own affairs. The trustee will become obligated to exercise any of its powers under the indenture at the request of any of the holders of any debt securities only after those holders have offered the trustee indemnity reasonably satisfactory to it. Each indenture limits the right of the trustee, if the trustee, becomes one of our creditors, to obtain payment of claims or to realize on some property received for any of these claims, as security or otherwise. The trustee may engage in other transactions with us. If it acquires any conflicting interest, however, it must eliminate that conflict or resign within 90 days after ascertaining that it has a conflicting interest and after the occurrence of a default under the indenture, unless that default has been cured, waived or otherwise eliminated within the 90-day period. The trustee acts as agent for and a lender under our $75 million revolving credit facility. We expect that the trustee will act as the trustee under our junior subordinated indenture, as property trustee under the declarations of trust and as guarantee trustee under our preferred securities guarantee in connection with any offering by Seitel Capital Trust I or Seitel Capital Trust II of its trust preferred securities and by us of our related junior subordinated debt securities. We expect that an affiliate of the trustee will serve as Delaware trustee for these trusts. Please read "About This Prospectus." Form, Exchange, Registration and Transfer. We will issue the debt securities in registered form. We will not charge a service charge for any registration of transfer or exchange of the debt securities. We may, however, require the payment of any tax or other governmental charge payable for that registration. 12 42 Debt securities of any series will be exchangeable for other debt securities of the same series with the same total principal amount and the same terms but in different authorized denominations in accordance with the applicable indenture. Holders may present debt securities for registration of transfer at the office of the registrar. The registrar will effect the transfer or exchange when it is satisfied with the documents of title and identity of the person making the request. We will appoint the trustee under each indenture as registrar for our debt securities issued under that indenture. We are required to maintain an office or agency for transfers and exchanges in each place of payment. We may at any time designate additional registrars for any series of debt securities. In the case of any redemption or repurchase, we will not be required to register the transfer or exchange of any debt security either: - if we have called the debt security for redemption in whole or in part, except the unredeemed portion of any debt security being redeemed in part; or - during a period beginning 15 business days before the mailing of the relevant notice of redemption or repurchase and ending on the close of business on the day of mailing. Payment and Paying Agents. Unless we inform you otherwise in a prospectus supplement, payments on the debt securities will be made in U.S. dollars at the office of the applicable trustee or any paying agent we designate. At our option, we may make payments by check mailed to the holder's registered address or by wire transfer for global debt securities. Unless we inform you otherwise in a prospectus supplement, we will make interest payments to the person in whose name the debt security is registered at the close of business on the record date for the interest payment. Unless we inform you otherwise in a prospectus supplement, the trustee under each indenture will be designated as our paying agent for payments on debt securities issued under the indenture. We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts. In most cases, the trustee and paying agent will repay to us upon written request any funds held by them for payments on the debt securities that remain unclaimed for two years after the date upon which that payment has become due. After payment to us, holders entitled to the money must look to us for payment. Book-Entry Debt Securities. We may issue the debt securities of a series in the form of one or more global debt securities that would be deposited with a depositary or its nominee identified in the prospectus supplement. We may issue global debt securities in either temporary or permanent form. We will describe in the prospectus supplement the terms of any depositary arrangement and the rights and limitations of owners of beneficial interests in any global debt security. PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES Ranking. The senior debt securities will rank equally with all our unsecured and unsubordinated debt and senior to any subordinated indebtedness, including any subordinated debt securities. Restrictive Covenants. We will describe any restrictive covenants relating to the senior debt securities in a prospectus supplement. PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES Ranking. The subordinated debt securities will rank junior to all our senior debt and may rank equally with or senior to other subordinated debt that may be outstanding from time to time. Subordination. Under the subordinated indenture, payment of the principal, interest and any premium on the subordinated debt securities will generally be subordinated and junior in right of payment to the prior payment in full of all senior debt. Unless we inform you otherwise in the prospectus 13 43 supplement, we may not make any payment of principal, interest or any premium on the subordinated debt securities if: - we fail to pay the principal, interest, premium or any other amounts on any senior debt when due; or - we default in performing any other covenant (a "covenant default") in any senior debt that we have designated if the covenant default allows the holders of that senior debt to accelerate the maturity of the senior debt they hold. Unless we inform you otherwise in the prospectus supplement, a covenant default will only prevent us from making payments on the subordinated debt securities for up to 179 days after holders of the senior debt give the trustee for the subordinated debt securities notice of the covenant default. The subordination will not affect our obligation, which will be absolute and unconditional, to pay, when due, principal of, premium, if any, and interest on the subordinated debt securities. In addition, the subordination will not prevent the occurrence of any default under the subordinated indenture. The subordinated indenture will not limit the amount of senior debt that we may incur. As a result of the subordination of the subordinated debt securities, if we became insolvent, holders of subordinated debt securities may receive less on a proportionate basis than other creditors. Unless we inform you otherwise in the prospectus supplement, "senior debt" will mean all debt of Seitel, unless the debt states that it is not senior to the subordinated debt securities or our other junior debt. The term "debt" of a person means: - indebtedness for borrowed money; - obligations evidenced by bonds, debentures, notes or similar instruments; - undrawn obligations relating to letters of credit or similar instruments, other than standby letters of credit and bid or performance bonds issued in the ordinary course of business; - reimbursement obligations relating to drawn letters of credit and similar instruments described in the preceding item if the drawing is reimbursed within 30 business days following demand for reimbursement; - obligations to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business; - capitalized lease obligations; - indebtedness of a third party secured by a lien on any asset of that person; and - indebtedness of others guaranteed to the extent of the guarantee. 14 44 DESCRIPTION OF CAPITAL STOCK GENERAL As of the date of this prospectus, we are authorized to issue up to 55,000,000 shares of stock, including up to 50,000,000 shares of common stock and up to 5,000,000 shares of preferred stock. As of August 20, 1999, we had 24,285,795 shares of common stock and no shares of preferred stock outstanding. As of that date, we also had approximately 6,665,515 shares of common stock reserved for issuance upon exercise of options or in connection with other awards outstanding under various employee or director incentive, compensation and option plans. The following is a summary of the key terms and provisions of our equity securities. You should refer to the applicable provisions of our certificate of incorporation, bylaws, the Delaware General Corporation Law and the documents we have incorporated by reference for a complete statement of the terms and rights of our capital stock. COMMON STOCK Voting Rights. Each holder of common stock is entitled to one vote per share. Subject to the rights, if any, of the holders of any series of preferred stock pursuant to applicable law or the provision of the certificate of designation creating that series, all voting rights are vested in the holders of shares of common stock. Holders of shares of common stock have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of directors can elect all of the directors, and the holders of the remaining shares voting for the election of directors will not be able to elect any directors. Dividends. Dividends may be paid to the holders of common stock when, as and if declared by the board of directors out of funds legally available for their payment, subject to the rights of holders of any preferred stock. We generally do not pay cash dividends, and we intend to retain future earnings in order to provide funds for use in the operation and expansion of our business. Rights upon Liquidation. In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of common stock will be entitled to share equally, in proportion to the number of shares of common stock held by them, in any of our assets available for distribution after the payment in full of all our debts and distributions and after the holders of all series of our outstanding preferred stock, if any, have received their liquidation preferences in full. Non-Assessable. All outstanding shares of common stock are fully paid and non-assessable. Any additional common stock we offer and issue under this prospectus will also be fully paid and non-assessable. No Preemptive Rights. Holders of common stock are not entitled to preemptive purchase rights in future offerings of our common stock. Listing. Our outstanding shares of common stock are listed on the New York Stock Exchange under the symbol "SEI." Any additional common stock we issue will also be listed on the NYSE. 15 45 PREFERRED STOCK Our board of directors can, without approval of our stockholders, issue one or more series of preferred stock and determine the number of shares of each series and the rights, preferences and limitations of each series. The following description of the terms of the preferred stock sets forth some of the general terms and provisions of our authorized preferred stock. If we offer preferred stock, we will file a description with the SEC and describe the specific designations and rights in a prospectus supplement, including the following terms: - the series, the number of shares offered and the liquidation value of the preferred stock; - the price at which the preferred stock will be issued; - the dividend rate, the dates on which the dividends will be payable and other terms relating to the payment of dividends on the preferred stock; - the liquidation preference of the preferred stock; - the voting rights of the preferred stock; - whether the preferred stock is redeemable or subject to a sinking fund, and the terms of any redemption or sinking fund; - whether the preferred stock is convertible or exchangeable for any other securities, and the terms of any conversion; and - any additional rights, preferences, qualifications, limitations and restrictions of the preferred stock. The description of the terms of the preferred stock to be set forth in an applicable prospectus supplement will not be complete and will be subject to and qualified by the certificate of designation relating to the applicable series of preferred stock. The registration statement of which this prospectus forms a part will include the certificate of designation as an exhibit or will incorporate the certificate of designation by reference. Undesignated preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of our management. The issuance of shares of preferred stock may adversely affect the rights of the holders of our common stock. For example, any preferred stock issued may rank prior to our common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. As a result, the issuance of shares of preferred stock may discourage bids for our common stock or may otherwise adversely affect the market price of our common stock or any existing preferred stock. Any preferred stock will, when issued, be fully paid and non-assessable. BUSINESS COMBINATIONS UNDER DELAWARE LAW We are subject to Section 203 of the Delaware General Corporation Law, which restricts some types of business combinations of Delaware corporations. Section 203 prohibits us from engaging in a business combination with an interested stockholder for a period of three years after the time of the transaction in which the person became an interested stockholder, unless: - prior to the time of the business combination, our board of directors approved the business combination or the transaction in which the stockholder became an interested stockholder; - as a result of the business combination, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced; or 16 46 - on or after the date of the business combination, our board of directors and the holders of at least 66 2/3% of our outstanding voting stock not owned by the interested stockholder approve the business combination. The DGCL defines a "business combination" generally as: - a merger or consolidation with the interested stockholder or with any other corporation if the merger or consolidation is caused by the interested stockholder; - a sale or other disposition to or with an interested stockholder of assets with an aggregate market value greater than or equal to 10% or more of either the aggregate market value of all our assets or the aggregate market value of all of our outstanding stock; - a transaction resulting in the issuance or transfer by our company or any of our majority-owned subsidiaries of any of our stock or stock of our subsidiary to the interested stockholder; - any transaction involving our company or any of our majority-owned subsidiaries that has the effect of increasing the proportionate share of our stock or the stock of the subsidiary owned by the interested stockholder; or - any receipt of the interested stockholder of the benefit of any loans or other financial benefits provided by our company or any of our majority-owned subsidiaries. An interested stockholder is defined generally to mean a person who, together with its affiliates, owns, or if the person is an affiliate of the corporation did own within the last three years, 15% or more of our outstanding voting stock. PLAN OF DISTRIBUTION We may sell the offered securities in and outside the United States (1) through underwriters or dealers, (2) directly to purchasers or (3) through agents. The prospectus supplement will include the following information: - the terms of the offering; - the names of any underwriters or agents; - the name or names of any managing underwriter or underwriters; - the purchase price of the securities from us; - the net proceeds to us from the sale of the securities; - any delayed delivery arrangements; - any underwriting discounts, commissions and other items constituting underwriters' compensation; - any initial public offering price; - any discounts or concessions allowed or reallowed or paid to dealers; and - any commissions paid to agents. SALE THROUGH UNDERWRITERS OR DEALERS If we use underwriters in the sale, the underwriters will acquire the securities for their own account. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless we inform you otherwise in the prospectus supplement, the obligations of the underwriters to purchase the securities 17 47 will be subject to certain conditions, and the underwriters will be obligated to purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers. During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include over allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, which means that selling concessions allowed to syndicate members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if the offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, the underwriters may discontinue these activities at any time. If we use dealers in the sale of securities, we will sell the securities to them as principals. They may then resell those securities to the public at varying prices determined by the dealers at the time of resale. We will include in the prospectus supplement the names of the dealers and the terms of the transaction. DIRECT SALES AND SALES THROUGH AGENTS We may sell the securities directly. In this case, no underwriters or agents would be involved. We may also sell the securities through agents we designate from time to time. In the prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions payable by us to the agent. Unless we inform you otherwise in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment. We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act of 1933 with respect to any sale of those securities. We will describe the terms of any such sales in the prospectus supplement. DELAYED DELIVERY CONTRACTS If we so indicate in the prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The prospectus supplement will describe the commission payable for solicitation of those contracts. GENERAL INFORMATION We may have agreements with the agents, dealers and underwriters to indemnify them against some civil liabilities, including liabilities under the Securities Act of 1933, or to contribute with respect to payments that the agents, dealers or underwriters may be required to make. Agents, dealers and underwriters may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses. LEGAL MATTERS Gardere Wynne Sewell & Riggs, L.L.P., our special counsel, will issue opinions about the legality of the offered securities for us. Any underwriters will be advised about other issues relating to any offering by their own legal counsel. 18 48 EXPERTS The financial statements of Seitel, Inc. included in the annual report on Form 10-K for the year ended December 31, 1998, and incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said report. Some of the information regarding our oil and gas reserves that we have incorporated by reference into this prospectus is derived from Forrest A. Garb & Associates, Inc.'s reserve report dated January 1, 1999. We have included this information in reliance upon Forrest A. Garb & Associates, Inc. as experts with respect to these matters. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements or other information filed by us at the SEC's public reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our filings with the SEC are also available to the public from commercial document retrieval services and at the SEC's web site at "http://www.sec.gov." This prospectus is part of a registration statement we have filed with the SEC relating to the securities we may offer. As permitted by SEC rules, this prospectus does not contain all of the information we have included in the registration statement and the accompanying exhibits and schedules we file with the SEC. You may refer to the registration statement, the exhibits and schedules for more information about us and our securities. The registration statement, exhibits and schedules are available at the SEC's Public Reference Room. INFORMATION WE INCORPORATE BY REFERENCE The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information we incorporate by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings we may make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934. The documents we incorporate by reference are: - our Annual Report on Form 10-K, as amended by our Form 10-K/A, for the year ended December 31, 1998; - our Quarterly Report on Form 10-Q, as amended by our Form 10-Q/A, for the three months ended March 31, 1999, and our Quarterly Report on Form 10-Q for the three months ended June 30, 1999; and - Seitel's Current Report on Form 8-K dated February 16, 1999. - the description of our common stock contained in our Registration Statement on Form 8-A, dated March 27, 1991 (Registration Number 0-14488). You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Seitel, Inc. Investor Relations 50 Briar Hollow Lane 7th Floor, West Building Houston, Texas 77027 (713) 881-8900 19 49 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the various expenses to be paid by Seitel, Inc. in connection with the issuance and distribution of the securities being registered. All amounts shown are estimates except for the Securities and Exchange Commission registration fee. Securities and Exchange Commission registration fee......... $ 55,600 Legal fees and expenses..................................... 150,000 Printing, EDGAR formatting and mailing expenses............. 100,000 Accounting fees and expenses................................ 100,000 Blue Sky qualification fees and expenses.................... 10,000 Trustees' fees and expenses................................. 40,000 Rating agency fees.......................................... 180,000 Miscellaneous............................................... 64,400 -------- Total............................................. $700,000 ========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145(a) of the General Corporation Law of the State of Delaware (the "General Corporation Law") provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he is or was a director or officer of the corporation. Such indemnity may be against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, if the indemnitee acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, the indemnitee must not have had reasonable cause to believe his conduct was unlawful. Section 145(b) of the General Corporation Law provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the corporation against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; provided, however, that if the person is found to be liable to the corporation, no indemnification shall be made except to the extent that the court determines that indemnification is fair and reasonable under the circumstances. Section 145(g) of the General Corporation Law provides, in general, that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any liability asserted against him or incurred by him in any capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of the law. Article Eighth of Seitel, Inc.'s Certificate of Incorporation and Section Six of Seitel, Inc.'s Bylaws give a director or officer the right to be indemnified by Seitel, Inc. to the fullest extent permitted under Delaware law. II-1 50 The directors and officers of Seitel and the Regular Trustees of each trust are covered by insurance policies indemnifying against certain liabilities, including certain liabilities arising under the Securities Act, which might be incurred by them in such capacities. The above discussion of Seitel, Inc's Certificate of Incorporation and Bylaws and of the General Corporation Law of the State of Delaware is not intended to be exhaustive and is qualified in its entirety by such Certificate of Incorporation, the Bylaws and the statutes. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. 1.1* -- Underwriting Agreement. 4.1 -- Certificate of Trust of Seitel Capital Trust I. 4.2 -- Declaration of Trust of Seitel Capital Trust I. 4.3 -- Certificate of Trust of Seitel Capital Trust II. 4.4 -- Declaration of Trust of Seitel Capital Trust II. 4.5 -- Form of Amended and Restated Declaration of Trust. 4.6 -- Form of Preferred Securities Certificate of Seitel Capital Trust I (included in Exhibit 4.5). 4.7 -- Form of Preferred Securities Certificate of Seitel Capital Trust II (included in Exhibit 4.5). 4.8 -- Form of Indenture between Seitel, Inc. and The First National Bank of Chicago covering the Junior Subordinated Debentures. 4.9 -- Form of Preferred Securities Guarantee between Seitel, Inc. and Seitel Capital Trust I and Seitel Capital Trust II. 4.10 -- Form of Indenture between Seitel, Inc. and The First National Bank of Chicago covering the Senior Debt Securities. 4.11 -- Form of Indenture between Seitel, Inc. and The First National Bank of Chicago covering the Subordinated Debt Securities. 5.1 -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P. 5.2 -- Opinion of Richards Layton & Finger, L.L.P. 8.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P. as to certain tax matters. 12.1 -- Statement regarding computation of ratio of earnings to fixed charges. 23.1 -- Consent of Arthur Andersen LLP. 23.2 -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included in Exhibit 5.1). 23.3 -- Consent of Richards Layton & Finger, P.A. (included in Exhibit 5.2). 23.4 -- Consent of Forrest A. Garb & Associates, Inc. 24.1 -- Power of Attorney (set forth on the signature pages contained in Part II of this Registration Statement). 25.1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, on Form T-1 of The First National Bank of Chicago, as Trustee under the Senior Debt Securities Indenture, the Subordinated Debt Securities Indenture and the Junior Subordinated Debenture Indenture, and as Guarantee Trustee under the Guarantees of Preferred Securities of Seitel Capital Trust I and Guarantees of Preferred Securities of Seitel Capital Trust II. 25.2 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, on Form T-1 of The First National Bank of Chicago, as Property Trustee, relating to Seitel Capital Trust I.
II-2 51 25.3 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, on Form T-1 of The First National Bank of Chicago, as Property Trustee, relating to Seitel Capital Trust II.
- --------------- * To be filed by amendment or by a report on Form 8-K pursuant to Regulation S-K, Item 601(b). ITEM 17. UNDERTAKINGS. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made of securities registered hereby, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933 if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; provided, however, that the undertakings set forth in paragraph (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby understands that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate II-3 52 jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. (d) For the purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (e) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (f) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of that Act. II-4 53 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on August 20, 1999. SEITEL, INC. By: /s/ PAUL A. FRAME ---------------------------------- Paul A. Frame President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Paul A. Frame and Debra D. Valice, and each of them, each of whom may act without joinder of the other, his or her true and lawful attorneys and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all pre- and post-effective amendments to this Registration Statement, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully as to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ HERBERT M. PEARLMAN Chairman of the Board of August 20, 1999 - ----------------------------------------------------- Directors Herbert M. Pearlman /s/ PAUL A. FRAME President, Chief Executive August 20, 1999 - ----------------------------------------------------- Officer and Director Paul A. Frame (Principal Executive Officer) /s/ HORACE A. CALVERT Executive Vice President, August 20, 1999 - ----------------------------------------------------- Chief Operating Officer Horace A. Calvert and Director /s/ DEBRA D. VALICE Executive Vice President of August 20, 1999 - ----------------------------------------------------- Finance, Chief Financial Debra D. Valice Officer (Principal Accounting and Financial Officer) /s/ DAVID S. LAWI Director August 20, 1999 - ----------------------------------------------------- David S. Lawi
54
SIGNATURE TITLE DATE --------- ----- ---- /s/ WALTER M. CRAIG, JR. Director August 20, 1999 - ----------------------------------------------------- Walter M. Craig, Jr. /s/ FRED S. ZEIDMAN Director August 20, 1999 - ----------------------------------------------------- Fred S. Zeidman /s/ JOHN E. STIEGLITZ Director August 20, 1999 - ----------------------------------------------------- John E. Stieglitz /s/ WILLIAM LERNER Director August 20, 1999 - ----------------------------------------------------- William Lerner
55 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on August 20, 1999. SEITEL CAPITAL TRUST I By: Seitel, Inc., sponsor By: /s/ PAUL A. FRAME ---------------------------------- Paul A. Frame President and Chief Executive Officer 56 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on August 20, 1999. SEITEL CAPITAL TRUST II By: Seitel, Inc., sponsor By: /s/ PAUL A. FRAME ---------------------------------- Paul A. Frame President and Chief Executive Officer 57 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- 1.1* -- Underwriting Agreement. 4.1 -- Certificate of Trust of Seitel Capital Trust I. 4.2 -- Declaration of Trust of Seitel Capital Trust I. 4.3 -- Certificate of Trust of Seitel Capital Trust II. 4.4 -- Declaration of Trust of Seitel Capital Trust II. 4.5 -- Form of Amended and Restated Declaration of Trust. 4.6 -- Form of Preferred Securities Certificate of Seitel Capital Trust I (included in Exhibit 4.5). 4.7 -- Form of Preferred Securities Certificate of Seitel Capital Trust II (included in Exhibit 4.5). 4.8 -- Form of Indenture between Seitel, Inc. and The First National Bank of Chicago covering the Junior Subordinated Debentures. 4.9 -- Form of Preferred Securities Guarantee between Seitel, Inc. and Seitel Capital Trust I and Seitel Capital Trust II. 4.10 -- Form of Indenture between Seitel, Inc. and The First National Bank of Chicago covering the Senior Debt Securities. 4.11 -- Form of Indenture between Seitel, Inc. and The First National Bank of Chicago covering the Subordinated Debt Securities. 5.1 -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P. 5.2 -- Opinion of Richards Layton & Finger, L.L.P. 8.1* -- Opinion of Gardere Wynne Sewell & Riggs, L.L.P. as to certain tax matters. 12.1 -- Statement regarding computation of ratio of earnings to fixed charges. 23.1 -- Consent of Arthur Andersen LLP. 23.2 -- Consent of Gardere Wynne Sewell & Riggs, L.L.P. (included in Exhibit 5.1). 23.3 -- Consent of Richards Layton & Finger, P.A. (included in Exhibit 5.2). 23.4 -- Consent of Forrest A. Garb & Associates, Inc. 24.1 -- Power of Attorney (set forth on the signature pages contained in Part II of this Registration Statement). 25.1 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, on Form T-1 of The First National Bank of Chicago, as Trustee under the Senior Debt Securities Indenture, the Subordinated Debt Securities Indenture and the Junior Subordinated Debenture Indenture, and as Guarantee Trustee under the Guarantees of Preferred Securities of Seitel Capital Trust I and Guarantees of Preferred Securities of Seitel Capital Trust II. 25.2 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, on Form T-1 of The First National Bank of Chicago, as Property Trustee, relating to Seitel Capital Trust I. 25.3 -- Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, as amended, on Form T-1 of The First National Bank of Chicago, as Property Trustee, relating to Seitel Capital Trust II.
- --------------- * To be filed by amendment or by a report on Form 8-K pursuant to Regulation S-K, Item 601(b). EX-4.1 2 CERTIFICATE OF TRUST OF SEITEL CAPITAL TRUST I 1 EXHIBIT 4.1 CERTIFICATE OF TRUST OF SEITEL CAPITAL TRUST I THIS CERTIFICATE OF TRUST of Seitel Capital Trust I (the "Trust"), dated as of August 19, 1999, is being duly executed and filed by the undersigned, as trustees, with the Secretary of State of the State of Delaware to form a business trust under the Delaware Business Trust Act (12 Del.Code ss. 3801 et seq.) (the "Act"). 1. Name. The name of the business trust being formed hereby is "Seitel Capital Trust I." 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware are Bank One Delaware, Inc., 3 Christiana Center, 201 North Walnut Street, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective at the time of its filing with the Secretary of State of the State of Delaware. 4. Counterparts. This Certificate of Trust may be executed in one or more counterparts. IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act. BANK ONE DELAWARE, INC., as Delaware Trustee By: /s/ SANDRA L. CARUBA ------------------------------- Name: Sandra L. Caruba Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO as Property Trustee By: /s/ DIANE SWANSON ------------------------------- Name: Diane Swanson Title: Assistant Vice President DEBRA D. VALICE, as Regular Trustee /s/ DEBRA D. VALICE ----------------------------------- EX-4.2 3 DECLARATION OF TRUST OF SEITEL CAPITAL TRUST I 1 EXHIBIT 4.2 DECLARATION OF TRUST, dated as of August 19, 1999, between Seitel, Inc., a Delaware corporation, as Sponsor (the "Sponsor"), and The First National Bank of Chicago, not in its individual capacity but solely as trustee (the "Property Trustee"), Bank One Delaware, Inc., not in its individual capacity but solely as trustee (the "Delaware Trustee"), and Debra D. Valice, not in her individual capacity but solely as trustee (the Property Trustee, the Delaware Trustee and such individual as trustee, collectively the "Trustees"). The Sponsor and the Trustees hereby agree as follows: 1. The Delaware business trust created hereby shall be known as "Seitel Capital Trust I" (the "Trust"), in which name the Trustees, or the Sponsor to the extent provided herein, may conduct the business of the Trust, make and execute contracts, and sue and be sued. 2. The Sponsor hereby assigns, transfers, conveys and sets over to the Trust the sum of $10. The Trust hereby acknowledges receipt of such amount from the Sponsor, which amount shall constitute the initial trust estate. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del.Code Section 3801 et seq. (the "Business Trust Act"), and that this document constitutes the governing instrument of the Trust. The Trustees are hereby authorized and directed to execute and file a certificate of trust with the Secretary of State of the State of Delaware in the form attached hereto in accordance with the provisions of the Business Trust Act. The Trust is hereby established by the Sponsor and the Trustees for the purposes of (i) issuing preferred securities representing undivided beneficial interests in the assets of the Trust ("Preferred Securities") in exchange for cash and investing the proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing and selling common securities representing an undivided beneficial interest in the assets of the Trust ("Common Securities") to the Sponsor in exchange for cash and investing the proceeds thereof in additional junior subordinated debentures of the Sponsor and (iii) engaging in such other activities as are necessary, convenient or incidental thereto. 3. The Sponsor and the Trustees will enter into an Amended and Restated Declaration of Trust, satisfactory to each such party and substantially in the form included as an exhibit to the Securities Act Registration Statement referred to below, to provide for the contemplated operation of the Trust created hereby and the issuance of the Preferred Securities and Common Securities referred to therein. Prior to the execution and delivery of such Amended and Restated Declaration of Trust, the Trustees shall not have any duty or obligation hereunder or with respect to the trust estate, except as otherwise required by applicable law or as may be necessary to obtain prior to such execution and delivery any licenses, consents or approvals required by applicable law or otherwise. 4. The Sponsor, as the sponsor of the Trust, is hereby authorized (i) to prepare and file with the Securities and Exchange Commission (the "Commission") and execute, in each case on behalf of the Trust, (a) a Registration Statement on Form S-3 or on such other form or forms as may be appropriate, including without limitation any registration statement of the type contemplated by Rule 462(b) of the Securities Act of 1933, as amended (the "Securities Act") (any such registration statement, whether on Form S-3, another form or under Rule 462(b) being referred to herein as the "Securities Act Registration Statement"), including any pre-effective or post-effective amendments to such Registration Statement, relating to the registration under the Securities Act of the Preferred Securities and certain other securities of the Sponsor and (b) if the Sponsor shall deem it desirable, a Registration Statement on Form 8-A (the "Exchange Act Registration 2 Statement") (including all pre-effective and post-effective amendments thereto) relating to the registration of the Preferred Securities under Section 12 of the Securities Exchange Act of 1934, as amended; (ii) if the Sponsor shall deem it desirable, to prepare and file with New York Stock Exchange, Inc. or any other exchange or over-the-counter market (collectively, the "Exchanges") and execute on behalf of the Trust a listing application or applications and all other applications, statements, certificates, agreements and other instruments as shall be necessary or desirable to cause the Preferred Securities to be listed on any Exchange; (iii) to prepare and file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as the Sponsor, on behalf of the Trust, may deem necessary or desirable to register the Preferred Securities under the securities or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or desirable; (iv) to negotiate the terms of and execute on behalf of the Trust an underwriting or other purchase agreement among the Trust, the Sponsor and any underwriter(s), dealer(s) or agent(s) relating to the Preferred Securities, as the Sponsor, on behalf of the Trust, may deem necessary or desirable; and (v) to execute and deliver on behalf of the Trust letters or documents to, or instruments for filing with, a depositary relating to the Preferred Securities. In the event that any filing referred to in clauses (i)-(iii) above is required by the rules and regulations of the Commission, any Exchange, the National Association of Securities Dealers, Inc. or state securities or blue sky laws, to be executed on behalf of the Trust by a Trustee, any natural person appointed pursuant to Section 6 hereof, in his or her capacity as trustee of the Trust, and the Sponsor are hereby authorized to join in any such filing and to execute on behalf of the Trust any and all of the foregoing. 5. This Declaration of Trust may be executed in one or more counterparts. 6. The number of Trustees initially shall be three (3) and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Sponsor that may increase or decrease the number of Trustees; provided, however, that the number of Trustees shall in no event be less than three (3); and provided further that to the extent required by the Business Trust Act, one Trustee shall either be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity that has its principal place of business in the State of Delaware and meets other requirements imposed by applicable law. Subject to the foregoing, the Sponsor is entitled to appoint or remove without cause any Trustee at any time. Any Trustee may resign upon thirty days' prior notice to the Sponsor. 7. The Trust may be dissolved and terminated before the issuance of any Preferred Securities at the election of the Sponsor. 8. This Declaration of Trust shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflict of laws principles. 9. Bank One Delaware, Inc., in its capacity as Trustee hereunder, shall not have any of the powers or duties of the trustees set forth herein, except as required under the Business Trust Act, and shall be a Trustee hereunder for the sole and limited purpose of fulfilling the requirements of Section 3807(a) of the Business Trust Act. -2- 3 IN WITNESS WHEREOF, the parties hereto have caused this Declaration of Trust to be duly executed as of the day and year first above written. SEITEL, INC. as Sponsor By: /s/ DEBRA D. VALICE ------------------------------------- Name: Debra D. Valice Title: Chief Financial Officer THE FIRST NATIONAL BANK OF CHICAGO, not in its individual capacity but solely as Property Trustee By: /s/ DIANE SWANSON ------------------------------------- Name: Diane Swanson Title: Assistant Vice President BANK ONE DELAWARE, INC., not in its individual capacity but solely as Delaware Trustee By: /s/ SANDRA L. CARUBA ------------------------------------- Name: Sandie Caruba Title: Vice President DEBRA D. VALICE, not in her individual capacity but solely as Trustee /s/ DEBRA D. VALICE ----------------------------------------- -3- EX-4.3 4 CERTIFICATE OF TRUST OF SEITEL CAPITAL TRUST II 1 EXHIBIT 4.3 CERTIFICATE OF TRUST OF SEITEL CAPITAL TRUST II THIS CERTIFICATE OF TRUST of Seitel Capital Trust II (the "Trust"), dated as of August 19, 1999, is being duly executed and filed by the undersigned, as trustees, with the Secretary of State of the State of Delaware to form a business trust under the Delaware Business Trust Act (12 Del.Code Section 3801 et seq.) (the "Act"). 1. Name. The name of the business trust being formed hereby is "Seitel Capital Trust II." 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware are Bank One Delaware, Inc., 3 Christiana Center, 201 North Walnut Street, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective at the time of its filing with the Secretary of State of the State of Delaware. 4. Counterparts. This Certificate of Trust may be executed in one or more counterparts. IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act. BANK ONE DELAWARE, INC., as Delaware Trustee By: /s/ SANDRA L. CARUBA ------------------------------- Name: Sandra L. Caruba Title: Vice President THE FIRST NATIONAL BANK OF CHICAGO as Property Trustee By: /s/ DIANE SWANSON ------------------------------- Name: Diane Swanson Title: Assistant Vice President DEBRA D. VALICE, as Regular Trustee /s/ DEBRA D. VALICE ----------------------------------- EX-4.4 5 DECLARATION OF TRUST SEITEL CAPTIAL TRUST II 1 EXHIBIT 4.4 DECLARATION OF TRUST, dated as of August 19, 1999, between Seitel, Inc., a Delaware corporation, as Sponsor (the "Sponsor"), and The First National Bank of Chicago, not in its individual capacity but solely as trustee (the "Property Trustee"), Bank One Delaware, Inc., not in its individual capacity but solely as trustee (the "Delaware Trustee"), and Debra D. Valice, not in her individual capacity but solely as trustee (the Property Trustee, the Delaware Trustee and such individual as trustee, collectively the "Trustees"). The Sponsor and the Trustees hereby agree as follows: 1. The Delaware business trust created hereby shall be known as "Seitel Capital Trust II" (the "Trust"), in which name the Trustees, or the Sponsor to the extent provided herein, may conduct the business of the Trust, make and execute contracts, and sue and be sued. 2. The Sponsor hereby assigns, transfers, conveys and sets over to the Trust the sum of $10. The Trust hereby acknowledges receipt of such amount from the Sponsor, which amount shall constitute the initial trust estate. It is the intention of the parties hereto that the Trust created hereby constitute a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del.Code Section 3801 et seq. (the "Business Trust Act"), and that this document constitutes the governing instrument of the Trust. The Trustees are hereby authorized and directed to execute and file a certificate of trust with the Secretary of State of the State of Delaware in the form attached hereto in accordance with the provisions of the Business Trust Act. The Trust is hereby established by the Sponsor and the Trustees for the purposes of (i) issuing preferred securities representing undivided beneficial interests in the assets of the Trust ("Preferred Securities") in exchange for cash and investing the proceeds thereof in junior subordinated debentures of the Sponsor, (ii) issuing and selling common securities representing an undivided beneficial interest in the assets of the Trust ("Common Securities") to the Sponsor in exchange for cash and investing the proceeds thereof in additional junior subordinated debentures of the Sponsor and (iii) engaging in such other activities as are necessary, convenient or incidental thereto. 3. The Sponsor and the Trustees will enter into an Amended and Restated Declaration of Trust, satisfactory to each such party and substantially in the form included as an exhibit to the Securities Act Registration Statement referred to below, to provide for the contemplated operation of the Trust created hereby and the issuance of the Preferred Securities and Common Securities referred to therein. Prior to the execution and delivery of such Amended and Restated Declaration of Trust, the Trustees shall not have any duty or obligation hereunder or with respect to the trust estate, except as otherwise required by applicable law or as may be necessary to obtain prior to such execution and delivery any licenses, consents or approvals required by applicable law or otherwise. 4. The Sponsor, as the sponsor of the Trust, is hereby authorized (i) to prepare and file with the Securities and Exchange Commission (the "Commission") and execute, in each case on behalf of the Trust, (a) a Registration Statement on Form S-3 or on such other form or forms as may be appropriate, including without limitation any registration statement of the type contemplated by Rule 462(b) of the Securities Act of 1933, as amended (the "Securities Act") (any such registration statement, whether on Form S-3, another form or under Rule 462(b) being referred to herein as the "Securities Act Registration Statement"), including any pre-effective or post-effective amendments to such Registration Statement, relating to the registration under the Securities Act of the Preferred Securities and certain other securities of the Sponsor and (b) if the Sponsor shall deem it desirable, a Registration Statement on Form 8-A (the "Exchange Act Registration 2 Statement") (including all pre-effective and post-effective amendments thereto) relating to the registration of the Preferred Securities under Section 12 of the Securities Exchange Act of 1934, as amended; (ii) if the Sponsor shall deem it desirable, to prepare and file with New York Stock Exchange, Inc. or any other exchange or over-the-counter market (collectively, the "Exchanges") and execute on behalf of the Trust a listing application or applications and all other applications, statements, certificates, agreements and other instruments as shall be necessary or desirable to cause the Preferred Securities to be listed on any Exchange; (iii) to prepare and file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as the Sponsor, on behalf of the Trust, may deem necessary or desirable to register the Preferred Securities under the securities or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or desirable; (iv) to negotiate the terms of and execute on behalf of the Trust an underwriting or other purchase agreement among the Trust, the Sponsor and any underwriter(s), dealer(s) or agent(s) relating to the Preferred Securities, as the Sponsor, on behalf of the Trust, may deem necessary or desirable; and (v) to execute and deliver on behalf of the Trust letters or documents to, or instruments for filing with, a depositary relating to the Preferred Securities. In the event that any filing referred to in clauses (i)-(iii) above is required by the rules and regulations of the Commission, any Exchange, the National Association of Securities Dealers, Inc. or state securities or blue sky laws, to be executed on behalf of the Trust by a Trustee, any natural person appointed pursuant to Section 6 hereof, in his or her capacity as trustee of the Trust, and the Sponsor are hereby authorized to join in any such filing and to execute on behalf of the Trust any and all of the foregoing. 5. This Declaration of Trust may be executed in one or more counterparts. 6. The number of Trustees initially shall be three (3) and thereafter the number of Trustees shall be such number as shall be fixed from time to time by a written instrument signed by the Sponsor that may increase or decrease the number of Trustees; provided, however, that the number of Trustees shall in no event be less than three (3); and provided further that to the extent required by the Business Trust Act, one Trustee shall either be a natural person who is a resident of the State of Delaware or, if not a natural person, an entity that has its principal place of business in the State of Delaware and meets other requirements imposed by applicable law. Subject to the foregoing, the Sponsor is entitled to appoint or remove without cause any Trustee at any time. Any Trustee may resign upon thirty days' prior notice to the Sponsor. 7. The Trust may be dissolved and terminated before the issuance of any Preferred Securities at the election of the Sponsor. 8. This Declaration of Trust shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflict of laws principles. 9. Bank One Delaware, Inc., in its capacity as Trustee hereunder, shall not have any of the powers or duties of the trustees set forth herein, except as required under the Business Trust Act, and shall be a Trustee hereunder for the sole and limited purpose of fulfilling the requirements of ss. 3807(a) of the Business Trust Act. -2- 3 IN WITNESS WHEREOF, the parties hereto have caused this Declaration of Trust to be duly executed as of the day and year first above written. SEITEL, INC. as Sponsor By: /s/ DEBRA D. VALICE ------------------------------------ Name: Debra D. Valice Title: Chief Financial Officer THE FIRST NATIONAL BANK OF CHICAGO, not in its individual capacity but solely as Property Trustee By: /s/ DIANE SWANSON ------------------------------------ Name: Diane Swanson Title: Assistant Vice President BANK ONE DELAWARE, INC., not in its individual capacity but solely as Delaware Trustee By: /s/ SANDRA L. CARUBA ------------------------------------ Name: Sandie Caruba Title: Vice President DEBRA D. VALICE, not in her individual capacity but solely as Trustee /s/ DEBRA D. VALICE ----------------------------------------- -3- EX-4.5 6 FORM OF AMENDED DECLARATION OF TRUST 1 EXHIBIT 4.5 ================================================================================ FORM OF AMENDED AND RESTATED DECLARATION OF TRUST OF SEITEL CAPITAL TRUST [I] [II] ----------------------------------------------------- DATED AS OF ---------- ----------------------------------------------------- ================================================================================ 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINITIONS......................................................................................2 SECTION 1.01 Definitions..............................................................................2 ARTICLE II TRUST INDENTURE ACT.............................................................................9 SECTION 2.01 Trust Indenture Act; Application.........................................................9 SECTION 2.02 Lists of Holders of Preferred Securities.................................................9 SECTION 2.03 Reports by the Property Trustee.........................................................10 SECTION 2.04 Periodic Reports to the Property Trustee................................................10 SECTION 2.05 Evidence of Compliance with Conditions Precedent........................................10 SECTION 2.06 Events of Default; Waiver...............................................................10 SECTION 2.07 Disclosure of Information...............................................................12 ARTIcLE III ORGANIZATION..................................................................................12 SECTION 3.01 Name....................................................................................12 SECTION 3.02 Office..................................................................................13 SECTION 3.03 Issuance of the Securities..............................................................13 SECTION 3.04 Purchase of Debentures..................................................................13 SECTION 3.05 Purpose.................................................................................14 SECTION 3.06 Authority...............................................................................14 SECTION 3.07 Title to Property of the Trust..........................................................14 SECTION 3.08 Powers and Duties of the Regular Trustees...............................................15 SECTION 3.09 Prohibition of Actions by the Trust and the Trustees....................................17 SECTION 3.10 Powers and Duties of the Property Trustee...............................................19 SECTION 3.11 Delaware Trustee........................................................................21 SECTION 3.12 Certain Rights and Duties of the Property Trustee.......................................22 SECTION 3.13 Registration Statement and Related Matters..............................................25 SECTION 3.14 Filing of Amendments to Certificate of Trust............................................26 SECTION 3.15 Execution of Documents by the Regular Trustees..........................................26 SECTION 3.16 Trustees Not Responsible for Recitals or Issuance of Securities.........................26 SECTION 3.17 Duration of the Trust...................................................................27 SECTION 3.18 Mergers.................................................................................27 SECTION 3.19 Property Trustee May File Proofs of Claim...............................................29 ARTICLE IV SPONSOR........................................................................................30 SECTION 4.01 Purchase of Common Securities by the Sponsor............................................30 SECTION 4.02 Expenses................................................................................30 ARTICLE V TRUSTEES........................................................................................31 SECTION 5.01 Number of Trustees; Qualifications......................................................31
-i- 3 SECTION 5.02 Appointment, Removal and Resignation of the Trustees....................................33 SECTION 5.03 Vacancies Among the Trustees............................................................34 SECTION 5.04 Effect of Vacancies.....................................................................34 SECTION 5.05 Meetings................................................................................34 SECTION 5.06 Delegation of Power.....................................................................35 SECTION 5.07 Merger, Conversion, Consolidation or Succession to Business.............................35 ARTICLE VI DISTRIBUTIONS..................................................................................36 SECTION 6.01 Distributions...........................................................................36 ARTICLE VII ISSUANCE OF THE SECURITIES....................................................................36 SECTION 7.01 General Provisions Regarding the Securities.............................................36 SECTION 7.02 Conversion Agent........................................................................37 ARTICLE VIII DISSOLUTION OF THE TRUST.....................................................................38 SECTION 8.01 Dissolution of the Trust................................................................38 ARTICLE IX TRANSFER OF INTERESTS..........................................................................39 SECTION 9.01 Transfer of Securities..................................................................39 SECTION 9.02 Transfer of Certificates................................................................39 SECTION 9.03 Deemed Security Holders.................................................................39 SECTION 9.04 Book Entry Interests....................................................................40 SECTION 9.05 Notices to Holders of Certificates......................................................41 SECTION 9.06 Appointment of Successor Clearing Agency................................................41 SECTION 9.07 Definitive Preferred Securities Certificates............................................41 SECTION 9.08 Mutilated, Destroyed, Lost or Stolen Certificates.......................................41 ARTICLE X LIMITATION OF LIABILITY; INDEMNIFICATION........................................................42 SECTION 10.01 Exculpation............................................................................42 SECTION 10.02 Indemnification........................................................................42 SECTION 10.03 Outside Business.......................................................................43 ARTICLE XI ACCOUNTING.....................................................................................43 SECTION 11.01 Fiscal Year............................................................................43 SECTION 11.02 Certain Accounting Matters.............................................................43 SECTION 11.03 Banking................................................................................44 SECTION 11.04 Withholding............................................................................44 ARTICLE XII AMENDMENTS AND MEETINGS.......................................................................45 SECTION 12.01 Amendments.............................................................................45 SECTION 12.02 Meetings of the Holders of Securities; Action by Written Consent.......................46
-ii- 4 ARTICLE XIII REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE..............................................................................................47 SECTION 13.01 Representations and Warranties of the Property Trustee.................................47 SECTION 13.02 Representations and Warranties of the Delaware Trustee.................................48 ARTICLE XIV MISCELLANEOUS.................................................................................49 SECTION 14.01 Notices................................................................................49 SECTION 14.02 Undertaking for Costs..................................................................50 SECTION 14.03 Governing Law..........................................................................50 SECTION 14.04 Headings...............................................................................51 SECTION 14.05 Partial Enforceability.................................................................51 SECTION 14.06 Counterparts...........................................................................51 SECTION 14.07 Intention of the Parties...............................................................51 SECTION 14.08 Successors and Assigns.................................................................51 SECTION 14.09 No Recourse............................................................................51 SECTION 14.10 Agent for Service of Process...........................................................52
EXHIBIT A CERTIFICATE OF TRUST EXHIBIT B TERMS OF PREFERRED SECURITIES EXHIBIT C TERMS OF COMMON SECURITIES -iii- 5 AMENDED AND RESTATED DECLARATION OF TRUST OF SEITEL CAPITAL TRUST [I] [II] AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and effective as of , by , an individual, , an individual, and , an individual, as Regular Trustees (the "Regular Trustees"), The First National Bank of Chicago, as Property Trustee (the "Property Trustee"), and Bank One Delaware, Inc., having its principal place of business in the State of Delaware, as Delaware Trustee (the "Delaware Trustee") (together with all other Persons from time to time duly appointed and serving as trustees in accordance with the provisions of this Declaration, the "Trustees"), by Seitel, Inc., a Delaware corporation, as trust sponsor ("Seitel"or the "Sponsor"), and by the holders, from time to time, of undivided beneficial interests in the assets of the Trust (as hereinafter defined) to be issued pursuant to this Declaration. WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration of Trust dated as of [ ], 1999 (the "Original Declaration") in order to establish Seitel Capital Trust [I] [II], a statutory business trust (the "Trust"), under the Business Trust Act (as hereinafter defined); WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust was filed with the office of the Secretary of State of the State of Delaware on [ ], 1999; and WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant to the Business Trust Act for the purpose of, as described more fully in Sections 3.03, 3.04 and 3.05 hereof, (i) issuing and selling Preferred Securities (as hereinafter defined) representing preferred undivided beneficial interests in the assets of the Trust for cash and investing the proceeds thereof in Debentures (as hereinafter defined) of Seitel issued under the Indenture (as hereinafter defined) to be held as assets of the Trust and (ii) issuing and selling Common Securities (as hereinafter defined) representing common undivided beneficial interests in the assets of the Trust to Seitel in exchange for cash and investing the proceeds thereof in additional Debentures issued under the Indenture to be held as assets of the Trust; NOW, THEREFORE, it being the intention of the parties hereto that the Trust constitute a business trust under the Business Trust Act, that the Original Declaration be amended and restated in its entirety as provided herein and that this Declaration constitute the governing instrument of such business trust, the Trustees declare that all Debentures referred to in clauses (i) and (ii) of the previous paragraph purchased by the Trust will be held for the benefit of the Holders (as hereinafter defined) from time to time, of the Certificates (as hereinafter defined) representing undivided beneficial interests in the assets of the Trust issued hereunder, subject to the provisions of this Declaration. 6 ARTICLE I DEFINITIONS SECTION 1.01 Definitions (a) Capitalized terms used in this Declaration but not defined in the preamble above have the respective meanings assigned to them in this Section 1.01. (b) A term defined anywhere in this Declaration has the same meaning throughout. (c) All references to "the Declaration" or "this Declaration" are to this Amended and Restated Declaration Of Trust (including Exhibits A, B and C hereto (the "Exhibits")) as modified, supplemented or amended from time to time. (d) All references in this Declaration to Articles, Sections and Exhibits are to Articles and Sections of and Exhibits to this Declaration unless otherwise specified. (e) A term defined in the Trust Indenture Act has the same meaning when used in this Declaration unless otherwise defined in this Declaration or unless the context otherwise requires. (f) A reference to the singular includes the plural and vice versa. "Additional Amounts" has the meaning set forth in the Indenture. "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 purposes of this definition, "control" of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. "Book Entry Interest" means a beneficial interest in a Global Certificate registered in the name of a Clearing Agency or a nominee thereof, ownership and transfers of which shall be maintained and made through book entries by such Clearing Agency as described in Section 9.04. "Business Day" means any day that is not a Legal Holiday. "Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time, or any successor legislation. "Certificate" means a Common Security Certificate or a Preferred Security Certificate. "Certificate of Trust" has the meaning set forth in the recitals above. -2- 7 "Clearing Agency" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as depository for the Preferred Securities and in whose name or in the name of a nominee of that organization shall be registered a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Preferred Securities. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Clearing Agency effects book entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means the Closing Date as specified in the Underwriting Agreement, which date is also the date of execution and delivery of this Declaration. "Code" means the United States Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. A reference to a specific section (Sec.) of the Code refers not only to such specific section but also to any corresponding provision of any United States federal tax statute enacted after the date of this Declaration, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Declaration containing such reference. "Commission" means the Securities and Exchange Commission. "Common Securities" has the meaning specified in Section 7.01(b). "Common Security Certificate" means a definitive certificate in fully registered form representing a Common Security substantially in the form of Annex I to Exhibit C. ["Conversion Agent" has the meaning specified in Section 7.02.] "Covered Person" means (i) any officer, director, shareholder, partner, member, representative, employee or agent of the Trust or of any of its Affiliates, (ii) any officer, director, shareholder, employee, representative or agent of Seitel or of any of its Affiliates and (iii) the Holders from time to time of the Securities. "Creditor" has the meaning specified in Section 4.02(c). "Debenture Trustee" means The First National Bank of Chicago, a national banking association, as trustee under the Indenture until a successor is appointed thereunder and thereafter means such successor trustee. "Debentures" means the series of [convertible] junior subordinated debentures issued by Seitel under the Indenture to the Property Trustee and entitled the " _____% [Convertible] Junior Subordinated Debentures due ______." "Definitive Preferred Security Certificates" has the meaning set forth in Section 9.04. -3- 8 "Delaware Trustee" has the meaning set forth in Section 5.01(a)(iii). "Depositary Agreement" means the agreement among the Trust, the Property Trustee and DTC dated as of the Closing Date, as the same may be amended or supplemented from time to time. "Distribution" means a distribution payable to Holders of Securities in accordance with Section 6.01. "DTC" means The Depository Trust Company, the initial Clearing Agency. "Event of Default" in respect of the Securities means that an Indenture Event of Default has occurred and is continuing with respect to the Debentures. "Exchange" has the meaning specified in Section 3.13. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any successor legislation. "Fiscal Year" has the meaning specified in Section 11.01. "Global Certificate" has the meaning set forth in Section 9.04. "Holder" means a Person in whose name a Certificate representing a Security is registered, such Person being a beneficial owner within the meaning of the Business Trust Act. "Holder Direct Action" has the meaning specified in Section 3.10(e). "Indemnified Person" means any Trustee, any Affiliate of any Trustee, [any Conversion Agent], any Paying Agent, any officers, directors, shareholders, members, partners, employees, representatives or agents of any Trustee, [Conversion Agent] or Paying Agent, or any employee or agent of the Trust or of any of its Affiliates. "Indenture" means the Indenture dated as of __________, ______ between Seitel and the Debenture Trustee, as supplemented by the ________ Supplemental Indenture thereto dated as of _______, _______, pursuant to which the Debentures are to be issued. "Indenture Event of Default" means that event or condition defined as an "Event of Default" with respect to the Debentures under Section 6.01 (a) of the Indenture has occurred and is continuing. "Investment Company" means an "investment company" as defined in the Investment Company Act. -4- 9 "Investment Company Act" means the Investment Company Act of 1940, as amended from time to time, or any successor legislation. "Legal Action" has the meaning specified in Section 3.08(g). "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York or Houston, Texas are authorized or obligated by law, regulation or executive order to remain closed. "Liquidation Distribution" has the meaning set forth in Exhibits B and C hereto establishing the terms of the Securities. "List of Holders" has the meaning specified in Section 2.02(a). "Majority in liquidation amount of" Securities means, except as otherwise required by the Trust Indenture Act and except as provided in the penultimate paragraph of Section [6](b) of Exhibit B hereto, Holder(s) of outstanding Securities voting together as a single class or, as the context may require, Holder(s) of outstanding Preferred Securities or Common Securities voting separately as a class, who are the record owners of a relevant class of Securities whose liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions and Additional Amounts to the date upon which the voting percentages are determined) represents more than 50% of the liquidation amount of all outstanding Securities of such class. "1933 Act Registration Statement" has the meaning specified in Section 3.13. "1934 Act Registration Statement" has the meaning specified in Section 3.13. "Officers' Certificate" means a certificate signed by the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the chief financial officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of the Sponsor, and delivered to the appropriate Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 2.04 shall be the principal executive, financial or accounting officer of the Sponsor. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Declaration shall include: (i) a statement that the person making such certificate has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based; -5- 10 (iii) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel that (i) may be counsel for the Trust, the Property Trustee or the Sponsor, (ii) unless otherwise provided, may be an employee of the Sponsor but shall not be an employee of the Trust or the Property Trustee, and (iii) shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel pertaining to U.S. federal income tax matters may rely, inter alia, on published rulings or other official pronouncements of the U.S. Internal Revenue Service. ["Option Closing Date" means the Option Closing Date as specified in the Underwriting Agreement.] "Original Declaration" has the meaning set forth in the recitals above. "Paying Agent" has the meaning specified in Section 3.10(i). "Payment Amount" has the meaning specified in Section 6.01. "Person" means any individual, corporation, partnership, limited liability Company, joint venture, incorporated or unincorporated association, joint stock Company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "Preferred Securities" has the meaning specified in Section 7.01(b). "Preferred Securities Guarantee" means the Guarantee Agreement dated as of _______, _____ of Seitel and The First National Bank of Chicago, as initial guarantee trustee thereunder, in respect of the Preferred Securities. "Preferred Security Beneficial Owner" means, with respect to a Book Entry Interest, a Person who is the beneficial owner of such Book Entry Interest, as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Preferred Security Certificate" means a definitive certificate in fully registered form representing a Preferred Security substantially in the form of Annex I to Exhibit B. -6- 11 "Property Trustee" means the Trustee meeting the eligibility requirements set forth in Section 5.01(c) and having the duties set forth for the Property Trustee herein. "Property Account" has the meaning specified in Section 3.10(c). "Quorum" means a majority of the Regular Trustees or, if there are only two Regular Trustees, both such Regular Trustees. "Regular Trustee" means any Trustee other than the Property Trustee and the Delaware Trustee. "Resignation Request" has the meaning specified in Section 5.02(d). "Responsible Officer" means, when used with respect to the Property Trustee, any officer within the corporate trust department of the Property Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Property Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person's knowledge of and familiarity with the particular subject and, in either case, who shall have direct responsibility for the administration of this Declaration. "Securities" means the Common Securities and the Preferred Securities. "Securities Act" means the Securities Act of 1933, as amended from time to time, or any successor legislation. "Seitel" or "Sponsor" means Seitel, Inc., a Delaware corporation, or any successor entity resulting from any merger, consolidation, amalgamation or other business combination, in its capacity as sponsor of the Trust. [" Shares" means the common stock, par value $.01 per share, of Seitel or any other class of stock, other securities, cash or other assets into which the Debentures are then convertible.] "Special Event" has the meaning set forth in the terms of the Securities as set forth in Section 4 of Exhibits B and C hereto. "Sponsor" or "Seitel" means Seitel, Inc., a Delaware corporation, or any successor entity resulting from any merger, consolidation, amalgamation or other business combination, in its capacity as sponsor of the Trust. "Successor Delaware Trustee" has the meaning specified in Section 5.02(b)(ii). "Successor Entity" has the meaning specified in Section 3.18(b)(i). -7- 12 "Successor Property Trustee" has the meaning specified in Section 5.02(b)(i). "Successor Securities" has the meaning specified in Section 3.18(b)(i)(B). "Super Majority" has the meaning specified in Section 2.06(a)(ii). "Supplemental Indenture" means the Supplemental Indenture dated as of ________, ______ between Seitel and the Debenture Trustee, pursuant to which the Debentures are to be issued. "10% in liquidation amount of" Securities means, except as otherwise required by the Trust Indenture Act and except as provided in the penultimate paragraph of Section [6](b) of Exhibit B hereto, Holder(s) of outstanding Securities voting together as a single class or, as the context may require, Holder(s) of outstanding Preferred Securities or Common Securities, voting separately as a class, who are the record owners of a relevant class of Securities whose liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions and additional amounts to the date upon which the voting percentages are determined) represents 10% or more of the liquidation amount of all outstanding Securities of such class. "Treasury Regulations" means the income tax regulations, including temporary regulations, promulgated under the Code by the United States Treasury, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). "Trust" has the meaning set forth in the recitals above. "Trustee" or "Trustees" means each person who has signed this Declaration as a trustee, so long as such Person shall continue in office in accordance with the terms hereof, and all other Persons who may from time to time be duly appointed, qualified and serving as Trustees in accordance with the provisions hereof, and references herein to a Trustee or the Trustees shall refer to such Person or Persons solely in their capacity as trustees hereunder. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. "Underwriting Agreement" means the Underwriting Agreement dated as of _________, _______ among the Trust, the Sponsor and _________ and__________ as [representatives of the several] underwriters [named therein]. -8- 13 ARTICLE II TRUST INDENTURE ACT SECTION 2.01 Trust Indenture Act; Application (a) This Declaration is subject to the provisions of the Trust Indenture Act that are required to be part of this Declaration and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Declaration limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. (c) The Property Trustee, to the extent permitted by applicable law and/or the rules and regulations of the Commission, shall be the only Trustee which is a trustee for the purposes of the Trust Indenture Act. (d) The application of the Trust Indenture Act to this Declaration shall not affect the nature of the Securities as equity securities representing undivided beneficial interests in the assets of the Trust. SECTION 2.02 Lists of Holders of Preferred Securities (a) Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the Property Trustee (unless the Property Trustee is the registrar for the Securities) (i) on each regular record date for payment of Distributions, a list, in such form as the Property Trustee may reasonably require, of the names and addresses of the Holders ("List of Holders") as of such record date, and (ii) at any other time, within 30 days of receipt by the Trust of a written request for a List of Holders as of a date no more than 15 days before such List of Holders is given to the Property Trustee, provided that in each case neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to provide such List of Holders at any time that the List of Holders does not differ from the most recent List of Holders given to the Property Trustee by the Sponsor and the Regular Trustees on behalf of the Trust. The Property Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in the Lists of Holders given to it or which it receives in the capacity as Paying Agent (if acting in such capacity) provided that the Property Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Property Trustee shall comply with its obligations under Sections 310(b), 311 and 312(b) of the Trust Indenture Act. -9- 14 SECTION 2.03 Reports by the Property Trustee Within 60 days after May 15 of each year, commencing May 15, _________, __________ the Property Trustee shall deliver to the Holders of the Securities such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form, in the manner and at the times provided by Section 313 of the Trust Indenture Act. The Property Trustee shall also comply with the other requirements of Section 313 of the Trust Indenture Act. A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with the Sponsor, with each stock exchange or quotation system upon which any Preferred Securities are listed or traded (if so listed or traded) and also with the Commission. The Sponsor agrees to notify the Property Trustee when any Preferred Securities become listed on any stock exchange or quotation system and of any delisting thereof. SECTION 2.04 Periodic Reports to the Property Trustee Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property Trustee, the Commission and the Holders of the Securities, as applicable, such documents, reports and information as required by Section 314 (if any) of the Trust Indenture Act and the compliance certificates required by Section 314 of the Trust Indenture Act, any such certificates to be provided in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act (provided that any certificate to be provided pursuant to Section 314(a)(4) of the Trust Indenture Act shall be provided within 120 days of the end of each Fiscal Year). Delivery of such reports, information and documents to the Property Trustee is for informational purposes only and the Property Trustee's receipt of such shall not constitute constructive notice of any information contained therein, including the Sponsor's compliance with any of its covenants hereunder (as to which the Property Trustee is entitled to rely exclusively on Officers' Certificates or on certificates provided pursuant to this Section 2.04). SECTION 2.05 Evidence of Compliance with Conditions Precedent Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent provided for in this Declaration which relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c) may be given in the form of an Officers' Certificate. SECTION 2.06 Events of Default; Waiver (a) The Holders of a Majority in liquidation amount of Preferred Securities may, by vote, on behalf of the Holders of all of the Preferred Securities, waive any past Event of Default in respect of the Preferred Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, the Event of Default under this Declaration shall also not be waivable; or -10- 15 (ii) requires the consent or vote of the holders of greater than a majority in aggregate principal amount of the Debentures (a "Super Majority") to be waived under the Indenture, the Event of Default under this Declaration may only be waived by the vote of the Holders of at least the proportion in aggregate liquidation amount of the Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding. The foregoing provisions of this Section 2.06(a) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such default shall cease to exist, and any Event of Default with respect to the Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or an Event Of Default with respect to the Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Preferred Securities of an Event of Default with respect to the Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Common Securities of any such Event of Default with respect to the Common Securities for all purposes of this Declaration without any further act, vote or consent of the Holders of the Common Securities. (b) The Holders of a Majority in liquidation amount of Common Securities may, by vote, on behalf of the Holders of all of the Common Securities, waive any past Event of Default with respect to the Common Securities and its consequences, provided that, if the underlying Event of Default under the Indenture: (i) is not waivable under the Indenture, except where the Holders of the Common Securities are deemed to have waived such Event of Default under this Declaration as provided above in Section 2.06(a) or below in this Section 2.06(b), the Event of Default under this Declaration shall also not be waivable; or (ii) requires the consent or vote of a Super Majority to be waived, except where the Holders of the Common Securities are deemed to have waived such Event Of Default under this Declaration as provided above in Section 2.06(a) or below in this Section 2.06(b), the Event of Default under this Declaration may only be waived by the vote of the Holders of at least the proportion in aggregate liquidation amount of the Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding; provided, further, that the Holders of Common Securities will be deemed to have waived any such Event of Default and all Events of Defaults with respect to the Common Securities and their consequences until all Events of Default with respect to the Preferred Securities have been cured, waived or otherwise eliminated, and until such Events of Default have been so cured, waived or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of the Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the Securities. The foregoing provisions of this Section 2.06(b) -11- 16 shall be in lieu of Sections 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. In the event that any Event of Default with respect to the Preferred Securities is waived by the Holders of Preferred Securities as provided in this Declaration, the Holders of Common Securities agree that such waiver shall also constitute the waiver of such Event of Default with respect to the Common Securities for all purposes under this Declaration without any further act, vote or consent of the Holders of the Common Securities. Subject to the foregoing provisions of this Section 2.06(b), upon waiver, any such default shall cease to exist and any Event of Default with respect to the Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration, but no such waiver shall extend to any subsequent or other default or Event of Default with respect to the Common Securities or impair any right consequent thereon. (c) A waiver of an Event of Default under the Indenture by the Property Trustee, at the direction of the Holders of Preferred Securities, constitutes a waiver of the corresponding Event of Default under this Declaration. The foregoing provisions of this Section 2.06(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this Declaration and the Securities, as permitted by the Trust Indenture Act. SECTION 2.07 Disclosure of Information The disclosure of information as to the names and addresses of the Holders of the Securities in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, shall not be deemed to be a violation of any existing law, or any law hereafter enacted which does not specifically refer to Section 312 of the Trust Indenture Act, nor shall the Property Trustee be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act. ARTICLE III ORGANIZATION SECTION 3.01 Name The Trust continued by this Declaration is named "Seitel Capital Trust [I] [II]" as such name may be modified from time to time by the Regular Trustees following written notice to the Holders of the Securities. The Trust's activities may be conducted under the name of the Trust or any other name deemed advisable by the Regular Trustees. -12- 17 SECTION 3.02 Office The address of the principal office of the Trust is c/o Seitel, Inc., 50 Briar Hollow Lane, Seventh Floor, West Building, Houston, Texas 77027. Upon ten days' written notice to the Holders, the Regular Trustees may change the location of the Trust's principal office. SECTION 3.03 Issuance of the Securities On __________, __________ the Sponsor, on behalf of the Trust and pursuant to the Original Declaration, executed and delivered the Underwriting Agreement. On the Closing Date and contemporaneously with the execution and delivery of this Declaration, the Regular Trustees, in accordance with Section 7.01 and on behalf of the Trust, shall execute and deliver (i) one or more Global Certificates, registered in the name of the nominee of the initial Clearing Agency as specified in Section 9.04 for the benefit of the underwriters named in the Underwriting Agreement, in an aggregate amount of __________ Preferred Securities having an aggregate liquidation amount of $__________, against receipt of the aggregate purchase price of such Preferred Securities of $__________, and (ii) to the Sponsor, one or more Common Securities Certificates, registered in the name of the Sponsor, in an aggregate amount of __________ Common Securities having an aggregate liquidation amount of $__________, against receipt of the aggregate purchase price of such Common Securities of $__________. [In the event and to the extent the overallotment option granted by the Trust pursuant to the Underwriting Agreement is exercised by such underwriters, on the [Option Closing Date] the Regular Trustees, on behalf of the Trust, shall execute and deliver one or more Global Certificates, registered in the name of the nominee of the initial Clearing Agency as specified in Section 9.04 for the benefit of the underwriters named in the Underwriting Agreement, in an aggregate amount of up to __________ Preferred Securities having an aggregate liquidation amount of up to $__________, against receipt of the aggregate purchase price of such Preferred Securities of up to $__________.] SECTION 3.04 Purchase of Debentures On the Closing Date and contemporaneously with the execution and delivery of this Declaration, the Regular Trustees, on behalf of the Trust, shall purchase from the Sponsor with the proceeds received by the Trust from the sale of the Securities on such date pursuant to Section 3.03, at a purchase price of 100% of the principal amount thereof, Debentures, registered in the name of the Property Trustee and having an aggregate principal amount equal to $__________, and, in satisfaction of the purchase price, for such Debentures, the Regular Trustees, on behalf of the Trust, shall deliver or cause to be delivered to the Sponsor the sum of $__________. [In the event the overallotment option granted by the Trust with respect to the Preferred Securities pursuant to the Underwriting Agreement is exercised by the underwriters named therein, on the [Option Closing Date] the Regular Trustees, on behalf of the Trust, shall purchase from the Sponsor with the proceeds received by the Trust from the sale of the Preferred Securities on such date pursuant to Section 3.03, at a purchase price of 100% of the principal amount thereof, additional Debentures, registered in the name of the Property Trustee and having an aggregate principal amount of up to $__________, and, in satisfaction of the purchase price for such Debentures, the Regular Trustees, on behalf of the Trust, shall deliver or cause to be -13- 18 delivered to the Sponsor an amount equal to the aggregate principal amount of the Debentures being purchased.] SECTION 3.05 Purpose The exclusive purposes and functions of the Trust are: (a)(i) to issue and sell Preferred Securities for cash and use the proceeds of such sales to purchase from Seitel Debentures issued under the Indenture having an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities so issued and sold; (ii) to enter into such agreements and arrangements as may be necessary in connection with the sale of Preferred Securities to the initial purchasers thereof (including the Underwriting Agreement) and to take any action, and exercise such discretion, as may be necessary or desirable in connection therewith and to file such registration statements or make such other filings under the Securities Act, the Exchange Act or state securities or "Blue Sky" laws as may be necessary or desirable in connection therewith and with the issuance of the Preferred Securities; and (iii) to issue and sell Common Securities to Seitel for cash and use the proceeds of such sale to purchase from Seitel Debentures issued under the Indenture having an aggregate principal amount equal to the aggregate liquidation amount of the Common Securities so issued and sold; and (b) except as otherwise limited herein, to engage in only those other activities necessary, convenient or incidental thereto, including such other activities specifically authorized in this Declaration. The Trust shall not borrow money, issue debt or reinvest proceeds derived from investments, mortgage or pledge any of its assets or at any time while the Securities are outstanding, otherwise undertake or permit to be undertaken any activity that would result in or cause the Trust not to be classified for United States Federal income tax purposes as a grantor trust. SECTION 3.06 Authority Subject to the limitations provided in this Declaration and to the specific duties of the Property Trustee, the Regular Trustees shall have exclusive and complete authority to carry out the purposes of the Trust. An action taken by the Regular Trustees in accordance with their powers shall constitute the act of and serve to bind the Trust and an action taken by the Property Trustee on behalf of the Trust in accordance with its powers shall constitute the act of and serve to bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no Person shall be required to inquire into the authority of the Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely conclusively on the power and authority of the Trustees as set forth in this Declaration. SECTION 3.07 Title to Property of the Trust Except as provided in Section 3.10 with respect to the Debentures and the Property Account or unless otherwise provided in this Declaration, legal title to all assets of the Trust shall be vested in the Trust. The Holders shall not have legal title to any part of the assets of the Trust, but shall have undivided beneficial interests in the assets of the Trust. -14- 19 SECTION 3.08 Powers and Duties of the Regular Trustees The Regular Trustees shall have the exclusive power, authority and duty to cause the Trust, and shall cause the Trust, to engage in the following activities: (a) to issue Preferred Securities and Common Securities, in each case in accordance with this Declaration; provided, however, that the Trust may issue no more than one series of Preferred Securities and no more than one series of Common Securities, and, provided further, that there shall be no interests in the Trust other than the Securities and the issuance of Securities shall be limited to [(x)] a one-time, simultaneous issuance of both Preferred Securities and Common Securities on the Closing Date [and (y) any subsequent issuance of Preferred Securities on the Option Closing Date pursuant to an exercise of the overallotment option granted to the underwriters in the Underwriting Agreement]; (b) in connection with the issuance of the Preferred Securities, at the direction of the Sponsor, to effect or cause to be effected the filings, and to execute or cause to be executed, the documents, set forth in Section 3.13 and to execute, deliver and perform the Depositary Agreement on behalf of the Trust; (c) to acquire as trust assets Debentures with the proceeds of the sale of the Preferred Securities and the Common Securities; provided, however, that the Regular Trustees shall cause legal title to all of the Debentures to be vested in, and the Debentures to be held of record in the name of, the Property Trustee for the benefit of the Holders of the Preferred Securities and the Common Securities; (d) if and to the extent that the Sponsor on behalf of the Trust has not already done so, to cause the Trust to enter into the Underwriting Agreement and such other agreements and arrangements as may be necessary or desirable in connection with the sale of the Preferred Securities to the initial purchasers thereof and the consummation thereof, and to take all action, and exercise all discretion, as may be necessary or desirable in connection with the consummation thereof; (e) to give the Sponsor and the Property Trustee prompt written notice of the occurrence of a Special Event; (f) to establish a record date with respect to all actions to be taken hereunder that require a record date be established, including for the purposes of Section 316(c) of the Trust Indenture Act and with respect to Distributions, voting rights, redemptions, and exchanges, and to issue relevant notices to Holders of the Preferred Securities and Common Securities as to such actions and applicable record dates; (g) to bring or defend, pay, collect, compromise, arbitrate, resort to legal action or otherwise adjust claims or demands of or against the Trust ("Legal Action"), unless pursuant to Section 3.10, the Property Trustee has the exclusive power to bring such Legal Action; -15- 20 (h) to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors and consultants and pay reasonable compensation for such services; (i) to cause the Trust to comply with the Trust's obligations under the Trust Indenture Act; (j) to give the certificate to the Property Trustee required by Section 314(a)(4) of the Trust Indenture Act, which certificate may be executed by any Regular Trustee; (k) to incur expenses which are necessary or incidental to carrying out any of the purposes of the Trust; (l) to act as, or appoint another Person to act as, registrar and transfer agent for the Securities, the Regular Trustees hereby initially appointing the Property Trustee for such purposes; (m) to take all actions and perform such duties as may be required of the Regular Trustee pursuant to the terms of the Securities set forth in Exhibits B and C hereto; (n) to take all actions which may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Securities or to enable the Trust to effect the purposes for which the Trust has been created; (o) to take all actions, not inconsistent with this Declaration or with applicable law, which the Regular Trustees determine in their discretion to be necessary or desirable in carrying out the purposes of the Trust and the activities of the Trust as set out in this Section 3.08, including, but not limited to: (i) causing the Trust not to be deemed to be an Investment Company required to be registered, under the Investment Company Act; (ii) causing the Trust to be classified for United States Federal income tax purposes as a grantor trust; and (iii) cooperating with the Sponsor to ensure that the Debentures will be treated as indebtedness of the Sponsor for United States federal income tax purposes; (p) to take all actions necessary to cause all applicable tax returns and tax information reports and forms that are required to be filed with respect to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of the Trust, and to comply with any applicable requirements -16- 21 imposed by any taxing authority on holders of instruments treated as indebtedness for United States federal income tax purposes; (q) to appoint a Paying Agent for the Securities except for such time as the power to appoint a Paying Agent is vested in the Property Trustee; and (r) to execute all documents or instruments, perform all duties and powers and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing. The Regular Trustees must exercise the powers set forth in this Section 3.08 in a manner which is consistent with the purposes and functions of the Trust set out in Section 3.05, and the Regular Trustees shall not take any action which is inconsistent with the purposes and functions of the Trust set forth in Section 3.05. Subject to this Section 3.08, the Regular Trustees shall have none of the powers or any of the authority of the Property Trustee set forth in Section 3.10. The Regular Trustees shall take all actions on behalf of the Trust that are not specifically required by this Declaration to be taken by any other Trustee. Any expenses incurred by the Regular Trustees pursuant to this Section 3.08 shall be reimbursed by the Sponsor. SECTION 3.09 Prohibition of Actions by the Trust and the Trustees The Trust shall not, and the Trustees (including the Property Trustee) shall not cause the Trust to, engage in any activity other than in connection with the purposes of the Trust or other than as required or authorized by this Declaration. In particular, the Trust shall not and the Trustees (including the Property Trustee) shall not cause the Trust to: (a) invest any proceeds received by the Trust as a result of holding the Debentures but the Trust shall promptly distribute from the Property Account all such proceeds to Holders of Securities pursuant to the term of this Declaration and of the Securities; (b) acquire any assets other than as expressly provided herein; (c) possess Trust property for other than a Trust purpose; (d) make any loans, other than loans represented by the Debentures; (e) possess any power or otherwise act in such a way as to vary the Trust assets or the terms of the Securities in any way whatsoever, except as otherwise expressly provided herein; -17- 22 (f) issue any securities or other evidences of beneficial ownership of, or beneficial interests in, the Trust other than the Securities; (g) incur any indebtedness for borrowed money; (h) (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee or exercising any trust or power conferred upon the Debenture Trustee with respect to the Debentures, (ii) waive any past default that is waivable under Section 6.06 of the Indenture, or (iii) exercise any right to rescind or annul a declaration of acceleration of the maturity of the principal of the Debentures, without, in each case, obtaining the prior approval of the Holders of a Majority in liquidation amount of Securities; (i) revoke any action previously authorized or approved by a vote of the Holders of Preferred Securities except by subsequent vote of such Holders; (j) consent to any amendment, modification or termination of the Indenture or the Debentures, where such consent shall be required, unless in the case of this clause (j) the Property Trustee shall have received an Opinion of Counsel experienced in such matters to the effect that such amendment, modification or termination will not cause more than a remote risk that for United States federal income tax purposes the Trust will not be classified as a grantor trust; (k) take or consent to any action that would result in the placement of a lien, pledge, charge, mortgage or other encumbrance on any of the Trust property; (l) vary the investment of certificate holders of the Trust (within the meaning of Treasury Regulation Section 301.7701-4(c)); or (m) after the date hereof, enter into any contract or agreement (other than any depositary agreement or any agreement with any securities exchange or automated quotation system) that does not expressly provide that the Holders of Preferred Securities, in their capacities as such, have limited liability (in accordance with the provisions of the Business Trust Act) for the liabilities and obligations of the Trust, which express provision shall be in substantially the following form: The Holders of the Preferred Securities, in their capacities as such, shall not be personally liable for any liabilities or obligations of the Trust arising out of this Agreement, and the parties hereto hereby agree that the Holders of the Preferred Securities, in their capacities as such, shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. -18- 23 SECTION 3.10 Powers and Duties of the Property Trustee (a) The legal title to the Debentures shall be owned by and held of record in the name of the Property Trustee acting in such capacity for the benefit of the Trust and the Holders of the Securities. The right, title and interest of the Property Trustee to the Debentures shall vest automatically in each Person who may hereafter be appointed as Property Trustee in accordance with Article V. Such vesting and cessation of title shall be effective whether or not conveyancing documents with regard to the Debentures have been executed and delivered. (b) The Property Trustee shall not transfer its right, title and interest in the Debentures to the Regular Trustees or, if the Property Trustee does not also act as the Delaware Trustee, the Delaware Trustee. (c) The Property Trustee shall: (i) establish and maintain a segregated non-interest bearing bank account (the "Property Account") in the name of and under the exclusive control of the Property Trustee on behalf of the Holders of the Securities and, on the receipt of payments of funds made in respect of the Debentures held by the Property Trustee, deposit such funds into the Property Account and, without any further acts of the Property Trustee or the Regular Trustees, promptly make payments to the Holders of the Preferred Securities and Common Securities from the Property Account in accordance with Section 6.01. Funds in the Property Account shall be held uninvested, and without liability for interest thereon, until disbursed in accordance with this Declaration. The Property Account shall be an account which is maintained with a banking institution whose long term unsecured indebtedness is rated by a "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act, at least investment grade; (ii) engage in such ministerial activities as shall be necessary or appropriate to effect promptly the redemption of the Preferred Securities and the Common Securities to the extent the Debentures are redeemed or mature; (iii) upon notice of distribution issued by the Regular Trustees in accordance with the terms of the Preferred Securities and the Common Securities, engage in such ministerial activities as shall be necessary or appropriate to effect promptly pursuant to terms of the Securities the distribution of Debentures to Holders of Securities upon the election of the Holder of Common Securities to distribute the Debentures to Holders of Securities and dissolve the Trust; and (iv) have the legal power to exercise all of the rights, powers and privileges of a holder of the Debentures under the Indenture and, if an Event of Default occurs and is continuing, the Property Trustee, subject to Section 3.10(e), shall for the benefit of the Holders of the Securities, enforce its rights as holder of the Debentures under the Indenture, -19- 24 subject to the rights of the Holders of the Preferred Securities pursuant to the terms of this Declaration, the Business Trust Act and the Trust Indenture Act. (d) The Property Trustee shall take all actions and perform such duties as may be specifically required of the Property Trustee pursuant to the terms of the Securities set forth in Exhibits B and C hereto. (e) if an Event of Default has occurred and is continuing, then the Holders of a Majority in liquidation amount of Preferred Securities will have, subject to Section 3.12(c)(iv), the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under this Declaration, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Debentures. If the Property Trustee fails to enforce its rights under the Debentures, a Holder of Preferred Securities may, to the fullest extent permitted by law, after a period of 30 days has elapsed since such Holder's written request to the Property Trustee to enforce such rights, institute a legal proceeding directly against the Sponsor to enforce the Property Trustee's rights under the Debentures without first instituting any legal proceeding against the Property Trustee or any other Person; provided that, if an Event of Default has occurred and is continuing and such event is attributed to the failure of the Sponsor to pay principal of, any premium or interest on or any Additional Amounts with respect to the Debentures on the date such amounts are otherwise payable (or in the case of redemption, on the redemption date), then a Holder of Preferred Securities may directly institute a proceeding for enforcement of payment to such Holder of such amounts on the Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities of such Holder (a "Holder Direct Action") on or after the respective due date specified in the Debentures. In connection with such Holder Direct Action, the Sponsor will be subrogated to the rights of such Holder of Preferred Securities to the extent of any payment made by the Sponsor to such Holders of Preferred Securities in such Holder Direct Action. Except as provided in the preceding sentences, the Holders of Preferred Securities will not be able to exercise directly any other remedy available to the Holders of the Debentures. (f) All moneys deposited in the Property Account and all Debentures held by the Property Trustee for the benefit of the Holders of the Securities will not be subject to any right, charge, security interest, lien or claim of any kind in favor of, or for the benefit of the Property Trustee or its agents or their creditors. (g) The Property Trustee shall, within 90 days after the occurrence of a default with respect to the Securities actually known to a Responsible Officer of the Property Trustee, transmit by mail, first class postage prepaid, to the holders of the Securities, as their names and addresses appear upon the register, notice of such default with respect to the Securities known to the Property Trustee, unless such default shall have been cured before the giving of such notice (the term "default" for the purposes of this Section 3.10(g) being hereby defined to be an Indenture Event of Default, not including any periods of grace provided in the Indenture and irrespective of the giving of any notice provided therein); provided that, except in the case of default in the payment of the -20- 25 principal of, any premium or interest on or any Additional Amounts with respect to any of the Debentures, the Property Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Securities. The Property Trustee shall not be deemed to have knowledge of any default, except (i) a default in the payment of principal, premium or interest on or any Additional Amounts with respect to the Debentures or (ii) any default as to which the Property Trustee shall have received written notice or a Responsible Officer charged with the administration of this Declaration shall have obtained actual knowledge. (h) The Property Trustee shall continue to serve as a Trustee until either: (i) the Trust has been completely liquidated and the proceeds thereof distributed to the Holders of Securities pursuant to the terms of the Securities; or (ii) a Successor Property Trustee has been appointed and accepted that appointment in accordance with Article V. (i) The Property Trustee shall act as paying agent in respect of the Common Securities and, if the Preferred Securities are not in book entry only form, the Preferred Securities and, subject to Section 3.08(q), may authorize one or more Persons (each, a "Paying Agent") to pay Distributions, redemption payments or liquidation payments on behalf of the Trust with respect to the Preferred Securities. Any such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee, after consultation with the Regular Trustees, at any time and a successor Paying Agent or additional Paying Agents may be appointed at any time by the Property Trustee, subject to Section 3.08(q). (j) The Property Trustee shall give prompt written notice to the Holders of the Securities of any notice received by it from Seitel of its election to defer payments of interest on the Debentures by extending the interest payment period with respect thereto. (k) Subject to this Section 3.10, the Property Trustee shall have none of the powers or the authority of the Regular Trustees set forth in Section 3.08. (l) The Property Trustee shall exercise the powers, duties and rights set forth in this Section 3.10 and Section 3.12 in a manner which is consistent with the purposes and functions of the Trust set out in Section 3.05, and the Property Trustee shall not take any action which is inconsistent with the purposes and functions of the Trust set forth in Section 3.05. SECTION 3.11 Delaware Trustee (a) Notwithstanding any other provision of this Declaration, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and -21- 26 responsibilities of the Trustees described in this Declaration. The Delaware Trustee shall be a Trustee for the sole and limited purpose of fulfilling the requirements of Section 3807(a) of the Business Trust Act. (b) It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust, (i) any agreements or instruments executed and delivered by Bank One Delaware, Inc. are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by Bank One Delaware, Inc. in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Bank One Delaware, Inc. in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Trust Agreement. SECTION 3.12 Certain Rights and Duties of the Property Trustee (a) The Property Trustee, before the occurrence of an Event of Default and after the curing or waving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Declaration, and no implied covenants shall be read into this Declaration against the Property Trustee. In case an Event of Default has occurred (that has not now been cured or waived pursuant to Section 2.06), the Property Trustee shall exercise such of the rights and powers vested in it by this Declaration, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) No provision of this Declaration shall be construed to relieve the Property Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of an Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Property Trustee shall be determined solely by the express provisions of this Declaration, and the Property Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Declaration, and no implied covenants or obligations shall be read into this Declaration against the Property Trustee; and (B) in the absence of bad faith on the part of the Property Trustee, the Property Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions -22- 27 furnished to the Property Trustee and conforming to the requirements of this Declaration; provided, however, that in the case of any such certificates or opinions that by any provision hereof or the Trust Indenture Act are specifically required to be furnished to the Property Trustee, the Property Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Declaration or the Trust Indenture Act, as the case may be; (ii) the Property Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Property Trustee, unless it shall be proved that the Property Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Property Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a Majority in liquidation amount of Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Property Trustee hereunder or under the Indenture, or exercising any trust or power conferred upon the Property Trustee under this Declaration; and (iv) no provision of this Declaration shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Declaration or adequate indemnity against such risk or liability is not reasonably assured to it. (c) Subject to the provisions of Section 3.12(a) and (b): (i) whenever in the administration of this Declaration, the Property Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Sponsor or the Regular Trustees; (ii) the Property Trustee (A) may consult with counsel (which may be counsel to the Sponsor or any of its Affiliates and may include any of its employees) selected by it in good faith and with due care and the written advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice and opinion and (B) shall have the right at any time to seek instructions concerning the administration of this Declaration from any court of competent jurisdiction; -23- 28 (iii) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it in good faith and with due care; (iv) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Declaration at the request or direction of any Holder, unless such Holder shall have offered to the Property Trustee security and indemnity satisfactory to the Property Trustee against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction; provided that nothing contained in this clause (iv) shall relieve the Property Trustee of the obligation, upon the occurrence of an Event of Default (which has not been cured or waived) to exercise such of the rights and powers vested in it by this Declaration, and to use the same degree of care and skill in this exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs; (v) any action taken by the Property Trustee or its agents hereunder shall bind the Holders of the Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action; and no third party shall be required to inquire as to the authority of the Property Trustee to so act, or as to its compliance with any of the terms and provisions of this Declaration, both of which shall be conclusively evidenced by the Property Trustee's or its agent's taking such action; and (vi) whenever in the administration of this Declaration the Property Trustee shall deem it necessary or desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee may request instructions from the Holders of the Securities, which instructions shall be given by the Holders of the same proportion in liquidation amount of the Securities as would be entitled to direct the Property Trustee under the terms of the Securities in respect of such remedy, right or action. (d) The Property Trustee, in its individual or any other capacity, may become the owner or pledgee of Preferred Securities and may otherwise deal with the Sponsor with the same rights it would have if it were not the Property Trustee. (e) Except as required by Section 3.10(c) hereof, all moneys received by the Property Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Property Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree in writing to pay thereon. (f) (i) The Sponsor covenants and agrees to pay to the Property Trustee from time to time, and the Property Trustee shall be entitled to, such compensation as the Sponsor and the Property Trustee shall from time to time agree in writing (which shall not be limited by any provision -24- 29 of law in regard to the compensation of a Property Trustee of an express trust) for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Property Trustee, and the Sponsor will pay or reimburse the Property Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Property Trustee in accordance with any of the provisions of this Declaration (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Sponsor also covenants to indemnify each of the Property Trustee and any predecessor Property Trustee and their officers, agents, directors and employees for, and to hold them harmless against, any and all loss, liability, damage, claim or expense including taxes (other than taxes based upon, measured by or determined by the income, profit, franchise or doing business of the Property Trustee) incurred without negligence or bad faith on the part of the Property Trustee and arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim (whether asserted by the Sponsor, any Holder or any other Person) of liability in the premises. The provisions of this subpart (f) of this Section 3.12 shall survive the termination of this Declaration and resignation or removal of the Property Trustee. (ii) The obligations of the Sponsor under this subpart (f) of this Section 3.12 to compensate and indemnify the Property Trustee and to pay or reimburse the Property Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Property Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities. (g) Whether or not expressly stated, every provision of this Declaration pertaining to the Property Trustee shall be subject to this Section 3.12. SECTION 3.13 Registration Statement and Related Matters In accordance with the Original Declaration, Seitel, as the sponsor of the Trust, was authorized (a) to prepare and file with the Commission and execute, in each case on behalf of the Trust, (i) a Registration Statement on Form S-3 (Registration No. 333-____________) (the "1933 Act Registration Statement"), including any pre-effective or post-effective amendments to such Registration Statement, relating to the registration under the Securities Act of the Preferred Securities and certain other securities of the Sponsor and (ii) if the Sponsor shall deem it necessary or desirable, a Registration Statement on Form 8-A (the "1934 Act Registration Statement") (including all pre-effective and post-effective amendments thereto) relating to the registration of the Preferred Securities under Section 12 of the Exchange Act; (b) if the Sponsor shall deem it desirable, to prepare and file with New York Stock Exchange, Inc. or any other exchange or over-the-counter market (collectively, the "Exchanges") and execute on behalf of the Trust a listing application or applications and all other applications, statements, certificates, agreements and other instruments as shall be necessary or desirable to cause the Preferred Securities to be listed on any Exchange; (c) -25- 30 to prepare and file and execute on behalf of the Trust such applications, reports, surety bonds, irrevocable consents, appointments of attorney for service of process and other papers and documents as the Sponsor, on behalf of the Trust, may deem necessary or desirable to register the Preferred Securities under the securities or "Blue Sky" laws of such jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or desirable; (d) to negotiate the terms of and execute on behalf of the Trust the Underwriting Agreement; and (e) to execute and deliver on behalf of the Trust letters or documents to, or instruments for filing with, the Clearing Agency relating to the Preferred Securities. In the event that any filing referred to in clauses (a)-(c) above is required by the rules and regulations of the Commission, any Exchange, the National Association of Securities Dealers, Inc. or state securities or blue sky laws, to be executed on behalf of the Trust by the Regular Trustees, the Regular Trustees, in their capacities as Trustee of the Trust, and the Sponsor are hereby authorized to join in any such filing and to execute on behalf of the Trust any and all of the foregoing. In connection with all of the foregoing, Seitel and each Regular Trustee, solely in its capacity as Trustee of the Trust have constituted and appointed, and hereby confirm the appointment of, _________, _________ and __________, and each of them, as his, her or its, as the case may be, true and lawful attorneys-in-fact, and agents, with full power of substitution and resubstitution, for Seitel or such Trustee or in Seitel's or such Trustee's name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to the 1933 Act Registration Statement and the 1934 Act Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as Seitel or such Trustee might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. SECTION 3.14 Filing of Amendments to Certificate of Trust The Certificate of Trust as filed with the Secretary of State of the State of Delaware on ___________, _______ is attached hereto as Exhibit A. On or after the date of execution of this Declaration, the Regular Trustees shall cause the filing with the Secretary of State of the State of Delaware of such amendments, if any, to the Certificate of Trust as the Regular Trustees shall deem necessary or desirable. SECTION 3.15 Execution of Documents by the Regular Trustees Except as otherwise required by the Business Trust Act with respect to the Certificate of Trust or otherwise and except as provided in Sections 7.01(c) and 9.08, any Regular Trustee, or if there is only one, such Regular Trustee is authorized to execute and deliver on behalf of the Trust any documents which the Regular Trustees have the power and authority to execute or deliver pursuant to this Declaration. SECTION 3.16 Trustees Not Responsible for Recitals or Issuance of Securities -26- 31 The recitals contained in this Declaration and the Securities shall be taken as the statements of the Sponsor, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the value or condition of the property of the Trust or any part thereof. The Trustees make no representations as to the validity or sufficiency of this Declaration or the Securities. SECTION 3.17 Duration of the Trust The Trust, absent dissolution pursuant to the provisions of Article VIII hereof, shall continue without dissolution until __________, _____. SECTION 3.18 Mergers (a) The Trust may not merge with or into, convert into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any Person, except as described in Section 3.18(b) and (c) of this Declaration. (b) The Trust may, at the request of the Sponsor, with the consent of the Regular Trustees or, if there are more than two, a majority of the Regular Trustees and without the consent of the Holders, the Delaware Trustee or the Property Trustee, merge with or into, convert into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to, a trust organized as such under the laws of any State; provided that: (i) such successor entity (the "Successor Entity") either: (A) expressly assumes all of the obligations of the Trust under the Securities and this Declaration; or (B) substitutes for the Securities other securities having substantially the same terms as the Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Securities rank with respect to Distributions and payments upon liquidation, redemption and otherwise; (ii) the Sponsor expressly appoints a trustee of the Successor Entity that possesses the same powers and duties as the Property Trustee as the holder of the Debentures; (iii) the Successor Securities are listed, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or with another organization in which the Preferred Securities are then listed or quoted, if any; (iv) if the Preferred Securities (including any Successor Securities) are rated by any nationally recognized statistical rating organization prior to such transaction, such -27- 32 merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Securities (including any Successor Securities), or if the Debentures are so rated, the Debentures, to be downgraded by such nationally recognized statistical rating organization; (v) such merger, conversion, consolidation amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders (including the holders of any Successor Securities) in any material respect (other than with respect to any dilution of such Holders' interests in the new entity); (vi) such Successor Entity has purposes substantially identical to those of the Trust; (vii) prior to such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Sponsor has received an Opinion of Counsel experienced in such matters to the effect that: (A) such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders (including the holders of any Successor Securities) in any material respect (other than with respect to any dilution of the Holders' interest in the new entity); (B) following such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor the Successor Entity will be required to register as an Investment Company under the Investment Company Act; and (C) following such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Trust (or the Successor Entity) will continue to be classified as a grantor trust for United States Federal income tax purposes; (viii) prior to such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Sponsor has received an Officers' Certificate that such merger, conversion, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the Holders (including the holders of any Successor Securities) in any material respect (other than with respect to any dilution of the Holders' interest in the new entity); (ix) the Sponsor or any permitted successor or assignee owns all of the common securities of such Successor Entity and guarantees the obligations of such Successor Entity -28- 33 under the Successor Securities at least to the extent provided by the Preferred Securities Guarantee; and (x) there shall have been furnished to the Property Trustee an Officers' Certificate and Opinion of Counsel, each to the effect that all conditions precedent in this Declaration to such transaction have been satisfied. (c) Notwithstanding Section 3.18(b), the Trust shall not, except with the consent of Holders of 100% in liquidation amount of the Securities, consolidate, amalgamate, merge, with or into, convert into, or be replaced by or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to, any other Person or permit any other Person to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, conversion, replacement, conveyance, transfer or lease would cause the Trust or the Successor Entity not to be classified as a grantor trust for United States Federal income tax purposes or would cause the Holders of the Securities not to be treated as owning an undivided interest in the Debentures. SECTION 3.19 Property Trustee May File Proofs of Claim In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other similar judicial proceeding relative to the Trust or any other obligor upon the Securities or the property of the Trust or of such other obligor or their creditors, the Property Trustee (irrespective of whether any Distributions on the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Property Trustee shall have made any demand on the Trust for the payment of any past due Distributions) shall be entitled and empowered, to the fullest extent permitted by law, by intervention in such proceeding or otherwise: (a) to file and prove a claim for the whole amount of any Distributions owing and unpaid in respect of the Securities (or, if the Securities are original issue discount Securities, such portion of the liquidation amount as may be specified in the terms of such Securities) and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Property Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel) 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 other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Property Trustee and, in the event that the Property Trustee shall consent to the making of such payments directly to the Holders to pay to the Property Trustee any amount due it for the reasonable -29- 34 compensation, expenses, disbursements and advances of the Property Trustee, its agents and counsel, and any other amounts due the Property Trustee. Nothing herein contained shall be deemed to authorize the Property Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or compensation affecting the Securities or the rights of any Holder thereof to authorize the Property Trustee to vote in respect of the claim of any Holder in any such proceeding. ARTICLE IV SPONSOR SECTION 4.01 Purchase of Common Securities by the Sponsor On the Closing Date, the Sponsor will purchase all of the Common Securities issued by the Trust at the same time as the Preferred Securities to be issued on such date are issued, such purchase to be in an amount equal to [3%] of the total capital of the Trust. [In addition, on each Option Closing Date, the Sponsor will purchase additional Common Securities in an amount equal to [3%] of the total capital of the Trust issued on such Option Closing Date at the same time as additional Preferred Securities are issued pursuant to the exercise of the overallotment option set forth in the Underwriting Agreement.] SECTION 4.02 Expenses (a) In connection with the purchase of the Debentures by the Trust, the Sponsor, in its capacity as Sponsor and not as a Holder, shall be responsible for and shall pay for all debts and obligations (other than with respect to the Securities) and all current and future costs and expenses of the Trust (including, but not limited to, costs and expenses relating to the organization of the Trust, the issuance of the Preferred Securities to initial purchasers thereof (including any underwriting discounts or commissions payable to such purchasers), the fees and expenses (including reasonable counsel fees and expenses) of the Trustees (including any amounts payable under Article X), the costs and expenses relating to the operation of the Trust, including, without limitation, costs and expenses of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel and telephone and other telecommunications expenses and costs and expenses incurred in connection with the acquisition and disposition of Trust assets). (b) In connection with the purchase of the Debentures by the Trust, the Sponsor, in its capacity as Sponsor and not as a Holder, shall pay any and all taxes (other than United States withholding taxes attributable to the Trust or its assets) of the Trust and all liabilities, costs and expenses of the Trust with respect to such taxes. (c) The Sponsor's obligations under this Section 4.02 shall be for the benefit of, and shall be enforceable by, any Person to whom any such debts, obligations, costs, expenses and taxes are -30- 35 owed (a "Creditor") whether or not such Creditor has received notice hereof. Any such Creditor may enforce the Sponsor's obligations under this Section 4.02 directly against the Sponsor, and the Sponsor irrevocably waives any right or remedy to require that any such Creditor take any action against the Trust or any other Person before proceeding against the Sponsor. (d) The Sponsor shall be subrogated to all (if any) rights of the Trust in respect of any amounts paid to any Creditor by the Sponsor under this Section 4.02. ARTICLE V TRUSTEES SECTION 5.01 Number of Trustees; Qualifications (a) The number of Trustees initially shall be five (5). At any time (i) before the issuance of the Securities, the Sponsor may, by written instrument, increase or decrease the number of, and appoint, remove and replace, the Trustees, and (ii) after the issuance of the Securities the number of Trustees may be increased or decreased solely by, and Trustees may be appointed, removed or replaced solely by, vote of Holders of Common Securities representing a Majority in liquidation amount of Common Securities voting as a class; provided that in any case: (i) the number of Trustees shall be at least five (5) unless the Trustee that acts as the Property Trustee also acts as the Delaware Trustee, in which case the number of Trustees shall be at least four (4); (ii) at least a majority of the Trustees shall at all times be officers, directors or employees of Seitel; (iii) if required by the Business Trust Act, one Trustee (the "Delaware Trustee") shall be either a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and otherwise is permitted to act as a Trustee hereunder under the laws of the State of Delaware, except that if the Property Trustee has its principal place of business in the State of Delaware and otherwise is permitted to act as a Trustee hereunder under the laws of the State of Delaware, then the Property Trustee shall also be the Delaware Trustee and Section 3.11 shall have no application; and (iv) there shall at all times be a Property Trustee hereunder which shall satisfy the requirements of Section 5.01(c). Each Trustee shall be either a natural person at least 21 years of age or a legal entity which shall act through one or more duly appointed representatives. (b) The initial Regular Trustees shall be: -31- 36 ---------------------------- ---------------------------- ---------------------------- c/o Seitel, Inc. 50 Briar Hollow Lane Seventh Floor, West Building Houston, Texas 77027 (c) There shall at all times be one Trustee which shall act as the Property Trustee. In order to act as the Property Trustee hereunder such Trustee shall: (i) not be an Affiliate of the Sponsor; and (ii) be a corporation or national banking association organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation, national banking association or Person permitted by the Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation or national banking association publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this Section 5.01(c)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee shall cease to satisfy the requirements of clauses (i) and (ii) above, the Property Trustee shall immediately resign in the manner and with the effect set out in Section 5.02(d). If the Property Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Property Trustee and the Holders of the Common Securities (as if such Holders were the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all respects comply with the provision of Section 310(b) of the Trust Indenture Act. The Preferred Securities Guarantee and the Indenture shall be deemed to be specifically described in this Declaration for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. The initial Trustee which shall serve as the Property Trustee is The First National Bank of Chicago, whose address is as set forth in Section 14.01(b). (d) The initial Trustee which shall serve as the Delaware Trustee is Bank One Delaware, Inc., whose address is as set forth in Section 14.01(c). -32- 37 (e) Any action taken by the Holders of Common Securities pursuant to this Article V shall be taken at a meeting of the Holders of Common Securities convened for such purpose or by written consent as provided in Section 12.02. (f) No amendment may be made to this Section 5.01 which would change any rights with respect to the number, existence or appointment and removal of Trustees, except with the consent of each Holder of Common Securities. SECTION 5.02 Appointment, Removal and Resignation of the Trustees (a) Subject to Section 5.02(b), Trustees may be appointed or removed without cause at any time: (i) until the issuance of the Securities, by written instrument executed by the Sponsor; and (ii) after the issuance of the Securities by vote of the Holders of a Majority in liquidation amount of Common Securities voting as a class. (b) (i) The Trustee that acts as the Property Trustee shall not be removed in accordance with Section 5.02(a) until a successor Trustee possessing the qualifications to act as the Property Trustee under Section 5.01(c) (a "Successor Property Trustee") has been appointed and has accepted such appointment by written instrument executed by such Successor Property Trustee and delivered to the Regular Trustees, the Sponsor and the Property Trustee being removed; and (ii) the Trustee that acts as the Delaware Trustee shall not be removed in accordance with Section 5.02(a) until a successor Trustee possessing the qualifications to act as the Delaware Trustee under Section 5.01(a)(iii) (a "Successor Delaware Trustee") has been appointed and has accepted such appointment by written instrument executed by such Successor Delaware Trustee and delivered to the Regular Trustees, the Sponsor and the Delaware Trustee being removed. (c) A Trustee appointed to office shall hold such office until his successor shall have been appointed or until his death, removal or resignation. (d) Any Trustee may resign from office (without need for prior or subsequent accounting) by an instrument (a "Resignation Request") in writing signed by the Trustee and delivered to the Sponsor and the Trust, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that: (i) no such resignation of the Trustee that acts as the Property Trustee shall be effective until a Successor Property Trustee has been appointed and has accepted such -33- 38 appointment by instrument executed by such Successor Property Trustee and delivered to the Regular Trustees, the Sponsor and the resigning Property Trustee; and (ii) no such resignation of the Trustee that acts as the Delaware Trustee shall be effective until a Successor Delaware Trustee has been appointed and has accepted such appointment by instrument executed by such Successor Delaware Trustee and delivered to the Regular Trustees, the Sponsor and the resigning Delaware Trustee. (e) If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 5.02 within 60 days after delivery of a notice of removal or a Resignation Request, the Property Trustee or Delaware Trustee being removed or resigning, as the case may be, may petition any court of competent jurisdiction for appointment of a Successor Property Trustee or Successor Delaware Trustee, as the case may be. Such court may thereupon after prescribing such notice, if any, as it may deem proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be. (f) No amendment may be made to this Section 5.02 which would change any rights with respect to the appointment or removal of Trustees, except with the consent of each Holder of Common Securities. SECTION 5.03 Vacancies Among the Trustees If a Trustee ceases to hold office for any reason and the number of Trustees is not reduced pursuant to Section 5.01 or if the number of Trustees is increased pursuant to Section 5.01, a vacancy shall occur. A resolution certifying the existence of such vacancy by a majority of the Regular Trustees shall be conclusive evidence of the existence of such vacancy. The vacancy shall be filled with a Trustee appointed in accordance with the requirements of this Article V. SECTION 5.04 Effect of Vacancies The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the duties of a Trustee, or any one of them, shall not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of Regular Trustees shall occur until such vacancy is filled as provided in this Article V, the Regular Trustees in office, regardless of their number, shall have all the powers granted to the Regular Trustees and shall discharge all the duties imposed upon the Regular Trustees by this Declaration. SECTION 5.05 Meetings Meetings of the Regular Trustees shall be held from time to time upon the call of any Regular Trustee. Regular meetings of the Regular Trustees may be held at a time and place fixed by resolution of the Regular Trustees. Notice of any in-person meeting of the Regular Trustees shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by -34- 39 overnight courier) not less than 48 hours before such meeting. Notice of any telephonic meeting of the Regular Trustees or any committee thereof shall be hand delivered or otherwise delivered in writing (including by facsimile, with a hard copy by overnight courier) not less than 24 hours before such meeting. Notices shall contain a brief statement of the time, place and anticipated purposes of the meeting. The presence (whether in person or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice of such meeting except where a Regular Trustee attends a meeting for the express purpose of objecting to the transaction of any activity on the ground that the meeting has not been lawfully called or convened. Unless otherwise provided in this Declaration, any action of the Regular Trustees may be taken at a meeting by vote of a majority of the Regular Trustees present (whether in person or by telephone) and eligible to vote with respect to such matter, provided that a Quorum is present, or without a meeting and without prior notice by the unanimous written consent of the Regular Trustees. SECTION 5.06 Delegation of Power (a) Any Regular Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any registration statement or amendment thereto or other document or schedule filed with the Commission or making any other governmental filing (including, without limitation, the filings referred to in Section 3.13). (b) The Regular Trustees shall have power to delegate from time to time to such of their number or to officers of the Trust the doing of such things and the execution of such instruments, either in the name of the Trust or the names of the Regular Trustees or otherwise, as the Regular Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth in this Declaration. SECTION 5.07 Merger, Conversion, Consolidation or Succession to Business Any Person into which the Property Trustee or the Delaware Trustee or any Regular Trustee that is not a natural person, as the case may be, may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Property Trustee or the Delaware Trustee or the Regular Trustees, as the case may be, shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Property Trustee or the Delaware Trustee or any Regular Trustee, as the case may be, shall be the successor of the Property Trustee or the Delaware Trustee or that Regular Trustee, as the case may be, hereunder, provided, that such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. -35- 40 ARTICLE VI DISTRIBUTIONS SECTION 6.01 Distributions Holders shall receive periodic distributions, redemption payments, liquidation distributions and any other payments in accordance with the applicable terms of the relevant Holder's Securities as set forth in Exhibits B and C hereto ("Distributions"). If and to the extent that Seitel makes a payment of principal of, any premium or interest on or any Additional Amounts with respect to the Debentures held by the Property Trustee (the amount of any such payment being a "Payment Amount"), the Property Trustee shall and is directed, to the extent funds are available for that purpose, promptly to make a Distribution of the Payment Amount to Holders in accordance with the terms of the Securities as set forth in Exhibits B and C hereto. The record dates and payment dates for Distributions shall be the same as the record dates and payment dates for the Debentures held by the Property Trustee. ARTICLE VII ISSUANCE OF THE SECURITIES SECTION 7.01 General Provisions Regarding the Securities (a) The Regular Trustees shall issue the Securities on behalf of the Trusts in fully registered form representing undivided beneficial interests in the assets of the Trust in accordance with Section 7.01(b) and for the consideration specified in Section 3.03. (b) The Regular Trustees shall issue on behalf of the Trust one class of preferred securities representing preferred undivided beneficial interests in the assets of the Trust having such terms as are set forth in Exhibit B (the "Preferred Securities") hereto, which terms are incorporated by reference in, and made a part of, this Declaration as if specifically set forth herein, and one class of common securities representing common undivided beneficial interests in the assets of the Trust having such terms as are set forth in Exhibit C (the "Common Securities") hereto, which terms are incorporated by reference in, and made a part of, this Declaration as if specifically set forth herein. The Trust shall have no securities or other interests in the assets of the Trust other than the Preferred Securities and the Common Securities. (c) The Certificates shall be signed on behalf of the Trust by at least one Regular Trustee. Such signature may be the manual or facsimile signature of a present or any future Regular Trustee. Typographical and other minor errors or defects in any such reproduction of any such signature shall not affect the validity of any Certificate. In case any Regular Trustee who shall have signed any of the Certificates shall cease to be such Regular Trustee before the Certificate so signed shall be delivered by the Trust, such Certificate nevertheless may be delivered as though the person who signed such certificate had not ceased to be such Regular Trustee; and any Certificate may be signed on behalf of the Trust by such persons as, at the actual date of the execution of such Certificate, shall -36- 41 be the Regular Trustees, although at the date of the execution and delivery of this Declaration any such person was not a Regular Trustee. Certificates shall be typewritten, printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Regular Trustees, as evidenced by their execution thereof, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements as the Regular Trustees may deem appropriate, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or automated quotation system on which Securities may be listed or traded, or with any rule or regulation of the Clearing Agency, or to conform to usage. Pending the preparation of definitive Certificates, the Regular Trustees on behalf of the Trust may execute temporary Certificates (printed, lithographed or typewritten), in substantially the form of the definitive Certificates in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Certificates, all as may be determined by the Regular Trustees. Each temporary Certificate shall be executed by a Regular Trustee on behalf of the Trust upon the same conditions and in substantially the same manner, and with like effect, as definitive Certificates. Without unnecessary delay, the Regular Trustees on behalf of the Trust will execute and furnish definitive Certificates and thereupon any or all temporary Certificates may be surrendered to the transfer agent and registrar in exchange therefor (without charge to the Holders). Each Preferred Security Certificate, whether in temporary or definitive form, shall be countersigned upon receipt of a written order of the Trust signed by one Regular Trustee, by the manual signature of an authorized signatory of the Person acting as registrar and transfer agent for the Preferred Securities, which shall initially be the Property Trustee. (d) The consideration received by the Trust for the issuance of the Securities shall constitute a contribution to the capital of the Trust and shall not constitute a loan to the Trust. (e) Upon issuance of the Securities as provided in this Declaration, the Securities so issued shall be deemed to be validly issued, fully paid and non-assessable. (f) Every Person, by virtue of having become a Holder or a Preferred Security Beneficial Owner in accordance with the terms of this Declaration, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by this Declaration. (g) Upon issuance of the Securities as provided in this Declaration, the Regular Trustees on behalf of the Trust shall return to Seitel the $10 constituting initial trust assets as set forth in the Original Declaration. [SECTION 7.02 Conversion Agent The Trust shall maintain an office or agency where Preferred Securities may be presented for conversion ("Conversion Agent"). The Trust may appoint the Conversion Agent and may appoint one or more additional Conversion Agents in such other locations as it may determine. The term "Conversion Agent" includes any additional Conversion Agent. The Trust may change any -37- 42 Conversion Agent without prior notice to any Holders. If the Trust fails to appoint or maintain another entity as Conversion Agent, the Property Trustee will act as such. The Trust or any of its Affiliates may act as Conversion Agent. The Conversion Agent shall be entitled to the rights and protections extended to the Property Trustee when acting in such capacity. The Property Trustee is hereby initially appointed as the Conversion Agent for the Preferred Securities.] ARTICLE VIII DISSOLUTION OF THE TRUST SECTION 8.01 Dissolution of the Trust The Trust shall dissolve: (a) when all of the Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders of the Securities in accordance with the terms of the Securities; or (b) when all of the Debentures shall have been distributed to the Holders of the Securities in exchange for all of the Securities in accordance with the terms of the Securities; or (c) upon the expiration of the term of the Trust as set forth in Section 3.17; or (d) upon a decree of judicial dissolution[; or (e) upon the distribution of Shares to all Securities Holders upon conversion of all outstanding Securities]. Upon dissolution and the completion of the winding up of the affairs of the Trust in accordance with Section 3808 of the Business Trust Act, the Trust and this Declaration shall terminate when a certificate of cancellation is filed by the Regular Trustees with the Secretary of State of the State of Delaware. The Regular Trustees shall so file such a certificate as soon as practicable after the occurrence of an event referred to in this Section 8.01. The provisions of Sections 3.12 and 4.02 and Article X shall survive the dissolution and termination of the Trust and this Declaration. -38- 43 ARTICLE IX TRANSFER OF INTERESTS SECTION 9.01 Transfer of Securities (a) Securities may only be transferred , in whole or in part, in accordance with the terms and conditions set forth in this Declaration and in the terms of the Securities. To the fullest extent permitted by law, any transfer or purported transfer of any Security not made in accordance with this Declaration shall be null and void. (b) Subject to this Article IX, Preferred Securities shall be freely transferable. (c) The Holder of the Common Securities may not transfer the Common Securities except (i) in connection with transactions permitted under Section 10.01 of the Indenture, or (ii) to the Sponsor or an Affiliate thereof in compliance with applicable law (including the Securities Act and applicable state securities and blue sky laws). Upon any such transfer, such Holder shall deliver to the Trustees a certificate or affidavit executed by or on behalf of such Holder that the transfer is in compliance with this Section 9.01(c). To the fullest extent permitted by law, any attempted transfer of the Common Securities other than as set forth in the immediately preceding sentence shall be null and void. SECTION 9.02 Transfer of Certificates The Regular Trustees shall provide for the registration of Certificates and of transfers of Certificates, which will be effected without charge but only upon payment (with such indemnity as the Regular Trustees may require) in respect of any tax or other government charges which may be imposed in relation to it. Upon surrender for registration of transfer of any Certificate, the Regular Trustees shall cause one or more new Certificates to be issued in the name of the designated transferee or transferees. Every Certificate surrendered for registration of transfer shall be accompanied by a written instrument of transfer in form satisfactory to the Regular Trustees duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Certificate surrendered for registration of transfer shall be canceled by the Regular Trustees. A transferee of a Certificate shall be entitled to the rights and subject to the obligations of a Holder hereunder upon the receipt by such transferee of a Certificate. By acceptance of a Certificate, each transferee shall be deemed to have agreed to be bound by this Declaration SECTION 9.03 Deemed Security Holders The Trustees may treat the Person in whose name any Certificate shall be registered on the books and records of the Trust as the sole holder of such Certificate and of the Securities represented by such Certificate for purposes of receiving Distributions and for all other purposes whatsoever and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such -39- 44 Certificate or in the Securities represented by such Certificate on the part of any person, whether or not the Trustees shall have actual or other notice thereof. SECTION 9.04 Book Entry Interests Unless otherwise specified in the terms of the Preferred Securities, the Preferred Security Certificates, on original issuance [(including Preferred Securities, if any, issued on the Option Closing Date pursuant to the exercise of the overallotment option set forth in the Underwriting Agreement)], will be issued in the form of one or more, fully registered, global Preferred Security Certificates (each a "Global Certificate") to be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such Global Certificates shall initially be registered on the books and records of the Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner will receive a definitive Preferred Security Certificate representing such Preferred Security Beneficial Owner's interests in such Global Certificates, except as provided in Section 9.07. Unless and until definitive, fully registered Preferred Security Certificates (the "Definitive Preferred Security Certificates") have been issued to the Preferred Security Beneficial Owners pursuant to Section 9.07: (a) the provisions of this Section 9.04 shall be in full force and effect; (b) the Trust and the Trustees shall be entitled to deal with the Clearing Agency for all purposes of this Declaration (including the payment of Distributions on the Global Certificates and receiving approvals, votes or consents hereunder) as the Holder of the Preferred Securities and the sole holder of the Global Certificates and, except as set forth herein in Section 9.07 with respect to the Property Trustee, shall have no obligation to the Preferred Security Beneficial Owners; (c) to the extent that the provisions of this Section 9.04 conflict with any other provisions of this Declaration, the provisions of this Section 9.04 shall control; and (d) the rights of the Preferred Security Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Preferred Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC will make book entry transfers among the Clearing Agency Participants and receive and transmit payments of Distributions on the Global Certificates to such Clearing Agency Participants, provided that solely for the purposes of determining whether the Holders of the requisite amount of Preferred Securities have voted on any matter provided for in this Declaration, so long as definitive Preferred Security Certificates have not been issued (pursuant to Section 9.07 hereof), the Trustees may conclusively rely on, and shall be protected in relying on, any written instrument (including a proxy) delivered to the Trustees by the Clearing Agency setting forth the Preferred Security Beneficial Owners' votes or assigning the right to vote on any matter to any other Persons either in whole or in part. -40- 45 SECTION 9.05 Notices to Holders of Certificates Whenever a notice or other communication to the Holders is required to be given under this Declaration, unless and until Definitive Preferred Security Certificates shall have been issued pursuant to Section 9.07, the relevant Trustees shall give all such notices and communications, specified herein to be given to Holders of Preferred Securities, to the Clearing Agency and, with respect to any Preferred Security Certificate registered in the name of a Clearing Agency or the nominee of a Clearing Agency, the Trustees shall have no notice obligations to the Preferred Security Beneficial Owners. SECTION 9.06 Appointment of Successor Clearing Agency If any Clearing Agency elects to discontinue its services as securities depository with respect to the Preferred Securities, the Regular Trustees may, in their sole discretion, appoint a successor Clearing Agency with respect to the Preferred Securities. SECTION 9.07 Definitive Preferred Securities Certificates If (i) a Clearing Agency elects to discontinue its services as securities depository with respect to the Preferred Securities and a successor Clearing Agency is not appointed within 90 days after such discontinuance pursuant to Section 9.06, (ii) an Event of Default has occurred with respect to the Preferred Securities and is continuing and the Property Trustee has received a request from the Clearing Agency to issue Definitive Preferred Security Certificates in lieu of all or a portion of the Global Certificates (in which case the Regular Trustees shall deliver such Definitive Preferred Security Certificates within 30 days of such request) or (iii) the Regular Trustees elect after consultation with the Sponsor to terminate the book entry system through the Clearing Agency with respect to the Preferred Securities, then (x) Definitive Preferred Security Certificates shall be prepared by the Regular Trustees on behalf of the Trust with respect to such Preferred Securities and (y) upon surrender of the Global Certificates by the Clearing Agency, accompanied by registration instructions, the Regular Trustees shall cause Definitive Preferred Security Certificates to be delivered to Preferred Security Beneficial owners in accordance with the instructions of the Clearing Agency. Neither the Trustees nor the Trust shall be liable for any delay in delivery of such instructions and each of them may conclusively rely on, and shall be protected in relying on, such instructions. SECTION 9.08 Mutilated, Destroyed, Lost or Stolen Certificates If (a) any mutilated Certificates should be surrendered to the Regular Trustees, or if the Regular Trustees shall receive evidence to their satisfaction of the destruction, loss or theft of any Certificate; and (b) there shall be delivered to the Regular Trustees an indemnity bond which, in the judgment of the Property Trustee, is sufficient to protect the Trustees, the Sponsor, the Trust and any authenticating agent from any loss any of them may suffer if a security is replaced, then in the absence of notice that such Certificate shall have been acquired by a bona fide purchaser, at least one -41- 46 Regular Trustee on behalf of the Trust shall execute and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like denomination. In connection with the issuance of any new Certificate under this Section 9.08, the Regular Trustees may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section 9.08 shall constitute conclusive evidence of an ownership interest in the relevant Securities, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time. ARTICLE X LIMITATION OF LIABILITY; INDEMNIFICATION SECTION 10.01 Exculpation (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Trust or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Declaration or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's gross negligence (but, in the case of the Property Trustee, subject to the Trust Indenture Act) or willful misconduct with respect to such acts or omissions. (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Trust and upon such information, opinions, reports or statements presented to the Trust by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Trust, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which Distributions to Holders of Securities might properly be paid. (c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of Securities, in their capacities as Holders, shall be entitled to the same limitation of liability that is extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. SECTION 10.02 Indemnification (a) To the fullest extent permitted by applicable law, the Sponsor shall indemnify and hold harmless each Indemnified Person from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith on behalf of the Trust and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this -42- 47 Declaration, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of gross negligence (but, in the case of the Property Trustee, subject to the Trust Indenture Act) or willful misconduct with respect to such acts or omissions. (b) The provisions of this Section 10.02 shall survive the termination of this Declaration or the resignation or removal of any Trustee. SECTION 10.03 Outside Business The Sponsor and any Trustee (in the case of the Property Trustee, subject to Section 5.01(c)) may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Trust, and the Trust and the Holders of Securities shall have no rights by virtue of this Declaration in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Trust, shall not be deemed wrongful or improper. Neither the Sponsor nor any Trustee shall be obligated to present any particular investment or other opportunity to the Trust even if such opportunity is of a character that, if presented to the Trust, could be taken by the Trust, and the Sponsor or any Trustee shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment or other opportunity. Any Trustee may engage or be interested in any financial or other transaction with the Sponsor or any Affiliate of the Sponsor or may act as depository for, trustee or agent for, or act on any committee or body of holders of, securities or other obligations of the Sponsor or any of its Affiliates. ARTICLE XI ACCOUNTING SECTION 11.01 Fiscal Year In fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or such other year as is required by the Code. SECTION 11.02 Certain Accounting Matters (a) At all times during the existence of the Trust, the Regular Trustees shall keep, or cause to be kept, full books of account, records and supporting documents, which shall reflect in reasonable detail each transaction of the Trust. The books of account shall be maintained on the accrual method of accounting, in accordance with generally accepted accounting principles, consistently applied. The Trust shall use the accrual method of accounting for United States federal income tax purposes. -43- 48 (b) If required by applicable law, the Regular Trustees shall, as soon as available after the end of each Fiscal Year of the Trust, cause to be prepared and mailed to each Holder of Securities unaudited financial statements of the Trust for such Fiscal Year, prepared in accordance with generally accepted accounting principles; provided that if the Trust is required to comply with the periodic reporting requirements of Section 13(a) or 15(d) of the Exchange Act, such financial statements for such Fiscal Year shall be examined and reported on by a firm of independent certified public accountants selected by the Regular Trustees (which firm may be the firm used by the Sponsor). (c) The Regular Trustees shall cause to be duly prepared and mailed to each Holder of Securities any United States federal income tax information statement or form required by the Code or the Treasury Regulations, containing such information with regard to the Securities held by each Holder as is required by the Code or the Treasury Regulations. Notwithstanding any right under the Code to deliver any such statement at a later date, the Regular Trustees shall endeavor to deliver all such statements or forms within 30 days after the end of each Fiscal Year of the Trust. (d) The Regular Trustees shall cause to be properly prepared and filed on a timely basis with the appropriate taxing authority any United States federal income tax return or form as is required by the Code or the Treasury Regulations, and any other tax returns or forms required to be filed by or on behalf of the Trust with any state, local or other taxing authority. SECTION 11.03 Banking The Trust shall maintain one or more non-interest bearing bank accounts in the name and for the sole benefit of the Trust; provided, however, that all payments of funds in respect of the Debentures held by the Property Trustee shall be made directly to the Property Account and no other funds from the Trust shall be deposited in the Property Account. The sole signatories for such accounts shall be designated by the Regular Trustees; provided, however, that the Property Trustee shall designate the sole signatories for the Property Account. SECTION 11.04 Withholding The Trust and the Trustees shall comply with all withholding requirements under applicable law. The Regular Trustees shall request, and the Holders shall provide to the Trust, such forms or certificates as are necessary to establish an available exemption from withholding with respect to each Holder, and any representations and forms as shall reasonably be requested by the Regular Trustees to assist them in determining the extent of, and in fulfilling, the Trust's withholding obligations. The Regular Trustees on behalf of the Trust shall file required forms with applicable jurisdictions and, unless an exemption from withholding is properly established by a Holder, shall remit amounts withheld with respect to the Holder to applicable jurisdictions. To the extent that the Trust is required to withhold and pay over any amounts to any authority with respect to Distributions or allocations to any Holder, the Regular Trustees shall so notify the Property Trustee and shall provide such information as is reasonably requested by the Property Trustee to enable the Property -44- 49 Trustee to effect such withholding, and the amount withheld shall be deemed to be a Distribution in the amount of the withholding to the Holder. In the event of any claimed overwithholding, Holders shall be limited to an action against the applicable jurisdiction. If the amount required to be withheld was not withheld from a Distribution to a Holder, the Trust may reduce subsequent Distributions to such Holder (or its successor) by the amount of such underwithholding. No additional amounts shall be paid to a Holder to compensate the Holder for any required withholding. ARTICLE XII AMENDMENTS AND MEETINGS SECTION 12.01 Amendments (a) Except as otherwise provided in this Declaration or by any applicable terms of the Securities, this Declaration may be amended by, and only by, a written instrument executed by a majority of the Regular Trustees; provided, however, that (i) no amendment or modification to this Declaration shall be made, and any such purported amendment shall be void and ineffective: (A) unless the Regular Trustees and the Property Trustee shall have first received: (x) an Officers' Certificate that such amendment is permitted by, and conforms to, the terms of this Declaration; and (y) an Opinion of Counsel that such amendment is permitted by, and conforms to, the terms of this Declaration and that all conditions precedent, if any, in this Declaration to the execution and delivery of such amendment have been satisfied; and (B) to the extent the result of such amendment would be to: (x) cause the Trust to fail to continue to be classified for purposes of United States Federal income taxation as a grantor trust; (y) reduce or otherwise adversely affect the rights or powers of the Property Trustee in contravention of the Trust Indenture Act; or (z) cause the Trust to be deemed to be an Investment Company required to be registered under the Investment Company Act; (ii) at such time after the Trust has issued any Securities which remain outstanding, any amendment which would adversely affect the rights, privileges or preferences of any Holder of Securities may be effected only with such additional requirements as may be set forth in the terms of such Securities; (iii) Section 4.02, Section 9.01(c), 10.01(c) and this Section 12.01 shall not be amended without the consent of all of the Holders of the Securities; (iv) no amendment which affects the rights, powers and privileges of the Property Trustee or the Delaware Trustee shall be made without the consent of the Property Trustee or the Delaware Trustee, respectively; (v) Article IV shall not be amended without the consent of the Sponsor; and (vi) the rights of the Holders of Common Securities under Article V to increase or decrease the number of, and to appoint, replace or remove, Trustees shall not be amended without the consent of each Holder of Common Securities. (b) Notwithstanding Section 12.01(a), this Declaration may be amended by a written instrument executed by a majority of the Regular Trustees without the consent of the Holders of the Securities to (i) cure any ambiguity, (ii) correct or supplement any provision in this Declaration that may be defective or inconsistent with any other provision of this Declaration, (iii) add to the covenants, restrictions or obligations of the Sponsor, (iv) amend any other provisions with respect to matters or questions arising under this Declaration which shall not be inconsistent with the other provisions of this Declaration, (v) modify, eliminate or add to any provisions of this Declaration to -45- 50 such extent as shall be necessary to ensure that the Trust will be classified for United States federal income tax purposes as a grantor trust at all times that any Securities are outstanding or to ensure that the Trust will not be required to register as an Investment Company under the Investment Company Act, and (vi) pursuant to Section 5.02, evidence the acceptance of the appointment of a successor Trustee or fill a vacancy created by an increase in the number of Regular Trustees; provided that any such amendment does not adversely affect in any material respect the rights, preferences or privileges of the Holders. SECTION 12.02 Meetings of the Holders of Securities; Action by Written Consent (a) Meetings of the Holders of Preferred Securities and/or Common Securities may be called at any time by the Regular Trustees (or as provided in the terms of the Securities) to consider and act on any matter on which the Holders of such class of Securities are entitled to act under the terms of this Declaration, the terms of the Securities or the rules of any stock exchange or automated quotation system on which the Preferred Securities are then listed, traded or quoted. The Regular Trustees shall call a meeting of the Holders of Preferred Securities or Common Securities, if directed to do so by Holders of at least 10% in liquidation amount of Securities of such class. Such direction shall be given by delivering to the Regular Trustees one or more notices in writing stating that the signing Holders of Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Securities calling a meeting shall specify in writing the Certificates held by the Holders of Securities exercising the right to call a meeting and only those specified Certificates shall be counted for purposes of determining whether the required percentage set forth in the second sentence of this paragraph has been met. (b) Except to the extent otherwise provided in the terms of the Securities, the following provision shall apply to meetings of the Holders of Securities: (i) Notice of any such meeting shall be given by mail to all the Holders of Securities having a right to vote thereat not less than seven (7) days nor more than sixty (60) days prior to the date of such meeting. Whenever a vote, consent or approval of the Holders of Securities is permitted or required under this Declaration or the rules of any stock exchange or automated quotation system on which the Preferred Securities are then listed, traded or quoted, such vote, consent or approval may be given at a meeting of the Holders of Securities. Any action that may be taken at a meeting of the Holders of Securities may be taken without a meeting and without prior notice if a consent in writing setting forth the action so taken is signed by Holders of Securities owning not less than the minimum aggregate liquidation amount of Securities that would be necessary to authorize or take such action at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Securities entitled to vote who have not consented in writing. The Regular Trustees may specify that any written ballot submitted to the Holders of Securities for the purpose of taking any action without a meeting shall be returned to the Trust within the time specified by the Regular Trustees. -46- 51 (ii) Each Holder of a Security may authorize any Person to act for it by proxy on all matters in which a Holder of a Security is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Holder of the Security executing it. Except as otherwise provided herein or in the terms of the Securities, all matters relating to the giving, voting or validity of proxies shall be governed by the General Corporation Law of the State of Delaware relating to proxies, and judicial interpretations thereunder, as if the Trust were a Delaware corporation and the Holders of the Securities were stockholders of a Delaware corporation. (iii) Each meeting of the Holders of the Securities shall be conducted by the Regular Trustees or by such other Person that the Regular Trustees may designate. (iv) Unless otherwise provided in the Business Trust Act, this Declaration or the rules of any stock exchange or automated quotation system on which the Preferred Securities are then listed, traded or quoted, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Securities, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Holders of Securities, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote. ARTICLE XIII REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE SECTION 13.01 Representations and Warranties of the Property Trustee The Trustee which acts as the initial Property Trustee represents and warrants to the Trust and to the Sponsor at the date of this Declaration, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee's acceptance of its appointment as the Property Trustee that: (a) The Property Trustee is a national banking association or a banking corporation with trust powers, duly organized, validly existing and in good standing under the laws of the United States or the laws of the state of its incorporation, with trust power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration. (b) The execution, delivery and performance by the Property Trustee of this Declaration have been duly authorized by all necessary corporate action on the part of the Property Trustee. This Declaration has been duly executed and delivered by the Property Trustee, and constitutes a legal, -47- 52 valid and binding obligation of the Property Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law). (c) The execution, delivery and performance of this Declaration by the Property Trustee does not conflict with or constitute a breach of the charter or by-laws of the Property Trustee. (d) No consent, approval or authorization of, or registration with or notice to, any banking authority which supervises or regulates the Property Trustee is required for the execution, delivery or performance by the Property Trustee of this Declaration. (e) The Property Trustee satisfies the qualifications set forth in Section 5.01 (c). SECTION 13.02 Representations and Warranties of the Delaware Trustee The Trustee which acts as the initial Delaware Trustee represents and warrants to the Trust and the Sponsor at the date of this Declaration, and each Successor Delaware Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Delaware Trustee's acceptance of its appointment as the Delaware Trustee, that: (a) The Delaware Trustee is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, with corporate power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, this Declaration. (b) The execution, delivery and performance by the Delaware Trustee of this Declaration have been duly authorized by all necessary corporate action on the part of the Delaware Trustee. This Declaration has been duly executed and delivered by the Delaware Trustee and constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against it in accordance with its terms, subject to applicable bankruptcy, reorganization, moratorium, insolvency and other similar laws affecting creditors' rights generally and to general principles of equity and the discretion of the court (regardless of whether the enforcement of such remedies is considered in a proceeding in equity or at law). (c) No consent, approval or authorization of, or registration with or notice to, any banking authority is required for the execution, delivery or performance by the Delaware Trustee of this Declaration. (d) The Delaware Trustee is a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and is a Person that satisfies for the Trust Section 3807(a) of the Business Trust Act. -48- 53 ARTICLE XIV MISCELLANEOUS SECTION 14.01 Notices All notices provided for in this Declaration shall be in writing, in English, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows: (a) if given to the Trust, in care of the Regular Trustees at the Trust's mailing address set forth below (or such other address as the Regular Trustees on behalf of the Trust may give notice of to the Holders of the Securities): Seitel, Inc. 50 Briar Hollow Lane Seventh Floor, West Building Houston, Texas 77027 Attention: Chief Financial Officer Telecopy: (713) 881-2806 (b) if given to the Property Trustee, at the mailing address of the Property Trustee set forth below (or such other address as the Property Trustee may give notice of to the Holders of the Securities): The First National Bank of Chicago 1 North State Street, 9th Floor Mail Suite IL1-0126 Chicago, Illinois 60602 Attention: Corporate Trust Administration Telecopy: (312) 407-1708 (c) if given to the Delaware Trustee, at the mailing address of the Delaware Trustee set forth below (or such other address as the Delaware Trustee may give notice of to the Holders of the Securities): Bank One Delaware, Inc. 3 Christiana Center 201 North Walnut Street Wilmington, Delaware 19801 Attention: Legal Department/First USA Telecopy: (312) 407-1708 -49- 54 (d) if given to the Holder of the Common Securities, at the mailing address of the Sponsor set forth below (or such other address as the Holder of the Common Securities may give notice of to the Trust): Seitel, Inc. 50 Briar Hollow Lane Seventh Floor, West Building Houston, Texas 77027 Attention: Chief Financial Officer Telecopy: (713) 881-2806 (e) if given to any other Holder, at the address set forth on the books and records of the Trust. A copy of any notice to the Property Trustee or the Delaware Trustee shall also be sent to the Trust. All notices shall be deemed to have been given when (i) received in person, (ii) telecopied with receipt confirmed, or (iii) mailed by first class mail, postage prepaid, when received, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 14.02 Undertaking for Costs All parties to this Declaration agree, and each Holder of any Securities by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Declaration, or in any suit against the Property Trustee for any action taken or omitted by it as Property Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 14.02 shall not apply to any suit instituted by the Property Trustee or to any suit instituted by any Holder of Preferred Securities or group of Holders of Preferred Securities, holding more than 10% in liquidation amount of Preferred Securities, for the enforcement of the payment of the principal of, any premium or interest on or any Additional Amounts with respect to the Debentures, on or after the respective due dates expressed in such Debentures. SECTION 14.03 Governing Law This Declaration, the Securities and the rights of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws. -50- 55 SECTION 14.04 Headings Headings contained in this Declaration are inserted for convenience of reference only and do not affect the interpretation of this Declaration or any provision hereof. SECTION 14.05 Partial Enforceability If any provision of this Declaration, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration, or the application of such provision to Persons or circumstances other than those to which it is held invalid, shall not be affected thereby. SECTION 14.06 Counterparts This Declaration may contain more than one counterpart of the signature pages and this Declaration may be executed by the affixing of the signature of the Sponsor and each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. SECTION 14.07 Intention of the Parties It is the intention of the parties hereto that the Trust not be classified for United States Federal income tax purposes as an association taxable as a corporation but that the Trust be treated as a grantor trust for United States federal income tax purposes. The provisions of this Declaration shall be interpreted to further this intention of the parties. SECTION 14.08 Successors and Assigns Whenever in this Declaration any of the parties hereto is named or referred to, the successors and assigns of such party shall be deemed to be included, and all covenants and agreements in this Declaration by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed. SECTION 14.09 No Recourse The Trust's obligations hereunder are intended to be the obligations of the Trust, and no recourse for the payment of Distributions, or for any claim upon the Securities or otherwise in respect thereof, shall be had against any Holder of Securities or any Affiliate of a Holder of Securities, solely by reason of such Person's being a Holder of Securities or an Affiliate of a Holder of Securities, it being understood that the Holder of Securities, solely by reason of being a Holder of Securities, has limited liability (in accordance with the provisions of the Business Trust Act) for the liabilities and obligations of the Trust. Nothing contained in this Section 14.09 shall be -51- 56 construed to limit the exercise or enforcement in accordance with the term of this Declaration, the Preferred Guarantee and the Indenture, of the rights and remedies against the Trust or the Sponsor. SECTION 14.10 Agent for Service of Process The Sponsor hereby designates CT Corporation System, currently located at 1633 Broadway, New York, New York, as its authorized agent upon whom process may be served in any action, suit or proceeding that may be instituted in any State or Federal court sitting in the County of New York of the State of New York pertaining to this Declaration or any matter arising out of or related to this Declaration, and the Sponsor will accept the jurisdiction of such court in such action, and waive, to the fullest extent permitted by applicable law, any defense based upon lack of personal jurisdiction or venue or forum non conveniens. The Sponsor may and shall (to the extent the process agent ceases to be able to be served on the basis contemplated herein), by written notice to the Property Trustee, designate such additional or alternative agents for service of process under this Section 14.10 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) are either (a) counsel for the Sponsor or (b) a corporate service company which acts as agent for service of process for other persons in the ordinary course of its business and (iii) agrees to act as agent for service of process in accordance with this Section 14.10. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any Holder of a Security or Preferred Security Beneficial Owner, the Property Trustee shall deliver such information to such Holder or Preferred Security Beneficial Owner. Notwithstanding the foregoing, there shall, at all times, be at least one agent for service of process for the Sponsor appointed and acting in accordance with this Section 14.10. A copy of any such process shall be sent or given to the Sponsor at the address for notices specified in Section 14.01 hereof. The Sponsor shall maintain the designation of such authorized agent until two years after the dissolution of the Trust pursuant to Section 3.17 or Section 8.01. -52- 57 IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as of the day and year first above written. SEITEL, INC. as Sponsor By: -------------------------------- Name: Title: ----------------------------------- [Name], as Regular Trustee ----------------------------------- [Name], as Regular Trustee ----------------------------------- [Name], as Regular Trustee THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee By: -------------------------------- Name: Title: BANK ONE DELAWARE, INC., as Delaware Trustee By: -------------------------------- Name: Title: -53- 58 EXHIBIT A CERTIFICATE OF TRUST OF SEITEL CAPITAL TRUST [I] [II] THIS CERTIFICATE OF TRUST of Seitel Capital Trust [I] [II] (the "TRUST"), dated as of ____________, ________ is being duly executed and filed by the undersigned, as trustees, with the Secretary of State of the State of Delaware to form a business trust under the Delaware Business Trust Act (12 Del. Code Section 3801 et seq.). 1. Name. The name of the business trust being formed hereby is "Seitel Capital Trust [I] [II]." 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware are Bank One Delaware, Inc., 3 Christiana Center, 201 North Walnut Street, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective at the time of its filing with the Secretary of State of the State of Delaware. 4. Counterparts. This Certificate of Trust may be executed in one or more counterparts. IN WITNESS WHEREOF, the undersigned, being all of the trustees of the Trust at the time of filing this Certificate of Trust, have executed this Certificate of Trust as of the date first above written. BANK ONE DELAWARE, INC., as Delaware Trustee By: ---------------------------- Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee By: ---------------------------- Name: Title: [ ], ---------------------------- as Regular Trustee A-1 59 EXHIBIT B TERMS OF PREFERRED SECURITIES Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust of Seitel Capital Trust [I] [II] dated as of _____________, __________ (as amended from time to time, the "Declaration"), the designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth below (each capitalized term used but not defined herein having the meaning set forth in the Declaration): 1. DESIGNATION AND NUMBER. ___________ (__________) Preferred Securities of the Trust with an aggregate liquidation amount at any time outstanding with respect to the assets of the Trust of ______________ Dollars ($____________) [(including up to Dollars _________________ ($_____________) issuable upon exercise of the overallotment option set forth in the Underwriting Agreement)], and each with a liquidation amount with respect to the assets of the Trust of $ per Preferred Security, are hereby designated as " % [[Convertible] Trust Preferred Securities]." The Preferred Security Certificates evidencing the Preferred Securities shall be substantially in the form attached hereto as Annex I, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice or to conform to the rules of any stock exchange or automated quotation system on which the Preferred Securities are then listed, traded or quoted. In connection with the issuance and sale of the Preferred Securities and the Common Securities, the Trust will purchase as trust assets Debentures of Seitel having an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities and the Common Securities so issued and bearing interest at an annual rate equal to the annual Distribution rate on the Preferred Securities and the Common Securities and having payment and redemption provisions which correspond to the payment and redemption provisions of the Preferred Securities and the Common Securities. 2. DISTRIBUTIONS AND ADDITIONAL AMOUNTS. (a) Distributions payable on each Preferred Security will be fixed at a rate per annum of _______% (the "Coupon Rate") of the stated liquidation amount of $_____________ per Preferred Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one [calendar quarter] [semi-annual period] will accumulate additional distributions thereon at the Coupon Rate per annum (to the extent permitted by applicable law), compounded [quarterly] [semiannually]. The term "Distributions" as used herein means such periodic cash distributions and any such additional distributions payable unless otherwise stated. A Distribution will be made by the Property Trustee only to the extent that interest payments are made in respect of the Debentures held by the Property Trustee and to the extent the Trust has funds on hand legally available therefor. The amount of Distributions payable for any period will be computed for any full [quarterly] [semiannual] Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full [quarterly] [semi-annual] Distribution period for which Distributions are B-1 60 computed, Distributions will be computed on the basis of the actual number of days elapsed per [90-day quarter] [180-day semi-annual period]. If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature, imposed by the United States or any other taxing authority (other than withholding taxes), then, in any such case, Seitel shall pay such additional amounts as are required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will be not less than the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. (b) Distributions on the Preferred Securities will accumulate from ___________, _______ and will be payable [quarterly] [semiannually] in arrears, on [_________ , ________,] _________ and _________ of each year, commencing on ____________, _____________, except as otherwise described below, but only if and to the extent that interest payments are made in respect of the Debentures held by the Property Trustee. So long as Seitel shall not be in default in the payment of interest and Additional Amounts on the Debentures, Seitel has the right under the Indenture for the Debentures to defer payments of interest and Additional Amounts on the Debentures by extending the interest payment period at any time and from time to time on the Debentures for a period not exceeding [20] [10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension Period"), during which Extension Period no interest or Additional Amounts shall be due and payable on the Debentures. As a consequence of such deferral, Distributions and payments of additional amounts with respect to the Preferred Securities shall also be deferred. Despite such deferral, Distributions will continue to accumulate with additional distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded [quarterly] [semi-annually] during any such Extension Period. No Extension Period shall extend beyond the stated maturity of the Debentures. Prior to the termination of any such Extension Period, Seitel may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed [20][10] consecutive [quarterly] [semi-annual] interest periods. Upon the termination of any Extension Period and the payment of all amounts then due, Seitel may commence a new Extension Period, subject to the above requirements. On the Distribution payment date at the end of an Extension Period, payments of accumulated Distributions and additional amounts will be payable to Holders of Preferred Securities as they appear on the books and records of the Trust (regardless of who the Holders may have been on other dates during the Extension Period) on the record date for such Distribution payment date. (c) Distributions and additional amounts on the Preferred Securities will be payable promptly by the Property Trustee (or other Paying Agent) upon receipt of immediately available funds to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates. While the Preferred Securities remain in book-entry only form, the relevant record dates shall be one business day prior to the relevant Distribution payment date, and if the Preferred Securities are no longer in book-entry only form, the relevant record dates will be the fifteenth (15th) day of the month prior to the relevant Distribution payment date, which record and payment dates B-2 61 correspond to the record and interest payment dates on the Debentures. Distributions and additional amounts payable on any Preferred Securities that are not punctually paid on any Distribution payment date as a result of Seitel's having failed to make the corresponding payment on the Debentures will forthwith cease to be payable to the person in whose name such Preferred Security is registered on the relevant record date, and such defaulted payment will instead be payable to the person in whose name such Preferred Security is registered on the special record date established by the Regular Trustees, which record date shall correspond to the special record date or other specified date determined in accordance with the Indenture; provided, however, that Distributions and additional amounts shall not be considered payable on any Distribution payment date falling within an Extension Period unless Seitel has elected to make a full or partial payment of accrued interest on and Additional Amounts with respect to the Debentures on such Distribution payment date. Subject to any applicable laws and regulations and the provisions of the Declaration, each payment in respect of the Preferred Securities will be made as described in Section [9] hereof. If any date on which Distributions and additional amounts are payable on the Preferred Securities is not a Business Day, then payment of the Distribution and additional amounts payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. Notwithstanding anything herein to the contrary, the record dates and payment dates for Distributions and additional amounts shall be the same as the record dates and payment dates for the Debentures. (d) All Distributions and additional amounts paid with respect to the Preferred Securities and the Common Securities will be paid Pro Rata (as defined below) to the Holders thereof entitled thereto. If an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities with respect to such payments. (e) [In the event of an election by the Holder to convert its Preferred Securities through the Conversion Agent into Shares pursuant to the terms of the Preferred Securities as set forth herein, no payment, allowance or adjustment shall be made with respect to accumulated and unpaid Distributions on or additional amounts with respect to such Preferred Securities, or be required to be made; provided, however, that if a Preferred Security is surrendered for conversion after the close of business on any regular record date for payment of a Distribution and additional amounts and before the opening of business on the corresponding Distribution payment date, then, notwithstanding such conversion, the Distribution and additional amounts payable on such Distribution payment date will be paid in cash to the person in whose name the Preferred Security is registered at the close of business on such record date, and (other than a Preferred Security or a portion of a Preferred Security called for redemption on a redemption date occurring after such record date and on or prior to such Distribution payment date) when so surrendered for conversion, the Preferred Security must be accompanied by payment of an amount equal to the Distribution and additional amounts payable on such Distribution payment date.] B-3 62 (f) In the event that there is any money or other property held by or for the Trust that is not accounted for under the Declaration, such money or property shall be distributed Pro Rata among the Holders of the Preferred Securities and the Common Securities. 3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any voluntary or involuntary dissolution, winding-up or termination of the Trust, the Holders of the Preferred Securities and the Common Securities will be entitled to receive Pro Rata solely out of the assets of the Trust legally available for distribution to Holders of Preferred Securities and Common Securities after satisfaction of liabilities to the creditors of the Trust, an amount equal to the aggregate of the stated liquidation amount of $____________ per Preferred Security and Common Security plus accumulated and unpaid Distributions thereon and any additional amounts with respect thereto to the date of payment (such amount being the "Liquidation Distribution"), unless, in connection with such dissolution, winding-up or termination and after satisfaction of liabilities to the creditors of the Trust, Debentures, in an aggregate principal amount equal to the aggregate stated liquidation amount of such Preferred Securities and the Common Securities and bearing accrued and unpaid interest and Additional Amounts in an amount equal to the accumulated and unpaid Distributions on and any additional amounts with respect to such Preferred Securities and the Common Securities, shall be distributed Pro Rata to the Holders of the Preferred Securities and the Common Securities in exchange for such Securities. If, upon any such dissolution, winding-up or termination, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets on hand legally available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Preferred Securities and the Common Securities shall be paid, subject to the next paragraph, on a Pro Rata basis. Holders of Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution Pro Rata with Holders of Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities with respect to such Liquidation Distribution. (b) The Holder of the Common Securities shall have the right to direct the Property Trustee in writing at any time to dissolve the Trust and to distribute Debentures to Holders in exchange for Securities (which direction is optional and wholly within the discretion of the Holder of the Common Securities). Upon the receipt of any such written direction, the Property Trustee shall promptly (i) distribute Debentures in an aggregate principal amount equal to the aggregate stated liquidation amount of the Preferred Securities and the Common Securities held by each Holder, which Debentures bear accrued and unpaid interest in an amount equal to the accumulated and unpaid Distributions on the Preferred Securities and the Common Securities of such Holder, in exchange for the Preferred Securities and Common Securities of such Holder and (ii) dissolve the Trust. B-4 63 (c) On the date fixed for any distribution of Debentures, upon dissolution of the Trust, (i) the Preferred Securities will no longer be deemed to be outstanding and may be canceled by the Regular Trustees; (ii) the Clearing Agency, or its nominee, as the Holder of the Preferred Securities, will receive a registered global certificate or certificates representing the Debentures to be delivered upon such distribution; and (iii) Certificates representing Preferred Securities not held by the Clearing Agency or its nominee will be deemed to represent beneficial interests in the Debentures having an aggregate principal amount equal to the stated liquidation amount of, and bearing accrued and unpaid interest equal to accumulated and unpaid Distributions on, such Preferred Securities until such Certificates are presented to Seitel or its agent for cancellation and Debentures are issued in lieu thereof. [(d) If Debentures are distributed to Holders of the Preferred Securities, Seitel, pursuant to the terms of the Indenture, will use its best efforts to have the Debentures listed on the New York Stock Exchange or on such other exchange as the Preferred Securities were listed immediately prior to the distribution of the Debentures.] 4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed only if Debentures having an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities and the Common Securities are repaid or redeemed as set forth below: (a) Upon the repayment of the Debentures, in whole or in part, whether at maturity, upon redemption at any time or from time to time [on or after_________, _________], the proceeds of such repayment will be promptly applied to redeem Pro Rata Preferred Securities and Common Securities having an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so repaid or redeemed, upon not less than 30 nor more than 60 days' notice, at a redemption price [of $___________ per Preferred Security and Common Security plus an amount equal to accumulated and unpaid Distributions thereon and any additional amounts with respect thereto to, but excluding, the date of redemption, payable in cash (the "Redemption Price").] (b) If fewer than all the outstanding Preferred Securities and Common Securities are to be so redeemed, the Preferred Securities will be redeemed as described in Section 4(e)(ii) below, and the Common Securities will be redeemed Pro Rata with the Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities will have a priority over the Common Securities with respect to payment of the Redemption Price. If a partial redemption would result in the delisting of the Preferred Securities by any national securities exchange or other organization on which the Preferred Securities are then listed or traded, Seitel pursuant to the Indenture will redeem Debentures only in whole and, as a result the Trust may redeem the Preferred Securities only in whole. (c) If, at any time, a Tax Event or an Investment Company Event (each as hereinafter defined, and each a "Special Event") shall occur and be continuing, Seitel shall have the right at any time [prior to ________, __________], upon not less than 30 nor more than 60 days' notice, to redeem the Debentures in whole but not in part for cash at the Redemption Price within 90 days B-5 64 following the occurrence of such Special Event, and promptly following such redemption, Preferred Securities and Common Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so redeemed will be redeemed by the Trust at the Redemption Price on a Pro Rata basis. The Common Securities will be redeemed Pro Rata with the Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities will have a priority over the Common Securities with respect to payment of the Redemption Price. "Tax Event" means that the Sponsor and the Regular Trustees shall have received an Opinion of Counsel experienced in such matters to the effect that on or after ____________, _________as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any rules or regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, (b) any amendment to, or change in, an interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation or the publication of any judicial decision or regulatory determination), (c) any interpretation or pronouncement by any legislative body, court, governmental agency or regulatory authority that provides for a position with respect to such laws, rules or regulations that differs from its previous position or a theretofore commonly accepted position or (d) any action taken by any governmental agency or regulatory authority, which amendment or change is enacted, promulgated, issued or announced or which interpretation or pronouncement is issued or announced or which action is taken, in each case on or after __________, __________, there is more than a remote risk that (i) the Trust is, or will be within 90 days of the date thereof, subject to United States federal income tax with respect to income accrued or received on the Debentures, (ii) the Sponsor or an Affiliate thereof is, or will be within 90 days of the date thereof, subject to United States federal income tax with respect to a percentage of the income accrued or received on the Debentures which exceeds the percentage of the total capital of the Trust owned by the Holders of the Common Securities, (iii) the Trust is, or will be within 90 days of the date thereof, subject to more than a de minimis amount of taxes, duties or other governmental charges, (iv) interest payable by Seitel to the Trust on the Debentures is not, or within 90 days of the date thereof will not be, deductible by Seitel for United States federal income tax purposes or (v) Seitel will be required to pay either Additional Amounts with respect to the Debentures as provided in the Indenture or additional amounts with respect to the Preferred Securities as provided in Section 2 hereof. "Investment Company Event" means that the Sponsor and the Regular Trustees shall have received an Opinion of Counsel experienced in practice under the Investment Company Act that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in Investment Company Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an Investment Company that is required to be registered under the Investment Company Act, which Change in Investment Company Act Law becomes effective on or after _________, ________. B-6 65 (d) The Trust may not redeem fewer than all the outstanding Preferred Securities unless all accumulated and unpaid Distributions have been paid on all Preferred Securities for all [quarterly] [semi-annual] Distribution periods terminating on or prior to the date of redemption. (f) (i) Notice of any redemption of, or notice of distribution of Debentures in exchange for, the Preferred Securities and the Common Securities (a "Redemption/Distribution Notice") will be given by the Regular Trustees on behalf of the Trust by mail to each Holder of Preferred Securities and Common Securities to be redeemed or exchanged not less than 30 nor more than 60 days prior to the date fixed for redemption or exchange thereof. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this Section 4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, to Holders of Preferred Securities and Common. Securities. Each Redemption/Distribution Notice shall be addressed to the Holders of Preferred Securities and Common Securities at the address of each such Holder appearing in the books and records of the Trust. No defect in the Redemption/Distribution Notice or in the mailing of either thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder. (ii) In the event that fewer than all the outstanding Preferred Securities are to be redeemed, the Preferred Securities to be redeemed will be redeemed Pro Rata from each Holder of Preferred Securities, it being understood that, in respect of Preferred Securities registered in the name of and held of record by DTC (or successor Clearing Agency) or any other nominee, the Preferred Securities will be redeemed from, and the distribution of the proceeds of such redemption will be made to, DTC (or successor Clearing Agency) or other nominee. (iii) Subject to Section [9] hereof, if the Trust gives a Redemption/Distribution Notice in respect of a redemption of Preferred Securities as provided in this Section 4, then (A) while the Preferred Securities are in book-entry only form, with respect to the Preferred Securities, by 12:00 noon, New York City time, on the redemption date, provided that Seitel has paid the Property Trustee, in immediately available funds, a sufficient amount of cash in connection with the related redemption or maturity of the Debentures, the Property Trustee will deposit irrevocably with DTC (or successor Clearing Agency) funds sufficient to pay the applicable Redemption Price with respect to the Preferred Securities and will give DTC (or successor Clearing Agency) irrevocable instructions and authority to pay the Redemption Price to the Holders of the Preferred Securities and (B) if the Preferred Securities are issued in definitive form, with respect to the Preferred Securities and provided that Seitel has paid the Property Trustee, in immediately available funds, a sufficient amount of cash in connection with the related redemption or maturity of the Debentures, the Property Trustee will pay the relevant Redemption Price to the Holders of such Preferred Securities by check mailed to the address of the relevant Holder appearing on the books and records of the Trust on the redemption date. If a Redemption/Distribution Notice shall have been given and funds deposited as required, if applicable, then immediately prior to the close of business on the redemption date, Distributions will cease to accumulate on the Preferred Securities called for redemption, such Preferred Securities will no longer be deemed to be outstanding and all rights of Holders of such B-7 66 Preferred Securities so called for redemption will cease, except the right of the Holders of such Preferred Securities to receive the Redemption Price, but without interest on such Redemption Price. Neither the Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Preferred Securities which have been so called for redemption. If any date fixed for redemption of Preferred Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of Preferred Securities is improperly withheld or refused and not paid either by the Property Trustee or by Seitel pursuant to the Preferred Securities Guarantee, Distributions on such Preferred Securities will continue to accumulate, from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. (iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf of the Trust to DTC or its nominee (or any successor Clearing Agency or its nominee) if the Global Certificates have been issued or, if Definitive Preferred Security Certificates have been issued, to the Holders of the Preferred Securities. (v) Subject to the foregoing and applicable law (including, without limitation, United States Federal securities laws), Seitel or any of its Affiliates may at any time and from time to time purchase outstanding Preferred Securities by tender, in the open market or by private agreement. [5. CONVERSION RIGHTS. The Holders of Preferred Securities shall have the right at any time prior to the close of business on _________, _______ or, in the case of Preferred Securities called for redemption, prior to the close of business on the Business Day prior to the redemption date, at their option, to cause the Conversion Agent to convert Preferred Securities, on behalf of the converting Holders, into Shares in the manner described herein on and subject to the following terms and conditions: (a) The Preferred Securities will be convertible at the office of the Conversion Agent maintained for such purpose in the Borough of Manhattan, The City of New York, into fully paid and nonassessable Shares pursuant to the Holder's direction to the Conversion Agent to exchange such Preferred Securities for a portion of the Debentures theretofore held by the Trust on the basis of one Preferred Security per $_____________ principal amount of Debentures, and immediately convert such amount of Debentures into fully paid and nonassessable Shares at an initial rate of Shares per $____________ principal amount of Debentures (which is equivalent to a conversion price of $____________ per Share, subject to certain adjustments set forth in Sections __________ and ____________ of the Supplemental Indenture (as so adjusted, the "Conversion Price")). (b) In order to convert Preferred Securities into shares, the Holder shall submit to the Conversion Agent at the office referred to above an irrevocable request to convert Preferred B-8 67 Securities on behalf of such Holder (the "Conversion Request"), together, if the Preferred Securities are in certificated form, with such Preferred Security Certificates. The Conversion Request shall (i) set forth the number of Preferred Securities to be converted and the name or names, if other than the Holder, in which the Shares should be issued and (ii) direct the Conversion Agent (a) to exchange such Preferred Securities for a portion of the Debentures held by the Trust (at the rate of exchange specified in the preceding paragraph) and (b) to immediately convert such Debentures on behalf of such Holder into Shares, subject to certain adjustments set forth in the Supplemental Indenture (at the conversion rate specified in the preceding paragraph). The Conversion Agent shall notify the Trust of the Holder's election to exchange Preferred Securities for a portion of the Debentures held by the Trust and the Trust shall, upon receipt of such notice, deliver to the Conversion Agent the appropriate principal amount of Debentures for exchange in accordance with this Section. The Conversion Agent shall thereupon notify the Sponsor of the Holder's election to convert such Debentures into Shares. If a Preferred Security is surrendered for conversion after the close of business on any regular record date for payment of a Distribution and before the opening of business on the corresponding Distribution payment date, then, notwithstanding such conversion, the Distribution payable on such Distribution payment date will be paid in cash to the person in whose name the Preferred Security is registered at the close of business on such record date, and (other than a Preferred Security or a portion of a Preferred Security called for redemption on a redemption date occurring after such record date and on or prior to such Distribution payment date) when so surrendered for conversion, the Preferred Security must be accompanied by payment of an amount equal to the Distribution payable on such Distribution payment date. Except as provided above, neither the Trust nor the Sponsor will make, or be required to make, any payment, allowance or adjustment upon any conversion on account of any accumulated and unpaid Distributions accumulated on the Preferred Securities surrendered for conversion, or on account of any accumulated and unpaid dividends on the Shares issued upon such conversion, and the delivery of Shares upon conversion of the Preferred Securities shall be deemed to constitute full payment for all accumulated and unpaid Distributions on the Preferred Securities. Preferred Securities shall be deemed to have been converted immediately prior to the close of business on the day on which a Notice of Conversion relating to such Preferred Securities is received by the Trust in accordance with the foregoing provision (the "Conversion Date"). The Person or Persons entitled to receive Shares issuable upon conversion of the Debentures shall be treated for all purposes as the record holder or holders of such Shares at such time. As promptly as practicable on or after the Conversion Date, the Sponsor shall issue the number of full Shares issuable upon such conversion to, and shall deliver at the office of the Conversion Agent the cash payment, if any, in lieu of any fraction of any Share for the account of, the Person or Persons entitled to receive the same, unless otherwise directed by the Holder in the Notice of Conversion. The Conversion Agent shall distribute such cash payment, if any, to such Person or Persons. (c) Each Holder of a Preferred Security by his acceptance thereof appoints The First National Bank of Chicago, as the "Conversion Agent" for the purpose of effecting the conversion of Preferred Securities in accordance with this Section. In effecting the conversion and transactions described in this Section, the Conversion Agent shall be acting as agent of the Holders of Preferred Securities directing it to effect such conversion transactions. The Conversion Agent is hereby B-9 68 authorized (i) to exchange Preferred Securities from time to time for Debentures held by the Trust in connection with the conversion of such Preferred Securities in accordance with this Section and (ii) to convert all or a portion of the Debentures into Shares and thereupon to deliver such Shares in accordance with the provisions of this Section and to deliver to the Trust a new Debenture or Debentures for any resulting unconverted principal amount. (d) No fractional Shares will be issued as a result of conversion, but in lieu thereof, such fractional interest will be paid by the Sponsor in cash (based upon the Closing Price (as defined in the Indenture) of Shares on the date such Preferred Securities are surrendered for conversion to the Trust) to the Conversion Agent, which in turn will make such payment to the Holder or Holders of Preferred Securities so converted, or, if such day is not a Trading Day (as defined in the Indenture), on the next Trading Day. (e) [The Sponsor shall be entitled to deliver upon conversion of Debentures, Shares reacquired and held in the treasury of the Sponsor (in lieu of the issuance of authorized and unissued Shares), so long as any such treasury shares are free and clear of all liens, charges, security interests or encumbrances.] Any Shares issued upon conversion of the Debentures shall be duly authorized, validly issued and fully paid and nonassessable. The Trust shall deliver the Shares received upon conversion of the Debentures to the converting Holder of Preferred Securities free and clear of all liens, charges, security interests and encumbrances, except for United States withholding taxes. Each of the Sponsor and the Trust shall prepare and shall use its best efforts to obtain and keep in force such governmental or regulatory permits or other authorizations as may be required by law, and shall comply with all applicable requirements as to registration or qualification of Shares (and all requirements to list Shares issuable upon conversion of Debentures that are at the time applicable), in order to enable the Sponsor to lawfully issue Shares to the Trust upon conversion of the Debentures and the Trust to lawfully deliver Shares to each Holder of Preferred Securities upon conversion of the Preferred Securities. (f) The Sponsor will pay any and all taxes that may be payable in respect of the issue or delivery of Shares on conversion of Debentures and the delivery of the Shares by the Trust upon conversion of the Preferred Securities. The Sponsor shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of Shares in a name other than that in which the Preferred Securities so converted were registered, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Trust the amount of any such tax, or has established to the satisfaction of the Trust that such tax has been paid. (g) Nothing in the preceding paragraph (f) shall limit the requirement of the Trust to withhold taxes pursuant to the terms of the Preferred Securities or set forth in this Exhibit B to the Declaration or to the Declaration itself or otherwise require the Property Trustee or the Trust to pay any amounts on account of such withholdings.] B-10 69 6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as otherwise required by law and the Declaration, the Holders of the Preferred Securities will have no voting rights. (b) If any proposed amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to the Declaration, other than as described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than as described in Section 8.01 of the Declaration or Section 3 of this Exhibit B, then the Holders of outstanding Securities will be entitled to vote on such amendment or proposal as a single class and such amendment or proposal shall not be effective except with the approval of the Holders of Securities of at least a Majority in liquidation amount of Securities, voting together as a single class; provided, however, that (A) if any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or the Common Securities, then only the affected class of Securities will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of at least a Majority in liquidation amount of Securities of such class and (B) amendments to the Declaration shall be subject to such further requirements as are set forth in Sections 12.01 and 12.02 of the Declaration. In the event the consent of the Property Trustee, as the holder of the Debentures, is required under the Indenture with respect to any amendment, modification or termination of the Indenture or the Debentures, the Property Trustee shall request the written direction of the Holders of the Securities with respect to such amendment, modification or termination. The Property Trustee shall vote with respect to such amendment, modification or termination as directed by a Majority in liquidation amount of Securities voting together as a single class; provided, however, that where such amendment, modification or termination of the Indenture requires the consent or vote of (1) holders of Debentures representing a specified percentage greater than a majority in principal amount of the Debentures or (2) each holder of Debentures, the Property Trustee may only vote with respect to that amendment, modification or termination as directed by, in the case of clause (1) above, the vote of Holders of Securities representing such specified percentage of the aggregate liquidation amount of the Securities, or, in the case of clause (2) above, each Holder of Securities; and provided, further, that the Property Trustee shall be under no obligation to take any action in accordance with the directions of the Holders of Securities unless the Property Trustee shall have received, at the expense of the Sponsor, an Opinion of Counsel experienced in such matters to the effect that the Trust will not be classified for United States Federal income tax purposes as other than a grantor trust on account of such action. So long as any Debentures are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Trustee of the Indenture (the "Debenture Trustee") or exercising any trust or power conferred on the Debenture Trustee with respect to the Debentures, (ii) waive any past default that is waivable under Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a declaration of acceleration of the maturity of the principal of the Debentures, without, in each case, obtaining the prior approval B-11 70 of the Holders of a Majority in liquidation amount of Preferred Securities and Common Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Holders of the Preferred Securities except by subsequent vote of such Holders. The Property Trustee shall notify each Holder of Preferred Securities of any notice of default with respect to the Debentures. If an Event of Default has occurred and is continuing, then the Holders of a Majority in liquidation amount of Preferred Securities will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee or to direct the exercise of any trust or power conferred upon the Property Trustee under the Declaration, including the right to direct the Property Trustee to exercise the remedies available to it as a holder of the Debentures. If the Property Trustee fails to enforce its rights under the Debentures, a Holder of Preferred Securities may, after a period of 30 days has elapsed since such Holder's written request to the Property Trustee to enforce such rights, institute a legal proceeding directly against the Sponsor to enforce the Property Trustee's rights under the Debentures without first instituting any legal proceeding against the Property Trustee or any other Person, provided that, if an Event of Default has occurred and is continuing and such event is attributed to the failure of the Sponsor to pay principal of, any premium or interest on or any Additional Amounts with respect to the Debentures on the date such amounts are otherwise payable (or in the case of redemption, on the redemption date), then a Holder of Preferred Securities may directly institute a proceeding for enforcement of payment to such Holder of such amounts on the Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities of such Holder (a "Holder Direct Action") on or after the respective due date specified in the Debentures. In connection with such Holder Direct Action, the Sponsor will be subrogated to the rights of such Holder of Preferred Securities to the extent of any payment made by the Sponsor to such Holder of Preferred Securities in such Holder Direct Action. Except as provided in the preceding sentences, the Holders of Preferred Securities will not be able to exercise directly any other remedy available to the Holders of the Debentures. A waiver of an Indenture Event of Default by the Property Trustee at the direction of the Holders of the Preferred Securities will constitute a waiver of the corresponding Event of Default under the Declaration in respect of the Securities. Any required approval or direction of Holders of Preferred Securities may be given at a separate meeting of Holders of Preferred Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent as provided in Section 12.02 of the Declaration. The Regular Trustees will cause a notice of any meeting at which Holders of Preferred Securities are entitled to vote to be mailed to each Holder of record of Preferred Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies. Any action that may be taken at a meeting of the Holders of Securities may be taken without a meeting and without prior notice if a consent in writing setting forth the action so taken is signed by Holders of Securities owning not less than the minimum aggregate liquidation amount of Securities that would be necessary to authorize or take such action B-12 71 at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. No vote or consent of the Holders of Preferred Securities will be required for the Trust to redeem and cancel Preferred Securities or to distribute the Debentures in accordance with the Declaration or Section 3 of this Exhibit B. Notwithstanding that Holders of Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Preferred Securities at such time that are owned by Seitel or by any Affiliate of Seitel shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if they were not outstanding. Holders of the Preferred Securities have no rights to increase or decrease the number of Trustees or to appoint, remove or replace a Trustee, which voting rights are vested exclusively in the Holders of the Common Securities. 7. PRO RATA TREATMENT. A reference in these terms of the Preferred Securities to any payment, Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities according to the aggregate liquidation amount of the Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of Default has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Preferred Securities pro rata according to the aggregate liquidation amount of Preferred Securities held by the relevant Holder relative to the aggregate liquidation amount of all Preferred Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate liquidation amount of Common Securities held by the relevant Holder relative to the aggregate liquidation amount of all Common Securities outstanding. 8. RANKING. The Preferred Securities rank pari passu and payment thereon will be made Pro Rata with the Common Securities, except that when an Event of Default occurs and is continuing, the rights of Holders of Preferred Securities to payment in respect of Distributions and payments upon liquidation, redemption or otherwise rank in priority to the rights of Holders of the Common Securities. 9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and payments on redemption of the Preferred Securities will be payable, the transfer of the Preferred Securities will be registrable, and Preferred Securities will be exchangeable for Preferred Securities of other denominations of a like aggregate liquidation amount, at the corporate trust office of the Property Trustee (or its Affiliate) in The City of New York; provided that payment of Distributions may be made at the option of the Regular Trustees on behalf of the Trust by check mailed to the address of Holders entitled thereto or by wire transfer of funds to an account designated by such Holder and that the payment on redemption of any Preferred Security will be made only upon surrender of such Preferred Security to the Property Trustee. B-13 72 10. ACCEPTANCE OF INDENTURE AND PREFERRED SECURITIES GUARANTEE. Each Holder of Preferred Securities, by the acceptance thereof, agrees to the provisions of (i) the Preferred Securities Guarantee, including the subordination provisions therein, and (ii) the Indenture and the Debentures, including the subordination provisions of the Indenture. 11. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have no preemptive or similar rights to subscribe to any additional Preferred Securities or Common Securities. 12. MISCELLANEOUS. These Terms shall constitute a part of the Declaration. The Trust will provide a copy of the Declaration and the Indenture to a Holder of Preferred Securities without charge on written request to the Trust at its principal place of business. B-14 73 Annex I FORM OF PREFERRED SECURITY CERTIFICATE [IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT THIS PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (55 WATER STREET, NEW YORK, NEW YORK) TO SEITEL CAPITAL TRUST [I] [II] OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO, HAS AN INTEREST HEREIN.] Certificate Number Number of Preferred Securities: ----------------- - ------------------ Aggregate Liquidation Amount: $ ----------------- CUSIP NO. ------------------ Certificate Evidencing Preferred Securities of Seitel Capital Trust [I] [II] ______% [[Convertible] Trust Preferred Securities] (liquidation amount $__________ per Preferred Security) Seitel Capital Trust [I] [II], a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that _________________(the "Holder") is the registered owner of ____________ (__________) preferred securities of the Trust representing preferred undivided beneficial interests in the assets of the Trust and designated the "_______% [[Convertible] Trust Preferred Securities]" (liquidation amount $__________ per Preferred Security) (the "Preferred Securities"). The Preferred Securities are transferable on the books and records of the Trust, in person or by a duly B-15 74 authorized attorney, upon surrender of this Certificate duly endorsed and in proper form for transfer. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Securities are set forth in, and this Certificate and the Preferred Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Declaration of Trust of the Trust dated as of _________, ______, as the same may be amended from time to time (the "Declaration") including the designation of the terms of Preferred Securities as set forth in Exhibit B thereto. The Preferred Securities and the Common Securities issued by the Trust pursuant to the Declaration represent undivided beneficial interests in the assets of the Trust, including the Debentures (as defined in the Declaration) issued by Seitel, Inc., a Delaware corporation ("Seitel"), to the Trust pursuant to the Indenture referred to in the Declaration. The Holder is entitled to the benefits of the Preferred Securities Guarantee Agreement of Seitel dated as of ___________, ___________(the "Guarantee") to the extent provided therein. The Trust will furnish a copy of the Declaration, the Guarantee and the Indenture to the Holder without charge upon written request to the Trust at its principal place of business or registered office. The Holder of this Certificate, by accepting this Certificate, is deemed to have (i) agreed to the terms of the Indenture and the Debentures, including that the Debentures are subordinate and junior in right of payment to all Senior Debt (as defined in the Indenture) as and to the extent provided in the Indenture, and (ii) agreed to the term of the Guarantee, including that the Guarantee is subordinate and junior in right of payment to all other [senior] liabilities of Seitel [, including the Debentures, except those made pari passu or subordinate by their terms,] and senior to all common stock now or hereafter issued by Seitel. Upon receipt of this Certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder. IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate. SEITEL CAPITAL TRUST [I] [II] By: , as Regular Trustee ---------------- Name: Title: Regular Trustee Dated: B-16 75 Countersigned and Registered: THE FIRST NATIONAL BANK OF CHICAGO, as Transfer Agent and Registrar By ---------------------------- Authorized Signatory B-17 76 [FORM OF REVERSE OF SECURITY] Distributions payable on each Preferred Security will be fixed at a rate per annum of _____% (the "Coupon Rate") of the stated liquidation amount of $________ per Preferred Security, such rate being the interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one [calendar quarter] [semi-annual period] will accumulate additional distributions thereon at the Coupon Rate per annum (to the extent permitted by applicable law), compounded [quarterly] [semi-annually]. The term "Distributions" as used herein means such periodic cash distributions and any such additional distributions payable unless otherwise stated. A Distribution will be made by the Property Trustee only to the extent that interest payments are made in respect of the Debentures held by the Property Trustee and to the extent the Trust has funds on hand legally available therefor. The amount of Distributions payable for any period will be computed for any full [quarterly] [semi-annual] Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full [quarterly] [semi-annual] Distribution period for which Distributions are computed, Distributions will be computed on the basis of the actual number of days elapsed per [90-day quarter] [180-day semi-annual period]. If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature, imposed by the United States or any other taxing authority (other than withholding taxes), then, in any such case, Seitel shall pay such additional amounts as are required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will be not less than the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. Distributions on the Preferred Securities will accumulate from ________, _______ and will be payable [quarterly] [semi-annually] in arrears, on [_______, ________] _________ and ________ of each year, commencing on _________, ______, except as otherwise described below, but only if and to the extent that interest payments are made in respect of the Debentures held by the Property Trustee. So long as Seitel shall not be in default in the payment of interest and Additional Amounts on the Debentures, Seitel has the right under the Indenture for the Debentures to defer payments of interest and Additional Amounts on the Debentures by extending the interest payment period at any time and from time to time on the Debentures for a period not exceeding [20] [10] consecutive [quarterly] [semi- B-18 77 annual] interest periods (each, an "Extension Period"), during which Extension Period no interest or Additional Amounts shall be due and payable on the Debentures. As a consequence of such deferral, Distributions and payments of additional amounts with respect to the Preferred Securities shall also be deferred. Despite such deferral, Distributions will continue to accumulate with additional distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded [quarterly] [semi-annually] during any such Extension Period. No Extension Period shall extend beyond the stated maturity of the Debentures. Prior to the termination of any such Extension Period, Seitel may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed [20] [10] consecutive [quarterly] [semi-annual] interest periods. Upon the termination of any Extension Period and the payment of all amounts then due, Seitel may commence a new Extension Period, subject to the above requirements. On the Distribution payment date at the end of an Extension Period, payments of accumulated Distributions and additional amounts will be payable to Holders of Preferred Securities as they appear on the books and records of the Trust (regardless of who the Holders may have been on other dates during the Extension Period) on the record date for such Distribution payment date. The Preferred Securities shall be redeemable as provided in the Declaration. [The Preferred Securities shall be convertible into Shares (as defined in the Declaration), through (i) the exchange of Preferred Securities for a portion of the Debentures and (ii) the immediate conversion of such Debentures into Shares, in the manner and according to the terms set forth in the Indenture.] B-19 78 [CONVERSION REQUEST To: The First National Bank of Chicago, as Conversion Agent for Seitel Capital Trust [I] [II] The undersigned owner of these Preferred Securities hereby irrevocably exercises the option to convert these Preferred Securities, or the portion below designated, into Shares (as that term is defined in the Amended and Restated Declaration of Trust, dated as of ________, ______(as amended from time to time, the "Declaration"), by ________, ________ and ________ as Regular Trustees, Bank One Delaware, Inc., as the Delaware Trustee, The First National Bank of Chicago, as the Property Trustee, Seitel, Inc., as Sponsor, and by the Holders, from time to time, of undivided beneficial interests in the assets of the Trust to be issued pursuant to the Declaration) in accordance with and subject to the terms and conditions of the Declaration. Pursuant to the aforementioned exercise of the option to convert these Preferred Securities, the undersigned hereby directs the Conversion Agent (as that term is defined in the Declaration) to (i) exchange such Preferred Securities for a portion of the Debentures (as that term is defined in the Declaration) held by Seitel Capital Trust [I] [II] (at the rate of exchange specified in the terms of the Preferred Securities set forth as Exhibit B to the Declaration) and (ii) immediately convert such Debentures on behalf of the undersigned into Shares (at the conversion rate specified in the terms of the Preferred Securities set forth as Exhibit B to the Declaration, subject to certain adjustments set forth in the Supplemental Indenture (as that term is defined in the Declaration)). The undersigned does also hereby direct the Conversion Agent that the Shares issuable and deliverable upon conversion, together with any check in payment for fractional shares, be issued in the name of and delivered to the undersigned, unless a different name has been indicated in the assignment below. If Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. B-20 79 Date:__________, __________ in whole___________ in part_______ Number of Preferred Securities to be converted: ----------------------------------------------- If a name or names other than the undersigned, please indicate in the spaces below the name or names in which the Shares are to be issued, along with the address or addresses of such person or persons: ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- Signature (for conversion only) Please Print or Type Name and Address, Including Zip Code, and Social Security or Other Identifying Number: ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- Signature Guarantee:* -------------------------- - ------------------- *(Signature must be guaranteed by an "eligible guarantor institution" that is a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Conversion Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Conversion Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)] B-21 80 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Security Certificate to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) and irrevocably appoints: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- agent to transfer this Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: ---------------------------- Signature: ----------------------- NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. B-22 81 EXHIBIT C TERMS OF COMMON SECURITIES Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust of Seitel Capital Trust [I] [II] dated as of _________, _______ (as amended from time to time, the "Declaration"), the designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth below (each capitalized term used but not defined herein having the meaning set forth in the Declaration): 1. DESIGNATION AND NUMBER. _____________ (_________________) Common Securities of the Trust with an aggregate liquidation amount at any time outstanding with respect to the assets of the Trust of ___________ Dollars ($________) [(including up to ______________ Dollars ($____________) issuable to Seitel upon exercise of the overallotment option by the Underwriter[s] as set forth in the Underwriting Agreement)], and each with a liquidation amount with respect to the assets of the Trust of $_____________ per Common Security, are hereby designated as "_______% [[Convertible] Trust Common Securities]." The Common Security Certificates evidencing the Common Securities shall be substantially in the form attached hereto as Annex I, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice. The Common Securities are to be issued and sold to Seitel in consideration of $__________ in cash. In connection with the issuance and sale of the Preferred Securities and the Common Securities, the Trust will purchase as trust assets Debentures of Seitel having an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities and the Common Securities so issued, and bearing interest at an annual rate equal to the annual Distribution rate on the Preferred Securities and the Common Securities and having payment and redemption provisions which correspond to the payment and redemption provisions of the Preferred Securities and the Common Securities. 2. DISTRIBUTIONS AND ADDITIONAL AMOUNTS. (a) Distributions payable on each Common Security will be fixed at a rate per annum of ________% (the "Coupon Rate") of the stated liquidation amount of $________ per Common Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one [calendar quarter] [semi-annual period] will accumulate additional distributions thereon at the Coupon Rate per annum (to the extent permitted by applicable law), compounded [quarterly] [semi-annually]. The term "Distributions" as used herein means such periodic cash distributions and any such additional distributions payable unless otherwise stated. A Distribution will be made by the Property Trustee only to the extent that interest payments are made in respect of the Debentures held by the Property Trustee and to the extent the Trust has funds on hand legally available therefor. The amount of Distributions payable for any period will be computed for any full [quarterly] [semi-annual] Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full [quarterly][semi-annual] Distribution period for which Distributions are C-1 82 computed. Distributions will be computed on the basis of the actual number of days elapsed per [90-day quarter] [180-day semi-annual period]. If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature, imposed by the United States or any other taxing authority (other than withholding taxes), then, in any such case, Seitel shall pay such additional amounts as are required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will be not less than the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. (b) Distributions on the Common Securities will accumulate from _________, _______ and will be payable [quarterly][semiannually] in arrears, on [_________, ________] ________ and _______ of each year, commencing on __________, ___________, except as otherwise described below, but only if and to the extent that interest payments are made in respect of the Debentures held by the Property Trustee. So long as Seitel shall not be in default in the payment of interest and Additional Amounts on the Debentures, Seitel has the right under the Indenture for the Debentures to defer payments of interest and Additional Amounts on the Debentures by extending the interest payment period at any time and from time to time on the Debentures for a period not exceeding [20] [10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension Period"), during which Extension Period no interest or Additional Amounts shall be due and payable on the Debentures. As a consequence of such deferral, Distributions and payments of additional amounts with respect to the Common Securities shall also be deferred. Despite such deferral, Distributions will continue to accumulate with additional distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded [quarterly] [semi-annually] during any such Extension Period. No Extension Period shall extend beyond the stated maturity of the Debentures. Prior to the termination of any such Extension Period, Seitel may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed [20] [10] consecutive [quarterly] [semi-annual] interest periods. Upon the termination of any Extension Period and the payment of all amounts then due, Seitel may commence a new Extension Period, subject to the above requirements. On the Distribution payment date at the end of an Extension Period, payments of accumulated Distributions and additional amounts will be payable to Holders of Common Securities as they appear on the books and records of the Trust (regardless of who the Holders may have been on other dates during the Extension Period) on the record date for such Distribution payment date. (c) Distributions and additional amounts on the Common Securities will be payable promptly by the Property Trustee (or other Paying Agent) upon receipt of immediately available funds to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates. While the Preferred Securities remain in book-entry only form, the relevant record dates for the Common Securities shall be one business day prior to the relevant Distribution payment date, and if the Preferred Securities are no longer in book-entry only form, the relevant record dates for the Common Securities will be the fifteenth (15th) day of the month prior to the relevant C-2 83 Distribution payment date, which record and payment dates correspond to the record and interest payment dates on the Debentures. Distributions and additional amounts payable on any Common Securities that are not punctually paid on any Distribution payment date as a result of Seitel's having failed to make the corresponding payment on the Debentures will forthwith cease to be payable to the person in whose name such Common Security is registered on the relevant record date, and such defaulted payment will instead be payable to the person in whose name such Common Security is registered on the special record date established by the Regular Trustees, which record date shall correspond to the special record date or other specified date determined in accordance with the Indenture; provided, however, that Distributions and additional amounts shall not be considered payable on any Distribution payment date falling within an Extension Period unless Seitel has elected to make a full or partial payment of accrued interest on and Additional Amounts with respect to the Debentures on such Distribution payment date. Subject to any applicable laws and regulations and the provisions of the Declaration, each payment in respect of the Common Securities will be made as described in Section [9] hereof. If any date on which Distributions and additional amounts are payable on the Common Securities is not a Business Day, then payment of the Distribution and additional amounts payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. Notwithstanding anything herein to the contrary, the record dates and payment dates for Distributions and additional amounts shall be the same as the record dates and payment dates for the Debentures. (d) All Distributions and additional amounts paid with respect to the Common Securities and the Preferred Securities will be paid Pro Rata (as defined below) to the Holders thereof entitled thereto. If an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities with respect to such payments. (e) In the event that there is any money or other property held by or for the Trust that is not accounted for under the Declaration, such money or property shall be distributed Pro Rata among the Holders of the Preferred Securities and the Common Securities. 3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any voluntary or involuntary dissolution, winding-up or termination of the Trust, the Holders of the Preferred Securities and the Common Securities will be entitled to receive Pro Rata solely out of the assets of the Trust legally available for distribution to Holders of Preferred Securities and Common Securities after satisfaction of liabilities to the creditors of the Trust, an amount equal to the aggregate of the stated liquidation amount of $________ per Preferred Security and Common Security plus accumulated and unpaid Distributions thereon and any additional amounts with respect thereto to the date of payment (such amount being the "Liquidation Distribution"), unless, in connection with such dissolution, winding-up or termination and after satisfaction of liabilities to the creditors of the Trust, Debentures, in an aggregate principal amount equal to the aggregate stated liquidation amount of such Preferred Securities and the Common Securities and bearing accrued and unpaid interest and C-3 84 Additional Amounts in an amount equal to the accumulated and unpaid Distributions on and any additional amounts with respect to such Preferred Securities and the Common Securities, shall be distributed Pro Rata to the Holders of the Preferred Securities and the Common Securities in exchange for such Securities. If, upon any such dissolution, winding-up or termination, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets on hand legally available to pay in full the aggregate Liquidation Distribution, then the amounts payable directly by the Trust on the Preferred Securities and the Common Securities shall be paid, subject to the next paragraph, on a Pro Rata basis. Holders of Common Securities will be entitled to receive Liquidation Distributions upon any such dissolution Pro Rata with Holders of Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities shall have a priority over the Common Securities with respect to such Liquidation Distribution. (b) The Holder of the Common Securities shall have the right to direct the Property Trustee in writing at any time to dissolve the Trust and to distribute Debentures to Holders in exchange for Securities (which direction is optional and wholly within the discretion of the Holder of the Common Securities). Upon the receipt of any such written direction, the Property Trustee shall promptly (i) distribute Debentures in an aggregate principal amount equal to the aggregate stated liquidation amount of the Preferred Securities and the Common Securities held by each Holder, which Debentures bear accrued and unpaid interest in an amount equal to the accumulated and unpaid Distributions on the Preferred Securities and the Common Securities of such Holder, in exchange for the Preferred Securities and Common Securities of such Holder and (ii) dissolve the Trust. (c) On the date fixed for any distribution of Debentures, upon dissolution of the Trust, (i) the Common Securities will no longer be deemed to be outstanding and may be canceled by the Regular Trustees and (ii) Certificates representing Common Securities will be deemed to represent beneficial interests in the Debentures having an aggregate principal amount equal to the stated liquidation amount of and bearing accrued and unpaid interest equal to accumulated and unpaid Distributions on, such Common Securities until such Certificates are presented to Seitel or its agent for cancellation and Debentures are issued in lieu thereof. 4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only if Debentures having an aggregate principal amount equal to the aggregate liquidation amount of the Preferred Securities and the Common Securities are repaid or redeemed as set forth below: (a) Upon the repayment of the Debentures, in whole or in part, whether at maturity, upon redemption at any time or from time to time [on or after _______________, ____ ], the proceeds of such repayment will be promptly applied to redeem Pro Rata Preferred Securities and Common Securities having an aggregate liquidation amount equal to the aggregate principal amount of the C-4 85 Debentures so repaid or redeemed, upon not less than 30 nor more than 60 days' notice, at a redemption price [of $__________ per Preferred Security and Common Security plus an amount equal to accumulated and unpaid Distributions thereon and any additional amounts with respect thereto to, but excluding, the date of redemption, payable in cash (the "Redemption Price").] (b) If fewer than all the outstanding Preferred Securities and Common Securities are to be so redeemed, the Common Securities will be redeemed as described in Section 4(e)(ii) below, and the Common Securities will be redeemed Pro Rata with the Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities will have a priority over the Common Securities with respect to payment of the Redemption Price. If a partial redemption would result in the delisting of the Preferred Securities by any national securities exchange or other organization on which the Preferred Securities are then listed or traded, Seitel pursuant to the Indenture will redeem Debentures only in whole and, as a result, the Trust may redeem the Common Securities only in whole. (c) If, at any time, a Tax Event or an Investment Company Event (each as hereinafter defined, and each a "Special Event") shall occur and be continuing, Seitel shall have the right at any time [prior to _________, ___________], upon not less than 30 nor more than 60 days' notice, to redeem the Debentures in whole but not in part for cash at the Redemption Price within 90 days following the occurrence of such Special Event, and promptly following such redemption, Preferred Securities and Common Securities with an aggregate liquidation amount equal to the aggregate principal amount of the Debentures so redeemed will be redeemed by the Trust at the Redemption Price on a Pro Rata basis. The Common Securities will be redeemed Pro Rata with the Preferred Securities, except that if an Event of Default has occurred and is continuing, the Preferred Securities will have a priority over the Common Securities with respect to payment of the Redemption Price. "Tax Event" means that the Sponsor and the Regular Trustees shall have received an Opinion of Counsel experienced in such matters to the effect on or after _____________, _________ as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any rules or regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, (b) any amendment to, or change in, an interpretation or application of any such laws, rules or regulations by any legislative body, court, governmental agency or regulatory authority (including the enactment of any legislation or the publication of any judicial decision or regulatory determination), (c) any interpretation or pronouncement by any legislative body, court, governmental agency or regulatory authority that provides for a position with respect to such laws, rules or regulations that differs from its previous position or a theretofore commonly accepted position or (d) any action taken by any governmental agency or regulatory authority, which amendment or change is enacted, promulgated, issued or announced or which interpretation or pronouncement is issued or announced or which action is taken, in each case on or after _____________, ____, there is more than a remote risk that (i) the Trust is, or will be within 90 days of the date thereof, subject to United States federal income tax with respect to income accrued or received on the Debentures, (ii) the Sponsor or an Affiliate thereof is, or will be within 90 days of the date thereof, subject to United States federal income tax with respect to a C-5 86 percentage of the income accrued or received on the Debentures which exceeds the percentage of the total capital of the Trust owned by the Holders of the Common Securities, (iii) the Trust is, or will be within 90 days of the date thereof, subject to more than a de minimis amount of taxes, duties or other governmental charges, (iv) interest payable by Seitel to the Trust on the Debentures is not, or within 90 days of the date thereof will not be, deductible by Seitel for United States federal income tax purposes or (v) Seitel will be required to pay either Additional Amounts with respect to the Debentures as provided in the Indenture or additional amounts with respect to the Common Securities as provided in Section 2 hereof. "Investment Company Event" means that the Sponsor and the Regular Trustees shall have received an Opinion of Counsel experienced in practice under the Investment Company Act that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in Investment Company Act Law"), there is more than an insubstantial risk that the Trust is or will be considered an Investment Company that is required to be registered under the Investment Company Act, which Change in Investment Company Act Law becomes effective on or after ______________, ________. (d) The Trust may not redeem fewer than all the outstanding Common Securities unless all accumulated and unpaid Distributions have been paid on all Common Securities for all [quarterly] [semi-annual] Distribution periods terminating on or prior to the date of redemption. (e) (i) Notice of any redemption of, or notice of distribution of Debentures in exchange for, the Preferred Securities and the Common Securities (a "Redemption/Distribution Notice") will be given by the Regular Trustees on behalf of the Trust by mail to each Holder of Preferred Securities and Common Securities to be redeemed or exchanged not less than 30 nor more than 60 days prior to the date fixed for redemption or exchange thereof. For purposes of the calculation of the date of redemption or exchange and the dates on which notices are given pursuant to this Section 4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the day such notice is first mailed by first-class mail, postage prepaid, to Holders of Preferred Securities and Common Securities. Each Redemption/Distribution Notice shall be addressed to the Holders of Preferred Securities and Common Securities at the address of each such Holder appearing in the books and records of the Trust. No defect in the Redemption/Distribution Notice or in the mailing of either thereof with respect to any Holder shall affect the validity of the redemption or exchange proceedings with respect to any other Holder. (ii) In the event that fewer than all the outstanding Common Securities are to be redeemed, the Common Securities to be redeemed will be redeemed Pro Rata from each Holder of Common Securities (subject to adjustment to eliminate fractional Common Securities). (iii) Subject to Section 9 hereof, if the Trust gives a Redemption/Distribution Notice in respect of a redemption of Common Securities as provided in this Section 4, then C-6 87 immediately prior to the close of business on the redemption date, provided that Seitel has paid the Property Trustee, in immediately available funds, a sufficient amount of cash in connection with the related redemption or maturity of the Debentures, Distributions will cease to accumulate on the Common Securities called for redemption, such Common Securities will no longer be deemed to be outstanding and all rights of Holders of such Common Securities so called for redemption will cease, except the right of the Holders of such Common Securities to receive the Redemption Price, but without interest on such Redemption Price. Neither the Trustees nor the Trust shall be required to register or cause to be registered the transfer of any Common Securities which have been so called for redemption. If any date fixed for redemption of Common Securities is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of Common Securities is improperly withheld or refused and not paid by the Property Trustee, Distributions on such Common Securities will continue to accumulate, from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the Redemption Price. (iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on behalf of the Trust to the Holders of the Common Securities. [5. CONVERSION RIGHTS. The Holders of Common Securities shall have the right at any time prior to the close of business on ___________, _________ or, in the case of Common Securities called for redemption, prior to the close of business on the Business Day prior to the redemption date, at their option, to cause the Conversion Agent to convert Common Securities, on behalf of the converting Holders, into Shares in the manner described herein on and subject to the following terms and conditions: (a) The Common Securities will be convertible at the office of the Conversion Agent into fully paid and nonassessable Shares pursuant to the Holder's direction to the Conversion Agent to exchange such Common Securities for a portion of the Debentures theretofore held by the Trust on the basis of one Common Security per $___________ principal amount of Debentures, and immediately convert such amount of Debentures into fully paid and nonassessable Shares at an initial rate of __________ Shares per $___________ principal amount of Debentures (which is equivalent to a conversion price of $____________ per Share, subject to certain adjustments set forth in Sections __________ and _________ of the Supplemental Indenture (as so adjusted, the "Conversion Price")). (b) In order to convert Common Securities into Shares, the Holder shall submit to the Conversion Agent at the office referred to above an irrevocable request to convert Common C-7 88 Securities on behalf of such Holder (the "Conversion Request"), together, if the Common Securities are in certificated form, with such Common Security Certificates. The Conversion Request shall (i) set forth the number of Common Securities to be converted and the name or names, if other than the Holder, in which the Shares should be issued and (ii) direct the Conversion Agent (a) to exchange such Common Securities for a portion of the Debentures held by the Trust (at the rate of exchange specified in the preceding paragraph) and (b) to immediately convert such Debentures on behalf of such Holder into Shares, subject to certain adjustments set forth in the Supplemental Indenture (at the conversion rate specified in the preceding paragraph). The Conversion Agent shall notify the Trust of the Holder's election to exchange Common Securities for a portion of the Debentures held by the Trust and the Trust shall, upon receipt of such notice, deliver to the Conversion Agent the appropriate principal amount of Debentures for exchange in accordance with this Section. The Conversion Agent shall thereupon notify the Sponsor of the Holder's election to convert such Debentures into Shares. If a Common Security is surrendered for conversion after the close of business on any regular record date for payment of a Distribution and before the opening of business on the corresponding Distribution payment date, then, notwithstanding such conversion, the Distribution payable on such Distribution payment date will be paid in cash to the person in whose name the Common Security is registered at the close of business on such record date, and (other than a Common Security or a portion of a Common Security called for redemption on a redemption date occurring after such record date and on or prior to such Distribution payment date) when so surrendered for conversion, the Common Security must be accompanied by payment of an amount equal to the Distribution payable on such Distribution payment date. Except as provided above, neither the Trust nor the Sponsor will make, or be required to make, any payment, allowance or adjustment upon any conversion on account of any accumulated and unpaid Distributions accumulated on the Common Securities surrendered for conversion, or on account of any accumulated and unpaid dividends on the Shares issued upon such conversion, and the delivery of Shares upon conversion of the Common Securities shall be deemed to constitute full payment for all accumulated and unpaid Distributions on the Common Securities. Common Securities shall be deemed to have been converted immediately prior to the close of business on the day on which a Notice of Conversion relating to such Common Securities is received by the Trust in accordance with the foregoing provision (the "Conversion Date"). The Person or Persons entitled to receive Shares issuable upon conversion of the Debentures shall be treated for all purposes as the record holder or holders of such Shares at such time. As promptly as practicable on or after the Conversion Date, the Sponsor shall issue the number of full Shares issuable upon such conversion to, and shall deliver at the office of the Conversion Agent the cash payment, if any, in lieu of any fraction of any Share for the account of, the Person or Persons entitled to receive the same, unless otherwise directed by the Holder in the Notice of Conversion. The Conversion Agent shall distribute such cash payment, if any, to such Person or Persons. (c) Each Holder of a Common Security by his acceptance thereof appoints The First National Bank of Chicago, as the "Conversion Agent" for the purpose of effecting the conversion of Common Securities in accordance with this Section. In effecting the conversion and transactions described in this Section, the Conversion Agent shall be acting as agent of the Holders of Common Securities directing it to effect such conversion transactions. The Conversion Agent is hereby C-8 89 authorized (i) to exchange Common Securities from time to time for Debentures held by the Trust in connection with the conversion of such Common Securities in accordance with this Section and (ii) to convert all or a portion of the Debentures into Shares and thereupon to deliver such Shares in accordance with the provisions of this Section and to deliver to the Trust a new Debenture or Debentures for any resulting unconverted principal amount. (d) No fractional Shares will be issued as a result of conversion, but in lieu thereof, such fractional interest will be paid by the Sponsor in cash (based upon the Closing Price (as defined in the Indenture) of Shares on the date such Common Securities are surrendered for conversion to the Trust) to the Conversion Agent, which in turn will make such payment to the Holder or Holders of Common Securities so converted, or, if such day is not a Trading Day (as defined in the Indenture), on the next Trading Day. (e) [The Sponsor shall be entitled to deliver upon conversion of Debentures, Shares reacquired and held in the treasury of the Sponsor (in lieu of the issuance of authorized and unissued Shares), so long as any such treasury shares are free and clear of all liens, charges, security interests or encumbrances.] Any Shares issued upon conversion of the Debentures shall be duly authorized, validly issued and fully paid and nonassessable. The Trust shall deliver the Shares received upon conversion of the Debentures to the converting Holder of Common Securities free and clear of all liens, charges, security interests and encumbrances, except for United States withholding taxes. Each of the Sponsor and the Trust shall prepare and shall use its best efforts to obtain and keep in force such governmental or regulatory permits or other authorizations as may be required by law, and shall comply with all applicable requirements as to registration or qualification of Shares (and all requirements to list Shares issuable upon conversion of Debentures that are at the time applicable), in order to enable the Sponsor to lawfully issue Shares to the Trust upon conversion of the Debentures and the Trust to lawfully deliver Shares to each Holder of Common Securities upon conversion of the Securities. (f) The Sponsor will pay any and all taxes that may be payable in respect of the issue or delivery of Shares on conversion of Debentures and the delivery of the Shares by the Trust upon conversion of the Common Securities. The Sponsor shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of Shares in a name other than that in which the Common Securities so converted are registered, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Trust the amount of any such tax, or has established to the satisfaction of the Trust that such tax has been paid. (g) Nothing in the preceding paragraph (f) shall limit the requirement of the Trust to withhold taxes pursuant to the terms of the Common Securities or set forth in this Exhibit C to the Declaration or to the Declaration itself or otherwise require the Property Trustee or the Trust to pay any amounts on account of such withholdings.] C-9 90 6. VOTING RIGHTS. (a) Except as provided under paragraph 6(b) below and as otherwise required by law and the Declaration, the Holders of the Common Securities will have no voting rights. (b) Holders of Common Securities have the sole right under the Declaration to increase or decrease the number of Trustees, and to appoint, remove or replace a Trustee, any such increase, decrease, appointment, removal or replacement to be approved by Holders of Common Securities representing a Majority in liquidation amount of Common Securities. If any proposed amendment to the Declaration provides for, or the Regular Trustees otherwise propose to effect, (i) any action that would adversely affect the powers, preferences or special rights of the Securities, whether by way of amendment to the Declaration, other than as described in Section 12.01(b) of the Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than as described in Section 8.01 of the Declaration or Section 3 of this Exhibit C, then the Holders of outstanding Securities will be entitled to vote on such amendment or proposal as a single class and such amendment or proposal shall not be effective except with the approval of the Holders of Securities of at least a Majority in liquidation amount of Securities, voting together as a single class; provided, however, that (A) if any amendment or proposal referred to in clause (i) above would adversely affect only the Preferred Securities or the Common Securities, then only the affected class of Securities will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of at least a Majority in liquidation amount of Securities of such class, (B) the rights of Holders of Common Securities under Section 5.02 of the Declaration to increase or decrease the number of, and to appoint, replace or remove, Trustees shall not be amended without the consent of each Holder of Common Securities, and (C) amendments to the Declaration shall be subject to such further requirements as are set forth in Sections 12.01 and 12.02 of the Declaration. In the event the consent of the Property Trustee, as the holder of the Debentures, is required under the Indenture with respect to any amendment, modification or termination of the Indenture or the Debentures, the Property Trustee shall request the written direction of the Holders of the Securities with respect to such amendment, modification or termination. The Property Trustee shall vote with respect to such amendment, modification or termination as directed by a Majority in liquidation amount of Securities voting together as a single class; provided, however, that where such amendment, modification or termination of the Indenture requires the consent or vote of (1) holders of Debentures representing a specified percentage greater than a majority in principal amount of the Debentures or (2) each holder of Debentures, the Property Trustee may only vote with respect to that amendment modification or termination as directed by, in the case of clause (1) above, the vote of Holders of Securities representing such specified percentage of the aggregate liquidation amount of the Securities, or, in the case of clause (2) above, each Holder of Securities; and provided, further, that the Property Trustee shall be under no obligation to take any action in accordance with the directions of the Holders of Securities unless the Property Trustee shall have received, at the expense of the Sponsor, an Opinion of Counsel experienced in such matters to the effect that the Trust will C-10 91 not be classified for United States Federal income tax purposes as other than a grantor trust on account of such action. So long as any Debentures are held by the Property Trustee, the Trustees shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Trustee of the Indenture (the "Debenture Trustee"), or exercising any trust or power conferred on such Debenture Trustee with respect to the Debentures, (ii) waive any past default that is waivable under Section 6.06 of the Indenture or (iii) exercise any right to rescind or annul a declaration of acceleration of the maturity of the principal of the Debentures, without, in each case, obtaining the prior approval of the Holders of a Majority in liquidation amount of Common Securities and Preferred Securities. The Trustees shall not revoke any action previously authorized or approved by a vote of the Holders of the Common Securities except by subsequent vote of such Holders. The Property Trustee shall notify each Holder of Common Securities of any notice of default with respect to the Debentures. Notwithstanding any other provision of these terms, each Holder of Common Securities will be deemed to have waived any Event of Default with respect to the Common Securities and its consequences until all Events of Default with respect to the Preferred Securities have been cured, waived by the Holders of Preferred Securities as provided in the Declaration or otherwise eliminated, and until all Events of Default with respect to the Preferred Securities have been so cured, waived by the Holders of Preferred Securities or otherwise eliminated, the Property Trustee will be deemed to be acting solely on behalf of the Holders of Preferred Securities and only the Holders of the Preferred Securities will have the right to direct the Property Trustee in accordance with the terms of the Declaration or of the Securities. In the event that any Event of Default with respect to the Preferred Securities is waived by the Holders of Preferred Securities as provided in the Declaration, the Holders of Common Securities agree that such waiver shall also constitute the waiver of such Event of Default with respect to the Common Securities for all purposes under the Declaration without any further act, vote or consent of the Holders of the Common Securities. A waiver of an Indenture Event of Default by the Property Trustee at the direction of the Holders of the Preferred Securities will constitute a waiver of the corresponding Event of Default under the Declaration in respect of the Securities. Any required approval or direction of Holders of Common Securities may be given at a separate meeting of Holders of Common Securities convened for such purpose, at a meeting of all of the Holders of Securities or pursuant to written consent as provided in Section 12.02 of the Declaration. The Regular Trustees will cause a notice of any meeting at which Holders of Common Securities are entitled to vote to be mailed to each Holder of record of Common Securities. Each such notice will include a statement setting forth (i) the date of such meeting, (ii) a description of any resolution proposed for adoption at such meeting on which such Holders are entitled to vote and (iii) instructions for the delivery of proxies. Any action that may be taken at a meeting of the Holders of Securities may be taken without a meeting and without prior notice if a consent in writing setting forth the action so taken is signed by Holders of Securities owning not less than the minimum C-11 92 aggregate liquidation amount of Securities that would be necessary to authorize or take such action at a meeting at which all Holders of Securities having a right to vote thereon were present and voting. No vote or consent of the Holders of Common Securities will be required for the Trust to redeem and cancel Common Securities or to distribute the Debentures in accordance with the Declaration or Section 3 of this Exhibit C. 7. PRO RATA TREATMENT. A reference in these terms of the Common Securities to any payment, Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities according to the aggregate liquidation amount of the Securities held by the relevant Holder in relation to the aggregate liquidation amount of all Securities outstanding unless, in relation to a payment, an Event of Default has occurred and is continuing, in which case any funds available to make such payment shall be paid first to each Holder of the Preferred Securities pro rata according to the aggregate liquidation amount of Preferred Securities held by the relevant Holder relative to the aggregate liquidation amount of all Preferred Securities outstanding, and only after satisfaction of all amounts owed to the Holders of the Preferred Securities, to each Holder of Common Securities pro rata according to the aggregate liquidation amount of Common Securities held by the relevant Holder relative to the aggregate liquidation amount of all Common Securities outstanding. 8. RANKING. The Common Securities rank pari passu and payment thereon will be made Pro Rata with the Preferred Securities, except that when an Event of Default occurs and is continuing, the rights of Holders of Common Securities to payment in respect of Distributions and payments upon liquidation, redemption or otherwise are subordinate to the rights of Holders of the Preferred Securities. 9. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and payments on redemption of the Common Securities will be payable, the transfer of the Common Securities will be registrable, and Common Securities will be exchangeable for Common Securities of other denominations of a like aggregate liquidation amount, at the corporate trust office of the Property Trustee (or its Affiliate) in The City of New York; provided that payment of Distributions may be made at the option of the Regular Trustees on behalf of the Trust by check mailed to the address of Holders entitled thereto or by wire transfer of funds to an account designated by such Holder and that the payment on redemption of any Common Security will be made only upon surrender of such Common Security to the Property Trustee. Notwithstanding the foregoing, transfers of Common Securities are subject to conditions set forth in Section 9.01(c) of the Declaration. 10. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the acceptance thereof, agrees to the provisions of Indenture and the Debentures, including the subordination provisions of the Indenture. C-12 93 11. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no preemptive or similar rights to subscribe to any additional Common Securities or Preferred Securities. 12. MISCELLANEOUS. These Terms shall constitute a part of the Declaration. The Trust will provide a copy of the Declaration and the Indenture to a Holder of Common Securities without charge on written request to the Trust at its principal place of business. C-13 94 Annex I FORM OF COMMON SECURITY CERTIFICATE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW Certificate Number Number of Common Securities --------- ---------- Certificate Evidencing Common Securities of Seitel Capital Trust [I] [II] ______% [[Convertible] Trust Common Securities] (liquidation amount $_______ per Common Security) Seitel Capital Trust [I] [II], a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that ____________ (the "Holder") is the registered owner of _________ (__________) common securities of the Trust representing common undivided beneficial interests in the assets of the Trust and designated the " __________% [[Convertible] Trust Common Securities]" (liquidation amount $__________ per Common Security) (the "Common Securities"). The Common Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this Certificate duly endorsed and in proper form for transfer and satisfaction of the other conditions set forth in the Declaration (as defined below) including, without limitation, Section 9.01(c) thereof. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Securities are set forth in, and this Certificate and the Common Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Declaration of Trust of the Trust dated as of __________, _________, as the same may be amended from time to time (the "Declaration") including the designation of the terms of Common Securities as set forth in Exhibit C thereto. The Common Securities and the Preferred Securities issued by the Trust pursuant to the Declaration represent undivided beneficial interests in the assets of the Trust, including the Debentures (as defined in the Declaration) issued by Seitel, Inc., a Delaware corporation ("Seitel"), to the Trust pursuant to the Indenture referred to in the Declaration. The Trust will furnish a copy of the Declaration and the Indenture to the Holder without charge upon written request to the Trust at its principal place of business or registered office. C-14 95 The Holder of this Certificate, by accepting this Certificate, is deemed to have agreed to the terms of the Indenture and the Debentures, including that the Debentures are subordinate and junior in right of payment to all Senior Debt (as defined in the Indenture) as and to the extent provided in the Indenture. Upon receipt of this Certificate, the Holder is bound by the Declaration and is entitled to the benefits thereunder. IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate this day of _________, ________. SEITEL CAPITAL TRUST [I] [II] By: , as Regular Trustee ---------------------- Name: Title: Regular Trustee C-15 96 [FORM OF REVERSE OF SECURITY] Distributions payable on each Common Security will be fixed at a rate per annum of ________% (the "Coupon Rate") of the stated liquidation amount of $_________ per Common Security, such rate being the rate of interest payable on the Debentures to be held by the Property Trustee. Distributions in arrears for more than one [calendar quarter] [semi-annual period] will accumulate additional distributions thereon at the Coupon Rate per annum (to the extent permitted by applicable law), compounded [quarterly] [semi-annually]. The term "Distributions" as used herein means such periodic cash distributions and any such additional distributions payable unless otherwise stated. A Distribution will be made by the Property Trustee only to the extent that interest payments are made in respect of the Debentures held by the Property Trustee and to the extent the Trust has funds on hand legally available therefor. The amount of Distributions payable for any period will be computed for any full [quarterly] [semi-annual] Distribution period on the basis of a 360-day year of twelve 30-day months, and for any period shorter than a full [quarterly] [semi-annual] Distribution period for which Distributions are computed, Distributions will be computed on the basis of the actual number of days elapsed per [90-day quarter] [180-day semi-annual period]. If at any time the Trust shall be required to pay any taxes, duties, assessments or governmental charges of whatever nature, imposed by the United States or any other taxing authority (other than withholding taxes), then, in any such case, Seitel shall pay such additional amounts as are required so that the net amounts received and retained by the Trust after paying any such taxes, duties, assessments or other governmental charges will be not less than the amounts the Trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. (b) Distributions on the Common Securities will accumulate from _________, ________ and will be payable [quarterly] [semi-annually] in arrears, on [_________, _________,] _________ and _________ of each year, commencing on ____________, ____________, except as otherwise described below, but only if and to the extent that interest payments are made in respect of the Debentures held by the Property Trustee. So long as Seitel shall not be in default in the payment of interest and Additional Amounts on the Debentures, Seitel has the right under the Indenture for the Debentures to defer payments of interest and Additional Amounts on the Debentures by extending the interest payment period at any time and from time to time on the Debentures for a period not exceeding [20] [10] consecutive [quarterly] [semi-annual] interest periods (each, an "Extension Period"), during which Extension Period no interest or Additional Amounts shall be due and payable on the Debentures. As a consequence of such deferral, Distributions and payments of additional amounts with respect to the Common Securities shall also be deferred. Despite such deferral, Distributions will continue to accumulate with additional distributions thereon (to the extent permitted by applicable law but not at a rate greater than the rate at which interest is then accruing on the Debentures) at the Coupon Rate compounded [quarterly] [semi-annually] during any such Extension Period. No Extension Period shall extend beyond the stated maturity of the Debentures. Prior to the termination of any such Extension Period, Seitel may further extend such Extension Period; provided that such Extension Period together with all such previous and further extensions thereof may not exceed [20] [10] consecutive [quarterly] [semi- C-16 97 annual] interest periods. Upon the termination of any Extension Period and the payment of all amounts then due, Seitel may commence a new Extension Period, subject to the above requirements. On the Distribution payment date at the end of an Extension Period, payments of accumulated Distributions and additional amounts will be payable to Holders of Common Securities as they appear on the books and records of the Trust (regardless of who the Holders may have been on other dates during the Extension Period) on the record date for such Distribution payment date. The Common Securities shall be redeemable as provided in the Declaration. [The Common Securities shall be convertible into Shares (as defined in the Declaration), through (i) the exchange of Common Securities for a portion of the Debentures and (ii) the immediate conversion of such Debentures into Shares, in the manner and according to the terms set forth in the Indenture.] C-17 98 [CONVERSION REQUEST To: The First National Bank of Chicago, as Conversion Agent for Seitel Capital Trust [I] [II] The undersigned owner of these Common Securities hereby irrevocably exercises the option to convert these Common Securities, or the portion below designated, into Shares (as that term is defined in the Amended and Restated Declaration of Trust dated as of ____________, ____________ (as amended from time to time, the "Declaration"), by _____________, ____________ and_______________, as Regular Trustees, Bank One Delaware, Inc., as the Delaware Trustee, The First National Bank of Chicago, as the Property Trustee, Seitel, Inc., as Sponsor, and by the Holders, from time to time, of undivided beneficial interests in the assets of the Trust to be issued pursuant to the Declaration) in accordance with and subject to the terms and conditions of the Declaration. Pursuant to the aforementioned exercise of the option to convert these Common Securities, the undersigned hereby directs the Conversion Agent (as that term is defined in the Declaration) to (i) exchange such Common Securities for a portion of the Debentures (as that term is defined in the Declaration) held by Seitel Capital Trust [I] [II] (at the rate of exchange specified in the terms of the Common Securities set forth as Exhibit C to the Declaration) and (ii) immediately convert such Debentures on behalf of the undersigned, into Shares (at the conversion rate specified in the terms of the Common Securities set forth as Exhibit C to the Declaration, subject to certain adjustments set forth in the Supplemental Indenture (as that term is defined in the Declaration)). The undersigned does also hereby direct the Conversion Agent that the Shares issuable and deliverable upon conversion, together with any check in payment for fractional shares, be issued in the name of and delivered to the undersigned, unless a different name has been indicated in the assignment below. If Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. C-18 99 Date: ____________, ________ in whole _________ in Part _______________ Number of Common Securities to be converted: ---------------------------------- If a name or names other than the undersigned, please indicate in the spaces below the name or names in which the Shares are to be issued, along with the address or addresses of such person or persons: -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- Signature (for conversion only) Please Print or Type Name and Address, Including Zip Code, and Social Security or Other Identifying Number -------------------------------------------- -------------------------------------------- -------------------------------------------- Signature Guarantee:** ----------------- - ------------- **(Signature must be guaranteed by an "eligible guarantor institution" that is, a bank, stockbroker, savings and loan association or credit union meeting the requirements of the Conversion Agent, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Conversion Agent in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)] C-19 100 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security Certificate to: - ----------------------------------------------------- - ----------------------------------------------------- - ----------------------------------------------------- {Insert assignee's social security or tax identification number} - ----------------------------------------------------- - ----------------------------------------------------- {Insert address and zip code of assignee} and irrevocably appoints - ----------------------------------------------------- - ----------------------------------------------------- agent to transfer this - ----------------------------------------------------- Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her. Date: ------------------------- Signature: -------------------- NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. C-20 EX-4.8 7 FORM OF INDENTURE 1 EXHIBIT 4.8 ================================================================================ SEITEL, INC., AS ISSUER, and THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE --------------------------- INDENTURE Dated as of _______________, ______ --------------------------- JUNIOR SUBORDINATED DEBENTURES ================================================================================ 2 TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINITIONS........................................................................2 SECTION 1.01 Definitions...................................................................2 SECTION 1.02 Rules of Construction.........................................................9 ARTICLE II THE DEBENTURES.....................................................................9 SECTION 2.01 Designation, Terms, Amount, Authentication and Delivery.......................9 SECTION 2.02 Form of Debenture and Trustee's Certificate..................................12 SECTION 2.03 Date and Denominations of Debentures and Provisions for Payment of Principal, Premium and Interest...................................13 SECTION 2.04 Execution of Debentures......................................................14 SECTION 2.05 Exchange of Debentures.......................................................15 SECTION 2.06 Temporary Debentures.........................................................17 SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Debentures..............................17 SECTION 2.08 Cancellation of Surrendered Debentures.......................................18 SECTION 2.09 Provisions of Indenture and Debentures for Sole Benefit of Parties and Debentureholders.........................................................18 SECTION 2.10 Appointment of Authenticating Agent..........................................18 SECTION 2.11 Global Debentures............................................................19 SECTION 2.12 CUSIP Numbers................................................................21 ARTICLE III REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS..............................22 SECTION 3.01 Redemption...................................................................22 SECTION 3.02 Notice of Redemption.........................................................22 SECTION 3.03 Payment Upon Redemption......................................................23 SECTION 3.04 Sinking Funds for Debentures.................................................24 SECTION 3.05 Satisfaction of Sinking Fund Payments With Debentures........................24 SECTION 3.06 Redemption of Debentures for Sinking Fund....................................25 ARTICLE IV PARTICULAR COVENANTS OF THE COMPANY...............................................25 SECTION 4.01 Payment of Debentures........................................................25 SECTION 4.02 Maintenance of Office or Agency..............................................26 SECTION 4.03 Paying Agent and Holding Sums in Trust.......................................26 SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee.............................27 SECTION 4.05 Certain Expenses.............................................................27 SECTION 4.06 Additional Amounts...........................................................27
-i- 3 ARTICLE V DEBENTUREHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.................28 SECTION 5.01 Company to Furnish Trustee Information as to Names and Addresses of Debentureholders................................................28 SECTION 5.02 Trustee to Preserve Information as to Names and Addresses of Debentureholders.............................................................29 SECTION 5.03 Annual and Other Reports to Be Filed by Company With the Trustee.............30 SECTION 5.04 Trustee to Transmit Annual Report to Debentureholders........................31 ARTICLE VI REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT..................31 SECTION 6.01 Events of Default Defined....................................................31 SECTION 6.02 Covenant of Company to Pay to Trustee Whole Amount Due on Debentures on Default in Payment.............................................34 SECTION 6.03 Application of Moneys Collected by Trustee...................................36 SECTION 6.04 Limitation on Suits by Holders of Debentures.................................36 SECTION 6.05 Remedies Cumulative; Delay or Omission in Exercise of Rights Not Waiver of Default........................................................37 SECTION 6.06 Rights of Holders of Majority in Principal Amount of Debentures to Direct Trustee and to Waive Defaults......................................38 SECTION 6.07 Trustee to Give Notice of Defaults Known To It, But May Withhold in Certain Circumstances.....................................................38 SECTION 6.08 Requirements of an Undertaking to Pay Costs in Certain Suits Under Indenture or Against Trustee...........................................39 ARTICLE VII CONCERNING THE TRUSTEE............................................................39 SECTION 7.01 Duties of Trustee............................................................39 SECTION 7.02 Certain Rights of the Trustee................................................41 SECTION 7.03 Trustee's Disclaimer.........................................................42 SECTION 7.04 May Own Debentures...........................................................43 SECTION 7.05 Moneys Received by Trustee to Be Held In Trust Without Interest..............43 SECTION 7.06 Compensation, Reimbursement and Indemnity....................................43 SECTION 7.07 Right of Trustee to Rely on Certificate of Officers of Company Where No Other Evidence Specifically Prescribed..............................44 SECTION 7.08 Disqualification; Conflicting Interests......................................44 SECTION 7.09 Requirements for Eligibility of Trustee......................................44 SECTION 7.10 Resignation of Trustee and Appointment of Successor..........................45 SECTION 7.11 Acceptance by Successor to Trustee...........................................46 SECTION 7.12 Successor to Trustee by Merger, Consolidation or Succession to Business......47 SECTION 7.13 Preferential Collection of Claims Against the Company........................48
-ii- 4 ARTICLE VIII CONCERNING THE DEBENTURES.........................................................48 SECTION 8.01 Evidence of Action by Debentureholders.......................................48 SECTION 8.02 Proof of Execution of Instruments and of Holding of Debentures...............48 SECTION 8.03 Who May Be Deemed Owners of Debentures.......................................49 SECTION 8.04 Debentures Owned by the Company or Controlled or Controlling Companies Disregarded for Certain Purposes...................................49 SECTION 8.05 Instruments Executed by Debentureholders Bind Future Holders.................50 ARTICLE IX SUPPLEMENTAL INDENTURES...........................................................50 SECTION 9.01 Without Consent of Debentureholders..........................................50 SECTION 9.02 With Consent of Debentureholders.............................................52 SECTION 9.03 Effect of Supplemental Indentures............................................53 SECTION 9.04 Debentures May Bear Notation of Changes by Supplemental Indentures...........53 SECTION 9.05 Opinion of Counsel...........................................................53 ARTICLE X CONSOLIDATION, MERGER, SALE OR CONVEYANCE.........................................54 SECTION 10.01 Company May Consolidate, etc. on Certain Terms...............................54 SECTION 10.02 Successor Corporation Substituted............................................54 ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS.........................55 SECTION 11.01 Satisfaction and Discharge of Indenture......................................55 SECTION 11.02 Application by Trustee of Funds Deposited For Payment of Debentures..........57 SECTION 11.03 Repayment of Moneys Held by the Paying Agent.................................58 SECTION 11.04 Repayment of Moneys Held by the Trustee......................................58 SECTION 11.05 Indemnification Relating to Governmental Obligations.........................58 SECTION 11.06 Reinstatement................................................................58 ARTICLE XII IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS...................59 SECTION 12.01 Exemption From Individual Liability..........................................59 ARTICLE XIII MISCELLANEOUS PROVISIONS..........................................................59 SECTION 13.01 Successors and Assigns of Company Bound by Indenture.........................59 SECTION 13.02 Acts of Board, Committee or Officer of Successor Company Valid...............60 SECTION 13.03 Surrender of Powers of the Company...........................................60 SECTION 13.04 Notices......................................................................60 SECTION 13.05 Governing Law................................................................61 SECTION 13.06 Officers' Certificates and Opinions of Counsel...............................61
-iii- 5 SECTION 13.07 Payments Due on Legal Holidays...............................................61 SECTION 13.08 Control by Trust Indenture Act of 1939.......................................62 SECTION 13.09 Counterparts.................................................................62 SECTION 13.10 Separability.................................................................62 SECTION 13.11 Assignment...................................................................62 SECTION 13.12 Holders of Preferred Securities as Third Party Beneficiaries.................62 SECTION 13.13 Agent for Service of Process.................................................63 ARTICLE XIV SUBORDINATION OF DEBENTURES.......................................................63 SECTION 14.01 Debentures Subordinated to Senior Debt.......................................63 SECTION 14.02 Payment Over of Proceeds upon Dissolution, Etc...............................64 SECTION 14.03 Prior Payment to Senior Debt upon Acceleration of Debentures.................65 SECTION 14.04 Default in Senior Debt.......................................................66 SECTION 14.05 Limitations on Acceleration and Enforcement..................................66 SECTION 14.06 Payment Permitted if No Default..............................................67 SECTION 14.07 Subrogation Rights of Holders of Senior Debt.................................67 SECTION 14.08 Provision Solely to Define Relative Rights...................................67 SECTION 14.09 Trustee to Effectuate Subordination..........................................68 SECTION 14.10 No Waiver of Subordination Provision.........................................68 SECTION 14.11 Notice to Trustee............................................................69 SECTION 14.12 Reliance on Judicial Order or Certificate of Liquidating Agent...............69 SECTION 14.13 Trustee Not Fiduciary for Holders of Senior Debt.............................70 SECTION 14.14 Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights.............................................................70 SECTION 14.15 Article XIV Applicable to Paying Agents......................................70
-iv- 6 THIS INDENTURE is dated as of , between Seitel, Inc., a Delaware corporation (the "Company"), and The First National Bank of Chicago, a national banking association, as trustee (the "Trustee"). WHEREAS, for its lawful corporate purposes, the Company has authorized the execution and delivery of this Indenture to provide for the issuance of unsecured junior subordinated debentures (hereinafter referred to as the "Debentures"), in an unlimited aggregate principal amount to be issued from time to time in one or more series in accordance with the terms of this Indenture, as registered Debentures without coupons, to be authenticated by the certificate of the Trustee; WHEREAS, to provide the terms and conditions upon which the Debentures are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Debenture; WHEREAS, the Debentures and the certificate of authentication to be borne by the Debentures (the "Certificate of Authentication") are to be substantially in such forms as may be approved by the Board of Directors (as defined below) or set forth in any indenture supplemental to this Indenture; and WHEREAS, all acts and things necessary to make the Debentures issued pursuant hereto, when executed by the Company and authenticated and delivered by the Trustee in accordance with the terms of this Indenture, the valid, binding and legal obligations of the Company, and to constitute a valid indenture and agreement according to its terms, have been done and performed or will be done and performed prior to the issuance of such Debentures, and the execution of this Indenture has been and the issuance hereunder of the Debentures has been or will be prior to issuance in all respects duly authorized, and the Company, in the exercise of the legal right and power in it vested, executes this Indenture and proposes to make, execute, issue and deliver the Debentures; NOW, THEREFORE, THIS INDENTURE WITNESSETH: That in order to declare the terms and conditions upon which the Debentures are and are to be authenticated, issued and delivered, and in consideration of the premises and of the acquisition and acceptance of the Debentures by the holders thereof, the Company covenants and agrees with the Trustee, for the equal and proportionate benefit (subject to the provisions of this Indenture) of the respective holders from time to time of the Debentures, without any discrimination, preference or priority of any one Debenture over any other by reason of priority in the time of issue, sale or negotiation thereof, or otherwise, except as provided herein, as follows: 7 ARTICLE I DEFINITIONS SECTION 1.01 Definitions. The terms defined in this Section (except as in this Indenture otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture, any resolution of the Board of Directors of the Company and of any indenture supplemental hereof shall have the respective meanings specified in this Section. All other terms used in this Indenture which are defined in the Trust Indenture Act of 1939, as amended, or which are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of this instrument. "Additional Amounts" means any additional amounts required by the express terms of a Debenture or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company to certain holders with respect to certain taxes, assessments or other governmental charges imposed on such holders. "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; provided, however, that, except as otherwise provided with respect to Debentures of a series as contemplated by Section 2.01, no Trust to which Debentures have been issued shall be deemed to be an Affiliate of the Company. For purposes of this definition, "control" of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. "Authenticating Agent" means an authenticating agent with respect to all or any of the series of Debentures, as the case may be, appointed with respect to all or any series of the Debentures, as the case may be, by the Trustee pursuant to Section 2.10. "Bankruptcy Custodian" has the meaning assigned in Section 6.01(a). "Bankruptcy Law" means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors of the Company. -2- 8 "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day that is not a Legal Holiday. "Capital Stock" of any Person means and includes any and all shares, interests, rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests (however designated) in the equity (which includes, but is not limited to, common stock, preferred stock and partnership and joint venture interests) of such Person (excluding any debt securities that are convertible into, or exchangeable for, such equity). "Capitalized Lease Obligation" of any Person means any obligation of such Person to pay rent or other amounts under a lease of property, real or personal, that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP. "Certificate" means a certificate signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company. The Certificate need not comply with the provisions of Section 13.06. "Common Equity" of any Person means and includes all Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management and policies of such Person. "Common Securities" means the common undivided beneficial interests in the assets of the applicable Trust. "Commission" means the Securities and Exchange Commission. "Company" means Seitel, Inc., a Delaware corporation, and, subject to the provisions of Article X, shall also include its successors and assigns. "Corporate Trust Office" of the Trustee shall be the address specified in Section 13.04 and may be located at such other address as the Trustee may give notice to the Company. ["Credit Agreement" means the Revolving Credit Agreement dated as of July 27, 1996 among The First National Bank of Chicago, as agent, the lenders party thereto, and the Company, as amended and as the same may be further amended or restated, in whole or in part, from time to time.] -3- 9 "Debenture" or "Debentures" means any Debenture or Debentures, as the case may be, authenticated and delivered under this Indenture. "Debenture Register" has the meaning assigned in Section 2.05(b). "Debenture Registrar" has the meaning assigned in Section 2.05(b). "Debentureholder," "holder of Debentures," "registered holder," or any other similar term, means the Person or Persons in whose name or names a particular Debenture shall be registered in the Debenture Register. "Debt" of any Person at any date means, without duplication, (a) all indebtedness or obligations of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto), other than standby letters of credit and bid or performance bonds issued by such Person in the ordinary course of business, to the extent not drawn or, to the extent drawn, if such drawing is reimbursed not later than 30 Business Days following demand for reimbursement, (d) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business, (c) all Capitalized Lease Obligations of such Person, (f) all Debt of others secured by a lien on any asset of such Person, whether or not such Debt is assumed by such Person, (g) all Debt of others guaranteed by such Person to the extent of such guarantee and (h) to the extent not otherwise included in this definition, all obligations of such Person for claims in respect of derivative products, including interest rate, foreign exchange rate and commodity prices, forward contracts, options, swaps, collars and similar arrangements. "Declaration of Trust" means the Amended and Restated Declaration of Trust of a Trust, if any, specified in the applicable Board Resolution or supplemental indenture establishing a particular series of Debentures pursuant to Section 2.01 hereof, as amended or supplemented from time to time. "Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default hereunder. "Depositary" means, with respect to Debentures of any series for which the Company shall determine that such Debentures will be issued as one or more Global Debentures, The Depository Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or 2.11. -4- 10 "Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt. "Event of Default" with respect to Debentures of a particular series, means any event specified in Section 6.01 (a), continued for the period of time, if any, and the giving of the notice, if any, therein designated. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute. "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time. "Global Debenture" means, with respect to any series of Debentures, a Debenture in the form prescribed by Section 2.11 issued in the name of the Depositary with respect thereto or its nominee. "Governmental Obligations" means securities that are (i) direct obligations of the United States for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depository receipt. "Indenture" means this instrument as originally executed, or, if amended or supplemented as herein provided, as so amended or supplemented. "Interest Payment Date," when used with respect to any installment of interest on a Debenture of a particular series, means the date specified in such Debenture or in or pursuant to a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Debentures of that series is due and payable. -5- 11 "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York, Houston, Texas or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed. "Officer" means the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the chief financial officer, the chief accounting officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of a Person. "Officers' Certificate" means a certificate signed by two Officers of a Person, one of whom must be the Person's chief executive officer, chief financial officer or chief accounting officer. "Opinion of Counsel" means an opinion in writing signed by legal counsel that (i) may be counsel for the Company, a Trust or the Trustee, (ii) unless otherwise provided, may be an employee of the Company but shall not be an employee of a Trust or the Trustee, and (iii) shall be reasonably acceptable to the Trustee. "Outstanding," when used with respect to Debentures of any series, subject to the provisions of Section 8.01, means, as of any particular time, all Debentures of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Debentures theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or which have previously been cancelled; (b) Debentures or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust for the holders of such Debentures by the Company (if the Company shall act as its own paying agent), provided, that if such Debentures or portions of such Debentures are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article III, or provision satisfactory to the Trustee shall have been made for giving such notice; (c) Debentures paid pursuant to Section 2.07; and (d) Debentures in lieu of or in substitution for which other Debentures shall have been authenticated and delivered pursuant to the terms of Section 2.07; provided, however, that in determining whether the holders of the requisite principal amount of Outstanding Debentures are present at a meeting of holders of Debentures for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, Debentures held for the account of the Company, any of its Subsidiaries or any of its Affiliates shall be disregarded and deemed not to be Outstanding, except that in determining whether the Trustee shall be protected in making such a determination or relying upon any such quorum, consent or vote, only Debentures which the Trustee actually knows to be so owned shall be so disregarded. "Person" means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. -6- 12 "Place of Payment" when used with respect to the Debentures of any series, means the place or places where the principal of, any premium and interest on and any Additional Amounts with respect to the Debentures of that series are payable as contemplated by Section 2.01. "Predecessor Debenture" of any particular Debenture means every previous Debenture evidencing all or a portion of the same debt as that evidenced by such particular Debenture; and, for the purposes of this definition, any Debenture authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the same debt as the lost, destroyed or stolen Debenture. "Preferred Securities" means the preferred undivided beneficial interests in the assets of the applicable Trust. "Property Trustee" means the entity performing the function of the Property Trustee under the applicable Declaration of Trust of a Trust. "Responsible Officer," when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person's knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. "Securities Act" means the Securities Act of 1933, as amended. "Security Exchange," when used with respect to the Debentures of any series which are held as trust assets of a Trust pursuant to the Declaration of Trust of such Trust, means the distribution of the Debentures of such series by such Trust in exchange for the Preferred Securities and Common Securities of such Trust in dissolution of such Trust pursuant to the Declaration of Trust of such Trust. ["Senior Notes" means, collectively, (i) (a) the Company's 7.17% Series A Senior Notes due December 30, 2001 in the original aggregate principal amount of $25,000,000, (b) the Company's 7.17% Series B Senior Notes due December 30, 2002 in the original aggregate principal amount of $27,500,000, and (c) the Company's Series C Senior Notes due December 30, 2002 in the original aggregate principal amount of $22,500,000, in each case, issued pursuant to separate Note Purchase Agreements, dated as of December 28, 1995, as such notes and agreements may be amended from time to time, and (ii) (a) the Company's 7.03% Series D Senior Notes due February 15, 2004 in the original aggregate principal amount of $20,000,000, (b) the Company's 7.28% Series E Senior Notes due February 15, 2009 in the original aggregate principal amount of $75,000,000, and (c) the Company's Series F Senior Notes due February 15, 2009 in the original aggregate principal amount of $43,000,000, in each case, issued pursuant to separate Note Purchase -7- 13 Agreements, dated as of February 12, 1999, as such notes and agreements may be amended from time to time.] "Senior Debt" means the principal of (and premium or make-whole amount, if any) and interest on (including interest, if any, accruing after the filing of a petition initiating any proceeding pursuant to any Bankruptcy Law or any other applicable federal or state law) and other amounts due on or in connection with [the Senior Notes, the Credit Agreement and] any Debt of the Company incurred, assumed or guaranteed by the Company, whether outstanding on the date of the Indenture or thereafter incurred, assumed or guaranteed and all renewals, extensions and refundings of any such Debt of the Company; provided, however, that the following will not constitute Senior Indebtedness: (i) any Debt of the Company as to which, in the instrument creating the same or evidencing the same or pursuant to which the same is outstanding, it is expressly provided that such Debt of the Company shall be subordinated to or pari passu with the Debentures; (ii) Debt of the Company in respect of the Debentures; (iii) any Debt of the Company constituting trade accounts payable arising in the ordinary course of business; (iv) any Debt of the Company initially issued to any other Trust which issues Preferred Securities and Common Securities; and (v) any Debt of the Company to any Subsidiary of the Company, other than a trust referred to in the preceding clause (iv). "Significant Subsidiary" means any "significant subsidiary" of the Company, as such term is defined in Regulation S-X, Title 17, Code of Federal Regulations Part 210, as in effect on the date hereof. "Subsidiary" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries own more than 50% of the total combined voting power of all Common Equity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries); provided, however, no Trust to which Debentures have been issued shall be deemed to be a Subsidiary of the Company. "Trust" means any statutory business trust created under the laws of the State of Delaware by the Company, as sponsor, as specified in the applicable Board Resolution or supplemental indenture establishing a particular series of Debentures pursuant to Section 2.01 hereof. "Trustee" means The First National Bank of Chicago, a national banking association, and, subject to the provisions of Article VII, shall also include its successors and assigns, and, if at any time there is more than one person acting in such capacity hereunder, "Trustee" shall mean each such person. The term "Trustee" is used with respect to a particular series of the Debentures shall mean the trustee with respect to that series. -8- 14 "Trust Indenture Act,"subject to the provisions of Section 9.01 and 9.02, means the Trust Indenture Act of 1939, as amended and in effect at the date of execution of this Indenture. "United States" means the United States of America (including the States and the District of Columbia) and its territories, its possessions (including Puerto Rico, the United States Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands) and other areas subject to its jurisdiction. "United States Alien" means any Person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien or foreign fiduciary of an estate or trust, or a foreign partnership. SECTION 1.02 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) all references in this Indenture to Articles and Sections are references to the corresponding Articles and Sections in and of this Indenture. ARTICLE II THE DEBENTURES SECTION 2.01 Designation, Terms, Amount, Authentication and Delivery. The aggregate principal amount of Debentures that may be authenticated and delivered under this Indenture is unlimited. The Debentures may be issued in one or more series up to the aggregate principal amount of Debentures of that series from time to time authorized by or pursuant to a Board Resolution or pursuant to one or more indentures supplemental hereto, prior to the initial issuance of Debentures of a particular series. Prior to the initial issuance of Debentures of any series, there -9- 15 shall be established in or pursuant to a Board Resolution, and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto: (1) the title of the Debentures of the series (which shall distinguish the Debentures of the series from all other Debentures); (2) any limit upon the aggregate principal amount of the Debentures of the series that may be authenticated and delivered under this Indenture (except for Debentures authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Debentures of that series); (3) the date or dates, if any, on which the principal of the Debentures of the series is payable and the right to shorten, extend or defer such date or dates; (4) the rate or rates at which the Debentures of the series shall bear interest or the manner of calculation of such rate or rates, if any; (5) the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates and the record date for the determination of holders of Debentures to whom interest is payable on any such Interest Payment Dates; (6) the right, if any, to extend or defer the interest payment periods and the duration of such extension; (7) whether interest payments on the Debentures of the series shall be cumulative and compounding and, if so, the dates from which such interest payments shall be so cumulative or compounded; (8) the period or periods within which, the price or prices at which, and the terms and conditions upon which, Debentures of the series may be redeemed, in whole or in part, at the option of the Company; (9) the obligation, if any, of the Company to redeem or purchase Debentures of the series pursuant to any sinking fund or analogous provisions (including payments made in cash in anticipation of future sinking fund obligations) or at the option of a holder thereof, or upon the occurrence of a specified event, and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which, Debentures of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (10) any exchangeability, conversion or prepayment provisions of the Debentures, including conversion into shares of Capital Stock of the Company; -10- 16 (11) whether and under what circumstances Additional Amounts with respect to the Debentures of the series shall be payable and, if so, any provisions for redemption of such Debentures at the option of the Company in lieu of payment of such Additional Amounts; (12) the form of the Debentures of the series, including the form of the Certificate of Authentication for such series; (13) if other than denominations of $25 or any integral multiple thereof, the denominations in which the Debentures of the series shall be issuable; (14) whether the Debentures are issuable as one or more Global Debentures and, in such case, the identity of the Depositary for such series, the form of any legend or legends which shall be borne by any such Global Debentures in addition to or in lieu of that set forth in Section 2.11 and any circumstances in addition to or in lieu of those set forth in Section 2.11 in which any such Global Debentures may be exchanged in whole or in part for Debentures registered, and any transfer of such Global Debentures in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Debentures or a nominee thereof; (15) if the Debentures of such series are to be deposited as trust assets in a Trust, the name of the applicable Trust (which shall distinguish such statutory business trust from all other Trusts) into which the Debentures of such series are to be deposited as trust assets and the date of its Declaration of Trust; (16) the place or places where the principal of, any premium and interest on and any Additional Amounts with respect to the Debentures of such series shall be payable, the place or places where the Debentures of such series may be presented for registration of transfer or exchange, and the place or places where notices and demands to or upon the Company in respect of the Debentures of such series may be made; (17) the additions, modifications or deletions, if any, in the definitions, Events of Default or covenants of the Company set forth herein with respect to the Debentures of such series; (18) if other than the principal amount thereof, the portion of the principal amount of Debentures of such series that shall be payable upon declaration of acceleration of the maturity thereof; (19) any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Debentures of the series pursuant to Article XI or any modifications of or deletions from such conditions or limitations; -11- 17 (20) if the amount of payments of principal of, any premium and interest on and any Additional Amounts with respect to the Debentures of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined; (21) the appointment of any paying agent or agents for the Debentures of such series; (22) the relative degree, if any, to which the Debentures of such series shall be senior to or be subordinated to other series of Debentures in right of payment, whether such other series of Debentures are Outstanding or not; and (23) any and all other terms with respect to the Debentures of such series (and any terms which may be required by or advisable under applicable laws or regulations not inconsistent with the terms of this Indenture). All Debentures of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers' Certificate or certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. The Debentures shall be subordinated in right of payment to Senior Debt as provided in Article XIV. SECTION 2.02 Form of Debenture and Trustee's Certificate. The Debentures of any series and the Certificate of Authentication to be borne by such Debentures shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in or pursuant to a Board Resolution and as set forth in an Officers' Certificate, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements typewritten, printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or automated quotation system on which Debentures of that series may be listed or traded, or to conform to usage. -12- 18 SECTION 2.03 Date and Denominations of Debentures and Provisions for Payment of Principal, Premium and Interest. The Debentures shall be issuable as registered Debentures and in the denominations of $25 or any integral multiple thereof, subject to Section 2.01. The Debentures of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series. The principal of, interest on and any Additional Amounts with respect to the Debentures of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in Dollars at a Place of Payment. The Company may, however, pay such amounts (1) by wire transfer with respect to Global Debentures or (2) by check mailed to a Holder's registered address with respect to any Debenture. Each Debenture shall be dated the date of its authentication. Interest on the Debentures shall be computed on the basis of a 360-day year composed of twelve 30-day months, subject to Section 2.01. Unless otherwise provided with respect to Debentures of a series as contemplated by Section 2.01, the interest installment on any Debenture which is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Debentures of that series shall be paid to the Person in whose name said Debenture (or one or more Predecessor Debentures) is registered at the close of business on the regular record date for such interest installment. In the event that any Debenture of a particular series or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Debenture will be paid upon presentation and surrender of such Debenture as provided in Section 3.03. Any interest on any Debenture which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Debentures of the same series (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder, and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below: (1) The Company may make payment of any Defaulted Interest on Debentures to the Persons in whose names such Debentures (or their respective Predecessor Debentures) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Debenture and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as provided in this clause. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the -13- 19 Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Debentureholder at his or her address as it appears in the Debenture Register, not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names such Debentures (or their Predecessor Debentures) are registered on such special record date and shall be no longer payable pursuant to the following clause (2). (2) The Company may make payment of any Defaulted Interest on any Debentures in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which such Debentures may be listed or traded, and upon such notice as may be required by such exchange or quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Unless otherwise set forth in or pursuant to a Board Resolution or in one or more indentures supplemental hereto establishing the terms of any series of Debentures pursuant to Section 2.01 hereof, the term "regular record date" as used in this Section with respect to a series of Debentures with respect to any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the last day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day. Subject to the foregoing provisions of this Section, each Debenture of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Debenture of such series shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Debenture. SECTION 2.04 Execution of Debentures. The Debentures shall, subject to the provisions of Section 2.06, be printed on steel engraved borders or fully or partially engraved, or legibly typed, as determined by the Officers of the Company executing such Debentures, and shall be signed on behalf of the Company by two Officers of the Company. Each such signature may be in the form of a manual or facsimile signature and may be imprinted or otherwise reproduced on the Debentures and for that purpose the Company may use the manual or facsimile signature of any Person who shall have been an Officer of the Company, notwithstanding the fact that at the time the Debentures shall be authenticated and delivered or disposed of such Person shall have ceased to be such an Officer. -14- 20 Only such Debentures as shall bear thereon a Certificate of Authentication substantially in the form established for such Debentures, executed manually by an authorized signatory of the Trustee, or by any Authenticating Agent with respect to such Debentures, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate executed by the Trustee, or by any Authenticating Agent appointed by the Trustee with respect to such Debentures, upon any Debenture executed by the Company shall be conclusive evidence that the Debenture so authenticated has been duly authenticated and made available for delivery hereunder and that the holder is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Debenture shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Debenture to the Trustee for cancellation as provided in Section 2.08, for all purposes of this Indenture such Debenture shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Debentures of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Debentures, signed by two Officers of the Company, and the Trustee in accordance with such written order shall authenticate and make available for delivery such Debentures. Each Debenture shall be dated the date of its authentication by the Trustee. In authenticating such Debentures and accepting the additional responsibilities under this Indenture in relation to such Debentures, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture. The Trustee shall not be required to authenticate such Debentures if the issue of such Debentures pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Debentures and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. SECTION 2.05 Exchange of Debentures. (a) Debentures of any series may be exchanged upon presentation thereof at a Place of Payment, for other Debentures of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, all as provided in this Section. In respect of any Debentures so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall make available for delivery in exchange therefor the Debenture or Debentures of the same series which the Debentureholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding. -15- 21 (b) The Company shall keep, or cause to be kept, at an office or agency in each Place of Payment a register (the register maintained in any such office or agency of the Company is herein sometimes collectively referred to as the "Debenture Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Debentures and the transfers and exchanges of Debentures as provided in this Article and which at all reasonable times shall be open for inspection by the Trustee. The registrar for the purpose of registering Debentures and transfer and exchange of Debentures as provided herein shall be appointed by the Company (the "Debenture Registrar"). The initial Debenture Registrar shall be the Trustee. Upon surrender for transfer or exchange of any Debenture at the office or agency of the Company in a Place of Payment, the Company shall execute and the Trustee shall authenticate and deliver, in the name of the transferee or transferees, one or more new Debentures of the same series as the Debenture presented, of any authorized denominations and of like tenor and aggregate principal amount. All Debentures presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be duly endorsed or accompanied (if so required by the Company or the Debenture Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Debenture Registrar, duly executed by the registered holder or by his duly authorized attorney in writing. (c) No service charge shall be made for any exchange or registration of transfer of Debentures, or issue of new Debentures in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer. (d) Notwithstanding any other provisions of this Indenture to the contrary, the Company shall not be required (i) to issue, exchange or register the transfer of any Debentures during a period beginning 15 Business Days before the day of the mailing of a notice of redemption of less than all the Outstanding Debentures of the same series and ending at the close of business on the day of such mailing or (ii) to register the transfer of or exchange any Debentures of any series or portions thereof called for redemption, except the unredeemed portion of any Debenture being redeemed in part. (e) The provisions of this Section 2.05 are, with respect to any Global Debenture, subject to Section 2.11 hereof. -16- 22 SECTION 2.06 Temporary Debentures. Pending the preparation of definitive Debentures of any series, the Company may execute, and the Trustee shall authenticate and make available for delivery, temporary Debentures (printed, lithographed or typewritten) of any authorized denomination, and substantially in the form of the definitive Debentures in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Debentures, all as may be determined by the Company. Every temporary Debenture of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Debentures of such series. Without unnecessary delay the Company will execute and will furnish definitive Debentures of such series and thereupon any or all temporary Debentures of such series may be surrendered in exchange therefor (without charge to the holders), at a Place of Payment, and upon receipt of a written order of the Company signed by one Officer of the Company, the Trustee shall authenticate and deliver in exchange for such temporary Debentures an equal aggregate principal amount of definitive Debentures of such series, unless the Company advises the Trustee to the effect that definitive Debentures need not be executed and furnished until further notice from the Company. Until so exchanged, the temporary Debentures of such series shall be entitled to the same benefits under this Indenture as definitive Debentures of such series authenticated and delivered hereunder. SECTION 2.07 Mutilated, Destroyed, Lost or Stolen Debentures. In case any temporary or definitive Debenture shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon its written request the Trustee (subject as aforesaid) shall authenticate and make available for delivery, a new Debenture of the same series bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Debenture, or in lieu of and in substitution for the Debenture so destroyed, lost or stolen. In every case the applicant for a substituted Debenture shall furnish to the Company and to the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and to the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant's Debenture and of the ownership thereof. The Trustee may authenticate any such substituted Debenture and make available for delivery the same upon the written request or authorization of any Officer of the Company. Upon the issuance of any substituted Debenture, 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. In case any Debenture which has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Debenture, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Debenture) if the applicant for such payment shall furnish to the Company and to the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Debenture and of the ownership thereof. -17- 23 Every Debenture issued pursuant to the provisions of this Section in substitution for any Debenture which is mutilated, destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the mutilated. destroyed, lost or stolen Debenture shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Debentures of the same series duly issued hereunder. All Debentures shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debentures, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender. SECTION 2.08 Cancellation of Surrendered Debentures. All Debentures surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company, any Debenture Registrar or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Debentures shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture. On written request of the Company, the Trustee shall deliver to the Company cancelled Debentures held by the Trustee. If the Company shall otherwise acquire any of the Debentures, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Debentures unless and until the same are delivered to the Trustee for cancellation. SECTION 2.09 Provisions of Indenture and Debentures for Sole Benefit of Parties and Debentureholders. Except as provided in Article XIV with respect to the holders of Senior Debt and except as provided in Sections 6.01(e) and 13.12, nothing in this Indenture or in the Debentures, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Debentures, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being (except as so provided) for the sole benefit of the parties hereto and of the holders of the Debentures. SECTION 2.10 Appointment of Authenticating Agent. So long as any of the Debentures of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Debentures which the Trustee shall have the right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Debentures of such series issued upon exchange, transfer or partial redemption thereof, and Debentures so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All references in this -18- 24 Indenture to the authentication of Debentures by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall be acceptable to the Company and shall be a corporation which has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and which is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by Federal or State authorities. If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately. Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto. SECTION 2.11 Global Debentures. (a) If the Company shall establish pursuant to Section 2.01 that the Debentures of a particular series are to be issued as one or more Global Debentures, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, one or more Global Debentures which shall represent such of the Outstanding Debentures of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Debentures from time to time endorsed thereon and that the aggregate amount of Outstanding Debentures represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges or redemptions. Any endorsement of a Global Debenture to reflect the amount, or any increase or decrease in the amount, of Outstanding Debentures represented thereby shall be made by the Trustee (i) in such manner and upon instructions given by such Person or Persons as shall be specified in such Debenture or in a written order of the Company to be delivered to the Trustee pursuant to Section 2.04 or (ii) otherwise in accordance with written instructions or such other written form of instructions as is customary for the Depositary for such Debenture, from such Depositary or its nominee on behalf of any Person having a beneficial interest in such Global Debenture. Subject to the provisions of Section 2.04 and, if applicable, Section 2.06, the Trustee shall deliver and redeliver any Debenture in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Debenture or in the applicable written order of the Company. With respect to the Debentures of any series that are represented by a Global Debenture, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary appointed with respect to such Global Debenture. Any Global Debenture may be deposited with the Depositary or its nominee, or may remain in the custody of the Trustee or the Debenture custodian therefor pursuant to a FAST Balance Certificate Agreement or similar -19- 25 agreement between the Trustee and the Depositary. If a written order of the Company has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Debenture in global form shall be in writing but need not comply with Section 13.06 and need not be accompanied by an Opinion of Counsel. (b) Notwithstanding the provisions of Section 2.05, the Global Debenture of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee of such successor Depositary. (c) If either (i) at any time the Depositary for a series of Debentures notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act or other applicable statute or regulation and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, or (ii) an Event of Default has occurred with respect to a series of Debentures and is continuing and the Debenture Registrar has received a request from the Depositary to issue Debentures of such series in lieu of all or a portion of that Global Debenture (in which case the Company shall deliver Debentures of such series within 30 days of such request), this Section 2.11 shall no longer be applicable to the Debentures of such series and the Company will execute, and subject to Section 2.05, the Trustee will authenticate and make available for delivery Debentures of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Debentures of such series in exchange for such Global Debentures. In addition, the Company may at any time determine that the Debentures of any series shall no longer be represented by one or more Global Debentures and that the provisions of this Section 2.11 shall no longer apply to the Debentures of such series. In such event the Company will execute and subject to Section 2.05, the Trustee, upon receipt of an Officers' Certificate evidencing such determination by the Company, will authenticate and deliver Debentures of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Debentures of such series in exchange for such Global Debentures. Upon the exchange of the Global Debentures for such Debentures in definitive registered form without coupons, in authorized denominations, the Global Debentures shall be cancelled by the Trustee. Such Debentures in definitive registered form issued in exchange for the Global Debentures pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Debentures to the Depositary for delivery to the Persons in whose name such Debentures are so registered. (d) Debentures distributed to holders of Global Certificates (as defined in the applicable Declaration of Trust) upon the dissolution of the applicable Trust shall be distributed in the form of one or more Global Debentures registered in the name of the Depositary or its nominee, and may be deposited with the Depositary or its nominee, or may remain in the custody of the -20- 26 Trustee or a security custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary, for credit by the Depositary to the respective accounts of the beneficial owners of the Debentures represented thereby (or such other accounts as they may direct). Prior to the distribution of Debentures to holders of Global Certificates upon the dissolution of the applicable Trust, the Company shall designate the Depositary in writing to the Trustee. Debentures distributed to holders of Certificates (as defined in the applicable Declaration of Trust), other than Global Certificates, upon the dissolution of the applicable Trust shall not be issued in the form of a Global Debenture or any other form intended to facilitate book-entry trading in beneficial interests in such Debentures. (e) The Depositary or its nominee, as the registered owner of a Global Debenture, shall be the holder of such Global Debenture for all purposes under this Indenture and the Debentures, and owners of beneficial interests in a Global Debenture shall hold such interests pursuant to the applicable procedures of the Depositary. Accordingly, any such owner's beneficial interest in a Global Debenture shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its participants. None of the Company, the Trustee or the Debenture Registrar will have any responsibility or liability for any aspect of the records relating to, or payments made on account of Debentures of any series by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Debentures. None of the Company, the Trustee or the Debenture Registrar shall be liable for any delay by the Depositary or its nominee or its participants in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from the Depositary or such nominee or participants for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Debentures to be issued). (f) The rights of owners of beneficial interests in a Global Debenture shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its participants. SECTION 2.12 CUSIP Numbers. The Company in issuing the Debentures may use "CUSIP" numbers, and the Trustee shall use such CUSIP numbers in notices of redemption or exchange as a convenience to Debentureholders and no representation shall be made as to the correctness of such numbers either as printed on the Debentures or as contained in any notice of redemption or exchange. -21- 27 ARTICLE III REDEMPTION OF DEBENTURES AND SINKING FUND PROVISIONS SECTION 3.01 Redemption. The Company may redeem the Debentures of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof. SECTION 3.02 Notice of Redemption. (a) In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Debentures of any series in accordance with the right reserved so to do, it shall give notice of such redemption to the Trustee at least 45 days in advance of the date fixed for redemption. The Trustee shall then notify holders of the Debentures of such series who are to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 60 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Debenture Register. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice. In any case, failure duly to give such notice to the holder of any Debenture of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Debentures of such series or any other series. In the case of any redemption of Debentures prior to the expiration of any restriction on such redemption provided in the terms of such Debentures or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with any such restriction. Each such notice of redemption shall identify the Debentures to be redeemed (including CUSIP number) and shall specify: (a) the date fixed for redemption, (b) the redemption price at which Debentures of that series are to be redeemed, (c) the place or places where Debentures are to be surrendered for payment of the redemption price, (d) that payment of the redemption price will be made upon presentation and surrender of such Debentures at such place or places, (e) that interest accrued to the date fixed for redemption will be paid as specified in said notice, (f) that from and after said date interest will cease to accrue and (g) that the redemption is for a sinking fund, if such is the case. If less than all the Debentures of a series are to be redeemed, the notice to the holders of Debentures of that series to be redeemed in whole or in part shall specify the particular Debentures to be so redeemed. In case any Debenture is to be redeemed in part only, the notice which relates to such Debenture shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Debenture, a new Debenture or Debentures of such series in principal amount equal to the unredeemed portion thereof will be issued. -22- 28 (b) In the event of a partial redemption of a series of Debentures, the Company shall give the Trustee at least 45 days' notice in advance of the date fixed for redemption as to the aggregate principal amount of Debentures of the series to be redeemed and the other information set forth in the immediately preceding paragraph, and thereupon the Trustee shall select, pro rata, by lot or in such other manner as it shall deem appropriate and fair in its discretion and which may provide for the selection of a portion or portions (equal to $25 or any integral multiple thereof) of the principal amount of such Debentures of a denomination larger than $25, the Debentures to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Debentures to be redeemed, in whole or in part. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Debentures shall relate, in the case of any Debenture redeemed or to be redeemed only in part, to the portion of the principal amount of such Debenture which has been or is to be redeemed. If the Company shall so direct, Debentures registered in the name of the Company, any Affiliate or any Subsidiary thereof shall not be included in the Debentures selected for redemption. (c) The Company may, if and whenever it shall so elect during any period in which Debentures of a particular series are subject to redemption, by delivery of instructions signed on its behalf by an Officer of the Company, instruct the Trustee or any paying agent to call all or any part of such Debentures for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in which notice of redemption is to be given by the Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Debenture Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section. SECTION 3.03 Payment Upon Redemption. (a) On or prior to any date fixed for redemption, the Company shall deposit with the Trustee or any paying agent (or, if the Company is acting as its own paying agent, segregate and hold in trust as provided in Section 4.03) an amount of money in same day funds sufficient to pay the redemption price of, and (except if the redemption date shall be an Interest Payment Date) accrued interest on and any Additional Amounts with respect to, the Debentures or portions thereof which are to be redeemed on that date, other than Debentures or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation. (b) If the giving of notice of redemption shall have been completed as above provided and funds deposited as required, the Debentures or portions of Debentures of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to, but excluding, the date fixed for redemption, and any Additional Amounts payable with respect thereto, and interest on such Debentures or portions of Debentures shall cease to accrue on and after the date -23- 29 fixed for redemption, unless the Company shall default in the payment of such redemption price, accrued interest and Additional Amounts with respect to any such Debenture or portion thereof. On presentation and surrender of such Debentures on or after the date fixed for redemption at the place of payment specified in the notice, said Debentures shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to, but excluding, the date fixed for redemption and any Additional Amounts payable with respect thereto (but if the date fixed for redemption is an Interest Payment Date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03). (c) Upon presentation of any Debenture of such series which is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Debenture is presented shall make available for delivery to the holder thereof, at the expense of the Company, a new Debenture or Debentures of the same series, of authorized denominations in principal amount equal to the unredeemed portion of the Debenture so presented. SECTION 3.04 Sinking Funds for Debentures. The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Debentures of a series, except as otherwise specified as contemplated by Section 2.01 for Debentures of such series. The minimum amount of any sinking fund payment provided for by the terms of Debentures of any series is herein referred to as a "mandatory sinking fund payment,"and any payment in excess of such minimum amount provided for by the terms of Debentures of any series is herein referred to as an "optional sinking fund payment." If provided for by the terms of Debentures for any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05. Each sinking fund payment shall be applied to the redemption of Debentures of any series as provided for by the terms of Debentures of such series and by this Article III. SECTION 3.05 Satisfaction of Sinking Fund Payments With Debentures. Unless otherwise provided with respect to Debentures of a series as contemplated by Section 2.01, the Company (i) may deliver Outstanding Debentures of a series (other than any previously called for redemption) and (ii) may apply as a credit Debentures of a series which have been redeemed either at the election of the Company pursuant to the terms of such Debentures or through the application of permitted optional sinking fund payments pursuant to the terms of such Debentures, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Debentures of such series required to be made pursuant to the terms of such Debentures as provided for by the terms of such series; provided that such Debentures have not been previously so credited. Such Debentures shall be received and credited for such purpose by the Trustee at the -24- 30 redemption price specified in such Debentures for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 3.06 Redemption of Debentures for Sinking Fund. Not less than 45 days prior to each sinking fund payment date for any series of Debentures (unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms for that series, the portion thereof, if any, which is to be satisfied by delivering and crediting Debentures of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officers' Certificate, deliver to the Trustee any Debentures to be so delivered. Not less than 30 days before each such sinking fund payment date, the Trustee shall select the Debentures to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02. Such notice having been duly given, the redemption of such Debentures shall be made upon the terms and in the manner stated in Section 3.03. ARTICLE IV PARTICULAR COVENANTS OF THE COMPANY The Company covenants and agrees for each series of the Debentures as follows: SECTION 4.01 Payment of Debentures. The Company will duly and punctually pay or cause to be paid the principal of, any premium and interest on and any Additional Amounts with respect to the Debentures of that series at the time and place and in the manner provided herein and established with respect to such Debentures. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal of and premium (if any) on Debentures of any series, at a rate equal to the then applicable interest rate on the Debentures of that series to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amount (without regard to any applicable grace period) on Debentures of any series at the same rate to the extent lawful. -25- 31 SECTION 4.02 Maintenance of Office or Agency. So long as any series of the Debentures remain Outstanding, the Company agrees to maintain an office or agency in each Place of Payment, with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Debentures of that series may be presented for payment, (ii) Debentures of that series may be presented as hereinabove authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Debentures of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by an Officer of the Company and delivered to the Trustee, designate some other office or agency for such purposes or any of them. 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, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands. SECTION 4.03 Paying Agent and Holding Sums in Trust. (a) If the Company shall appoint one or more paying agents for all or any series of the Debentures, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section: (1) that it will hold all sums held by it as such agent for the payment of the principal of, any premium or interest on or any Additional Amounts with respect to the Debentures of that series (whether such sums have been paid to it by the Company or by any other obligor of such Debentures) in trust for the benefit of the Persons entitled thereto; (2) that it will give the Trustee written notice of any failure by the Company (or by any other obligor of such Debentures) to make any payment of the principal of, any premium or interest on or any Additional Amounts with respect to the Debentures of that series when the same shall be due and payable; (3) that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and (4) that it will perform all other duties of paying agent as set forth in this Indenture. (b) If the Company shall act as its own paying agent with respect to any series of the Debentures, it will on or before each due date of the principal of, any premium or interest on or any Additional Amounts with respect to Debentures of that series, set aside, segregate and hold in -26- 32 trust for the benefit of the Persons entitled thereto a sum sufficient to pay such principal, premium, interest or Additional Amounts so becoming due on Debentures of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify in writing the Trustee of such action, or any failure (by it or any other obligor on such Debentures) to take such action. Whenever the Company shall have one or more paying agents for any series of Debentures, it will, prior to 10:00 a.m., New York City time on each due date of the principal of, any premium or interest on or any Additional Amounts with respect to any Debentures of that series, deposit with the paying agent a sum sufficient to pay the principal, premium, interest or Additional Amounts so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium, interest or Additional Amounts, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. (c) Anything in this Section to the contrary notwithstanding, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.04, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon such payment by any paying agent to the Trustee, such paying agent shall be released from all further liability with respect to such money. SECTION 4.04 Appointment to Fill Vacancy in Office of Trustee. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 4.05 Certain Expenses. Prior to a Security Exchange with respect to Debentures of any series, the Company shall pay, to the extent provided in the applicable Declaration of Trust, all debts and obligations (other than with respect to the Common Securities and Preferred Securities) and cost and expenses of the Trust that holds any Debentures of such series. SECTION 4.06 Additional Amounts. If the Debentures of a series expressly provide for the payment of Additional Amounts, the Company will pay to the holder of any Debenture of such series Additional Amounts as expressly provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Debenture of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.06 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.06 and express -27- 33 mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made. Unless otherwise provided pursuant to Section 2.01 with respect to Debentures of any series, if the Debentures of a series provide for the payment of Additional Amounts, at least ten days prior to the first Interest Payment Date with respect to that series of Debentures (or if the Debentures of that series will not bear interest prior to the maturity thereof, the first day on which a payment of principal and any premium is made), and at least ten days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company shall furnish the Trustee and the Company's principal paying agent or paying agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such paying agent or paying agents whether such payment of principal of and any premium or interest on the Debentures of that series shall be made to Holders of Debentures of that series who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Debentures of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Debentures and the Company will pay to such paying agent the Additional Amounts required by this Section 4.06. The Company covenants to indemnify the Trustee and any paying agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 4.06. ARTICLE V DEBENTUREHOLDERS LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE SECTION 5.01 Company to Furnish Trustee Information as to Names and Addresses of Debentureholders. The Company will furnish or cause to be furnished to the Trustee (a) on each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Debentures as of such regular record date, provided, that the Company shall not be obligated to furnish or cause to be furnished such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company, and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, no such list need be furnished for any series for which the Trustee shall be the Debenture Registrar. -28- 34 SECTION 5.02 Trustee to Preserve Information as to Names and Addresses of Debentureholders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Debentures contained in the most recent list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of Debentures received by the Trustee in its capacity as Debenture Registrar (if acting in such capacity). (b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished. (c) In case three or more holders of Debentures of a series (hereinafter referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Debenture for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Debentures of such series or holders of all Debentures with respect to their rights under this Indenture or under such Debentures, and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall within five Business Days after the receipt of such application, at its election, either: (1) afford to such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 5.02; or (2) inform such applicants as to the approximate number of holders of Debentures of such series or of all Debentures, as the case may be, whose names and addresses appear in the information preserved at the time by the Trustee, in accordance with the provisions of subsection (a) of this Section 5.02, and as to the approximate cost of mailing to such Debentureholders the form of proxy or other communication, if any, specified in such application. (d) If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each holder of such series or of all Debentures, as the case may be, whose name and address appears in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 5.02, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of Debentures of such series or of all Debentures, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for -29- 35 a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Debentureholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise, the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (e) Each and every holder of the Debentures, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any paying agent nor any Debenture Registrar shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Debentures in accordance with the provisions of subsection (c) of this Section 5.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (c). SECTION 5.03 Annual and Other Reports to Be Filed by Company With the Trustee. (a) The Company covenants and agrees to file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and the Commission in accordance with the rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates or on Certificates provided pursuant to subsection (d) of this Section 5.03). (b) The Company covenants and agrees to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations, including such opinions and reports of independent public accountants as are required by Section 314 of the Trust Indenture Act. -30- 36 (c) The Company covenants and agrees to transmit by mail, first class postage prepaid, or reputable overnight delivery service which provides for evidence of receipt, to the Debentureholders, as their names and addresses appear upon the Debenture Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. (d) The Company covenants and agrees to furnish to the Trustee, on or before May 15 in each calendar year in which any of the Debentures are Outstanding, or on or before such other day in each calendar year as the Company and the Trustee may from time to time agree upon, a Certificate as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture. For purposes of this subsection (d), such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. SECTION 5.04 Trustee to Transmit Annual Report to Debentureholders. (a) The Trustee shall transmit to Debentureholders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. If required by Section 313 of the Trust Indenture Act, the Trustee shall, within 60 days after each May 15 following the date of this Indenture, commencing May 15, 2000, deliver to Debentureholders a brief report, dated as of such May 15, which complies with the provisions of such Section 313. (b) The Trustee shall comply with Section 313 of the Trust Indenture Act. (c) A copy of each such report shall, at the time of such transmission to Debentureholders, be filed by the Trustee with the Company, with each stock exchange upon which any Debentures are listed (if so listed) and also with the Commission. The Company agrees to notify the Trustee when any Debentures become listed on any stock exchange. ARTICLE VI REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT SECTION 6.01 Events of Default Defined. (a) Whenever used herein with respect to Debentures of a particular series, "Event of Default" means any one or more of the following events which has occurred and is continuing: -31- 37 (1) default in the payment of any installment of interest upon or any Additional Amounts with respect to any of the Debentures of that series, as and when the same shall become due and payable, and continuance of such default for a period of 30 days; provided, however, that a valid extension of an interest payment period by the Company, in accordance with the terms of Debentures of that series established pursuant to Section 2.01 hereof, shall not constitute a default in the payment of interest or Additional Amounts for this purpose; (2) default (A) in the payment of the principal of (and premium, if any, on) any of the Debentures of that series as and when the same shall become due and payable, whether at maturity, upon redemption, by declaration of acceleration or otherwise, or (B) in any payment required by any sinking or analogous fund established with respect to that series, and in the case of this clause (B) only, continuance of such default for a period of 30 days; (3) failure on the part of the Company duly to observe or perform, in any material respect, any other of the covenants or agreements on the part of the Company with respect to that series contained in such Debentures or otherwise established with respect to that series of Debentures pursuant to Section 2.01 hereof or contained in this Indenture (other than a covenant or agreement which has been expressly included in this Indenture solely for the benefit of one or more series of Debentures other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a "Notice of Default" hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the Outstanding Debentures of the series affected by the default; (4) the Company or any Significant Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Bankruptcy Custodian of it or for all or for a substantial part of its property, or (D) makes a general assignment for the benefit of its creditors; (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that: (A) is for relief against the Company or any Significant Subsidiary of the Company as debtor in an involuntary case, -32- 38 (B) appoints a Bankruptcy Custodian of the Company or any Significant Subsidiary of the Company or a Bankruptcy Custodian for all or for a substantial part of the property of the Company or any Significant Subsidiary of the Company, or (C) orders the liquidation of the Company or any Significant Subsidiary of the Company; or (6) any other Event of Default provided with respect to Debentures of that series. The term "Bankruptcy Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. (b) In each and every such case specified in clause (1), (2), (3) or (6) of Section 6.01(a), unless the principal of all the Debentures of that series shall have already become due and payable, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Outstanding Debentures of the series affected by the default, by notice in writing to the Company (and to the Trustee if given by such Debentureholders), may declare the principal of all the Debentures of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything contained in this Indenture or in the Debentures of that series or established with respect to that series pursuant to Section 2.01 to the contrary notwithstanding. If an Event of Default specified in clause (5) or (6) of Section 6.01 (a) occurs, such amounts shall ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any holder. Payment of principal of, any premium and interest on and any Additional Amounts with respect to such Debentures shall remain subordinated to the extent provided in Article XIV notwithstanding that such amount shall become immediately due and payable as herein provided. (c) Section 6.01(b), however, is subject to the condition that if, at any time after the principal of the Debentures of that series shall have been so declared due and payable, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon and any Additional Amounts with respect to all the Debentures of that series and the principal of (and premium, if any, on) any and all Debentures of that series which shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that such payment is enforceable under applicable law, upon overdue installments of interest and Additional Amounts, at the rate per annum expressed in the Debentures of that series to the date of such payment or deposit) and the amount payable to the Trustee under Section 7.06, and any and all defaults under the Indenture, other than the nonpayment of principal on Debentures of that series which shall not have become due by their terms, shall have been remedied or waived as provided in Section 6.06 then and in every such case the holders of a majority in aggregate principal amount of the Outstanding Debentures of the series affected by the default (subject to, in the case of any series of Debentures held as trust assets of a Trust and with respect to which a Security Exchange has not theretofore occurred, such consent of -33- 39 the holders of the Preferred Securities and the Common Securities of such Trust as may be required under the Declaration of Trust of such Trust), by written notice to the Company and to the Trustee, may rescind and annul such declaration and its consequences with respect to that series of Debentures; but no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair any right consequent thereon. (d) In case the Trustee shall have proceeded to enforce any right with respect to Debentures of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken. (e) If, prior to a Security Exchange with respect to the Debentures of any series, a Default with respect to the Debentures of such series shall have occurred, the Company expressly acknowledges that under the circumstances set forth in the applicable Declaration of Trust, any holder of Preferred Securities of the applicable Trust may enforce directly against the Company the applicable Property Trustee's rights hereunder. In furtherance of the foregoing and for the avoidance of any doubt, the Company acknowledges that, under the circumstances described in the applicable Declaration of Trust, any such holder of Preferred Securities, in its own name, in the name of the applicable Trust or in the name of the holders of the Preferred Securities issued by such Trust, may institute or cause to be instituted a proceeding, including, without limitation, any suit in equity, an action at law or other judicial or administrative proceeding, to enforce the applicable Property Trustee's rights hereunder directly against the Company as issuer of the applicable series of Debentures, and may prosecute such proceeding to judgment or final decree, and enforce the same against the Company. SECTION 6.02 Covenant of Company to Pay to Trustee Whole Amount Due on Debentures on Default in Payment. (a) The Company covenants that (1) in case default shall be made in the payment of any installment of interest on or any Additional Amounts with respect to any of the Debentures of a series, or any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default shall have continued for a period of 30 days, or (2) in case default shall be made in the payment of the principal of (or premium, if any, on) any of the Debentures of a series when the same shall have become due and payable, whether upon maturity of the Debentures of a series or upon redemption or upon declaration or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Debentures of that series, the whole amount that then shall have become due and payable on all such Debentures for principal, any premium, interest or Additional Amounts, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law and without duplication -34- 40 of any other amounts paid by the Company or the applicable Trust in respect thereof) upon overdue installments of interest and Additional Amounts at the rate per annum expressed in the Debentures of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06. (b) In case the Company shall fail forthwith to pay such amounts upon such demand, the Trust, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Debentures of that series and collect in the manner provided by law out of the property of the Company or other obligor upon the Debentures of that series wherever situated the moneys adjudged or decreed to be payable. (c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or other judicial proceedings affecting the Company, any other obligor on such Debentures, or the creditors or property of either, the Trustee shall have the power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or advisable in order to have the claims of the Trustee and of the holders of Debentures of such series allowed for the entire amount due and payable by the Company or such other obligor under this Indenture at the date of institution of such proceedings and for any additional amount which may become due and payable by the Company or such other obligor after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Debentures of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Debentureholders, to pay to the Trustee any amount due it under Section 7.06. (d) All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Debentures of that series, may be enforced by the Trustee without the possession of any of such Debentures, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Debentures of such series. In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any -35- 41 covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Debentureholder any plan of reorganization, arrangement, adjustment or composition affecting the Debentures of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Debentureholder in any such proceeding. SECTION 6.03 Application of Moneys Collected by Trustee. Any moneys collected by the Trustee pursuant to this Article VI with respect to a particular series of Debentures shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal, premium, interest or Additional Amounts upon surrender of the Debentures of a particular series if fully paid: FIRST: To the payment of costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06; SECOND: To the payment of all Senior Debt of the Company if and to the extent required by Article XIV; THIRD: To the payment of the amounts then due and unpaid upon Debentures of such series for principal, premium, interest and Additional Amounts, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Debentures for principal, premium, interest and Additional Amounts, respectively; and FOURTH: To the Company. SECTION 6.04 Limitation on Suits by Holders of Debentures. No holder of any Debenture of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (a) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to Debentures of such series specifying such Event of Default, as hereinbefore provided, (b) the holders of not less than 25% in aggregate principal amount of the Debentures of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as trustee hereunder, (c) such holder or holders shall have offered to the Trustee indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, (d) the -36- 42 Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (e) during such 60 day period, the holders of a majority in principal amount of the Debentures of that series do not give the Trustee a direction inconsistent with the request; it being understood and intended, and being expressly covenanted by the holder of every Debenture of such series with every other such holder and the Trustee, that no one or more holders of Debentures of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Debentures, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Debentures of such series. For the protection and enforcement of the provisions of this Section, each and every Debentureholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. Notwithstanding any other provisions of this Indenture, however, the right of any holder of any Debenture to receive payment of the principal of, any premium and interest on and any Additional Amounts with respect to such Debenture, as therein provided, on or after the respective due dates expressed in such Debenture (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder. SECTION 6.05 Remedies Cumulative; Delay or Omission in Exercise of Rights Not Waiver of Default. (a) All powers and remedies given by this Article VI to the Trustee or to the Debentureholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any others thereof or of any other powers and remedies available to the Trustee or the holders of the Debentures, by judicial proceedings or otherwise, to enforce performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Debentures. (b) No delay or omission of the Trustee or of any holder of any of the Debentures to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or to the Debentureholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Debentureholders. -37- 43 SECTION 6.06 Rights of Holders of Majority in Principal Amount of Debentures to Direct Trustee and to Waive Defaults. The holders of a majority in aggregate principal amount of the Debentures of any series at the time Outstanding (with, in the case of any series of Debentures held as trust assets of a Trust and with respect to which a Security Exchange has not theretofore occurred, such consent of holders of the Preferred Securities and the Common Securities of such Trust as my be required under the Declaration of Trust of such Trust), shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or unduly prejudicial to the rights of holders of Debentures of any other series at the time Outstanding not parties thereto. Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability. The holders of a majority in aggregate principal amount of the Debentures of any series at the time Outstanding affected thereby (with, in the case of any series of Debentures held as trust assets of a Trust and with respect to which a Security Exchange has not theretofore occurred, such consent of holders of the Preferred Securities and the Common Securities of such Trust as may be required under the Declaration of Trust of such Trust), may on behalf of the holders of all of the Debentures of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, any premium or interest on or any Additional Amounts with respect to any of the Debentures of that series as and when the same shall become due by the terms of such Debentures otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of principal, any premium, interest and any Additional Amounts has been deposited with the Trustee in accordance with Section 6.01(c)), or by the terms of Debentures of that series. Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Debentures of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 6.07 Trustee to Give Notice of Defaults Known To It, But May Withhold in Certain Circumstances. The Trustee shall, within 90 days after knowledge of the occurrence of a default with respect to a particular series, transmit by mail, first class postage prepaid, to the holders of Debentures of that series, as their names and addresses appear upon the Debenture Register, notice of all defaults with respect to that series known to the Trustee, unless such defaults shall have been cured before the giving of such notice (the term "defaults" for the purposes of this Section being hereby defined to be the events specified in subsections (1), (2), (3), (4), (5) and (6) of Section 6.01(a), not including any periods of grace provided for therein and irrespective of the giving of notice provided for by subsection (3) of Section 6.01(a)); provided that, except in the case of default -38- 44 in the payment of the principal of, any premium or interest on or any Additional Amounts with respect to any of the Debentures of that series or in the payment of any sinking fund installment established with respect to that series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers, of the Trustee in good faith determine that the withholding of such notice is in the interests of the holders of Debentures of that series; provided further, that in the case of any default of the character specified in Section 6.01(a)(3) with respect to Debentures of such series no such notice to the holders of the Debentures of that series shall be given until at least 30 days after the occurrence thereof. The Trustee shall not be deemed to have knowledge of any default, except (i) a default under subsection (a)(1) or (a)(2) of Section 6.01 as long as the Trustee is acting as paying agent for such series of Debentures or (ii) any default as to which a Responsible Officer of the Trustee shall have received written notice. SECTION 6.08 Requirements of an Undertaking to Pay Costs in Certain Suits Under Indenture or Against Trustee. All parties to this Indenture agree, and each holder of any Debentures by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the making by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Debentureholder, or group of Debentureholders, holding more than 10% in aggregate principal amount of the Outstanding Debentures of any series, or to any suit instituted by any Debentureholder for the enforcement of the payment of the principal of, any premium or interest on or any Additional Amounts with respect to any Debenture of such series, on or after the respective due dates expressed in such Debenture or established pursuant to this Indenture. ARTICLE VII CONCERNING THE TRUSTEE SECTION 7.01 Duties of Trustee. (a) The Trustee, prior to the occurrence of an Event of Default with respect to Debentures of a series and after the curing of all Events of Default with respect to Debentures of that series which may have occurred, shall undertake to perform with respect to Debentures of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied -39- 45 covenants shall be read into this Indenture against the Trustee. In case an Event of Default with respect to Debentures of a series has occurred (which has not been cured or waived), the Trustee shall exercise with respect to Debentures of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (b) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) prior to the occurrence of an Event of Default with respect to Debentures of a series and after the curing or waiving of all such Events of Default with respect to that series which may have occurred: (A) the duties and obligations of the Trustee with respect to Debentures of such series shall be determined solely by the express provisions of this Indenture and the Trust Indenture Act, and the Trustee shall not be liable with respect to Debentures of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (B) in the absence of bad faith on the part of the Trustee, the Trustee may with respect to Debentures of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same 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; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority, or such other percentage as may be specified herein, in principal amount of the Debentures of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Debentures of that series; -40- 46 (4) none of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it; (5) whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VII; and (6) this subsection (b) shall not be construed to limit the effect of Section 7.01(a). SECTION 7.02 Certain Rights of the Trustee. Except as otherwise provided in Section 7.01: (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, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company by an Officer of the Company (unless other evidence in respect thereof is specifically prescribed herein); (c) The Trustee may consult with counsel of its selection and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon; (d) 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 Debentureholders, pursuant to the provisions of this Indenture, unless such Debentureholders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby. Nothing herein contained shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Debentures (which has not been cured or waived) to exercise with respect to Debentures of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs; -41- 47 (e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Debentures of the particular series affected thereby; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require indemnity satisfactory to it against such costs, expenses or liabilities as a condition to so proceeding. The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, 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. SECTION 7.03 Trustee's Disclaimer. (a) The recitals contained herein and in the Debentures (other than the Certificate of Authentication on the Debentures) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Debentures. (c) The Trustee shall not be accountable for the use or application by the Company of any of the Debentures or of the proceeds of such Debentures, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee. -42- 48 SECTION 7.04 May Own Debentures. The Trustee or any paying agent or Debenture Registrar, in its individual or any other capacity, may become the owner or pledgee of Debentures and, subject to Sections 7.08 and 7.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, paying agent or Debenture Registrar. SECTION 7.05 Moneys Received by Trustee to Be Held In Trust Without Interest. Subject to the provisions of Section 11.04, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree in writing to pay thereon. SECTION 7.06 Compensation, Reimbursement and Indemnity. (a) The Company covenants and agrees 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 (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Company also covenants to indemnify each of the Trustee and its officers, agents, directors and employees for, and to hold them harmless against, any loss, liability or expense including taxes (other than taxes based upon, measured by or determined by the income, profit, franchise or doing business of the Trustee) incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim of liability in the premises. The provisions of this Section 7.06 shall survive the termination of this Indenture and the resignation or removal of the Trustee. (b) The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Debentures upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Debentures. -43- 49 (c) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(a)(4) or (5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.07 Right of Trustee to Rely on Certificate of Officers of Company Where No Other Evidence Specifically Prescribed. Except as otherwise provided in Sections 7.01 and 7.02, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warranty to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture. SECTION 7.08 Disqualification; Conflicting Interests. If the Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of said Section 310(b). SECTION 7.09 Requirements for Eligibility of Trustee. There shall at all times be a Trustee with respect to the Debentures issued hereunder which shall at all times be a corporation or banking association organized and doing business under the laws of the United States, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50 million, and subject to supervision or examination by Federal, State, territorial, or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10. -44- 50 SECTION 7.10 Resignation of Trustee and Appointment of Successor. (a) The Trustee or any successor hereafter appointed, may at any time resign with respect to the Debentures of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Debentureholders of such series, as their names and addresses appear upon the Debenture Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Debentures of such series by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 60 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Debentures of such series, or any Debentureholder of that series who has been a bona fide holder of a Debenture or Debentures for at least six months may, subject to the provisions of Section 6.08, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur: (1) the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six months; or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Debentureholder; or (3) the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee with respect to all Debentures and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of removal, the Trustee so removed may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Debentures of such series, or any Debentureholder of that series who has been a bona fide holder of a Debenture or Debentures for at least six months may, subject to the provisions of Section 6.08, on behalf of himself and all others similarly situated, petition any such court for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. -45- 51 (c) The holders of a majority in aggregate principal amount of the Debentures of any series at the time Outstanding may at any time remove the Trustee with respect to such series and appoint a successor trustee. (d) Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Debentures of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11. (e) Any successor trustee appointed pursuant to this Section may be appointed with respect to the Debentures of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Debentures of any particular series. SECTION 7.11 Acceptance by Successor to Trustee. (a) In case of the appointment hereunder of a successor trustee with respect to all Debentures, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of the resigning Trustee; but, on the request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor trustee with respect to the Debentures of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee with respect to the Debentures of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which shall (1) contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Debentures of that or those series to which the appointment of such successor trustee relates, (2) contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Debentures of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring -46- 52 Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Debentures of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Debentures of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Debentures of that or those series to which the appointment of such successor trustee relates. (c) Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all such rights, power and trusts referred to in paragraph (a) or (b) of this Section 7.11, as the case may be. (d) No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article. (e) Upon acceptance of appointment by a successor trustee as provided in this Section 7.11, the successor trustee shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Debentureholders, as their names and addresses appear upon the Debenture Register. SECTION 7.12 Successor to Trustee by Merger, Consolidation or Succession to Business. Any corporation or banking association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case any Debentures shall have been authenticated, but not made available for delivery by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and make available for delivery the Debentures so authenticated with the same effect as if such successor Trustee had itself authenticated such Debentures. -47- 53 SECTION 7.13 Preferential Collection of Claims Against the Company. The Trustee shall comply with Section 311 (a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein. ARTICLE VIII CONCERNING THE DEBENTURES SECTION 8.01 Evidence of Action by Debentureholders. Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Debentures of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Debentures of that series in Person or by agent or proxy appointed in writing. If the Company shall solicit from the Debentureholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officers' Certificate, fix in advance a record date for such series for the determination of Debentureholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, 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 action may be given before or after the record date, but only the Debentureholders of record at the close of business on the record date shall be deemed to be Debentureholders for the purposes of determining whether Debentureholders of the requisite proportion of Outstanding Debentures of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Debentures of that series shall be computed as of the record date; provided that no such authorization, agreement or consent by such Debentureholders on the 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. SECTION 8.02 Proof of Execution of Instruments and of Holding of Debentures. Subject to the provisions of Sections 7.01 and 7.02, proof of the execution of any instrument by a Debentureholder or his agent or proxy and proof of the holding by any Person of any of the Debentures shall be sufficient if made in the following manner: -48- 54 (a) The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee. (b) The ownership of Debentures shall be proved by the Debenture Register of such Debentures or by a certificate of the Debenture Registrar thereof. (c) The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary. SECTION 8.03 Who May Be Deemed Owners of Debentures. Prior to the due presentment for registration of transfer of any Debenture, the Company, the Trustee, any paying agent and any Debenture Registrar may deem and treat the Person in whose name such Debenture shall be registered in the Debenture Register as the absolute owner of such Debenture (whether or not such Debenture shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Debenture Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Debenture and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Debenture Registrar shall be affected by any notice to the contrary. SECTION 8.04 Debentures Owned by the Company or Controlled or Controlling Companies Disregarded for Certain Purposes. In determining whether the holders of the requisite aggregate principal amount of Debentures of a particular series have concurred in any direction, consent or waiver under this Indenture, Debentures of that series which are owned by the Company or any other obligor on the Debentures of that series or by any Subsidiary or Affiliate of the Company or of such other obligor on the Debentures of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Debentures of such series which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Debentures so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right so to act with respect to such Debentures and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. -49- 55 SECTION 8.05 Instruments Executed by Debentureholders Bind Future Holders. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal of the Debentures of a particular series specified in this Indenture in connection with such action, any holder of a Debenture of that series which is shown by the evidence to be included in the Debentures the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Debenture. Except as aforesaid any such action taken by the holder of any Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of such Debenture, and of any Debenture issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Debenture. Any action taken by the holders of the majority or percentage in aggregate principal amount of the Debentures of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Debentures of that series. ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 9.01 Without Consent of Debentureholders. In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Debentureholders, for one or more of the following purposes: (a) to evidence the succession of another corporation or other entity to the Company, and the assumption by any such successor of the obligations of the Company contained herein or otherwise established with respect to the Debentures; (b) to add further covenants, restrictions, conditions or provisions for the protection of the holders of the Debentures of all or any series as the Board of Directors and the Trustee shall consider to be for the protection of the holders of Debentures of all or any series, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions a default or an Event of Default with respect to such series permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or -50- 56 longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default or may limit the right of the holders of a majority in aggregate principal amount of the Debentures of such series to waive such default; (c) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture as shall not be inconsistent with the provisions of this Indenture and shall not materially adversely affect the interests of the holders of the Debentures of any series; (d) to provide for the issuance under this Indenture of Debentures in coupon form (including Debentures registrable as to principal only) and to provide for exchangeability of such Debentures with the Debentures issued hereunder in fully registered form and to make all appropriate changes for such purposes; (e) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Debentures of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee; (f) to qualify or maintain qualification of this Indenture under the Trust Indenture Act; (g) to establish the form or terms of Debentures of any series as permitted by Section 2.01; or (h) to make any addition, change or elimination of any provision of this Indenture that does not adversely affect the rights of any Debentureholder in any material respect. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to, but may in its discretion, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Debentures at the time Outstanding, notwithstanding any of the provisions of Section 9.02. -51- 57 SECTION 9.02 With Consent of Debentureholders. With the consent (evidenced as provided in Section 8.01) of the holders of not less than a majority in aggregate principal amount of the Debentures of all series affected by such supplemental indenture or indentures at the time Outstanding (acting as one class) (and, in the case of any series of Debentures held as trust assets of a Trust and with respect to which a Security Exchange has not theretofore occurred, such consent of holders of the Preferred Securities and the Common Securities of such Trust as may be required under the Declaration of Trust of such Trust), the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debentures of such series under this Indenture; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Debentures of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof; (ii) reduce the aforesaid percentage of Debentures, the holders of which are required to consent to any such supplemental indenture; (iii) impair the right of a holder of Debentures to receive payment of principal of and interest on such Debentures on or after the due dates therefor or to institute suit for the enforcement of payment thereof or with respect thereto; (iv) make any change in this proviso of this Section 9.02; (v) change any obligation of the Company to pay Additional Amounts with respect to any Debentures; or (vi) impair the right of a holder of Debentures to convert or exchange such Debentures for another security, if such Debentures shall be so convertible or exchangeable, without in each case the consent of the holders of each Debenture (and, in the case of any series of Debentures held as trust assets of a Trust and with respect to which a Security Exchange has not theretofore occurred, such consent of the holders of the Preferred Securities and the Common Securities of such Trust as may be required under the Declaration of Trust of such Trust) then Outstanding and affected thereby. Upon the request of the Company, and upon the filing with the Trustee of evidence of the consent of Debentureholders (and, in the case of any series of Debentures held as trust assets of a Trust and with respect to which a Security Exchange has not theretofore occurred, such consent of holders of the Preferred Securities and the Common Securities of such Trust as may be required under the Declaration of Trust of such Trust) required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture. It shall not be necessary for the consent of the Debentureholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. -52- 58 Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Debentureholders of all series affected thereby as their names and addresses appear upon the Debenture Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.03 Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Debentures of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.04 Debentures May Bear Notation of Changes by Supplemental Indentures. Debentures of any series, affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any exchange upon which such series may be listed or traded, as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Debentures of that series so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Debentures of that series then Outstanding. SECTION 9.05 Opinion of Counsel. The Trustee, subject to the provisions of Sections 7.01 and 7.02, shall be entitled to rely on an Opinion of Counsel and an Officers' Certificate as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article IX and is authorized or permitted under this Indenture. -53- 59 ARTICLE X CONSOLIDATION, MERGER, SALE OR CONVEYANCE SECTION 10.01 Company May Consolidate, etc. on Certain Terms. The Company shall not consolidate with or merge with any Person, or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to any Person, unless: (a) either (1) the Company shall be the continuing corporation or (2) the Person formed by or surviving such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance, transfer or other disposition shall be made (collectively, the "Successor"), is organized and existing under the laws of the United States or any State thereof or the District of Columbia and expressly assumes by supplemental indenture all of the obligations of the Company under this Indenture and the Debentures; (b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (c) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with this Indenture. SECTION 10.02 Successor Corporation Substituted. Upon any consolidation or merger of the Company or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Company in accordance with Section 10.01, any Successor formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture and each series of Debentures with the same effect as if such Successor had been named as the Company herein and the predecessor Company, in the case of a sale, conveyance, transfer or other disposition (other than a lease), shall be released from all obligations under this Indenture and each series of Debentures. -54- 60 ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS SECTION 11.01 Satisfaction and Discharge of Indenture. (a) The following provisions shall apply to the Debentures of each series unless specifically otherwise provided in a Board Resolution or indenture supplemental hereto provided pursuant to Section 2.01. If at any time (1) the Company shall have paid or caused to be paid the principal of, any premium and interest on and any Additional Amounts with respect to all the Debentures of any series Outstanding hereunder (other than Debentures of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.07) as and when the same shall have become due and payable, or (2) the Company shall have delivered to the Trustee for cancellation all Debentures of any series theretofore authenticated (other than any Debentures of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.07) or (3)(A) all the Debentures of any series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms will become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and (B) the Company shall have irrevocably deposited or caused to be deposited with the Trustee as trust funds the entire amount in cash (other than moneys repaid by the Trustee or any paying agent to the Company in accordance with Section 11.04) or Government Obligations, maturing as to principal and interest at such times and in such amounts as will ensure the availability of cash, or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (i) the principal of, any premium and interest on and any Additional Amounts with respect to all Debentures of such series on each date that such amounts are due and payable and (ii) any mandatory sinking fund payments with respect to the Debentures of such series on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Debentures of such series; and if, in any such case, the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to the Debentures of such series, then this Indenture shall cease to be of further effect with respect to the Debentures of such series (except as to (1) rights of registration of transfer and exchange of Debentures of such series and the Company's right of optional redemption, if any, (2) substitution of mutilated, defaced, destroyed, lost or stolen Debentures, (3) rights of holders of Debentures to receive payments of principal thereof, any premium and interest thereon and any Additional Amounts with respect thereto, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the Debentureholders to receive mandatory sinking fund payments, if any, (4) the rights, obligations, duties and immunities of the Trustee hereunder, (5) the rights of the holders of Debentures of such series as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, (6) the obligations of the Company under Section 4.02 and (7) the rights of holders of the Debentures to receive upon any conversion or exchange of Debentures any securities into which such Debentures -55- 61 are convertible or exchangeable, if such Debentures are so convertible or exchangeable) and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging such satisfaction of and discharging this Indenture; provided that the rights of the Debentureholders to receive amounts in respect of principal of, any premium and interest on and any Additional Amounts with respect to the Debentures held by them shall not be delayed longer than required by then-applicable mandatory rules or policies of any securities exchange or automated quotation system upon which the Debentures are listed or traded. The Company agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Debentures of such series. (b) The following provisions shall apply to the Debentures of each series unless specifically otherwise provided in a Board Resolution or supplemental indenture pursuant to Section 2.01. In addition to discharge of the Indenture pursuant to the next preceding paragraph, the Company shall be deemed to have paid and discharged the entire indebtedness on all the Debentures of a series on the date of the deposit referred to in subparagraph (1) below, and the provisions of this Indenture with respect to the Debentures of such series shall no longer be in effect (except as to (i) rights of registration of transfer and exchange of Debentures of such series and the Company's right of optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Debentures, (iii) rights of holders of Debentures to receive payments of principal thereof, any premium and interest thereon and any Additional Amounts with respect thereto, upon the original stated due dates therefor (but not upon acceleration), and remaining rights of the holders of Debentures to receive mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the Trustee hereunder, (v) the rights of the Holders of Debentures as beneficiaries hereof with respect to the property so deposited with the Trustee payable to all or any of them, (vi) the obligations of the Company under Section 4.02 and (vii) the rights of holders of the Debentures to receive upon any conversion or exchange of Debentures any securities into which such Debentures are convertible or exchangeable, if such Debentures are so convertible or exchangeable) and the Trustee, at the expense of the Company, shall at the Company's request, execute proper instruments acknowledging the same, if (1) with reference to this provision the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the holders of the Debentures of such series (A) cash in an amount, or (B) Governmental Obligations maturing as to principal and interest at such times and in such amounts as will insure the availability of cash in an amount or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay (i) the principal of, any premium and interest on and any Additional Amounts with respect to all Debentures of such series on each date that such amounts are due and payable and (ii) any mandatory sinking fund payments with respect to -56- 62 the Debentures of such series on the dates on which such payments are due and payable in accordance with the terms of the Indenture and the Debentures of such series; (2) no Default or Event of Default with respect to the Debentures of such series shall have occurred and be continuing on the date of such deposit; (3) the Company has delivered to the Trustee a ruling received by the Company from the United States Internal Revenue Service which states that, or an Opinion of Counsel which states that, the holders of the Debentures of such series will not recognize income, gain or loss for United States federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to United States federal income tax on the same amount and in the same manner and at the same times, as would have been the case if such deposit, defeasance and discharge had not occurred; (4) the Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to the defeasance contemplated by this provision have been complied with; (5) no event or condition shall exist that, pursuant to the provisions of Section 14.02 or 14.03, would prevent the Company from making payments of the principal of, any premium or interest on or any Additional Amounts with respect to the Debentures of such series on the date of such deposit; and (6) the Company has delivered to the Trustee an Opinion of Counsel to the effect that after the passage of 91 days following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally. SECTION 11.02 Application by Trustee of Funds Deposited For Payment of Debentures. Subject to Section 11.04, all moneys deposited with the Trustee (or other trustee) pursuant to Section 11.01 shall be held in trust and applied by it to the payment, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular Debentures of such series for the payment or redemption of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal and interest; but such money need not be segregated from other funds except to the extent required by law. Notwithstanding anything contained herein to the contrary, all moneys in trust are not subject to Article XIV. -57- 63 SECTION 11.03 Repayment of Moneys Held by the Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to Debentures of any series, all moneys then held by any paying agent under the provisions of this Indenture with respect to such series of Debentures shall, upon demand of the Company, be repaid to it or paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys. SECTION 11.04 Repayment of Moneys Held by the Trustee. Any moneys deposited with or paid to the Trustee or any paying agent for the payment of the principal of or interest or any Additional Amounts on any Debenture of any series and not applied but remaining unclaimed for two years after the date upon which such principal or interest or any Additional Amounts shall have become due and payable, shall, upon the written request of the Company and unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property law, be repaid to the Company by the Trustee for such series or such paying agent, and a holder of the Debentures of such series shall, unless otherwise required by mandatory provisions of applicable escheat or abandoned or unclaimed property laws, thereafter look only to the Company for any payment which such holder may be entitled to collect, and all liability of the Trustee or any paying agent with respect to such moneys shall thereupon cease; provided, however, that the Trustee or such paying agent, before being required to make any such repayment with respect to moneys deposited with it for any payment series, shall at the expense of the Company, mail by first-class mail to holders of such Debentures at their addresses as they shall appear on the Debenture Register, notice, that such moneys remain and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 11.05 Indemnification Relating to Governmental Obligations. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Governmental Obligations deposited pursuant to Section 11.01 or the principal or interest received in respect of such obligations. SECTION 11.06 Reinstatement. If the Trustee or any paying agent is unable to apply any money or Government Obligations deposited with respect to Debentures of any series in accordance with this Article XI by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Debentures of such series and under the Debentures of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article XI until such time as the Trustee or such paying agent is permitted to apply all such money or Government Obligations in accordance with this Article XI; provided, however, that if the -58- 64 Company has made any payment of principal of, any premium or interest on or any Additional Amounts with respect to any Debentures because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Debentures to receive such payment from the money or Government Obligations held by the Trustee or such paying agent. ARTICLE XII IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS SECTION 12.01 Exemption From Individual Liability. No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Debenture, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Debentures or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Debentures or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Debentures. ARTICLE XIII MISCELLANEOUS PROVISIONS SECTION 13.01 Successors and Assigns of Company Bound by Indenture. All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not. -59- 65 SECTION 13.02 Acts of Board, Committee or Officer of Successor Company Valid. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company. SECTION 13.03 Surrender of Powers of the Company. The Company by instrument in writing executed by authority of two-thirds of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation. SECTION 13.04 Notices. Except as otherwise expressly provided herein, any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Debentures to or on the Company may be given or served by being deposited first class postage prepaid in a post office letterbox addressed (until another address is filed in writing by the Company with the Trustee), as follows: Seitel, Inc. 50 Briar Hollow Lane Seventh Floor, West Building Houston, Texas 77027 Attention: Chief Financial Officer Any notice, election, request or demand by the Company or any Debentureholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing, in English, upon receipt by the Trustee at the Corporate Trust Office, as follows: The First National Bank of Chicago 1 North State Street, 9th Floor Mail Suite IL1-0126 Chicago, Illinois 60609 Attention: Corporate Trust Administration The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. -60- 66 SECTION 13.05 Governing Law. THIS INDENTURE AND EACH DEBENTURE 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 SAID STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF. SECTION 13.06 Officers' Certificates and Opinions of Counsel. (a) Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of certain documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished. (b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture (other than the certificate provided pursuant to Section 5.03(d) of this Indenture) shall include (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with. SECTION 13.07 Payments Due on Legal Holidays. Except as provided with respect to Debentures of a series as contemplated by Section 2.01, in any case where the date of maturity of principal of, any premium or interest on or any Additional Amounts with respect to any Debenture or the date of redemption of any Debenture shall not be a Business Day, then payment of such principal, premium, interest or Additional Amounts may be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. -61- 67 SECTION 13.08 Control by Trust Indenture Act of 1939. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 13.09 Counterparts. 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. SECTION 13.10 Separability. In case any one or more of the provisions contained in this Indenture or in the Debentures of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Debentures, but this Indenture and such Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. SECTION 13.11 Assignment. The Company will have the right at all times to assign any of its rights or obligations under this Indenture to a Subsidiary or an Affiliate of the Company; provided that, in the event of any such assignment, the Company will remain jointly and severally liable for all such obligations. Subject to the foregoing, this Indenture is binding upon and inures to the benefit of the parties thereto and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties hereto (other than pursuant to Article VII or X). SECTION 13.12 Holders of Preferred Securities as Third Party Beneficiaries. The Company acknowledges that, prior to a Security Exchange with respect to Debentures of any series held as trust assets of a Trust, if the Property Trustee of such Trust fails to enforce its rights under this Indenture as the holder of the Debentures of a series held as trust assets of such Trust, any holder of the Preferred Securities of such Trust may in accordance with the provisions of the Declaration of Trust of such Trust, institute legal proceedings directly against the Company to enforce such Property Trustee's rights under this Indenture without first instituting any legal proceedings against such Property Trustee or any other Person; provided that, if an Event of Default has occurred and is continuing and such event is attributed to the failure of the Company to pay principal of, any premium or interest on or Additional Amounts with respect to the Debentures on the date such amounts are otherwise payable (or in the case of redemption, on the redemption date), then a holder of Preferred Securities of such Trust may directly institute a proceeding for enforcement of payment to such holder of such amounts on the Debentures having a principal amount equal to the aggregate liquidation amount of the Preferred Securities of such holder (a -62- 68 "Holder Direct Action") on or after the respective due date specified in the Debentures. In connection with such Holder Direct Action, the Company shall be subrogated to the rights of such holder of Preferred Securities to the extent of any payment made by the Company to such holders of Preferred Securities in such Holder Direct Action. Except as provided in the preceding sentences or Section 6.01(e), the holders of Preferred Securities of such Trust shall not be able to exercise directly any other remedy available to the holders of the Debentures. SECTION 13.13 Agent for Service of Process. The Company hereby designates CT Corporation System, currently located at 1633 Broadway, New York, New York, as its authorized agent upon whom process may be served in any action, suit or proceeding that may be instituted in any State or Federal court sitting in the County of New York of the State of New York pertaining to this Indenture or any matter arising out of or related to this Indenture, and the Company will accept the jurisdiction of such court in such action, and waive, to the fullest extent permitted by applicable law, any defense based upon lack of personal jurisdiction or venue or forum non conveniens. The Company may and shall (to the extent the process agent ceases to be able to be served on the basis contemplated herein), by written notice to the Trustee, designate such additional or alternative agents for service of process under this Section 13.13 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) are either (a) counsel for the Company or (b) a corporate service company which acts as agent for service of process for other persons in the ordinary course of its business and (iii) agrees to act as agent for service of process in accordance with this Section 13.13. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any holder of a Debenture, the Trustee shall deliver such information to such holder. Notwithstanding the foregoing, there shall, at all times, be at least one agent for service of process for the Company appointed and acting in accordance with this Section 13.13. A copy of any such process shall be sent or given to the Company at the address for notices specified in Section 13.04 hereof. The Company shall maintain the designation of such authorized agent until two years after termination of the Company's obligation under this Indenture pursuant to Section 11.01. ARTICLE XIV SUBORDINATION OF DEBENTURES SECTION 14.01 Debentures Subordinated to Senior Debt. The Debentures shall be subordinated to Senior Debt as set forth in this Article XIV. The Company covenants and agrees, and each holder of a Debenture of any series by such holder's acceptance thereof likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article XIV, the indebtedness represented by the Debentures of such series and the payment of the principal of, interest and premium on and any Additional Amounts with respect to -63- 69 each and all of the Debentures of such series are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Debt; provided, however, that no provision of this Article XIV shall prevent the occurrence of any Default or Event of Default hereunder. SECTION 14.02 Payment Over of Proceeds upon Dissolution, Etc. Upon any distribution of assets of the Company in the event of: (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company, then and in such event: (1) the holders of Senior Debt shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Debt, or provision shall be made for such payment in cash, before the holders of the Debentures of any series are entitled to receive any payment on account of the principal of, interest and premium on or any Additional Amounts as may be provided for in respect of the Debentures of such series; and (2) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the holders or the Trustee would be entitled but for the provisions of this Article XIV, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Debt of the Company being subordinated to the payment of the Debentures of such series, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Debt or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Debt may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of, and premium or make-whole amount, if any, and interest on the Senior Debt held or represented by each, to the extent necessary to make payment in full of all Senior Debt remaining unpaid, after giving affect to any concurrent payment or distribution to the holders of such Senior Debt. -64- 70 In the event that, notwithstanding the foregoing provisions of this Section 14.02, the Trustee or the holder of any Debenture of any series shall receive any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Debt of the Company being subordinated to the payment of the Debentures of such series, before all Senior Debt is paid in full or payment thereof provided for, and if such fact shall then have been made known to the Trustee as provided in Section 14.11, or, as the case may be, such holder, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other person making payment or distribution of assets of the Company for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. For purposes of this Article XIV only, the words "cash, property or securities," or any combination thereof, shall be deemed not to include shares of capital stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinated, at least to the extent provided in this Article XIV with respect to the Debentures, to the payment of all Senior Debt which may at the time be outstanding and to any securities issued to the holders of Senior Debt in respect of the Senior Debt under any such plan of reorganization or readjustment. SECTION 14.03 Prior Payment to Senior Debt upon Acceleration of Debentures. In the event that any Debentures of any series are declared due and payable before their stated maturity, then and in such event the holders of Senior Debt shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Debt or provision shall be made for such payment in cash, before the holders of the Debentures of such series are entitled to receive any payment (including any payment which may be payable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Debentures of such series) by the Company on account of the principal of, interest or premium on or any Additional Amounts with respect to Debentures of such series or on account of the purchase or other acquisition of Debentures of such series. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the holder of any Debentures of any series prohibited by the foregoing provisions of this Section 14.03, and if such facts then shall have been known or thereafter shall have been made known to the Trustee (as provided in Section 14.11) or to such holder, as the case may be, pursuant to the terms of this Indenture, then and in such event such payment shall be paid over and delivered forthwith to the Company by or on behalf of the person holding such payment for the benefit of the holders of Senior Debt. -65- 71 The provisions of this Section 14.03 shall not apply to any payment with respect to which Section 14.02 would be applicable. SECTION 14.04 Default in Senior Debt. In the event and during the continuation of any default by the Company in the payment of principal, premium, if any, interest or any other payment due on any Senior Debt of the Company, as the case may be, beyond any applicable grace period with respect thereto, or in the event that the maturity of any Senior Debt of the Company has been accelerated because of any default, then, in any such case, no payment shall be made by the Company with respect to the principal (including redemption payments, if any) of, interest or premium on or any Additional Amounts with respect to the Debentures until such default is cured or waived or ceases to exist or any such acceleration or demand for payment has been rescinded. In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the holder of any Debentures of any series prohibited by the foregoing provisions of this Section 14.04, and if such facts then shall have been known or thereafter shall have been made known to the Trustee (as provided in Section 14.11) or to such holder, as the case may be, pursuant to the terms of this Indenture, then and in such event such payment shall be paid over and delivered forthwith to the Company by or on behalf of the person holding such payment for the benefit of the holders of Senior Debt. The provisions of this Section 14.04 shall not apply to any payment with respect to which Section 14.02 would be applicable. SECTION 14.05 Limitations on Acceleration and Enforcement. At any time when the Company may not make payments in respect of the Debentures as a result of the application of Section 14.04, no holder of Debentures will: (a) accelerate or cause or permit the acceleration of the maturity of any of the Debentures; or (b) commence, cause the commencement of, participate in or support any action or proceeding (whether at law or in equity) against the Company to recover all or any part of the indebtedness represented by the Debentures or any action to commence or prosecute any bankruptcy or similar proceeding in respect of the Company unless the holders of at least a majority in principal amount of the Senior Notes at the time outstanding (exclusive of Senior Notes then owned by the Company or any of its Subsidiaries or Affiliates) shall have agreed in writing in advance to, and shall have joined in, such proceedings. -66- 72 SECTION 14.06 Payment Permitted if No Default. Nothing contained in this Article XIV or elsewhere in this Indenture or in any of the Debentures shall prevent (a) the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 14.02 or under the conditions described in Sections 14.03 or 14.04, from making payments at any time of the principal amount, interest or premium on and any Additional Amounts as may be provided for in this Indenture, as the case may be, in respect of the Debentures, or (b) the application by the Trustee or the retention by any holder of any money deposited with it hereunder to the payment of or on account of the principal of, interest or premium on and any Additional Amounts, as may be provided for in this Indenture, as the case may be, in respect of the Debentures if the Trustee did not have, at the time provided in the proviso to the first paragraph of Section 14.11, notice that such payment would have been prohibited by the provisions of this Article XIV. SECTION 14.07 Subrogation Rights of Holders of Senior Debt. Subject to the payment in full of all Senior Debt, the holders of the Debentures of any series shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article XIV to the rights of the holders of such Senior Debt to receive payments or distributions of cash, property or securities applicable to the Senior Debt until the principal of, interest or premium on, and any Additional Amounts, as provided for in this Indenture, as the case may be, in respect of the Debentures of such series shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the holders of the Debentures of such series or the Trustee would be entitled except for the provisions of this Article XIV, and no payments pursuant to the provisions of this Article XIV to the Company or to the holders of Senior Debt by holders of the Debentures of such series or the Trustee, shall, as between the Company, its creditors other than holders of Senior Debt and the holders of the Debentures of such series, be deemed to be a payment or distribution by the Company to or on account of the Senior Debt. SECTION 14.08 Provision Solely to Define Relative Rights. The provisions of this Article XIV are and are intended solely for the purpose of defining the relative rights of the holders of the Debentures of any series, on one hand, and the holders of Senior Debt, on the other hand. Nothing contained in this Article XIV or elsewhere in this Indenture or in the Debentures of any series is intended to or shall: (a) impair, as between the Company and the holders of the Debentures of such series, the obligation of the Company, which is absolute and unconditional, to pay to the holders of the Debentures of such series the principal of, interest or premium on and any Additional Amounts, as may be provided for in this Indenture in respect of the Debentures of such series as and when the same shall become due and payable in accordance with the terms of the Debentures -67- 73 of such series and this Indenture and which, subject to the rights under this Article XIV of the holders of Senior Debt, is intended to rank equally with all other general obligations of the Company; or (b) affect the relative rights against the Company of the holders of the Debentures of such series and creditors of the Company other than holders of Senior Debt; or (c) prevent the Trustee or the holder of any Debenture of such series from exercising all remedies otherwise permitted by applicable law upon any Event of Default under this Indenture, subject to the rights, if any, under this Article XIV of the holders of Senior Debt to receive cash, property or securities otherwise payable or deliverable to the Trustee or such holder. SECTION 14.09 Trustee to Effectuate Subordination. Each holder of a Debenture by such holder's acceptance thereof authorizes and directs the Trustee on such holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XIV and appoints the Trustee such holder's attorney-in-fact for any and all such purposes. SECTION 14.10 No Waiver of Subordination Provision. No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt may, at any time and from time to time, without the consent of, or notice to, the Trustee or the holders of the Debentures of any series, without incurring responsibility to the holders of the Debentures of such series and without impairing or releasing the subordination provided in this Article XIV or the obligations hereunder of the holders of the Debentures of such series to the holders of Senior Debt, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, or increase the amount of, Senior Debt, or otherwise amend or supplement in any manner Senior Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (ii) sell, exchange, release or otherwise dispose of or deal with any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any person liable in any manner for the payment or collection of Senior Debt; (iv) exercise or refrain from exercising any rights against the Company or any other person; and (v) apply any sums paid in respect of Senior Debt to Senior Debt, regardless of who made such payment or how such payment was realized. -68- 74 SECTION 14.11 Notice to Trustee. The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Debentures of any series. Failure to give such notice shall not affect the subordination of the Debentures of such series to Senior Debt. Notwithstanding the provisions of this Article XIV or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Debentures of such series, unless and until the Trustee shall have received written notice thereof in the manner prescribed by this Indenture from the Company or a holder of Senior Debt or from any trustee or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 7.01, shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of, interest or premium on or any Additional Amounts as may be provided for in this Indenture in respect of any Debenture), the notice with respect to such money provided for in this Section 14.11, then, anything herein contained to the contrary notwithstanding, the Trustee shall have the full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. Subject to the provisions of Section 7.01, the Trustee shall be entitled to rely on the delivery to it of a written notice by a person representing himself to be a holder of Senior Debt (or a trustee or agent on behalf of such holder) to establish that such notice has been given by a holder of Senior Debt (or a trustee or agent on behalf of any such holder). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article XIV, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article XIV, and if such evidence is not furnished, the Trustee may defer any payment which it may be required to make for the benefit of such person pursuant to the terms of this Indenture pending judicial determination as to the right of such person to receive such payment. SECTION 14.12 Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article XIV, the Trustee, subject to the provisions of Section 7.01, and the holders of the Debentures of any series shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate -69- 75 of the trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or to the holders of Debentures of such series, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XIV. SECTION 14.13 Trustee Not Fiduciary for Holders of Senior Debt. The Trustee shall be deemed not to owe any fiduciary duty to the holders of Senior Debt. The Trustee shall not be charged with knowledge of the existence of Senior Debt (other than the Senior Notes) or of any facts that would prohibit any payment hereunder unless the Trustee shall have received notice thereof in the manner prescribed by this Indenture. With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants or obligation as are specifically set forth in this Article XIV and no implied covenants or obligations with respect to holders of Senior Debt shall be read into this Indenture against the Trustee. SECTION 14.14 Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XIV with respect to any Senior Debt which may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article XIV shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.06. SECTION 14.15 Article XIV Applicable to Paying Agents. The term "Trustee" as used in this Article XIV shall (unless the context otherwise requires) be construed as extending to and including any paying agent within its meaning as fully for all intents and purposes as if such paying agent were named in this Article XIV in addition to or in place of the Trustee; provided, however, that Sections 14.11 and 14.13 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as paying agent. -70- 76 The First National Bank of Chicago, as Trustee, hereby accepts the trust in this Indenture declared and provided, upon the terms and conditions herein above set forth. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. SEITEL, INC. By ----------------------------------- Name: Title: THE FIRST NATIONAL BANK OF CHICAGO as Trustee By ----------------------------------- Name: Title: -71- EX-4.9 8 FORM OF GUARANTEE 1 EXHIBIT 4.9 ================================================================================ FORM OF SEITEL, INC. PREFERRED SECURITIES GUARANTEE AGREEMENT SEITEL CAPITAL TRUST [I] [II] ------------------ Dated as of , ---------------- ----- ------------------ ================================================================================ 2 TABLE OF CONTENTS
PAGE ARTICLE I DEFINITIONS.............................................................................................2 SECTION 1.01 Definitions..............................................................................2 ARTICLE II TRUST INDENTURE ACT....................................................................................6 SECTION 2.01 Trust Indenture Act; Application.........................................................6 SECTION 2.02 Lists of Holders of Preferred Securities.................................................6 SECTION 2.03 Reports by the Preferred Securities Guarantee Trustee....................................6 SECTION 2.04 Periodic Reports to the Preferred Securities Guarantee Trustee...........................7 SECTION 2.05 Evidence of Compliance with Conditions Precedent.........................................7 SECTION 2.06 Events of Default; Waiver................................................................7 SECTION 2.07 Disclosure of Information................................................................8 SECTION 2.08 Conflicting Interest.....................................................................8 ARTICLE III POWERS, DUTIES AND RIGHTS OF THE PREFERRED SECURITIES GUARANTEE TRUSTEE........................................................................................8 SECTION 3.01 Powers and Duties of the Preferred Securities Guarantee Trustee..........................8 SECTION 3.02 Certain Rights and Duties of the Preferred Securities Guarantee Trustee.........................................................................................9 SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee...................................11 SECTION 3.04 The Preferred Securities Guarantee Trustee May Own Preferred Securities.....................................................................................12 SECTION 3.05 Compensation and Expenses of Preferred Securities Guarantee Trustee........................................................................................12 ARTICLE IV PREFERRED SECURITIES GUARANTEE TRUSTEE................................................................12 SECTION 4.01 Qualifications..........................................................................12 SECTION 4.02 Appointment, Removal and Registration of the Preferred Securities Guarantee Trustee..............................................................................13 ARTICLE V GUARANTEE..............................................................................................14 SECTION 5.01 Guarantee...............................................................................14 SECTION 5.02 Waiver of Notice........................................................................14 SECTION 5.03 Obligations Not Affected................................................................15 SECTION 5.04 Enforcement of Guarantee................................................................16 SECTION 5.05 Guarantee of Payment....................................................................16 SECTION 5.06 Subrogation.............................................................................16 SECTION 5.07 Independent Obligations.................................................................17 ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION.............................................................17 SECTION 6.01 Limitation of Transactions..............................................................17 SECTION 6.02 Subordination...........................................................................18
i 3 ARTICLE VII TERMINATION..........................................................................................18 SECTION 7.01 Termination.............................................................................18 ARTICLE VIII LIMITATION OF LIABILITY; INDEMNIFICATION............................................................19 SECTION 8.01 Exculpation.............................................................................19 SECTION 8.02 Indemnification.........................................................................19 SECTION 8.03 Survive Termination.....................................................................19 ARTICLE IX MISCELLANEOUS.........................................................................................20 SECTION 9.01 Successors and Assigns..................................................................20 SECTION 9.02 Amendments..............................................................................20 SECTION 9.03 Notices.................................................................................20 SECTION 9.04 Genders.................................................................................21 SECTION 9.05 Benefits................................................................................21 SECTION 9.06 Governing Law...........................................................................21 SECTION 9.07 Counterparts............................................................................21 SECTION 9.08 Exercise of Overallotment Option........................................................21 SECTION 9.09 Agent for Service of Process............................................................22
ii 4 PREFERRED SECURITIES GUARANTEE AGREEMENT This PREFERRED SECURITIES GUARANTEE AGREEMENT, dated as of __________, ______, is executed and delivered by SEITEL, INC., a Delaware corporation (the "Guarantor"), and The First National Bank of Chicago, as the initial Preferred Securities Guarantee Trustee (as defined herein) for the benefit of the Holders (as defined herein) from time to time of the Preferred Securities (as defined herein) of Seitel Capital Trust [I] [II], a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the "Declaration"), dated as of ____________ , _________, among the trustees of the Issuer named therein, Seitel, Inc., as Sponsor, and the Holders from time to time of preferred undivided beneficial interests in the assets of the Issuer, the Issuer may issue up to $ ______________ aggregate liquidation amount of its _____ % [[Convertible] Trust Preferred Securities] (the "Preferred Securities") representing preferred undivided beneficial interests in the assets of the Issuer and having the terms set forth in Exhibit B to the Declaration [, of which $ ____________ liquidation amount of Preferred Securities is being issued as of the date hereof. Up to the remaining $ ___________ liquidation amount of Preferred Securities may be issued by the Issuer if and to the extent that the over-allotment option granted by the Guarantor and the Issuer pursuant to the Underwriting Agreement (as defined in the Declaration) is exercised by the Underwriters named in the Underwriting Agreement]; WHEREAS, as incentive for the Holders to purchase Preferred Securities, the Guarantor desires to irrevocably and unconditionally agree, to the extent set forth herein, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and WHEREAS, the Guarantor is executing and delivering a guarantee agreement (the "Common Securities Guarantee Agreement"), with substantially identical terms to this Preferred Securities Guarantee, for the benefit of the holders of the Common Securities (as defined herein), except that if an Event of Default (as defined in the Declaration) has occurred and is continuing, the rights of holders of the Common Securities to receive Guarantee Payments under the Common Securities Guarantee Agreement are subordinated, to the extent and in the manner set forth in the Common Securities Guarantee Agreement, to the rights of holders of Preferred Securities to receive Guarantee Payments under this Guarantee; NOW, THEREFORE, in consideration of the purchase by the initial purchasers thereof of Preferred Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Preferred Securities Guarantee Agreement for the benefit of the Holders from time to time. 1 5 ARTICLE I DEFINITIONS SECTION 1.01 Definitions. In this Preferred Securities Guarantee Agreement, unless the context otherwise requires: (a) Capitalized terms used in this Preferred Securities Guarantee Agreement but not defined in the preamble or recitals above have the respective meanings assigned to them in this Section 1.01. (b) A term defined in the Declaration or the Indenture has the same meaning when used in this Preferred Securities Guarantee Agreement unless otherwise defined in this Preferred Securities Guarantee Agreement. (c) A term defined anywhere in this Preferred Securities Guarantee Agreement has the same meaning throughout. (d) All references to "the Preferred Securities Guarantee Agreement" or "this Preferred Securities Guarantee Agreement" are to this Preferred Securities Guarantee Agreement as modified, supplemented or amended from time to time. (e) All references in this Preferred Securities Guarantee Agreement to Articles and Sections are to Articles and Sections of this Preferred Securities Guarantee Agreement unless otherwise specified. (f) A term defined in the Trust Indenture Act has the same meaning when used in this Preferred Securities Guarantee Agreement unless otherwise defined in this Preferred Securities Guarantee Agreement or unless the context otherwise requires. (g) A reference to the singular includes the plural and vice versa. "Additional Amounts" has the meaning set forth in the Indenture. "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 purposes of this definition, "control" of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. 2 6 "Business Day" has the meaning set forth in the Indenture. "Commission" means the Securities and Exchange Commission. "Common Securities" means the securities representing common undivided beneficial interests in the assets of the Issuer and having the terms set forth in Exhibit C to the Declaration. "Debentures" means the series of [convertible] junior subordinated debentures issued to the Property Trustee by the Guarantor under the Indenture and entitled the " ________ % [Convertible] Junior Subordinated Debentures due ____." "Declaration" has the meaning set forth in the recitals above. "Distributions" means the periodic distributions and other payments payable to Holders in accordance with the terms of the Preferred Securities set forth in Exhibit B to the Declaration. "Dollar" has the meaning set forth in the Indenture. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Preferred Securities Guarantee Agreement; provided, however, that, except with respect to a default in payment of any Guarantee Payment, any such default shall constitute an Event of Default only if the Guarantor shall have received notice of such default and shall not have cured such default within 60 days after receipt of such notice. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Preferred Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions, any Additional Amounts and the Redemption Price, including all accumulated and unpaid Distributions to the date of redemption, with respect to the Preferred Securities called for redemption by the Issuer, but only if and to the extent that in each case the Guarantor has made a payment to the Property Trustee of principal of, any premium or interest on or any Additional Amounts with respect to the Debentures and (ii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to Holders in exchange for Preferred Securities or the redemption of the Preferred Securities in full upon the maturity or redemption of the Debentures as provided in the Declaration), the lesser of (a) the aggregate of the liquidation amount and all accumulated and unpaid Distributions and Additional Amounts on the Preferred Securities to the date of payment, to the extent the Issuer has funds on hand legally available therefor, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer as required by applicable law. 3 7 "Holder" means any holder, as registered on the books and records of the Issuer, of any Preferred Securities; provided, however, that in determining whether the holders of the requisite percentage of Preferred Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indemnified Person" means the Preferred Securities Guarantee Trustee, any Affiliate of the Preferred Securities Guarantee Trustee, and any officers, directors, shareholders, members, partners, employees, representatives or agents of the Preferred Securities Guarantee Trustee. "Indenture" means the Indenture dated as of ____________, ______ between the Guarantor and The First National Bank of Chicago, as trustee, as supplemented by the __________ Supplemental Indenture thereto dated as of _________, _______ (the "Supplemental Indenture"), pursuant to which the Debentures are to be issued to the Property Trustee. "Majority" in liquidation amount of the Preferred Securities" means, except as otherwise required by the Trust Indenture Act, Holders of outstanding Preferred Securities, voting together as a single class, who are the record owners of Preferred Securities whose liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accumulated and unpaid Distributions to the date upon which the voting percentages are determined) represents more than 50% of the liquidation amount of all outstanding Preferred Securities. "Officers' Certificate" means, with respect to any Person, a certificate signed by the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the chief financial officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of such Person, and delivered to the Preferred Securities Guarantee Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 2.04 shall be the principal executive, financial or accounting officer of the Guarantor. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Preferred Securities Guarantee Agreement shall include: (i) a statement that the person making such certificate has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate are based; (iii) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. 4 8 "Person" means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "Preferred Securities" has the meaning set forth in the recitals above. "Preferred Securities Guarantee Trustee" means The First National Bank of Chicago, a national banking association, until a Successor Preferred Securities Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Preferred Securities Guarantee Agreement, and thereafter means each such Successor Preferred Securities Guarantee Trustee. "Property Trustee" means the Person acting as Property Trustee under the Declaration. "Redemption Price" means the amount payable on redemption of the Preferred Securities in accordance with the terms of the Preferred Securities. "Responsible Officer" means, when used with respect to the Preferred Securities Guarantee Trustee, any officer within the corporate trust department of the Preferred Securities Guarantee Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Preferred Securities Guarantee Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person's knowledge of and familiarity with the particular subject and, in either case, who shall have direct responsibility for the administration of this Preferred Securities Guarantee. "Shares" means the common stock, par value $.01 per share, of the Guarantor. "Successor Preferred Securities Guarantee Trustee" means a successor Preferred Securities Guarantee Trustee possessing the qualifications to act as a Preferred Securities Guarantee Trustee under Section 4.01. "Supplemental Indenture" has the meaning specified in the definition of Indenture. "Trust Indenture Act"means the Trust Indenture Act of 1939, as amended. 5 9 ARTICLE II TRUST INDENTURE ACT SECTION 2.01 Trust Indenture Act; Application. (a) This Preferred Securities Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required to be part of this Preferred Securities Guarantee Agreement and shall, to the extent applicable, be governed by such provisions. (b) If and to the extent that any provision of this Preferred Securities Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. (c) The application of the Trust Indenture Act to this Preferred Securities Guarantee Agreement shall not affect the nature of the Preferred Securities as equity securities representing preferred undivided beneficial interests in the assets of the Issuer. SECTION 2.02 Lists of Holders of Preferred Securities. (a) The Guarantor shall provide the Preferred Securities Guarantee Trustee (unless the Preferred Securities Guarantee Trustee is the registrar of the Preferred Securities) (i) within 14 days after each record date for payment of Distributions, a list, in such form as the Preferred Securities Guarantee Trustee may reasonably require, of the names and addresses of the Holders ("List of Holders") as of such date, and (ii) at any other time, within 30 days of receipt by the Guarantor of a written request for a List of Holders as of a date no more than 15 days before such List of Holders is given to the Preferred Securities Guarantee Trustee; provided that in each case the Guarantor shall not be obligated to provide such List of Holders at any time that the List of Holders does not differ from the most recent List of Holders given to the Preferred Securities Guarantee Trustee by the Guarantor. The Preferred Securities Guarantee Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in the Lists of Holders given to it; provided that the Preferred Securities Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Preferred Securities Guarantee Trustee shall comply with its obligations under Section 312(b) of the Trust Indenture Act. SECTION 2.03 Reports by the Preferred Securities Guarantee Trustee. Within 60 days after May 15 of each year, commencing May 15, _______, the Preferred Securities Guarantee Trustee shall deliver to the Holders such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form, in the manner and at the times provided by Section 313 of the Trust Indenture Act. The Preferred Securities Guarantee Trustee shall also comply with 6 10 the other requirements of Section 313 of the Trust Indenture Act. A copy of each such report shall, at the time of such transmission to the Holders, be filed by the Preferred Securities Guarantee Trustee with the Guarantor, with each stock exchange or quotation system upon which any Preferred Securities are listed or traded (if so listed or traded) and with the Commission. The Guarantor agrees to notify the Preferred Securities Guarantee Trustee when any Preferred Securities become listed on any stock exchange or quotation system and of any delisting thereof. SECTION 2.04 Periodic Reports to the Preferred Securities Guarantee Trustee. The Guarantor shall provide to the Preferred Securities Guarantee Trustee, the Commission and the Holders, as applicable, such documents, reports and information as required by Section 314 (if any) of the Trust Indenture Act and the compliance certificates required by Section 314 of the Trust Indenture Act, provided that any such compliance certificate shall be provided within 120 days of the end of each fiscal year of the Issuer. Delivery of such reports, information and documents to the Preferred Securities Guarantee Trustee is for informational purposes only and the Preferred Securities Guarantee Trustee's receipt of such shall not constitute constructive notice of any information contained therein, including the Guarantor's compliance with any of its covenants hereunder (as to which the Preferred Securities Guarantee Trustee is entitled to rely exclusively on Officers' Certificates or on certificates provided pursuant to this Section 2.04). SECTION 2.05 Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Preferred Securities Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Preferred Securities Guarantee Agreement which relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c) may be given in the form of an Officers' Certificate. SECTION 2.06 Events of Default; Waiver. (a) The Holders of a Majority in liquidation amount of the Preferred Securities may, by vote, on behalf of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Preferred Securities Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default, or impair any right consequent thereon. (b) The right of any Holder to receive payment of the Guarantee Payments in accordance with this Preferred Securities Guarantee Agreement, or to institute suit for the enforcement of any such payment, shall not be impaired without the consent of each such Holder. 7 11 SECTION 2.07 Disclosure of Information. The disclosure of information as to the names and addresses of the Holders in accordance with Section 312 of the Trust Indenture Act, regardless of the source from which such information was derived, shall not be deemed to be a violation of any existing law, or any law hereafter enacted which does not specifically refer to Section 312 of the Trust Indenture Act, nor shall the Preferred Securities Guarantee Trustee be held accountable by reason of mailing any material pursuant to a request made under Section 312(b) of the Trust Indenture Act. SECTION 2.08 Conflicting Interest. (a) The Declaration shall be deemed to be specifically described in this Preferred Securities Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. (b) The Preferred Securities Guarantee Trustee shall comply with its obligations under Section 310(b) and 311(a) of the Trust Indenture Act. ARTICLE III POWERS, DUTIES AND RIGHTS OF THE PREFERRED SECURITIES GUARANTEE TRUSTEE SECTION 3.01 Powers and Duties of the Preferred Securities Guarantee Trustee. (a) This Preferred Securities Guarantee Agreement shall be held by the Preferred Securities Guarantee Trustee in trust for the benefit of the Holders. The Preferred Securities Guarantee Trustee shall not transfer its right, title and interest in this Preferred Securities Guarantee Agreement to any Person except a Successor Preferred Securities Guarantee Trustee on acceptance by such Successor Preferred Securities Guarantee Trustee of its appointment to act as Preferred Securities Guarantee Trustee or to a Holder exercising his or her rights pursuant to Section 5.04(d). The right, title and interest of the Preferred Securities Guarantee Trustee to this Preferred Securities Guarantee Agreement shall vest automatically in each Person who may hereafter be appointed as Preferred Securities Guarantee Trustee in accordance with Article IV. Such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered. (b) If an Event of Default has occurred and is continuing, the Preferred Securities Guarantee Trustee shall enforce this Preferred Securities Guarantee Agreement for the benefit of the Holders. (c) This Preferred Securities Guarantee Agreement and all moneys received by the Preferred Securities Guarantee Trustee in respect of the Guarantee Payments will not be subject to 8 12 any right, charge, security interest, lien or claim of any kind in favor of, or for the benefit of, the Preferred Securities Guarantee Trustee or its agents or their creditors. (d) The Preferred Securities Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default actually known to a Responsible Officer of the Preferred Securities Guarantee Trustee, transmit by mail, first class postage prepaid, to the Holders, as their names and addresses appear upon the List of Holders, notice of all such Events of Default, unless such defaults shall have been cured before the giving of such notice; provided that the Preferred Securities Guarantee Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible Officers of the Preferred Securities Guarantee Trustee in good faith determine that the withholding of such notice is in the interests of the Holders. The Preferred Securities Guarantee Trustee shall not be deemed to have knowledge of any Event of Default except any Event of Default as to which the Preferred Securities Guarantee Trustee shall have received written notice or a Responsible Officer charged with the administration of this Preferred Securities Guarantee Agreement shall have obtained actual knowledge of such Event of Default. (e) The Preferred Securities Guarantee Trustee shall continue to serve as a trustee until a Successor Preferred Securities Guarantee Trustee has been appointed and accepted that appointment in accordance with Article IV. SECTION 3.02 Certain Rights and Duties of the Preferred Securities Guarantee Trustee. (a) The Preferred Securities Guarantee Trustee, before the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Preferred Securities Guarantee Agreement, and no implied covenants shall be read into this Preferred Securities Guarantee Agreement against the Preferred Securities Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.06), the Preferred Securities Guarantee Trustee shall exercise such of the rights and Powers vested in it by this Preferred Securities Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) No provision of this Preferred Securities Guarantee Agreement shall be construed to relieve the Preferred Securities Guarantee Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) prior to the occurrence of an Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Preferred Securities Guarantee Trustee shall be determined solely by the express provisions of this Preferred Securities Guarantee 9 13 Agreement, and the Preferred Securities Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Preferred Securities Guarantee Agreement, and no implied covenants or obligations shall be read into this Preferred Securities Guarantee Agreement against the Preferred Securities Guarantee Trustee; and (B) in the absence of bad faith on the part of the Preferred Securities Guarantee Trustee, the Preferred Securities Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Preferred Securities Guarantee Trustee and conforming to the requirements of this Preferred Securities Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or the Trust Indenture Act are specifically required to be furnished to the Preferred Securities Guarantee Trustee, the Preferred Securities Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Preferred Securities Guarantee Agreement or the Trust Indenture Act, as the case may be; (ii) the Preferred Securities Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Preferred Securities Guarantee Trustee, unless it shall be proved that the Preferred Securities Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Preferred Securities Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in liquidation amount of the Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Preferred Securities Guarantee Trustee, or exercising any trust or power conferred upon the Preferred Securities Guarantee Trustee under this Preferred Securities Guarantee Agreement; and (iv) no provision of this Preferred Securities Guarantee Agreement shall require the Preferred Securities Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Preferred Securities Guarantee Agreement or adequate indemnity against such risk or liability is not reasonably assured to it. (c) Subject to the provisions of Section 3.02(a) and (b): (i) whenever in the administration of this Preferred Securities Guarantee Agreement, the Preferred Securities Guarantee Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Preferred Securities Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on 10 14 its part, request and rely upon an Officers' Certificate, which, upon receipt of such request, shall be promptly delivered by the Guarantor; (ii) the Preferred Securities Guarantee Trustee (A) may consult with counsel (which may be counsel to the Guarantor or any of its Affiliates and may include any of its employees) selected by it in good faith and with due care and the written advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice and opinion and (B) shall have the right at any time to seek instructions concerning the administration of this Preferred Securities Guarantee Agreement from any court of competent jurisdiction; (iii) the Preferred Securities Guarantee Trustee may execute any of the trusts or Powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Preferred Securities Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it in good faith and with due care; (iv) the Preferred Securities Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Preferred Securities Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have offered to the Preferred Securities Guarantee Trustee security and indemnity satisfactory to the Preferred Securities Guarantee Trustee against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction; provided that nothing contained in this clause (iv) shall relieve the Preferred Securities Guarantee Trustee of the obligation, upon the occurrence of an Event of Default (which has not been cured or waived) to exercise such of the rights and powers vested in it by this Preferred Securities Guarantee Agreement, and to use the same degree of care and skill in this exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs; and (v) any action taken by the Preferred Securities Guarantee Trustee or its agents hereunder shall bind the Holders, and the signature of the Preferred Securities Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action; and no third party shall be required to inquire as to the authority of the Preferred Securities Guarantee Trustee to so act, or as to its compliance with any of the terms and provisions of this Preferred Securities Guarantee Agreement, both of which shall be conclusively evidenced by the Preferred Securities Guarantee Trustee's or its agent's taking such action. SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee. The recitals contained in this Preferred Securities Guarantee Agreement shall be taken as the statements of the Guarantor, and the Preferred Securities Guarantee Trustee does not assume any responsibility for their correctness. The Preferred Securities Guarantee Trustee makes no 11 15 representations as to the validity or sufficiency of this Preferred Securities Guarantee Agreement. SECTION 3.04 The Preferred Securities Guarantee Trustee May Own Preferred Securities. The Guarantee Trustee, in its individual or any other capacity, may become the owner or pledgee of Preferred Securities and may otherwise deal with the Guarantor with the same rights it would have if it were not the Preferred Securities Guarantee Trustee SECTION 3.05 Compensation and Expenses of Preferred Securities Guarantee Trustee. The Guarantor covenants and agrees to pay to the Preferred Securities Guarantee Trustee from time to time, and the Preferred Securities Guarantee Trustee shall be entitled to, such compensation as the Guarantor and the Preferred Securities Guarantee Trustee shall from time to time agree in writing (which shall not be limited by any provision of law in regard to the compensation of a Preferred Securities Guarantee Trustee of an express trust) for all services rendered by it in the exercise and performance of any of the powers and duties hereunder of the Preferred Securities Guarantee Trustee, and the Guarantor will pay or reimburse the Preferred Securities Guarantee Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Preferred Securities Guarantee Trustee in accordance with any of the provisions of this Preferred Securities Guarantee Agreement (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Guarantor also covenants to indemnify each of the Preferred Securities Guarantee Trustee or any predecessor Preferred Securities Guarantee Trustee and their officers, agents, directors and employees for, and to hold them harmless against, any and all loss, liability, damage, claim or expense including taxes (other than taxes based upon, measured by or determined by the income, profit, franchise or doing business of the Preferred Securities Guarantee Trustee) incurred without negligence or bad faith on the part of the Preferred Securities Guarantee Trustee and arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim (whether asserted by the Guarantor, any Holder or any other Person) of liability in the premises. The provisions of this Section 3.06 shall survive the termination of this Preferred Securities Guarantee Agreement and resignation or removal of the Preferred Securities Guarantee Trustee. ARTICLE IV PREFERRED SECURITIES GUARANTEE TRUSTEE SECTION 4.01 Qualifications. There shall at all times be a Preferred Securities Guarantee Trustee that shall: 12 16 (i) not be an Affiliate of the Guarantor; and (ii) be a national banking association or corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then for the purposes of this clause (ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Preferred Securities Guarantee Trustee shall cease to satisfy the requirements of clauses (i) and (ii) above, the Preferred Securities Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.02. If the Preferred Securities Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Preferred Securities Guarantee Trustee and the Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.02 Appointment, Removal and Registration of the Preferred Securities Guarantee Trustee. (a) Subject to Section 4.02(b), the Preferred Securities Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Preferred Securities Guarantee Trustee shall not be removed in accordance with Section 4.02(a) until a Successor Preferred Securities Guarantee Trustee possessing the qualifications to act as Preferred Securities Guarantee Trustee under Section 4.01 has been appointed and has accepted such appointment by written instrument executed by such Successor Preferred Securities Guarantee Trustee and delivered to the Guarantor and the Preferred Securities Guarantee Trustee being removed. (c) The Preferred Securities Guarantee Trustee appointed to office shall hold office until its successor shall have been appointed or until its removal or resignation. (d) The Preferred Securities Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument (a "Resignation Request") in writing signed by the Preferred Securities Guarantee Trustee and delivered to the Guarantor, which resignation shall take effect upon such delivery or upon such later date as is specified therein; provided, however, that no such resignation of the Preferred Securities Guarantee Trustee shall be effective until a Successor Preferred Securities Guarantee Trustee possessing the qualifications to act as Preferred Securities 13 17 Guarantee Trustee under Section 4.01 has been appointed and has accepted such appointment by instrument executed by such Successor Preferred Securities Guarantee Trustee and delivered to the Guarantor and the resigning Preferred Securities Guarantee Trustee. (e) If no Successor Preferred Securities Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery to the Guarantor of a Resignation Request, the resigning Preferred Securities Guarantee Trustee may petition any court of competent jurisdiction for appointment of a Successor Preferred Securities Guarantee Trustee. Such court may thereupon after such notice, if any, as it may deem proper, appoint a Successor Preferred Securities Guarantee Trustee. (f) No Preferred Securities Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Preferred Securities Guarantee Trustee. (g) Upon termination of this Preferred Securities Guarantee or removal or resignation of the Preferred Securities Guarantee Trustee pursuant to this Section 4.02, the Guarantor shall pay to the Preferred Securities Guarantee Trustee all amounts due to the Preferred Securities Guarantee Trustee accrued to the date of such termination, removal or resignation. ARTICLE V GUARANTEE SECTION 5.01 Guarantee. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 5.02 Waiver of Notice. The Guarantor hereby waives notice of acceptance of this Preferred Securities Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. Notwithstanding anything to the contrary herein, the Guarantor retains all of its rights under the Indenture to extend the interest payment period on the Debentures and the Guarantor shall not be obligated hereunder to make any Guarantee Payment during any 14 18 Extended Interest Payment Period (as defined in the Supplemental Indenture) with respect to the Distributions on the Preferred Securities. SECTION 5.03 Obligations Not Affected. The obligations, covenants, agreements and duties of the Guarantor under this Preferred Securities Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preferred Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution (as defined in the Declaration) or any other sums payable under the terms of the Preferred Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Preferred Securities (other than an extension of time for payment of Distributions that result from the extension of any interest payment period on the Debentures permitted by the Indenture); (c) any failure, omission, delay or lack of diligence on the part of the Preferred Securities Guarantee Trustee or the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Preferred Securities Guarantee Trustee or the Holders pursuant to the terms hereof or of the Preferred Securities, respectively, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Preferred Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.03 that the obligations of the Guarantor with respect to the Guarantee Payments shall be absolute and unconditional under any and all circumstances. 15 19 There shall be no obligation of the Preferred Securities Guarantee Trustee or the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.04 Enforcement of Guarantee. The Guarantor and the Preferred Securities Guarantee Trustee expressly acknowledge and agree that (a) this Preferred Securities Guarantee Agreement will be deposited with the Preferred Securities Guarantee Trustee to be held for the benefit of the Holders; (b) the Preferred Securities Guarantee Trustee has the right to enforce this Preferred Securities Guarantee Agreement on behalf of the Holders; (c) Holders representing not less than a Majority in liquidation amount of the Preferred Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Preferred Securities Guarantee Trustee in respect of this Preferred Securities Guarantee Agreement or exercising any trust or other power conferred upon the Preferred Securities Guarantee Trustee under this Preferred Securities Guarantee Agreement; and (d) if the Preferred Securities Guarantee Trustee fails to enforce this Preferred Securities Guarantee Agreement as provided in clauses (b) and (c) above, any Holder may institute a legal proceeding directly against the Guarantor to enforce its rights under this Preferred Securities Guarantee Agreement, without first instituting a legal proceeding against the Issuer, the Preferred Securities Guarantee Trustee or any other Person. Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder may directly institute a proceeding against the Guarantor for enforcement of this Preferred Securities Guarantee Agreement for such payment without first instituting a legal proceeding against the Issuer, the Preferred Securities Guarantee Trustee or any other Person. SECTION 5.05 Guarantee of Payment. This Preferred Securities Guarantee Agreement creates a guarantee of payment and not merely of collection. SECTION 5.06 Subrogation. The Guarantor shall be subrogated to all (if any) rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Preferred Securities Guarantee Agreement; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Preferred Securities Guarantee Agreement, if, at the time of any such payment, any amounts are due and unpaid under this Preferred Securities Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. 16 20 SECTION 5.07 Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preferred Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof. ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION 6.01 Limitation of Transactions. So long as any Preferred Securities remain outstanding, the Guarantor shall not (a) declare or pay dividends on, or redeem, purchase, acquire or make a distribution or liquidation payment with respect to, any of Guarantor's capital stock (other than (i) dividends or distributions in shares of, or options, warrants, rights to subscribe for or purchase shares of common stock of the Guarantor, (ii) any declaration of a dividend in connection with the implementation of a stockholders' rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto, (iii) as a result of a reclassification of one class or series of the Guarantor's capital stock or the exchange or the conversion of one class or series of the Guarantor's capital stock for another class or series of the Guarantor's capital stock, (iv) the payment of accrued dividends and the purchase of fractional interests in the Guarantor's share capital pursuant to the conversion or exchange provisions of such share capital or the security being converted or exchanged, or (v) purchases of common stock related to the issuance of common stock or rights under any of the Guarantor's benefit plans for its directors, officers or employees, any of the Guarantor's dividend reinvestment plans or stock purchase plans, or any of the benefit plans of any of the Guarantor's Affiliates, for such Affiliate's directors, officers or employees); (b) make any payment of principal of or interest or premium, if any, on, or repay, repurchase or redeem, any debt security of the Guarantor that ranks pari passu with or junior in interest to the Debentures; or (c) make any guarantee payments with respect to any guarantee by the Guarantor of the debt securities of any Subsidiary (as defined in the Indenture) of the Guarantor (other than pursuant to this Preferred Securities Guarantee Agreement) if such guarantee ranks pari passu with or junior in interest to the Debentures, if at such time (i) the Guarantor shall be in default with respect to its Guarantee Payments or other payment obligations hereunder, (ii) there shall have occurred and be continuing any Event of Default under the Indenture or (iii) the Guarantor shall have given notice of its election of the exercise of its right to extend the interest payment period on the Debentures as permitted by the Indenture and such extension is continuing. In addition, so long as any Preferred Securities remain outstanding, the Guarantor (i) will remain the sole direct or indirect owner of all of the outstanding Common Securities and shall not cause or permit the Common Securities to be transferred except to the extent such transfer is permitted under Section 9.01 of the Declaration; provided that any permitted successor of the Guarantor under the Indenture may succeed to the 17 21 Guarantor's ownership of the Common Securities, and (ii) will use reasonable efforts to cause the Issuer to continue to be treated as a grantor trust for United States federal income tax purposes except in connection with a distribution of Debentures as provided in the Declaration. SECTION 6.02 Subordination. This Preferred Securities Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor (other than the obligations of the Guarantor under the Common Securities Guarantee Agreement, which are subordinate and junior to this Preferred Securities Guarantee Agreement to the extent provided therein) and (ii) senior to all capital stock now or hereafter issued by the Guarantor. The Guarantor's obligations under this Preferred Securities Guarantee Agreement will rank pari passu with respect to obligations under other guarantee agreements which it may enter into from time to time to the extent that (i) such agreements shall be entered into in substantially the form hereof and provide for comparable guarantees by the Guarantor of payment on preferred securities issued by other trusts, partnerships or other entities affiliated with the Guarantor that are financing vehicles of the Guarantor and (ii) the debentures or other evidences of indebtedness of the Guarantor relating to such preferred securities are junior subordinated, unsecured indebtedness of the Guarantor. ARTICLE VII TERMINATION SECTION 7.01 Termination. This Preferred Securities Guarantee Agreement shall terminate and be of no further force and effect (i) upon full payment of the Redemption Price of all Preferred Securities, (ii) upon the distribution of Debentures [, or any securities into which such Debentures are convertible,] to Holders and holders of Common Securities in exchange for all of the Preferred Securities and Common Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to the Preferred Securities or under this Preferred Securities Guarantee Agreement. 18 22 ARTICLE VIII LIMITATION OF LIABILITY; INDEMNIFICATION SECTION 8.01 Exculpation. (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Holder for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Preferred Securities Guarantee Agreement and in a manner such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Preferred Securities Guarantee Agreement or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person's negligence or willful misconduct with respect to such acts or omissions. (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses or any other facts pertinent to the existence and amount of assets from which Distributions to Holders might properly be paid. SECTION 8.02 Indemnification. To the fullest extent permitted by applicable law, the Guarantor shall indemnify and hold harmless each Indemnified Person from and against any loss, damage or claim incurred by such Indemnified Person by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Preferred Securities Guarantee Agreement and in a manner such Indemnified Person reasonably believed to be within the scope of authority conferred on such Indemnified Person by this Preferred Securities Guarantee Agreement, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise of any of its powers or duties hereunder, except that no Indemnified Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Indemnified Person by reason of negligence or willful misconduct with respect to such acts or omissions. SECTION 8.03 Survive Termination. The provisions of Sections 8.01 and 8.02 shall survive the termination of this Preferred Securities Guarantee Agreement or the resignation or removal of the Preferred Securities Guarantee Trustee. 19 23 ARTICLE IX MISCELLANEOUS SECTION 9.01 Successors and Assigns. All guarantees and agreements contained in this Preferred Securities Guarantee Agreement shall bind the successors, assignees, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Preferred Securities Guarantee Trustee and the Holders then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article X of the Indenture, the Guarantor shall not assign its obligations hereunder. SECTION 9.02 Amendments. Except with respect to any changes which do not adversely affect the rights of Holders in any material respect (in which case no consent of Holders will be required), this Preferred Securities Guarantee Agreement may only be amended with the prior approval of the Guarantor, the Preferred Securities Guarantee Trustee and the Holders of not less than a Majority in liquidation amount of the Preferred Securities. The provisions of Section 12.02 of the Declaration concerning meetings of Holders shall apply to the giving of such approval. SECTION 9.03 Notices. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, in English, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address as the Guarantor may give notice of to the Holders: Seitel, Inc. 50 Briar Hollow Lane Seventh Floor, West Building Houston, Texas 77027 Attention: Chief Financial Officer (b) if given to the Preferred Securities Guarantee Trustee, to the address set forth below or such other address as the Preferred Securities Guarantee Trustee my give notice of to the Holders: 20 24 The First National Bank of Chicago 1 North State Street, 9th Floor Mail Suite IL1-0126 Chicago, Illinois 60602] Attention: Corporate Trust Administration (c) if given to any Holder, at the address set forth on the books and records of the Issuer. All notices hereunder shall be deemed to have been given when (i) received in person, (ii) telecopied with receipt confirmed, or (iii) mailed by first class mail, postage prepaid, when received, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 9.04 Genders. The masculine, feminine and neuter genders used herein shall include the masculine, feminine and neuter genders. SECTION 9.05 Benefits. This Preferred Securities Guarantee Agreement is solely for the benefit of the Preferred Securities Guarantee Trustee and the Holders and, subject to Section 3.01 (a), is not separately transferable from the Preferred Securities. SECTION 9.06 Governing Law. THIS PREFERRED SECURITIES GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS). SECTION 9.07 Counterparts. This Preferred Securities Guarantee Agreement may be executed in counterparts, each of which shall be an original; but such counterparts shall together constitute one and the same instrument. [ SECTION 9.08 Exercise of Overallotment Option. If and to the extent that Preferred Securities arc issued by the Issuer upon exercise of the overallotment option referred to in the first WHEREAS clause, the Guarantor agrees to give prompt 21 25 notice thereof to the Preferred Securities Guarantee Trustee but the failure to give such notice shall not relieve the Guarantor of any of its obligations hereunder.] SECTION 9.09 Agent for Service of Process. The Guarantor hereby designates CT Corporation System, currently located at 1633 Broadway, New York, New York, as its authorized agent upon whom process may be served in any action, suit or proceeding that may be instituted in any State or Federal court sitting in the County of New York of the State of New York pertaining to this Preferred Securities Guarantee Agreement or any matter arising out of or related to this Preferred Securities Guarantee Agreement, and the Guarantor will accept the jurisdiction of such court in such action, and waive, to the fullest extent permitted by applicable law, any defense based upon lack of personal jurisdiction or venue or forum non conveniens. The Guarantor may and shall (to the extent the process agent ceases to be able to be served on the basis contemplated herein), by written notice to the Preferred Securities Guarantee Trustee, designate such additional or alternative agents for service of process under this Section 9.09 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) are either (a) counsel for the Guarantor or (b) a corporate service company which acts as agent for service of process for other persons in the ordinary course of its business and (iii) agrees to act as agent for service of process in accordance with this Section 9.09. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any holder of a Preferred Security or Preferred Security Beneficial Owner (as defined in the Declaration), the Preferred Securities Guarantee Trustee shall deliver such information to such holder or Preferred Security Beneficial Owner. Notwithstanding the foregoing, there shall, at all times, be at least one agent for service of process for the Guarantor appointed and acting in accordance with this Section 9.09. A copy of any such process shall be sent or given to the Guarantor at the address for notices specified in Section 9.03 hereof. The Guarantor shall maintain the designation of such authorized agent until two years after termination of the Guarantor's obligation under this Preferred Securities Guarantee Agreement pursuant to Section 7.01. 22 26 THIS PREFERRED SECURITIES GUARANTEE AGREEMENT is executed as of the day and year first above written. SEITEL, INC. By: -------------------------------------- Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Preferred Securities Guarantee Trustee By: -------------------------------------- Name: Title: 23 EX-4.10 9 FORM OF INDENTURE 1 EXHIBIT 4.10 SEITEL, INC., AS ISSUER, and THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE --------------------------- INDENTURE Dated as of , 1999 --------------------------- DEBT SECURITIES 2 TABLE OF CONTENTS
PAGE ARTICLE I 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....................................................................6 ARTICLE II THE SECURITIES..................................................................................7 Section 2.01 Amount Unlimited; Issuable in Series.....................................................7 Section 2.02 Denominations............................................................................9 Section 2.03 Forms Generally..........................................................................9 Section 2.04 Execution, Authentication, Delivery and Dating..........................................10 Section 2.05 Registrar and Paying Agent..............................................................12 Section 2.06 Paying Agent to Hold Money in Trust.....................................................12 Section 2.07 Holder Lists............................................................................13 Section 2.08 Transfer and Exchange...................................................................13 Section 2.09 Replacement Securities..................................................................14 Section 2.10 Outstanding Securities..................................................................14 Section 2.11 Original Issue Discount and Treasury Securities.........................................14 Section 2.12 Temporary Securities....................................................................15 Section 2.13 Cancellation............................................................................15 Section 2.14 Payments; Defaulted Interest............................................................15 Section 2.15 Persons Deemed Owners...................................................................16 Section 2.16 Computation of Interest.................................................................16 Section 2.17 Global Securities; Book-Entry Provisions................................................16 ARTICLE III REDEMPTION.....................................................................................18 Section 3.01 Applicability of Article................................................................18 Section 3.02 Notice to the Trustee...................................................................18 Section 3.03 Selection of Securities To Be Redeemed..................................................18 Section 3.04 Notice of Redemption....................................................................19 Section 3.05 Effect of Notice of Redemption..........................................................20 Section 3.06 Deposit of Redemption Price.............................................................20 Section 3.07 Securities Redeemed or Purchased in Part................................................21 Section 3.08 Purchase of Securities..................................................................21 Section 3.09 Mandatory and Optional Sinking Funds....................................................21 Section 3.10 Satisfaction of Sinking Fund Payments with Securities...................................21 Section 3.11 Redemption of Securities for Sinking Fund...............................................22
-i- 3 ARTICLE IV COVENANTS......................................................................................22 Section 4.01 Payment of Securities...................................................................22 Section 4.02 Maintenance of Office or Agency.........................................................23 Section 4.03 SEC Reports; Financial Statements.......................................................23 Section 4.04 Compliance Certificate..................................................................24 Section 4.05 Corporate Existence.....................................................................24 Section 4.06 Maintenance of Properties...............................................................25 Section 4.07 Payment of Taxes and Other Claims.......................................................25 Section 4.08 Waiver of Stay, Extension or Usury Laws.................................................25 Section 4.09 Additional Amounts......................................................................26 ARTICLE V SUCCESSORS.....................................................................................26 Section 5.01 Limitations on Mergers and Consolidations...............................................26 Section 5.02 Successor Person Substituted............................................................27 ARTICLE VI DEFAULTS AND REMEDIES..........................................................................27 Section 6.01 Events of Default.......................................................................27 Section 6.02 Acceleration............................................................................29 Section 6.03 Other Remedies..........................................................................29 Section 6.04 Waiver of Existing or Past Defaults.....................................................30 Section 6.05 Control by Majority.....................................................................30 Section 6.06 Limitations on Suits....................................................................30 Section 6.07 Rights of Holders to Receive Payment....................................................31 Section 6.08 Collection Suit by Trustee..............................................................31 Section 6.09 Trustee May File Proofs of Claim........................................................31 Section 6.10 Priorities..............................................................................32 Section 6.11 Undertaking for Costs...................................................................32 ARTICLE VII TRUSTEE........................................................................................33 Section 7.01 Duties of Trustee.......................................................................33 Section 7.02 Rights of Trustee.......................................................................34 Section 7.03 May Hold Securities.....................................................................34 Section 7.04 Trustee's Disclaimer....................................................................35 Section 7.05 Notice of Defaults......................................................................35 Section 7.06 Reports by Trustee to Holders...........................................................35 Section 7.07 Compensation and Indemnity..............................................................35 Section 7.08 Replacement of Trustee..................................................................36 Section 7.09 Successor Trustee by Merger, etc........................................................38 Section 7.10 Eligibility; Disqualification...........................................................38 Section 7.11 Preferential Collection of Claims Against Company.......................................39 ARTICLE VIII DISCHARGE OF INDENTURE.........................................................................39 Section 8.01 Termination of Company's Obligations....................................................39
-ii- 4 Section 8.02 Application of Trust Money..............................................................43 Section 8.03 Repayment to Company....................................................................43 Section 8.04 Reinstatement...........................................................................43 ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS.........................................................44 Section 9.01 Without Consent of Holders..............................................................44 Section 9.02 With Consent of Holders.................................................................45 Section 9.03 Compliance with Trust Indenture Act.....................................................47 Section 9.04 Revocation and Effect of Consents.......................................................47 Section 9.05 Notation on or Exchange of Securities...................................................48 Section 9.06 Trustee to Sign Amendments, etc.........................................................48 ARTICLE X MISCELLANEOUS .................................................................................48 Section 10.01 Trust Indenture Act Controls...........................................................48 Section 10.02 Notices................................................................................48 Section 10.03 Communication by Holders with Other Holders............................................50 Section 10.04 Certificate and Opinion as to Conditions Precedent.....................................50 Section 10.05 Statements Required in Certificate or Opinion..........................................50 Section 10.06 Rules by Trustee and Agents............................................................51 Section 10.07 Legal Holidays.........................................................................51 Section 10.08 No Recourse Against Others.............................................................51 Section 10.09 Governing Law..........................................................................51 Section 10.10 No Adverse Interpretation of Other Agreements..........................................51 Section 10.11 Successors.............................................................................51 Section 10.12 Severability...........................................................................52 Section 10.13 Counterpart Originals..................................................................52 Section 10.14 Table of Contents; Headings; etc.......................................................52 Section 10.15 Agent for Service of Process...........................................................52
-iii- 5 INDENTURE dated as of , between Seitel, Inc., a Delaware corporation (the "Company"), and The First National Bank of Chicago, a national banking association, as trustee (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 unsecured debentures, notes or other evidences of indebtedness (the "Securities") to be issued from time to time in one or more series as provided in this Indenture: ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01 Definitions. "Additional Amounts" means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders. "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 purposes of this definition, "control" of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. "Agent" means any Registrar or Paying Agent. "Bankruptcy Law" means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors of the Company. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day that is not a Legal Holiday. 6 "Capital Stock" of any Person means and includes any and all shares, interests, rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests (however designated) in the equity (which includes, but is not limited to, common stock, preferred stock and partnership and joint venture interests) of such Person (excluding any debt securities that are convertible into, or exchangeable for, such equity). "Common Equity" of any Person means and includes all Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management and policies of such Person. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "Company Order" and "Company Request" mean, respectively, a written order or request signed in the name of the Company by two Officers of the Company, and delivered to the Trustee. "Corporate Trust Office of the Trustee" shall be the address specified in Section 10.02 and may be located at such other address as the Trustee may give notice to the Company. "Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default. "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of such series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter, "Depositary" shall mean or include such successor. "Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute. "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time. -2- 7 "Global Security" of any series means a Security of that series that is issued in global form in the name of the Depositary with respect thereto or its nominee. "Government Obligations" means, with respect to a series of Securities, direct noncallable obligations of the government that issues the currency in which the Securities of the series are payable for the payment of which the full faith and credit of such government is pledged, or noncallable obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is fully and unconditionally guaranteed as a full faith and credit obligation by such government. "Holder" means a Person in whose name a Security is registered. "Indenture" means this instrument as originally executed or as it may from time to time be amended or supplemented by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, and includes the terms of particular series of Securities established as contemplated by Section 2.01. "interest" means, with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, interest payable after Maturity. "Interest Payment Date," when used with respect to any Security, has the meaning assigned to such term in the Security as contemplated by Section 2.01. "Issue Date" means, with respect to Securities of a series, the date on which the Securities of such series are originally issued under this Indenture. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York, Houston, Texas or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed. "Maturity" means, with respect to any Security, the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or otherwise. "Officer" means the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the chief financial officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of a Person. "Officers' Certificate" means a certificate signed by two Officers of a Person, one of whom must be the Person's chief executive officer, chief financial officer or chief accounting officer. -3- 8 "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. Such counsel may be an employee of or counsel to the Company or the Trustee. "Original Issue Discount Security" means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02. "Person" means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "Place of Payment" means, with respect to the Securities of any series, the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on the Securities of that series are payable as specified in accordance with Section 2.01. "Redemption Date" means, with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price" means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture. "SEC" means the Securities and Exchange Commission. "Securities" has the meaning stated in the preamble of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Custodian" means, with respect to Securities of a series issued in global form, the Trustee for Securities of such series, acting in its capacity as custodian with respect to the Securities of such series, or any successor entity thereto. "Significant Subsidiary" means any "significant subsidiary" of the Company, as such term is defined in Regulation S-X, Title 17, Code of U.S. Federal Regulations Part 210, as in effect on the date hereof. "Stated Maturity" means, when used with respect to any Security or any installment of principal thereof or premium or interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or premium or interest is due and payable. "Subsidiary" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries own more than 50% of the total combined voting power of all Common Equity, and any -4- 9 partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa- 77bbbb), as in effect on the date hereof. "Trust Officer" means any officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Trustee" means the Person named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter "Trustee" means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series means the Trustee with respect to Securities of that series. "United States" means the United States of America (including the States and the District of Columbia) and its territories, its possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands) and other areas subject to its jurisdiction. "United States Alien" means any Person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien or foreign fiduciary of an estate or trust, or a foreign partnership. "U.S. Government Obligations" means Government Obligations with respect to Securities payable in Dollars. Section 1.02 Other Definitions.
DEFINED TERM IN SECTION ---- ---------- "Bankruptcy Custodian" ..........................................................................6.01 "covenant defeasance" ...........................................................................8.01 "Event of Default" ..............................................................................6.01 "legal defeasance" ..............................................................................8.01 "mandatory sinking fund payment" ................................................................3.09 "optional sinking fund payment" .................................................................3.09 "Paying Agent" ..................................................................................2.05 "Registrar" .....................................................................................2.05 "Required Currency" .............................................................................6.10 "Successor" .....................................................................................5.01
-5- 10 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 Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company or any other obligor on the Securities. All 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 under the TIA have the meanings so assigned to them. Section 1.04 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) all references in this Indenture to Articles and Sections are references to the corresponding Articles and Sections in and of this Indenture. -6- 11 ARTICLE II THE SECURITIES Section 2.01 Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an Officers' Certificate or in a Company Order, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities of all other series); (2) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05); (3) whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.17, and the initial Depositary and Security Custodian, if any, for any Global Security or Securities of such series; (4) (i) if other than provided herein, the Person to whom any interest on Securities of the series shall be payable, and (ii) the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.14; (5) the date or dates on which the principal of (and premium, if any, on) the Securities of the series is payable or the method of determination thereof; (6) the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which any interest shall accrue, the Interest Payment Dates on which any such interest shall -7- 12 be payable and the record date for the interest payable on any Securities on any Interest Payment Date; (7) the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable; (8) the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, and the manner in which the Company may exercise any such option, if different from those set forth herein; (9) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation; (10) if other than denominations of $1,000 and any integral multiple thereof, the denomination in which any Securities of that series shall be issuable; (11) the form, including Capital Stock, other debt securities (including Securities), warrants, other equity securities, or any other securities or property of the Company or any other Person in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable; (12) if the amount of payments of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined; (13) if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02; (14) any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series pursuant to Article VIII or any modifications of or deletions from such conditions or limitations; -8- 13 (15) any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 or covenants of the Company set forth in Article IV pertaining to the Securities of the series; (16) any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II; (17) if the Securities of the series are to be convertible into or exchangeable for Capital Stock, other debt securities (including Securities), warrants, other equity securities, or any other securities or property of the Company or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange; and (18) any other terms of the series (which terms shall not be prohibited by the provisions of this Indenture). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in the Officers' Certificate or Company Order referred to above or in any such indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers' Certificate or certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate or Company Order setting forth the terms of the series. Section 2.02 Denominations. The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiples thereof. Section 2.03 Forms Generally. The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto. The Securities may have notations, legends or endorsements required by law, securities exchange rules, the Company's certificate of incorporation or other similar governing documents, agreements to which the Company is subject, -9- 14 if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities. The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof. The Trustee's certificate of authentication shall be in substantially the following form: "This is one of the Securities of the series designated therein referred to in the within- mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: ------------------------------------ Authorized Signatory". Section 2.04 Execution, Authentication, Delivery and Dating. At least one Officer of the Company shall sign the Securities of each series on behalf of the Company by manual or facsimile signature. If an Officer of the Company whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall be valid nevertheless. A Security shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall authenticate and deliver Securities of a series for original issue upon a Company Order for the authentication and delivery of such Securities or pursuant to such procedures reasonably acceptable to the Trustee as may be specified from time to time by Company Order. Such order shall specify the amount of the Securities of such series to be authenticated, the date on which the original issue of Securities of such series is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined. If provided for in such procedures, such Company Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity date or dates, original issue date or dates -10- 15 and interest rate or rates) that differ from Security to Security and (2) may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions or any other method permitted by Section 2.01, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in addition to the Company Order referred to above and the other documents required by Section 10.04), and (subject to Section 7.01) shall be fully protected in relying upon, (a) an Officers' Certificate setting forth the Board Resolution and, if applicable, an appropriate record of any action taken pursuant thereto, as contemplated by the last paragraph of Section 2.01; and (b) an Opinion of Counsel to the effect that: (i) the form of such Securities has been established in conformity with the provisions of this Indenture; (ii) the terms of such Securities have been established in conformity with the provisions of this Indenture; and (iii) such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Officers' Certificate and Opinion of Counsel at the time of issuance of each such Security, but such Officers' Certificate and Opinion of Counsel shall be delivered at or before the time of issuance of the first Security of the series to be issued. The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee. -11- 16 The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company. Each Security shall be dated the date of its authentication. Section 2.05 Registrar and Paying Agent. The Company shall maintain an office or agency for each series of Securities where Securities of such series may be presented for registration of transfer or exchange ("Registrar") and an office or agency where Securities of such series may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities of each series and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. 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 Agent not a party to this Indenture. The Company may change any Paying Agent or Registrar without notice to any Holder. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints the Trustee as Registrar and Paying Agent. Section 2.06 Paying Agent to Hold Money in Trust. With respect to each series of Securities, the Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders of such series or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional Amounts with respect to Securities of such series and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. 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. Upon payment over to the Trustee and upon accounting for any funds disbursed, the Paying Agent (if other than the Company or a Subsidiary of the Company) shall have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent with respect to a series of Securities, it shall segregate and hold in a separate trust fund for the benefit of -12- 17 the Holders of such series all money held by it as Paying Agent. Each Paying Agent shall otherwise comply with TIA Section 317(b). Section 2.07 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of each series of Securities and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar with respect to a series of Securities, the Company shall furnish to the Trustee at least seven Business Days before each Interest Payment Date with respect to such series of Securities, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of such series, and the Company shall otherwise comply with TIA Section 312(a). Section 2.08 Transfer and Exchange. Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01, when Securities of any series are presented to the Registrar with the request to register the transfer of such Securities or to exchange such Securities for an equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements and the requirements of this Indenture for such transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely. To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar's written request and submission of the Securities (other than Global Securities). No service charge shall be made to a Holder for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in accordance with the provisions of Section 2.04. Notwithstanding any other provisions of this Indenture to the contrary, the Company shall not be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part pursuant to Article III, except the unredeemed portion of any Security being redeemed in part or (b) any Security during the period beginning 15 Business Days before the mailing of notice of any offer to repurchase Securities of the series required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed and ending at the close of business on the date of mailing. -13- 18 Section 2.09 Replacement Securities. If any mutilated Security of a series is surrendered to the Trustee, or if the Holder of a Security of a series claims that the Security has been destroyed, lost or stolen and the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of such Security, the Company shall issue and the Trustee shall authenticate a replacement Security of the same series if the Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. If required by the Trustee or the Company, such Holder must furnish an indemnity bond that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Company and the Trustee may charge a Holder for their expenses in replacing a Security. Every replacement Security is an additional obligation of the Company. Section 2.10 Outstanding Securities. The Securities of a series outstanding at any time are all the Securities of that series authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Security effected by the Trustee hereunder and those described in this Section 2.10 as not outstanding. If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. Section 2.11 Original Issue Discount and Treasury Securities. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of an Original Issue Discount Security shall be the principal amount thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 6.02 and (b) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded, except that, for the purpose of determining whether the Trustee shall be protected in relying upon any such -14- 19 direction, amendment, supplement, waiver or consent, only Securities with respect to which the Trustee has received written notice that they are so owned shall be so disregarded. Section 2.12 Temporary Securities. Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. Section 2.13 Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange, payment or redemption or for credit against any sinking fund payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit against any sinking fund. Unless the Company shall direct in writing that canceled Securities be returned to it, after written notice to the Company all canceled Securities held by the Trustee shall be disposed of in accordance with the usual disposal procedures of the Trustee, and the Trustee shall maintain a record of their disposal. The Company may not issue new Securities to replace Securities that have been paid or that have been delivered to the Trustee for cancellation. Section 2.14 Payments; Defaulted Interest. Unless otherwise provided as contemplated by Section 2.01 with respect to Securities of any series, interest (except defaulted interest) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons who are registered Holders of that Security at the close of business on the record date next preceding such Interest Payment Date. Unless otherwise provided with respect to the Securities of any series, the Company will pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities in Dollars. The Company may, however, pay such amounts (1) by wire transfer with respect to Global Securities or (2) by check payable in such money mailed to a Holder's registered address with respect to any Securities. If the Company defaults in a payment of interest on the Securities of any series, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest on the defaulted interest, in each case at the rate provided in the Securities of such series and in Section 4.01. The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. At least 15 days before any special record date selected by the -15- 20 Company, the Company (or the Trustee, in the name of and at the expense of the Company upon 20 days' prior written notice from the Company setting forth such record date and the interest amount to be paid) shall mail to Holders of any such series of Securities a notice that states the special record date, the related payment date and the amount of such interest to be paid. Section 2.15 Persons Deemed Owners. The Company, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of, premium (if any) or interest on, or any Additional Amounts with respect to such Security and for all other purposes. None of the Company, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary. Section 2.16 Computation of Interest. Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year comprising twelve 30-day months. Section 2.17 Global Securities; Book-Entry Provisions. If Securities of a series are issuable in global form as a Global Security, as contemplated by Section 2.01, then, notwithstanding clause (10) of Section 2.01 and the provisions of Section 2.02, any such Global Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be reduced to reflect exchanges or redemptions. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified in such Security or in a Company Order to be delivered to the Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Security or in the applicable Company Order. With respect to the Securities of any series that are represented by a Global Security, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary appointed with respect to such Global Security. Any Global Security may be deposited with the Depositary or its nominee, or may remain in the custody of the Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary. If a Company Order has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 10.05 and need not be accompanied by an Opinion of Counsel. -16- 21 Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Security Custodian as its custodian, or under such Global Security, and the Depositary may be treated by the Company, the Security Custodian and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of a Global Security of any series may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of such series is entitled to take under this Indenture or the Securities of such series and (ii) nothing herein shall prevent the Company, the Security Custodian or any agent of the Company or the Security Custodian, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security. Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01, transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary. Securities of any series shall be transferred to all beneficial owners of a Global Security of such series in exchange for their beneficial interests in that Global Security if, and only if, either (1) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Security of such series and a successor Depositary is not appointed by the Company within 90 days of such notice, (2) an Event of Default has occurred with respect to such series and is continuing and the Registrar has received a request from the Depositary to issue Securities of such series in lieu of all or a portion of that Global Security (in which case the Company shall deliver Securities of such series within 30 days of such request) or (3) the Company determines not to have the Securities of such series represented by a Global Security. In connection with any transfer of a portion of the beneficial interest in a Global Security of any series to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security of that series in an amount equal to the principal amount of the beneficial interest in the Global Security of that series to be transferred, and the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication and delivery of Securities of that series shall authenticate and deliver, one or more Securities of the same series of like tenor and amount. In connection with the transfer of all the beneficial interests in a Global Security of any series to beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate principal amount of Securities of that series of authorized denominations. -17- 22 Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities of any series by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities. Neither the Company nor the Trustee shall be liable for any delay by the related Global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such Global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued). Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as contemplated by Section 2.01 with respect to Securities of any series, payment of principal of and premium (if any) and interest on and any Additional Amounts with respect to any Global Security shall be made to the Person or Persons specified therein. ARTICLE III REDEMPTION Section 3.01 Applicability of Article. Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article III. Section 3.02 Notice to the Trustee. If the Company elects to redeem Securities of any series pursuant to this Indenture, it shall notify the Trustee of the Redemption Date and principal amount of Securities of such series to be redeemed. The Company shall so notify the Trustee at least 45 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers' Certificate stating that such redemption will comply with the provisions of this Indenture and of the Securities of such series. Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder of the Securities of such series and shall thereupon be void and of no effect. Section 3.03 Selection of Securities To Be Redeemed. If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities of such series not previously called for redemption, either pro rata, by lot or by such other method as the Trustee shall deem fair and appropriate. Such redemption may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of -18- 23 such series of a denomination larger than the minimum authorized denomination for Securities of that series or of the principal amount of Global Securities of such series. The Trustee shall promptly notify the Company and the Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities of any series shall relate, in the case of any of the Securities redeemed or to be redeemed only in part, to the portion of the principal amount thereof which has been or is to be redeemed. Section 3.04 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities of a series to be redeemed, at the address of such Holder appearing in the register of Securities for such series maintained by the Registrar. All notices of redemption shall identify the Securities to be redeemed and shall state: (1) the Redemption Date; (2) the Redemption Price; (3) that, unless the Company defaults in making the redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price plus accrued interest on and any Additional Amounts with respect to such Securities upon surrender to the Paying Agent of the Securities redeemed; (4) if any Security is to be redeemed in part, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder; (5) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price plus accrued interest on and any Additional Amounts with respect to such Securities and the name and address of the Paying Agent; (6) that the redemption is for a sinking or analogous fund, if such is the case; and -19- 24 (7) the CUSIP number, if any, relating to such Securities. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company. If at the time notice of redemption shall be given the Company shall not have deposited with a Paying Agent and/or irrevocably directed the Trustee or a Paying Agent to apply, from money held by it available to be used for the redemption of Securities that are to be redeemed, an amount in cash sufficient to redeem all of the Securities called for redemption, including accrued interest to the Redemption Date, such notice shall state that it is subject to the receipt of the redemption monies by the Trustee or a Paying Agent on or before the Redemption Date and such notice shall be of no effect unless such monies are so received before such date. Section 3.05 Effect of Notice of Redemption. Once notice of redemption is mailed, subject to the last paragraph of Section 3.04, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Securities called for redemption shall be paid at the Redemption Price plus accrued interest on and any Additional Amounts with respect to such Securities, but interest installments whose maturity is on or prior to such Redemption Date will be payable on the relevant Interest Payment Dates to the Holders of record at the close of business on the relevant record dates specified pursuant to Section 2.01. Section 3.06 Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit with the Trustee or the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money in same day funds sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on and any Additional Amounts with respect to, the Securities or portions thereof which are to be redeemed on that date, other than Securities or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation. If the Company complies with the preceding paragraph, then, unless the Company defaults in the payment of such Redemption Price, plus accrued interest on and any Additional Amounts with respect to such Securities, interest on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Securities are presented for payment, and the Holders of such Securities shall have no further rights with respect to such Securities except for the right to receive the Redemption Price, plus accrued interest on and any Additional Amounts with respect to such Securities, upon surrender of such Securities. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal of and premium, if any, any Additional Amounts, and accrued interest thereon, to the extent -20- 25 lawful, shall, until paid, bear interest from the Redemption Date at the rate specified pursuant to Section 2.01 or provided in the Securities or, in the case of Original Issue Discount Securities, such Securities' initial yield to Maturity. Section 3.07 Securities Redeemed or Purchased in Part. Upon surrender to the Paying Agent of a Security of any series to be redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge a new Security or Securities of the same series and of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed. Section 3.08 Purchase of Securities. Unless otherwise specified as contemplated by Section 2.01, the Company and any Affiliate of the Company may at any time purchase or otherwise acquire Securities of any series in the open market or by private agreement. Such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities. Any Securities purchased or acquired by the Company may be delivered to the Trustee for cancellation and, upon such cancellation, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.13 shall apply to all Securities so delivered. Section 3.09 Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.10. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and by this Article III. Section 3.10 Satisfaction of Sinking Fund Payments with Securities. The Company may deliver outstanding Securities of a series (other than any previously called for redemption) and may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities -21- 26 for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 3.11 Redemption of Securities for Sinking Fund. Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee a Company Order specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, that is to be satisfied by payment of cash and the portion thereof, if any, that is to be satisfied by delivery of or by crediting Securities of that series pursuant to Section 3.10 and will also deliver to the Trustee any Securities to be so delivered. Failure of the Company to deliver timely such Company Order and Securities specified in this paragraph shall not constitute a default but shall constitute the election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section. If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $100,000 or a lesser sum if the Company shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $100,000 or less and the Company makes no such request, then it shall be carried over until a sum in excess of $100,000 is available. Not less than 30 days before each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07. ARTICLE IV COVENANTS Section 4.01 Payment of Securities. The Company shall pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of each series on the dates and in the manner provided in the Securities of such series and in this Indenture. Principal, premium, interest and any Additional Amounts shall be considered paid on the date due if the Paying Agent, other than the Company or a Subsidiary of the Company, holds on that date money deposited by the Company -22- 27 designated for and sufficient to pay all principal, premium, interest and any Additional Amounts then due. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal of and premium (if any) on Securities of any series, at a rate equal to the then applicable interest rate on the Securities of that series to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amount (without regard to any applicable grace period) on Securities of any series at the same rate to the extent lawful. Section 4.02 Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Securities an office or agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities of that series may be presented for registration of transfer or exchange, where Securities of that series may be presented for payment and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. Unless otherwise designated by the Company by written notice to the Trustee, such office or agency shall be the office of the Trustee in The City of New York, which, on the date hereof, is located at 14 Wall Street, 8th Floor, New York, New York 10005. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 4.03 SEC Reports; Financial Statements. The Company shall file with the Trustee, within 15 days after it files the same with the SEC, copies of the annual reports and 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) that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not subject to the requirements of such Section 13 or 15(d), the Company shall file with the Trustee, within 15 days after it would have been required to file the same with the SEC, financial statements, including any notes thereto (and with respect to annual reports, an auditors' report by a firm of established national reputation), and a "Management's Discussion and Analysis -23- 28 of Financial Condition and Results of Operations," both comparable to that which the Company would have been required to include in such annual reports, information, documents or other reports if the Company had been subject to the requirements of such Section 13 or 15(d). The Company shall file with the Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations. The Company shall transmit by mail to all Holders, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to this Section 4.03 as may be required by rules and regulations prescribed from time to time by the SEC. The Company shall also comply with the provisions of TIA Section 314(a). Section 4.04 Compliance Certificate. (a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a statement signed by two Officers of the Company, which need not constitute an Officers' Certificate, complying with TIA Section 314(a)(4) and stating that in the course of performance by the signing Officers of the Company of their duties as such Officers of the Company they would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Company of its obligations under this Indenture, and further stating, as to each such Officer signing such statement, that to his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Company is taking or proposes to take with respect thereto). (b) The Company shall, so long as Securities of any series are outstanding, deliver to the Trustee, promptly upon any Officer of the Company becoming aware of any Default or Event of Default under this Indenture, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. Section 4.05 Corporate Existence. Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership and other existence of each of its Significant Subsidiaries and all rights (charter and statutory) and franchises of the Company and its Significant Subsidiaries; provided that the Company shall not be required to preserve the corporate existence of any Significant Subsidiary of the Company or any such right or franchise if it shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof would not have a material adverse effect on the business, assets or financial condition of the Company and its Subsidiaries taken as a whole and would not have any material -24- 29 adverse effect on the payment and performance of the obligations of the Company under the Securities and this Indenture. Section 4.06 Maintenance of Properties. The Company shall cause all material properties owned by or leased to the Company or any Significant Subsidiary of the Company or used or held for use in the conduct of its business or the business of any such Significant Subsidiary to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the sole judgment of the Company may be necessary so that the business carried on in connection therewith may be properly conducted at all times; provided that nothing in this Section 4.06 shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the sole judgment of the Company, desirable and not disadvantageous in any material respect to the Holders. Section 4.07 Payment of Taxes and Other Claims. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any of its Significant Subsidiaries or upon the income, profits or property of the Company or any of its Significant Subsidiaries, and (ii) all material lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any of its Significant Subsidiaries; provided that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith or would not be disadvantageous in any material respect to the Holders. Section 4.08 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 law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Securities of any series as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture, and (to the extent that it may lawfully do so) the Company 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. -25- 30 Section 4.09 Additional Amounts. If the Securities of a series expressly provide for the payment of Additional Amounts, the Company will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.09 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.09 and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made. Unless otherwise provided pursuant to Section 2.01 with respect to Securities of any series, if the Securities of a series provide for the payment of Additional Amounts, at least ten days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least ten days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below- mentioned Officers' Certificate, the Company shall furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities and the Company will pay to such Paying Agent the Additional Amounts required by this Section. The Company covenants to indemnify the Trustee and any Paying Agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 4.09. ARTICLE V SUCCESSORS Section 5.01 Limitations on Mergers and Consolidations. The Company shall not consolidate with or merge with any Person, or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to any Person, unless: (1) either (a) the Company shall be the continuing corporation or (b) the Person formed by or surviving such consolidation or merger (if other than the Company), or to -26- 31 which such sale, lease, conveyance, transfer or other disposition shall be made (collectively, the "Successor"), is organized and existing under the laws of the United States, or any State thereof or the District of Columbia, and expressly assumes by supplemental indenture all of the obligations of the Company under this Indenture and the Securities; (2) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (3) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with this Indenture. Section 5.02 Successor Person Substituted. Upon any consolidation or merger of the Company or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, any Successor formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture and each series of Securities with the same effect as if such Successor had been named as the Company herein and the predecessor Company, in the case of a sale, conveyance, transfer or other disposition, shall be released from all obligations under this Indenture and each series of Securities. ARTICLE VI DEFAULTS AND REMEDIES Section 6.01 Events of Default. Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series, an "Event of Default," wherever used herein with respect to Securities of any series, occurs if: (1) the Company defaults in the payment of interest on or any Additional Amounts with respect to any Security of that series when the same becomes due and payable and such default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of or premium (if any) on any Security of that series at its Maturity; -27- 32 (3) the Company defaults in the deposit of any mandatory sinking fund payment, when and as due by the terms of a Security of that series, and such default continues for a period of 30 days; (4) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities of such series or this Indenture (other than an agreement, covenant or provision that has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than that series) and such failure continues for the period and after the notice specified in the last paragraph of this Section 6.01; (5) the Company or any Significant Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Bankruptcy Custodian of it or for all or for a substantial part of its property, or (D) makes a general assignment for the benefit of its creditors; (6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that: (A) is for relief against the Company or any Significant Subsidiary of the Company as debtor in an involuntary case, (B) appoints a Bankruptcy Custodian of the Company or any Significant Subsidiary of the Company or a Bankruptcy Custodian for all or for a substantial part of the property of the Company or any Significant Subsidiary of the Company, or (C) orders the liquidation of the Company or any Significant Subsidiary of the Company; or (7) any other Event of Default provided with respect to Securities of that series occurs. The term "Bankruptcy Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. -28- 33 The Trustee shall not be deemed to know or have notice of a Default unless a Trust Officer at the Corporate Trust Office of the Trustee receives written notice at the Corporate Trust Office of the Trustee of such Default with specific reference to such Default. When a Default is cured, it ceases. A Default under clause (4) or (7) of this Section 6.01 is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Default notify the Company and the Trustee, of the Default, and the Company fails to cure the Default within 90 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." Section 6.02 Acceleration. If an Event of Default with respect to Securities of any series at the time outstanding (other than an Event of Default specified in clause (5) or (6) of Section 6.01 hereof) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of that series by notice to the Company and the Trustee, may declare the principal of (or, if any such Securities are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) and accrued and unpaid interest on all then outstanding Securities of such series to be due and payable. Upon any such declaration, the amounts due and payable on such Securities shall be due and payable immediately. If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts shall ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any Holder. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the then outstanding Securities of that series by written notice to the Trustee may rescind an acceleration and its consequences (other than nonpayment of principal of or premium or interest on or Additional Amounts with respect to the Securities) if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to Securities of that series have been cured or waived, except nonpayment of principal, premium, interest or Additional Amounts that has become due solely because of the acceleration. Section 6.03 Other Remedies. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on the Securities of that series or to enforce the performance of any provision of the Securities of that series or this Indenture. -29- 34 The Trustee may maintain a proceeding with respect to Securities of any series even if it does not possess any of the Securities of that series or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. Section 6.04 Waiver of Existing or Past Defaults. Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then outstanding Securities of any series by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such series and its consequences (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series), except (1) a continuing Default or Event of Default in the payment of the principal of, or premium, if any, or interest on or any Additional Amounts with respect to any Security of such series or (2) a continued Default in respect of a provision that under Section 9.02 cannot be amended or supplemented without the consent of the Holder of each outstanding Security of such series affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to such series arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 6.05 Control by Majority. With respect to Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it relating to or arising under an Event of Default with respect to Securities of such series. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders of such series, or that may involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion from Holders directing the Trustee against all losses and expenses caused by taking or not taking such action. Section 6.06 Limitations on Suits. Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series only if: (1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series; -30- 35 (2) the Holders of at least 25% in principal amount of the then outstanding Securities of such series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. Section 6.07 Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and premium, if any, and interest on and any Additional Amounts with respect to that Security, on or after the respective due dates expressed in that Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder. Section 6.08 Collection Suit by Trustee. If an Event of Default specified in clause (1), (2) or (3) of Section 6.01 hereof occurs and is continuing with respect to Securities of any series, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the amount of principal, premium (if any), interest and any Additional Amounts remaining unpaid on the Securities of that series, and interest on overdue principal and premium, if any, and, to the extent lawful, interest on overdue interest, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents and to take such actions, including participating as a member, voting or otherwise, of any committee of creditors, as may be necessary or advisable 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) and the Holders allowed in any judicial proceeding relative to the Company or its creditors or properties and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Bankruptcy Custodian -31- 36 in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to 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. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. 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, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium (if any), interest and any Additional Amounts ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium (if any), interest and any Additional Amounts, respectively; and Third: to the Company. The Trustee, upon prior written notice to the Company, may fix record dates and payment dates for any payment to Holders pursuant to this Article. Section 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorney's fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of the then outstanding Securities of any series. -32- 37 ARTICLE VII TRUSTEE Section 7.01 Duties of Trustee. (a) If an Event of Default with respect to the Securities of any series has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture with respect to such series, and use the same degree of care and skill in such exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default with respect to the Securities of any series: (1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine such certificates and opinions to determine whether, on their face, they appear to conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) this paragraph does not limit the effect of Section 7.01(b); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right -33- 38 or power unless it receives indemnity reasonably satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. All money received by the Trustee with respect to Securities of any series shall, until applied as herein provided, be held in trust for the payment of the principal of, premium (if any) and interest on and Additional Amounts with respect to the Securities of that series. Section 7.02 Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both to be provided. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. Section 7.03 May Hold Securities. 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 any of its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties. However, the Trustee is subject to Sections 7.10 and 7.11. -34- 39 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 of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof; it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee; and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication. Section 7.05 Notice of Defaults. If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and it is known to the Trustee, the Trustee shall mail to Holders of Securities of such series a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium (if any) and interest on and Additional Amounts or any sinking fund installment with respect to the Securities of such series, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders of Securities of such series. Section 7.06 Reports by Trustee to Holders. Within 60 days after each January 31, beginning with January 31, 1999, and in any event prior to March 31 in each year, the Trustee shall mail to Holders of a series a brief report dated as of such reporting date that complies with TIA Section 313(a); provided, however, that if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date with respect to a series, no report need be transmitted to Holders of such series. The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports if and as required by TIA Sections 313(c) and 313(d). A copy of each report at the time of its mailing to Holders of a series of Securities shall be filed with the SEC and each securities exchange, if any, on which the Securities of such series are listed. The Company shall notify the Trustee if and when any series of Securities is listed on any stock exchange. Section 7.07 Compensation and Indemnity. The Company agrees to pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company agrees to reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. -35- 40 The Company hereby indemnifies the Trustee against any loss, liability or expense incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. The Company shall not be obligated to reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the payment obligations of the Company in this Section 7.07, the Trustee shall have, and the Company hereby grants, a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of any series. Such lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. Section 7.08 Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. The Trustee may resign and be discharged at any time with respect to the Securities of one or more series by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee and the Company. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Bankruptcy Custodian or public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. -36- 41 If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, with respect to the Securities of one or more series, the Company shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). Within one year after the successor Trustee with respect to the Securities of any series takes office, the Holders of a majority in principal amount of the Securities of such series may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee with respect to the Securities of any series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, any Holder of Securities of such series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of such series. In case of the appointment of a successor Trustee with respect to all Securities, each such successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee. Nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. Upon the execution and delivery of such -37- 42 supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. On the request of the Company or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the obligations of the Company under Section 7.07 shall continue for the benefit of the retiring Trustee or Trustees. Section 7.09 Successor Trustee by Merger, etc. Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided, however, that in the case of a transfer of all or substantially all of its corporate trust business to another corporation, the transferee corporation expressly assumes all of the Trustee's liabilities hereunder. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. Section 7.10 Eligibility; Disqualification. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust power, shall be subject to supervision or examination by Federal or State (or the District of Columbia) authority and shall have, or be a Subsidiary of a bank or bank holding company having, a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition. The Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to and shall comply with the provisions of TIA Section 310(b) during the period of time required by this Indenture. Nothing in this Indenture shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA Section 310(b). -38- 43 Section 7.11 Preferential Collection of Claims Against Company. The Trustee is subject to and shall comply with the provisions of 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 VIII DISCHARGE OF INDENTURE Section 8.01 Termination of Company's Obligations. (a) Except as otherwise specified, as contemplated by Section 2.01, for Securities of any series, this Indenture shall cease to be of further effect with respect to the Securities of a series (except that the Company's obligations under Section 7.07, the Trustee's and Paying Agent's obligations under Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to the Securities of such series, when: (1) either (A) all outstanding Securities of such series theretofore authenticated and issued (other than destroyed, lost or stolen Securities that have been replaced or paid) have been delivered to the Trustee for cancellation; or (B) all outstanding Securities of such series not theretofore delivered to the Trustee for cancellation: (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee as funds (immediately available to the Holders in the case of clause (i)) in trust for such purpose (x) cash in an amount, or (y) Government Obligations, maturing as to principal and interest at such times and in such amounts as will ensure -39- 44 the availability of cash in an amount or (z) a combination thereof, which will be sufficient, in the opinion (in the case of clauses (y) and (z)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness on the Securities of such series for principal and any interest and any Additional Amounts to the date of such deposit (in the case of Securities which have become due and payable) or for principal, premium, if any, and interest and any Additional Amounts to the Stated Maturity or Redemption Date, as the case may be; or (C) the Company has properly fulfilled such other means of satisfaction and discharge as is specified, as contemplated by Section 2.01, to be applicable to the Securities of such series; (2) the Company has paid or caused to be paid all other sums payable by it hereunder with respect to the Securities of such series; and (3) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect. (b) Unless this Section 8.01(b) is specified as not being applicable to Securities of a series as contemplated by Section 2.01, the Company may terminate certain of its obligations under this Indenture ("covenant defeasance") with respect to the Securities of a series if: (1) the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of Securities of such series (i) money in the currency in which payment of the Securities of such series is to be made in an amount, or (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts (without consideration of the reinvestment of any such amounts) as will ensure the availability of money in the currency in which payment of the Securities of such series is to be made in an amount or (iii) a combination thereof, that is sufficient, in the opinion (in the case of clauses (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay, after payment of all taxes of other charges or assessments in respect thereof payable by the Trustee, the principal of and premium (if any) and any interest and Additional Amounts on all Securities of such series on each date that such principal, premium (if any), interest and Additional Amounts is due and payable and (at the Stated Maturity thereof or upon redemption as provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds of such Government Obligations to the payment of said principal, premium (if any), interest and -40- 45 Additional Amounts with respect to the Securities of such series as the same shall become due; (2) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, and an Opinion of Counsel to the same effect; (3) no Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit; (4) the Company shall have delivered to the Trustee an Opinion of Counsel from counsel reasonably acceptable to the Trustee or a tax ruling to the effect that the Holders of Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under this Section 8.01(b) and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised; (5) the Company has complied with any additional conditions specified pursuant to Section 2.01 to be applicable to the discharge of Securities of such series pursuant to this Section 8.01; (6) such deposit and discharge shall not cause the Trustee to have a conflicting interest as defined in TIA Section 310(b); and (7) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the passage of 91 days following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally. In such event, this Indenture shall cease to be of further effect (except as set forth in this paragraph), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging satisfaction and discharge under this Indenture. However, the Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive until all Securities of such series are no longer outstanding. Thereafter, only the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's obligations in Section 8.03 shall survive with respect to Securities of such series. After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture with respect to the Securities of such series except for those surviving obligations specified above. -41- 46 In order to have money available on a payment date to pay principal of or premium (if any) on or interest or Additional Amounts on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. (c) If the Company has previously complied or is concurrently complying with Section 8.01(b) (other than any additional conditions specified pursuant to Section 2.01 that are expressly applicable only to covenant defeasance) with respect to Securities of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities of such series as contemplated by Section 2.01, the Company may elect to be discharged ("legal defeasance") from its obligations to make payments with respect to Securities of such series, if: (1) no Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof shall have occurred at any time during the period ending on the 91st day after the date of deposit contemplated by Section 8.01(b) (it being understood that this condition shall not be deemed satisfied until the expiration of such period); (2) unless otherwise specified with respect to Securities of such series as contemplated by Section 2.01, the Company has delivered to the Trustee an Opinion of Counsel from counsel reasonably acceptable to the Trustee to the effect referred to in Section 8.01(b)(4) with respect to such legal defeasance; (3) the Company has complied with any other conditions specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of such series pursuant to this Section 8.01(c); and (4) the Company has delivered to the Trustee a Company Request requesting such legal defeasance of the Securities of such series and an Officers' Certificate stating that all conditions precedent with respect to such legal defeasance of the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect. In such event, the Company will be discharged from its obligations under this Indenture and the Securities of such series to pay principal of, premium (if any) and interest on, and any Additional Amounts with respect to Securities of such series, the Company's obligations under Sections 4.01, 4.02 and 5.01 shall terminate with respect to such Securities, and the entire indebtedness of the Company evidenced by such Securities shall be deemed paid and discharged. (d) If and to the extent additional or alternative means of satisfaction, discharge or defeasance of Securities of a series are specified to be applicable to such series as contemplated by Section 2.01, the Company may terminate any or all of its obligations under this Indenture with respect to Securities of a series and any or all of its obligations under the Securities of such series if it fulfills such other means of satisfaction and discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the Securities of such series. -42- 47 (e) If Securities of any series subject to subsections (a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory or optional sinking fund provisions, the terms of the applicable trust arrangement shall provide for such redemption, and the Company shall make such arrangements as are reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company. Section 8.02 Application of Trust Money. The Trustee or a trustee reasonably satisfactory to the Trustee and the Company shall hold in trust money or Government Obligations deposited with it pursuant to Section 8.01 hereof. It shall apply the deposited money and the money from Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series with respect to which the deposit was made. Section 8.03 Repayment to Company. The Trustee and the Paying Agent shall promptly pay to the Company at any time upon the written request of the Company any excess money or Government Obligations (or proceeds therefrom) held by them. Subject to the requirements of any applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium (if any), interest or any Additional Amounts that remain unclaimed for two years after the date upon which such payment shall have become due. After payment to the Company, Holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and the Paying Agent with respect to such money shall cease. Section 8.04 Reinstatement. If the Trustee or the Paying Agent is unable to apply any money or Government Obligations deposited with respect to Securities of any series in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Securities of such series and under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 8.01; provided, however, that if the Company has made any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Company shall be -43- 48 subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or the Paying Agent. ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS Section 9.01 Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities without the consent of any Holder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to comply with Section 5.01; (3) to provide for uncertificated Securities in addition to or in place of certificated Securities, or to provide for the issuance of bearer Securities (with or without coupons); (4) to provide any security for any series of Securities; (5) to comply with any requirement in order to effect or maintain the qualification of this Indenture under the TIA; (6) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company; (7) to add any additional Events of Default with respect to all or any series of the Securities (and, if such Events of Default are applicable to less than all series of Securities, specifying the series to which such Events of Default are applicable); (8) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision; (9) to establish the form or terms of Securities of any series as permitted by Section 2.01; -44- 49 (10) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Section 8.01; provided, however, that any such action shall not adversely affect the interest of the Holders of Securities of such series or any other series of Securities in any material respect; or (11) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.08. Upon the request of the Company, accompanied by a Board Resolution, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained. After an amendment, supplement or waiver under this Section 9.01 becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver. Section 9.02 With Consent of Holders. Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture with the written consent (including consents obtained in connection with a tender offer or exchange offer for Securities of any one or more series or all series or a solicitation of consents in respect of Securities of any one or more series or all series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of each such series (but the terms of such offer or solicitation may vary from series to series)) of the Holders of at least a majority in principal amount of the then outstanding Securities of all series affected by such amendment or supplement (acting as one class). Upon the request of the Company, accompanied by a Board Resolution, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall join with the Company in the execution of such amendment or supplemental indenture. 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. -45- 50 The Holders of a majority in principal amount of the then outstanding Securities of one or more series may waive compliance in a particular instance by the Company with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series (but the terms of such offer or solicitation may vary from series to series)). However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not: (1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or change the time for payment of interest, including default interest, on any Security; (3) reduce the principal of, premium on or any mandatory sinking fund payment with respect to, or change the Stated Maturity of, any Security or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02; (4) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed; (5) change any obligation of the Company to pay Additional Amounts with respect to any Security; (6) change the coin or currency in which any Security or any premium, interest or Additional Amounts with respect thereto are payable; (7) impair the right to institute suit for the enforcement of any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06; (8) make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07 or make any change in this sentence of Section 9.02; or (9) waive a continuing Default or Event of Default in the payment of principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities. -46- 51 A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one or more particular series of Securities, or that modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Company in a notice furnished to Holders in accordance with the terms of this Indenture. Section 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect. Section 9.04 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. The Company may, but shall not be obligated to, fix a record date (which need not comply with Section 316(c) of the TIA) for the purpose of determining the Holders of Securities of any series entitled to consent to any amendment, supplement or waiver or to take any other action under this Indenture. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it is of the type described in any of clauses (1) through (9) of Section 9.01 hereof. In -47- 52 such case, the amendment, supplement or waiver shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder's Security. Section 9.05 Notation on or Exchange of Securities. If an amendment or supplement changes the terms of an outstanding Security, the Company may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security at the request of the Company regarding the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment or supplement. Securities of any series authenticated and delivered after the execution of any amendment or supplement may, and shall if required by the Company, bear a notation in form approved by the Company as to any matter provided for in such amendment or supplement. Section 9.06 Trustee to Sign Amendments, etc. The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment to supplement, the Trustee shall be entitled to receive, and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of Counsel provided at the expense of the Company as conclusive evidence that such amendment or supplement is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE X MISCELLANEOUS Section 10.01 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control. Section 10.02 Notices. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other's address: -48- 53 If to the Company: Seitel, Inc. 50 Briar Hollow Lane 7th Floor, West Building Houston, Texas 77027 Attention: Chief Financial Officer If to the Trustee: The First National Bank of Chicago 1 North State Street, 9th Floor Mail Suite IL1-0126 Chicago, Illinois 60602 Attention: Corporate Trust Administration The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder's address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notice to the Trustee, it is duly given only when received. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. All notices or communications, including without limitation notices to the Trustee or the Company by Holders, shall be in writing, except as otherwise set forth herein. In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of -49- 54 notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice. Section 10.03 Communication by Holders with Other Holders. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). Section 10.04 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee at the expense of the Company; (1) an Officers' Certificate (which shall include the statements set forth in Section 10.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel (which shall include the statements set forth in Section 10.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. Section 10.05 Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)) and shall include: (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and -50- 55 (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with. Section 10.06 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or the Paying Agent may take reasonable rules and set reasonable requirements for its functions. Section 10.07 Legal Holidays. If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. Section 10.08 No Recourse Against Others. A director, officer, employee, stockholder, partner or other owner of the Company or the Trustee, as such, shall not have any liability for any obligations of the Company under the Securities or for any obligations of the Company or the Trustee under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Securities. Section 10.09 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Section 10.10 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any other Subsidiary of the Company. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 10.11 Successors. All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. -51- 56 Section 10.12 Severability. 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, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby. Section 10.13 Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 10.14 Table of Contents; Headings; etc. The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. Section 10.15 Agent for Service of Process. The Company hereby designates CT Corporation System, currently located at 1633 Broadway, New York, New York, as its authorized agent upon whom process may be served in any action, suit or proceeding that may be instituted in any State or Federal court sitting in the County of New York of the State of New York pertaining to this Indenture or any matter arising out of or related to this Indenture, and the Company will accept the jurisdiction of such court in such action, and waive, to the fullest extent permitted by applicable law, any defense based upon lack of personal jurisdiction or venue or forum non-conveniens. The Company may and shall (to the extent the process agent ceases to be able to be served on the basis contemplated herein), by written notice to the Trustee, designate such additional or alternative agents for service of process under this Section 10.15 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) are either (a) counsel for the Company or (b) a corporate service company which acts as agent for service of process for other persons in the ordinary course of its business and (iii) agrees to act as agent for service of process in accordance with this Section 10.15. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any holder of a Debenture, the Trustee shall deliver such information to such holder. Notwithstanding the foregoing, there shall, at all times, be at least one agent for service of process for the Company appointed and acting in accordance with this Section 10.15. A copy of any such process shall be sent or given to the Company at the address for notices specified in Section 10.02 hereof. The Company shall maintain the designation of such authorized agent until two years after termination of the Company's obligation under this Indenture pursuant to Section 8.01. -52- 57 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. SEITEL, INC. By: ----------------------------------- Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: ----------------------------------- Name: Title: -53- 58 SEITEL, INC. RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND INDENTURE, DATED AS OF , 1999 ---------------------
Section of Trust Indenture Section(s) of Act of 1939 Indenture ----------- --------- Section 310 (a)(1)................................................................................................7.10 (a)(2)................................................................................................7.10 (a)(3)......................................................................................Not Applicable (a)(4)......................................................................................Not Applicable (a)(5)................................................................................................7.10 (b).............................................................................................7.08, 7.10 Section 311 (a)...................................................................................................7.11 (b)...................................................................................................7.11 (c).........................................................................................Not Applicable Section 312 (a)...................................................................................................2.07 (b)..................................................................................................10.03 (c)..................................................................................................10.03 Section 313 (a)...................................................................................................7.06 (b)...................................................................................................7.06 (c)...................................................................................................7.06 (d)...................................................................................................7.06 Section 314 (a).............................................................................................4.03, 4.04 (b).........................................................................................Not Applicable (c)(1)...............................................................................................10.04 (c)(2)...............................................................................................10.04 (c)(3)......................................................................................Not Applicable (d).........................................................................................Not Applicable (e)..................................................................................................10.05 Section 315 (a)................................................................................................7.01(b) (b)...................................................................................................7.05 (c)................................................................................................7.01(a) (d)................................................................................................7.01(c) (d)(1)..........................................................................................7.01(c)(1) (d)(2)..........................................................................................7.01(c)(2) (d)(3)..........................................................................................7.01(c)(3) (e)...................................................................................................6.11
-54- 59 SEITEL, INC. RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND INDENTURE, DATED AS OF , 1999 ---------------------
Section of Trust Indenture Section(s) of Act of 1939 Indenture ----------- --------- Section 316 (a)(1)(A).............................................................................................6.05 (a)(1)(B).............................................................................................6.04 (a)(2)......................................................................................Not Applicable (a)(last sentence)....................................................................................2.11 (b)...................................................................................................6.07 Section 317 (a)(1)................................................................................................6.08 (a)(2)................................................................................................6.09 (b)...................................................................................................2.06 Section 318 (a)..................................................................................................10.01
- ------------------- Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. -55- EX-4.11 10 FORM OF INDENTURE 1 EXHIBIT 4.11 ================================================================================ SEITEL, INC., AS ISSUER, AND THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE --------------------------------- INDENTURE DATED AS OF ____________, ____ --------------------------------- SUBORDINATED DEBT SECURITIES ================================================================================ 2 SEITEL, INC. RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND INDENTURE, DATED AS OF ________________, ____ -----------------------------------------------------
SECTION OF TRUST INDENTURE SECTION(S) OF ACT OF 1939 INDENTURE - --------------------- --------------- Section 310 (a)(1)............................................................................... 7.10 (a)(2)............................................................................... 7.10 (a)(3)............................................................................... Not Applicable (a)(4)............................................................................... Not Applicable (a)(5)............................................................................... 7.10 (b).................................................................................. 7.08, 7.10 Section 311 (a).................................................................................. 7.11 (b).................................................................................. 7.11 (c).................................................................................. Not Applicable Section 312 (a).................................................................................. 2.07 (b).................................................................................. 11.03 (c).................................................................................. 11.03 Section 313 (a).................................................................................. 7.06 (b).................................................................................. 7.06 (c).................................................................................. 7.06 (d).................................................................................. 7.06 Section 314 (a).................................................................................. 4.03, 4.04 (b).................................................................................. Not Applicable (c)(1)............................................................................... 11.04 (c)(2)............................................................................... 11.04 (c)(3)............................................................................... Not Applicable (d).................................................................................. Not Applicable (e).................................................................................. 11.05 Section 315 (a).................................................................................. 7.01(b) (b).................................................................................. 7.05 (c).................................................................................. 7.01(a) (d).................................................................................. 7.01(c) (d)(1)............................................................................... 7.01(c)(1) (d)(2)............................................................................... 7.01(c)(2) (d)(3)............................................................................... 7.01(c)(3) (e).................................................................................. 6.11 Section 316 (a)(1)(A)............................................................................ 6.05 (a)(1)(B)............................................................................ 6.04 (a)(2)............................................................................... Not Applicable (a)(last sentence)................................................................... 2.11
3
SECTION OF TRUST INDENTURE SECTION(S) OF ACT OF 1939 INDENTURE - --------------------- --------------- (b).................................................................................. 6.07 Section 317 (a)(1)............................................................................... 6.08 (a)(2)............................................................................... 6.09 (b).................................................................................. 2.06 Section 318 (a).................................................................................. 11.01
- ---------- Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. 4 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE......................................................1 SECTION 1.01 Definitions..............................................................................1 SECTION 1.02 Other Definitions........................................................................7 SECTION 1.03 Incorporation by Reference of Trust Indenture Act........................................7 SECTION 1.04 Rules of Construction....................................................................8 ARTICLE II THE SECURITIES..................................................................................8 SECTION 2.01 Amount Unlimited; Issuable in Series.....................................................8 SECTION 2.02 Denominations...........................................................................11 SECTION 2.03 Forms Generally.........................................................................11 SECTION 2.04 Execution, Authentication, Delivery and Dating..........................................12 SECTION 2.05 Registrar and Paying Agent..............................................................13 SECTION 2.06 Paying Agent to Hold Money in Trust.....................................................14 SECTION 2.07 Holder Lists............................................................................14 SECTION 2.08 Transfer and Exchange...................................................................15 SECTION 2.09 Replacement Securities..................................................................15 SECTION 2.10 Outstanding Securities..................................................................16 SECTION 2.11 Original Issue Discount and Treasury Securities.........................................16 SECTION 2.12 Temporary Securities....................................................................16 SECTION 2.13 Cancellation............................................................................16 SECTION 2.14 Payments; Defaulted Interest............................................................17 SECTION 2.15 Persons Deemed Owners...................................................................17 SECTION 2.16 Computation of Interest.................................................................18 SECTION 2.17 Global Securities; Book-Entry Provisions................................................18 ARTICLE III REDEMPTION.....................................................................................20 SECTION 3.01 Applicability of Article................................................................20 SECTION 3.02 Notice to the Trustee...................................................................20 SECTION 3.03 Selection of Securities To Be Redeemed..................................................20 SECTION 3.04 Notice of Redemption....................................................................21 SECTION 3.05 Effect of Notice of Redemption..........................................................22 SECTION 3.06 Deposit of Redemption Price.............................................................22 SECTION 3.07 Securities Redeemed or Purchased in Part................................................22 SECTION 3.08 Purchase of Securities..................................................................23 SECTION 3.09 Mandatory and Optional Sinking Funds....................................................23 SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities...................................23 SECTION 3.11 Redemption of Securities for Sinking Fund...............................................23
-i- 5 ARTICLE IV COVENANTS......................................................................................24 SECTION 4.01 Payment of Securities...................................................................24 SECTION 4.02 Maintenance of Office or Agency.........................................................25 SECTION 4.03 SEC Reports; Financial Statements.......................................................25 SECTION 4.04 Compliance Certificate..................................................................26 SECTION 4.05 Corporate Existence.....................................................................26 SECTION 4.06 Maintenance of Properties...............................................................26 SECTION 4.07 Payment of Taxes and Other Claims.......................................................27 SECTION 4.08 Waiver of Stay, Extension or Usury Laws.................................................27 SECTION 4.09 Additional Amounts......................................................................27 ARTICLE V SUCCESSORS.....................................................................................28 SECTION 5.01 Limitations on Mergers and Consolidations...............................................28 SECTION 5.02 Successor Person Substituted............................................................29 ARTICLE VI DEFAULTS AND REMEDIES..........................................................................29 SECTION 6.01 Events of Default.......................................................................29 SECTION 6.02 Acceleration............................................................................31 SECTION 6.03 Other Remedies..........................................................................31 SECTION 6.04 Waiver of Existing or Past Defaults.....................................................31 SECTION 6.05 Control by Majority.....................................................................32 SECTION 6.06 Limitations on Suits....................................................................32 SECTION 6.07 Rights of Holders to Receive Payment....................................................33 SECTION 6.08 Collection Suit by Trustee..............................................................33 SECTION 6.09 Trustee May File Proofs of Claim........................................................33 SECTION 6.10 Priorities..............................................................................34 SECTION 6.11 Undertaking for Costs...................................................................34 ARTICLE VII TRUSTEE........................................................................................34 SECTION 7.01 Duties of Trustee.......................................................................34 SECTION 7.02 Rights of Trustee.......................................................................36 SECTION 7.03 May Hold Securities.....................................................................36 SECTION 7.04 Trustee's Disclaimer....................................................................36 SECTION 7.05 Notice of Defaults......................................................................36 SECTION 7.06 Reports by Trustee to Holders...........................................................37 SECTION 7.07 Compensation and Indemnity..............................................................37 SECTION 7.08 Replacement of Trustee..................................................................38 SECTION 7.09 Successor Trustee by Merger, etc........................................................40 SECTION 7.10 Eligibility; Disqualification...........................................................40 SECTION 7.11 Preferential Collection of Claims Against Company.......................................40
-ii- 6 ARTICLE VIII DISCHARGE OF INDENTURE.........................................................................41 SECTION 8.01 Termination of Company's Obligations....................................................41 SECTION 8.02 Application of Trust Money..............................................................45 SECTION 8.03 Repayment to Company....................................................................45 SECTION 8.04 Reinstatement...........................................................................45 ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS.........................................................46 SECTION 9.01 Without Consent of Holders..............................................................46 SECTION 9.02 With Consent of Holders.................................................................47 SECTION 9.03 Compliance with Trust Indenture Act.....................................................49 SECTION 9.04 Revocation and Effect of Consents.......................................................49 SECTION 9.05 Notation on or Exchange of Securities...................................................50 SECTION 9.06 Trustee to Sign Amendments, etc.........................................................50 ARTICLE X SUBORDINATION..................................................................................50 SECTION 10.01 Securities Subordinated to Senior Indebtedness.........................................50 SECTION 10.02 No Payment on Securities in Certain Circumstances......................................51 SECTION 10.03 Securities Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization.....................................................52 SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness................................53 SECTION 10.05 Obligations of the Company Unconditional...............................................54 SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice.........................................................................................54 SECTION 10.07 Application by Trustee of Amounts Deposited with It....................................54 SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Indebtedness......................................................55 SECTION 10.09 Trustee to Effectuate Subordination of Securities......................................55 SECTION 10.10 Right of Trustee to Hold Senior Indebtedness...........................................56 SECTION 10.11 Article X Not to Prevent Events of Default.............................................56 SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.........................56 SECTION 10.13 Article Applicable to Paying Agent.....................................................56 ARTICLE XI MISCELLANEOUS..................................................................................57 SECTION 11.01 Trust Indenture Act Controls...........................................................57 SECTION 11.02 Notices................................................................................57 SECTION 11.03 Communication by Holders with Other Holders............................................58 SECTION 11.04 Certificate and Opinion as to Conditions Precedent.....................................58 SECTION 11.05 Statements Required in Certificate or Opinion..........................................58 SECTION 11.06 Rules by Trustee and Agents............................................................59 SECTION 11.07 Legal Holidays.........................................................................59 SECTION 11.08 No Recourse Against Others.............................................................59 SECTION 11.09 Governing Law..........................................................................60 SECTION 11.10 No Adverse Interpretation of Other Agreements..........................................60
-iii- 7 SECTION 11.11 Successors.............................................................................60 SECTION 11.12 Severability...........................................................................60 SECTION 11.13 Counterpart Originals..................................................................60 SECTION 11.14 Table of Contents; Headings, etc.......................................................60 SECTION 11.15 Agent for Service of Process...........................................................60
-iv- 8 INDENTURE, dated as of , between Seitel, Inc., a Delaware corporation (the "Company"), and The First National Bank of Chicago, a national banking association, as trustee (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 unsecured subordinated debentures, notes or other evidences of indebtedness (the "Securities") to be issued from time to time in one or more series as provided in this Indenture: ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01 Definitions. "Additional Amounts" means any additional amounts required by the express terms of a Security or by or pursuant to a Board Resolution, under circumstances specified therein or pursuant thereto, to be paid by the Company with respect to certain taxes, assessments or other governmental charges imposed on certain Holders and that are owing to such Holders. "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 purposes of this definition, "control" of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing. "Agent" means any Registrar or Paying Agent. "Bankruptcy Law" means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors. "Board of Directors" means the Board of Directors of the Company or any committee thereof duly authorized, with respect to any particular matter, to act by or on behalf of the Board of Directors of the Company. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means any day that is not a Legal Holiday. -1- 9 "Capital Stock" of any Person means and includes any and all shares, interests, rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests (however designated) in the equity (which includes, but is not limited to, common stock, preferred stock and partnership and joint venture interests) of such Person (excluding any debt securities that are convertible into, or exchangeable for, such equity). "Capitalized Lease Obligation" of any Person means any obligation of such Person to pay rent or other amounts under a lease of property, real or personal, that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP. "Common Equity" of any Person means and includes all Capital Stock of such Person that is generally entitled to (i) vote in the election of directors of such Person or (ii) if such Person is not a corporation, vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management and policies of such Person. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "Company Order" and "Company Request" mean, respectively, a written order or request signed in the name of the Company by two Officers of the Company, and delivered to the Trustee. "Corporate Trust Office of the Trustee" shall be the address specified in Section 11.02 and may be located at such other address as the Trustee may give notice to the Company. "Default" means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default. "Depositary" means, with respect to the Securities of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities of such series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter, "Depositary" shall mean or include such successor. "Designated Senior Indebtedness," unless otherwise provided with respect to the Securities of a series as contemplated by Section 2.01, means any Senior Indebtedness that (i) in the instrument evidencing the same or the assumption or guarantee thereof (or related documents to which the Company is a party) is expressly designated as "Designated Senior Indebtedness" for purposes of this Indenture and (ii) satisfies such other conditions as may be provided with respect to the Securities of such series; provided that such instruments or documents may place limitations -2- 10 and conditions on the right of such Senior Indebtedness to exercise the rights of Designated Senior Indebtedness. "Disqualified Capital Stock" means, when used with respect to the Securities of any series, (a) except as set forth in (b), with respect to any Person, Capital Stock of such Person that, by its terms or by the terms of any security into which it is convertible, exercisable or exchangeable, is, or upon the happening of an event or the passage of time would be, required to be redeemed or repurchased (including at the option of the holder thereof) by such Person or any Subsidiary of such Person, in whole or in part, on or prior to the Stated Maturity of the Securities of such series, and (b) with respect to any Subsidiary of such Person (including with respect to any Subsidiary of the Company), any Capital Stock other than any Common Equity with no preference, privileges, or redemption or repayment provisions. "Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and any successor statute. "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time. "Global Security" of any series means a Security of that series that is issued in global form in the name of the Depositary with respect thereto or its nominee. "Government Obligations" means, with respect to a series of Securities, direct noncallable obligations of the government that issues the currency in which the Securities of the series are payable for the payment of which the full faith and credit of such government is pledged, or noncallable obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is fully and unconditionally guaranteed as a full faith and credit obligation by such government. "Holder" means a Person in whose name a Security is registered. "Indebtedness" of any Person at any date means, without duplication, (a) all indebtedness or obligations of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person in respect of letters of credit or other similar instruments (or reimbursement obligations with respect thereto), other than standby letters of credit and bid or performance bonds -3- 11 issued by such Person in the ordinary course of business, to the extent not drawn or, to the extent drawn, if such drawing is reimbursed not later than 30 Business Days following demand for reimbursement, (d) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred in the ordinary course of business, (e) all Capitalized Lease Obligations of such Person, (f) all Indebtedness of others secured by a lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, and (g) all Indebtedness of others guaranteed by such Person to the extent of such guarantee. "Indenture" means this instrument as originally executed or as it may from time to time be amended or supplemented by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, and includes the terms of particular series of Securities established as contemplated by Section 2.01. "interest" means, with respect to an Original Issue Discount Security that by its terms bears interest only after Maturity, interest payable after Maturity. "Interest Payment Date," when used with respect to any Security, has the meaning assigned to such term in the Security as contemplated by Section 2.01. "Issue Date" means, with respect to Securities of a series, the date on which the Securities of such series are originally issued under this Indenture. "Junior security" of a Person means, when used with respect to the Securities of any series, any Qualified Capital Stock of such Person or any Indebtedness of such Person that is subordinated in right of payment to the Securities of such series and has no scheduled installment of principal due, by redemption, sinking fund payment or otherwise, on or prior to the Stated Maturity of the Securities of such series. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in any of The City of New York, New York, Houston, Texas or a Place of Payment are authorized or obligated by law, regulation or executive order to remain closed. "Maturity" means, with respect to any Security, the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof, or by declaration of acceleration, call for redemption or otherwise. "Officer" means the Chairman of the Board, the President, any Vice Chairman of the Board, any Vice President, the chief financial officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of a Person. "Officers' Certificate" means a certificate signed by two Officers of a Person, one of whom must be the Person's chief executive officer, chief financial officer or chief accounting officer. -4- 12 "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. Such counsel may be an employee of or counsel to the Company or the Trustee. "Original Issue Discount Security" means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02. "Person" means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind. "Place of Payment" means, with respect to the Securities of any series, the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on the Securities of that series are payable as specified in accordance with Section 2.01. "Qualified Capital Stock" means any Capital Stock of the Company that is not Disqualified Capital Stock. "Redemption Date" means, with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price" means, with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture. "SEC" means the Securities and Exchange Commission. "Securities" has the meaning stated in the preamble of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Custodian" means, with respect to Securities of a series issued in global form, the Trustee for Securities of such series, acting in its capacity as custodian with respect to the Securities of such series, or any successor entity thereto. "Senior Indebtedness" of the Company, unless otherwise provided with respect to the Securities of series as contemplated by Section 2.10, means, (i) all Indebtedness of the Company, whether currently outstanding or hereafter issued, unless, by the terms of the instrument creating or evidencing such Indebtedness, it is provided that such Indebtedness is not superior in right of payment to the Securities or to other Indebtedness which is pari passu with or subordinated to the Securities, and (ii) any modifications, refunding, deferrals, renewals or extensions of any such Indebtedness or securities, notes or other evidences of Indebtedness issued in exchange for such Indebtedness; provided that in no event shall "Senior Indebtedness" include (i) Indebtedness of the Company for borrowed money owed or owing to any Subsidiary of the Company or any officer, -5- 13 director or employee of the Company or any Subsidiary of the Company or (ii) Indebtedness of the Company issued under the indenture to be entered into between the Company and The First National Bank of Chicago, as trustee, relating to junior subordinated debentures of the Company. "Significant Subsidiary" means any "significant subsidiary" of the Company, as such term is defined in Regulation S-X, Title 17, Code of U.S. Federal Regulations Part 210, as in effect on the date hereof. "Stated Maturity" means, when used with respect to any Security or any installment of principal thereof or premium or interest thereon, the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or premium or interest is due and payable. "Subsidiary" means, as to any Person, any corporation, association or other business entity in which such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries own more than 50% of the total combined voting power of all Common Equity, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such Person or one or more of its Subsidiaries or such Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa- 77bbbb), as in effect on the date hereof. "Trust Officer" means any officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Trustee" means the Person named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture, and thereafter "Trustee" means each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series means the Trustee with respect to Securities of that series. "United States" means the United States of America (including the States and the District of Columbia) and its territories, its possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands) and other areas subject to its jurisdiction. "United States Alien" means any Person who, for United States federal income tax purposes, is a foreign corporation, a nonresident alien individual, a nonresident alien or foreign fiduciary of an estate or trust, or a foreign partnership. -6- 14 "U.S. Government Obligations" means Government Obligations with respect to Securities payable in Dollars. SECTION 1.02 Other Definitions.
Defined Term in Section - ---------------------- ---------- "Bankruptcy Custodian"............................................... 6.01 "Conversion Event"................................................... 6.01 "covenant defeasance"................................................ 8.01 "Event of Default"................................................... 6.01 "legal defeasance"................................................... 8.01 "mandatory sinking fund payment"..................................... 3.09 "optional sinking fund payment"...................................... 3.09 "Paying Agent"....................................................... 2.05 "Payment Default".................................................... 10.02 "Payment Blocking Notice"............................................ 10.02 "Registrar".......................................................... 2.05 "Successor".......................................................... 5.01
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 Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company or any other obligor on the Securities. All 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 under the TIA have the meanings so assigned to them. -7- 15 SECTION 1.04 Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) all references in this Indenture to Articles and Sections are references to the corresponding Articles and Sections in and of this Indenture. ARTICLE II THE SECURITIES SECTION 2.01 Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth, or determined in the manner provided, in an Officers' Certificate or in a Company Order, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (1) the title of the Securities of the series (which shall distinguish the Securities of the series from the Securities of all other series); (2) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05); (3) whether any Securities of the series are to be issuable initially in temporary global form and whether any Securities of the series are to be issuable in permanent global form, as Global Securities or otherwise, and, if so, whether beneficial owners of interests in -8- 16 any such Global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 2.17, and the initial Depositary and Security Custodian, if any, for any Global Security or Securities of such series; (4) (i) if other than provided herein, the Person to whom any interest on Securities of the series shall be payable, and (ii) the manner in which any interest payable on a temporary Global Security on any Interest Payment Date will be paid if other than in the manner provided in Section 2.14; (5) the date or dates on which the principal of (and premium, if any, on) the Securities of the series is payable or the method of determination thereof; (6) the rate or rates, or the method of determination thereof, at which the Securities of the series shall bear interest, if any, whether and under what circumstances Additional Amounts with respect to such Securities shall be payable, the date or dates from which any interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the record date for the interest payable on any Securities on any Interest Payment Date; (7) the place or places where, subject to the provisions of Section 4.02, the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable; (8) the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, if the Company is to have that option, and the manner in which the Company may exercise any such option, if different from those set forth herein; (9) the obligation, if any, of the Company to redeem, purchase or repay Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices (whether denominated in cash, securities or otherwise) at which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid in whole or in part pursuant to such obligation; (10) if other than denominations of $1,000 and any integral multiple thereof, the denomination in which any Securities of that series shall be issuable; (11) the form, including Capital Stock, other debt securities (including Securities), warrants, other equity securities, or any other securities or property of the Company or any -9- 17 other Person in which payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series shall be payable; (12) if the amount of payments of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series may be determined with reference to any commodities, currencies or indices, values, rates or prices or any other index or formula, the manner in which such amounts shall be determined; (13) if other than the entire principal amount thereof, the portion of the principal amount of Securities of the series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.02; (14) any additional means of satisfaction and discharge of this Indenture and any additional conditions or limitations to discharge with respect to Securities of the series pursuant to Article VIII or any modifications of or deletions from such conditions or limitations; (15) any deletions or modifications of or additions to the Events of Default set forth in Section 6.01 or covenants of the Company set forth in Article IV pertaining to the Securities of the series; (16) any restrictions or other provisions with respect to the transfer or exchange of Securities of the series, which may amend, supplement, modify or supersede those contained in this Article II; (17) if the Securities of the series are to be convertible into or exchangeable for Capital Stock, other debt securities (including Securities), warrants, other equity securities, or any other securities or property of the Company or any other Person, at the option of the Company or the Holder or upon the occurrence of any condition or event, the terms and conditions for such conversion or exchange; (18) any modifications to, or qualifications contemplated by, the definition of "Designated Senior Indebtedness," any modifications to the definition of "Senior Indebtedness" or any modifications to Article X or the other provisions regarding subordination with respect to the Securities of such series; and (19) any other terms of the series (which terms shall not be prohibited by the provisions of this Indenture). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 2.03) set forth, or determined in the manner provided, in -10- 18 the Officers' Certificate or Company Order referred to above or in any such indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action, together with such Board Resolution, shall be set forth in an Officers' Certificate or certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate or Company Order setting forth the terms of the series. The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article X. SECTION 2.02 Denominations. The Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series denominated in Dollars shall be issuable in denominations of $1,000 and any integral multiples thereof. SECTION 2.03 Forms Generally. The Securities of each series shall be in fully registered form and in substantially such form or forms (including temporary or permanent global form) established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto. The Securities may have notations, legends or endorsements required by law, securities exchange rules, the Company's certificate of incorporation or other similar governing documents, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). A copy of the Board Resolution establishing the form or forms of Securities of any series shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 2.04 for the authentication and delivery of such Securities. The definitive Securities of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof. The Trustee's certificate of authentication shall be in substantially the following form: "This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. -11- 19 THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: ----------------------------- Authorized Signatory". SECTION 2.04 Execution, Authentication, Delivery and Dating. At least one Officer of the Company shall sign the Securities of each series on behalf of the Company by manual or facsimile signature. If an Officer of the Company whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall be valid nevertheless. A Security shall not be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of an authorized signatory of the Trustee, which signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall authenticate and deliver Securities of a series for original issue upon a Company Order for the authentication and delivery of such Securities or pursuant to such procedures reasonably acceptable to the Trustee as may be specified from time to time by Company Order. Such order shall specify the amount of the Securities of such series to be authenticated, the date on which the original issue of Securities of such series is to be authenticated, the name or names of the initial Holder or Holders and any other terms of the Securities of such series not otherwise determined. If provided for in such procedures, such Company Order may authorize (1) authentication and delivery of Securities of such series for original issue from time to time, with certain terms (including, without limitation, the Maturity date or dates, original issue date or dates and interest rate or rates) that differ from Security to Security and (2) may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent, which instructions shall be promptly confirmed in writing. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions or any other method permitted by Section 2.01, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive (in addition to the Company Order referred to above and the other documents required by Section 11.04), and (subject to Section 7.01) shall be fully protected in relying upon, (a) an Officers' Certificate setting forth the Board Resolution and, if applicable, an appropriate record of any action taken pursuant thereto, as contemplated by the last paragraph of Section 2.01; and -12- 20 (b) an Opinion of Counsel to the effect that: (i) the form of such Securities has been established in conformity with the provisions of this Indenture; (ii) the terms of such Securities have been established in conformity with the provisions of this Indenture; and (iii) such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws in effect from time to time affecting the rights of creditors generally, and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Officers' Certificate and Opinion of Counsel at the time of issuance of each such Security, but such Officers' Certificate and Opinion of Counsel shall be delivered at or before the time of issuance of the first Security of the series to be issued. The Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture would affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner not reasonably acceptable to the Trustee. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company. Each Security shall be dated the date of its authentication. SECTION 2.05 Registrar and Paying Agent. The Company shall maintain an office or agency for each series of Securities where Securities of such series may be presented for registration of transfer or exchange ("Registrar") and an office or agency where Securities of such series may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities of each series and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The -13- 21 term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. 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 Agent not a party to this Indenture. The Company may change any Paying Agent or Registrar without notice to any Holder. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints the Trustee as Registrar and Paying Agent. SECTION 2.06 Paying Agent to Hold Money in Trust. With respect to each series of Securities, the Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders of such series or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, or interest on or any Additional Amounts with respect to Securities of such series and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. 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. Upon payment over to the Trustee and upon accounting for any funds disbursed, the Paying Agent (if other than the Company or a Subsidiary of the Company) shall have no further liability for the money. If the Company or a Subsidiary of the Company acts as Paying Agent with respect to a series of Securities, it shall segregate and hold in a separate trust fund for the benefit of the Holders of such series all money held by it as Paying Agent. Each Paying Agent shall otherwise comply with TIA Section 317(b). SECTION 2.07 Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of each series of Securities and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar with respect to a series of Securities, the Company shall furnish to the Trustee at least seven Business Days before each Interest Payment Date with respect to such series of Securities, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of such series, and the Company shall otherwise comply with TIA Section 312(a). -14- 22 SECTION 2.08 Transfer and Exchange. Except as set forth in Section 2.17 or as may be provided pursuant to Section 2.01, when Securities of any series are presented to the Registrar with the request to register the transfer of such Securities or to exchange such Securities for an equal principal amount of Securities of the same series of like tenor and of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its requirements and the requirements of this Indenture for such transactions are met; provided, however, that the Securities presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form reasonably satisfactory to the Registrar duly executed by the Holder thereof or by his attorney, duly authorized in writing, on which instruction the Registrar can rely. To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar's written request and submission of the Securities (other than Global Securities). No service charge shall be made to a Holder for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Section 2.12, 3.07 or 9.05). The Trustee shall authenticate Securities in accordance with the provisions of Section 2.04. Notwithstanding any other provisions of this Indenture to the contrary, the Company shall not be required to register the transfer or exchange of (a) any Security selected for redemption in whole or in part pursuant to Article III, except the unredeemed portion of any Security being redeemed in part or (b) any Security during the period beginning 15 Business Days before the mailing of notice of any offer to repurchase Securities of the series required pursuant to the terms thereof or of redemption of Securities of a series to be redeemed and ending at the close of business on the date of mailing. SECTION 2.09 Replacement Securities. If any mutilated Security of a series is surrendered to the Trustee, or if the Holder of a Security of a series claims that the Security has been destroyed, lost or stolen and the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of such Security, the Company shall issue and the Trustee shall authenticate a replacement Security of the same series if the Trustee's requirements are met. If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. If required by the Trustee or the Company, such Holder must furnish an indemnity bond that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent or any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Company and the Trustee may charge a Holder for their expenses in replacing a Security. Every replacement Security is an additional obligation of the Company. -15- 23 SECTION 2.10 Outstanding Securities. The Securities of a series outstanding at any time are all the Securities of that series authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Security effected by the Trustee hereunder and those described in this Section 2.10 as not outstanding. If a Security is replaced pursuant to Section 2.09, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. SECTION 2.11 Original Issue Discount and Treasury Securities. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, amendment, supplement, waiver or consent, (a) the principal amount of an Original Issue Discount Security shall be the principal amount thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 6.02 and (b) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded, except that, for the purpose of determining whether the Trustee shall be protected in relying upon any such direction, amendment, supplement, waiver or consent, only Securities with respect to which the Trustee has received written notice that they are so owned shall be so disregarded. SECTION 2.12 Temporary Securities. Until definitive Securities of any series are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities in exchange for temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities. SECTION 2.13 Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for -16- 24 registration of transfer, exchange, payment or redemption or for credit against any sinking fund payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, redemption, replacement or cancellation or for credit against any sinking fund. Unless the Company shall direct in writing that canceled Securities be returned to it, after written notice to the Company all canceled Securities held by the Trustee shall be disposed of in accordance with the usual disposal procedures of the Trustee, and the Trustee shall maintain a record of their disposal. The Company may not issue new Securities to replace Securities that have been paid or that have been delivered to the Trustee for cancellation. SECTION 2.14 Payments; Defaulted Interest. Unless otherwise provided as contemplated by Section 2.01 with respect to Securities of any series, interest (except defaulted interest) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Persons who are registered Holders of that Security at the close of business on the record date next preceding such Interest Payment Date. Unless otherwise provided with respect to the Securities of any series, the Company will pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities in Dollars. The Company may, however, pay such amounts (1) by wire transfer with respect to Global Securities or (2) by check payable in such money mailed to a Holder's registered address with respect to any Securities. If the Company defaults in a payment of interest on the Securities of any series, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest on the defaulted interest, in each case at the rate provided in the Securities of such series and in Section 4.01. The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. At least 15 days before any special record date selected by the Company, the Company (or the Trustee, in the name of and at the expense of the Company upon 20 days' prior written notice from the Company setting forth such record date and the interest amount to be paid) shall mail to Holders of any such series of Securities a notice that states the special record date, the related payment date and the amount of such interest to be paid. SECTION 2.15 Persons Deemed Owners. The Company, the Trustee, any Agent and any authenticating agent may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of, premium (if any) or interest on, or any Additional Amounts with respect to such Security and for all other purposes. None of the Company, the Trustee, any Agent or any authenticating agent shall be affected by any notice to the contrary. -17- 25 SECTION 2.16 Computation of Interest. Except as otherwise specified as contemplated by Section 2.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year comprising twelve 30-day months. SECTION 2.17 Global Securities; Book-Entry Provisions. If Securities of a series are issuable in global form as a Global Security, as contemplated by Section 2.01, then, notwithstanding clause (10) of Section 2.01 and the provisions of Section 2.02, any such Global Security shall represent such of the outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be reduced to reflect exchanges or redemptions. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of outstanding Securities represented thereby shall be made by the Trustee in such manner and upon instructions given by such Person or Persons as shall be specified in such Security or in a Company Order to be delivered to the Trustee pursuant to Section 2.04. Subject to the provisions of Section 2.04 and, if applicable, Section 2.12, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified in such Security or in the applicable Company Order. With respect to the Securities of any series that are represented by a Global Security, the Company authorizes the execution and delivery by the Trustee of a letter of representations or other similar agreement or instrument in the form customarily provided for by the Depositary appointed with respect to such Global Security. Any Global Security may be deposited with the Depositary or its nominee, or may remain in the custody of the Security Custodian therefor pursuant to a FAST Balance Certificate Agreement or similar agreement between the Trustee and the Depositary. If a Company Order has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 11.05 and need not be accompanied by an Opinion of Counsel. Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Security Custodian as its custodian, or under such Global Security, and the Depositary may be treated by the Company, the Security Custodian and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, (i) the registered holder of a Global Security of any series may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder of such series is entitled to take under this Indenture or the Securities of such series and (ii) nothing herein shall prevent the Company, the Security Custodian or any agent of the Company or the Security Custodian, from giving effect to any written certification, proxy or other authorization furnished by the Depositary or shall impair, as -18- 26 between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a beneficial owner of any Security. Notwithstanding Section 2.08, and except as otherwise provided pursuant to Section 2.01, transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred in accordance with the rules and procedures of the Depositary. Securities of any series shall be transferred to all beneficial owners of a Global Security of such series in exchange for their beneficial interests in that Global Security if, and only if, either (1) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for the Global Security of such series and a successor Depositary is not appointed by the Company within 90 days of such notice, (2) an Event of Default has occurred with respect to such series and is continuing and the Registrar has received a request from the Depositary to issue Securities of such series in lieu of all or a portion of that Global Security (in which case the Company shall deliver Securities of such series within 30 days of such request) or (3) the Company determines not to have the Securities of such series represented by a Global Security. In connection with any transfer of a portion of the beneficial interest in a Global Security of any series to beneficial owners pursuant to this Section 2.17, the Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Global Security of that series in an amount equal to the principal amount of the beneficial interest in the Global Security of that series to be transferred, and the Company shall execute, and the Trustee upon receipt of a Company Order for the authentication and delivery of Securities of that series shall authenticate and deliver, one or more Securities of the same series of like tenor and amount. In connection with the transfer of all the beneficial interests in a Global Security of any series to beneficial owners pursuant to this Section 2.17, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate principal amount of Securities of that series of authorized denominations. Neither the Company nor the Trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, Securities of any series by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such Securities. Neither the Company nor the Trustee shall be liable for any delay by the related Global Security Holder or the Depositary in identifying the beneficial owners, and each such Person may conclusively rely on, and shall be protected in relying on, instructions from such Global Security Holder or the Depositary for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Securities to be issued). Notwithstanding the provisions of Sections 2.03 and 2.14, unless otherwise specified as contemplated by Section 2.01 with respect to Securities of any series, payment of principal of and -19- 27 premium (if any) and interest on and any Additional Amounts with respect to any Global Security shall be made to the Person or Persons specified therein. ARTICLE III REDEMPTION SECTION 3.01 Applicability of Article. Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 2.01 for Securities of any series) in accordance with this Article III. SECTION 3.02 Notice to the Trustee. If the Company elects to redeem Securities of any series pursuant to this Indenture, it shall notify the Trustee of the Redemption Date and principal amount of Securities of such series to be redeemed. The Company shall so notify the Trustee at least 45 days before the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee) by delivering to the Trustee an Officers' Certificate stating that such redemption will comply with the provisions of this Indenture and of the Securities of such series. Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder of the Securities of such series and shall thereupon be void and of no effect. SECTION 3.03 Selection of Securities To Be Redeemed. If less than all of the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the outstanding Securities of such series not previously called for redemption, either pro rata, by lot or by such other method as the Trustee shall deem fair and appropriate. Such redemption may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series or of the principal amount of Global Securities of such series. The Trustee shall promptly notify the Company and the Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Securities of any series shall relate, in the case of any of the Securities -20- 28 redeemed or to be redeemed only in part, to the portion of the principal amount thereof which has been or is to be redeemed. SECTION 3.04 Notice of Redemption. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities of a series to be redeemed, at the address of such Holder appearing in the register of Securities for such series maintained by the Registrar. All notices of redemption shall identify the Securities to be redeemed and shall state: (1) the Redemption Date; (2) the Redemption Price; (3) that, unless the Company defaults in making the redemption payment, interest on Securities called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the Redemption Price plus accrued interest on and any Additional Amounts with respect to such Securities upon surrender to the Paying Agent of the Securities redeemed; (4) if any Security is to be redeemed in part, the portion of the principal amount thereof to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such Security to the Paying Agent, a new Security or Securities in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder; (5) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price plus accrued interest on and any Additional Amounts with respect to such Securities and the name and address of the Paying Agent; (6) that the redemption is for a sinking or analogous fund, if such is the case; and (7) the CUSIP number, if any, relating to such Securities. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company. If at the time notice of redemption shall be given the Company shall not have deposited with a Paying Agent and/or irrevocably directed the Trustee or a Paying Agent to apply, from money held by it available to be used for the redemption of Securities that are to be redeemed, -21- 29 an amount in cash sufficient to redeem all of the Securities called for redemption, including accrued interest to the Redemption Date, such notice shall state that it is subject to the receipt of the redemption monies by the Trustee or a Paying Agent on or before the Redemption Date and such notice shall be of no effect unless such monies are so received before such date. SECTION 3.05 Effect of Notice of Redemption. Once notice of redemption is mailed, subject to the last paragraph of Section 3.04, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price. Upon surrender to the Paying Agent, such Securities called for redemption shall be paid at the Redemption Price plus accrued interest on and any Additional Amounts with respect to such Securities, but interest installments whose maturity is on or prior to such Redemption Date will be payable on the relevant Interest Payment Dates to the Holders of record at the close of business on the relevant record dates specified pursuant to Section 2.01. SECTION 3.06 Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit with the Trustee or the Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.06) an amount of money in same day funds sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on and any Additional Amounts with respect to, the Securities or portions thereof which are to be redeemed on that date, other than Securities or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation. If the Company complies with the preceding paragraph, then, unless the Company defaults in the payment of such Redemption Price, plus accrued interest on and any Additional Amounts with respect to such Securities, interest on the Securities to be redeemed will cease to accrue on and after the applicable Redemption Date, whether or not such Securities are presented for payment, and the Holders of such Securities shall have no further rights with respect to such Securities except for the right to receive the Redemption Price, plus accrued interest on and any Additional Amounts with respect to such Securities, upon surrender of such Securities. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal of and premium, if any, any Additional Amounts, and accrued interest thereon, to the extent lawful, shall, until paid, bear interest from the Redemption Date at the rate specified pursuant to Section 2.01 or provided in the Securities or, in the case of Original Issue Discount Securities, such Securities' initial yield to Maturity. SECTION 3.07 Securities Redeemed or Purchased in Part. Upon surrender to the Paying Agent of a Security of any series to be redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge a new Security or Securities of the same series and of any authorized -22- 30 denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed. SECTION 3.08 Purchase of Securities. Unless otherwise specified as contemplated by Section 2.01, the Company and any Affiliate of the Company may at any time purchase or otherwise acquire Securities of any series in the open market or by private agreement. Such acquisition shall not operate as or be deemed for any purpose to be a redemption of the indebtedness represented by such Securities. Any Securities purchased or acquired by the Company may be delivered to the Trustee for cancellation and, upon such cancellation, the indebtedness represented thereby shall be deemed to be satisfied. Section 2.13 shall apply to all Securities so delivered. SECTION 3.09 Mandatory and Optional Sinking Funds. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment." Unless otherwise provided by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.10. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and by this Article III. SECTION 3.10 Satisfaction of Sinking Fund Payments with Securities. The Company may deliver outstanding Securities of a series (other than any previously called for redemption) and may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such series of Securities; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. SECTION 3.11 Redemption of Securities for Sinking Fund. Not less than 45 days prior (unless a shorter period shall be satisfactory to the Trustee) to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee a Company Order specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, that is to be satisfied by -23- 31 payment of cash and the portion thereof, if any, that is to be satisfied by delivery of or by crediting Securities of that series pursuant to Section 3.10 and will also deliver to the Trustee any Securities to be so delivered. Failure of the Company to deliver timely such Company Order and Securities specified in this paragraph shall not constitute a default but shall constitute the election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect thereof and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section. If the sinking fund payment or payments (mandatory or optional or both) to be made in cash on the next succeeding sinking fund payment date plus any unused balance of any preceding sinking fund payments made in cash shall exceed $100,000 or a lesser sum if the Company shall so request with respect to the Securities of any particular series, such cash shall be applied on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. If such amount shall be $100,000 or less and the Company makes no such request, then it shall be carried over until a sum in excess of $100,000 is available. Not less than 30 days before each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.03 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 3.05, 3.06 and 3.07. ARTICLE IV COVENANTS SECTION 4.01 Payment of Securities. The Company shall pay the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of each series on the dates and in the manner provided in the Securities of such series and in this Indenture. Principal, premium, interest and any Additional Amounts shall be considered paid on the date due if the Paying Agent, other than the Company or a Subsidiary of the Company, holds on that date money deposited by the Company designated for and sufficient to pay all principal, premium, interest and any Additional Amounts then due. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal of and premium (if any) on Securities of any series, at a rate equal to the then applicable interest rate on the Securities of that series to the extent lawful; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and any Additional Amount (without regard to any applicable grace period) on Securities of any series at the same rate to the extent lawful. -24- 32 SECTION 4.02 Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Securities an office or agency (which may be an office of the Trustee, the Registrar or the Paying Agent) where Securities of that series may be presented for registration of transfer or exchange, where Securities of that series may be presented for payment and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. Unless otherwise designated by the Company by written notice to the Trustee, such office or agency shall be the office of the Trustee in The City of New York, which, on the date hereof, is located at 14 Wall Street, 8th Floor, New York, New York 10005. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 4.03 SEC Reports; Financial Statements. The Company shall file with the Trustee, within 15 days after it files the same with the SEC, copies of the annual reports and 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) that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not subject to the requirements of such Section 13 or 15(d), the Company shall file with the Trustee, within 15 days after it would have been required to file the same with the SEC, financial statements, including any notes thereto (and with respect to annual reports, an auditors' report by a firm of established national reputation), and a "Management's Discussion and Analysis of Financial Condition and Results of Operations," both comparable to that which the Company would have been required to include in such annual reports, information, documents or other reports if the Company had been subject to the requirements of such Section 13 or 15(d). The Company shall file with the Trustee and the SEC, in accordance with rules and regulations prescribed from time to time by the SEC, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations. The Company shall transmit by mail to all Holders, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to this Section 4.03 as may be -25- 33 required by rules and regulations prescribed from time to time by the SEC. The Company shall also comply with the provisions of TIA Section 314(a). SECTION 4.04 Compliance Certificate. (a) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a statement signed by two Officers of the Company, which need not constitute an Officers' Certificate, complying with TIA Section 314(a)(4) and stating that in the course of performance by the signing Officers of the Company of their duties as such Officers of the Company they would normally obtain knowledge of the keeping, observing, performing and fulfilling by the Company of its obligations under this Indenture, and further stating, as to each such Officer signing such statement, that to his knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action the Company is taking or proposes to take with respect thereto). (b) The Company shall, so long as Securities of any series are outstanding, deliver to the Trustee, promptly upon any Officer of the Company becoming aware of any Default or Event of Default under this Indenture, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. SECTION 4.05 Corporate Existence. Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership and other existence of each of its Significant Subsidiaries and all rights (charter and statutory) and franchises of the Company and its Significant Subsidiaries; provided that the Company shall not be required to preserve the corporate existence of any Significant Subsidiary of the Company or any such right or franchise if it shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof would not have a material adverse effect on the business, assets or financial condition of the Company and its Subsidiaries taken as a whole and would not have any material adverse effect on the payment and performance of the obligations of the Company under the Securities and this Indenture. SECTION 4.06 Maintenance of Properties. The Company shall cause all material properties owned by or leased to the Company or any Significant Subsidiary of the Company or used or held for use in the conduct of its business or the business of any such Significant Subsidiary to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and will cause to be made all necessary -26- 34 repairs, renewals, replacements, betterments and improvements thereof, all as in the sole judgment of the Company may be necessary so that the business carried on in connection therewith may be properly conducted at all times; provided that nothing in this Section 4.06 shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the sole judgment of the Company, desirable and not disadvantageous in any material respect to the Holders. SECTION 4.07 Payment of Taxes and Other Claims. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any of its Significant Subsidiaries or upon the income, profits or property of the Company or any of its Significant Subsidiaries, and (ii) all material lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any of its Significant Subsidiaries; provided that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith or would not be disadvantageous in any material respect to the Holders. SECTION 4.08 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 law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Securities of any series as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture, and (to the extent that it may lawfully do so) the Company 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. SECTION 4.09 Additional Amounts. If the Securities of a series expressly provide for the payment of Additional Amounts, the Company will pay to the Holder of any Security of such series Additional Amounts as expressly provided therein. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section 4.09 to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section 4.09 and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made. -27- 35 Unless otherwise provided pursuant to Section 2.01 with respect to Securities of any series, if the Securities of a series provide for the payment of Additional Amounts, at least ten days prior to the first Interest Payment Date with respect to that series of Securities (or if the Securities of that series will not bear interest prior to Maturity, the first day on which a payment of principal and any premium is made), and at least ten days prior to each date of payment of principal and any premium or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company shall furnish the Trustee and the Company's principal Paying Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and any premium or interest on the Securities of that series shall be made to Holders of Securities of that series who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of that series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities and the Company will pay to such Paying Agent the Additional Amounts required by this Section. The Company covenants to indemnify the Trustee and any Paying Agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section 4.09. ARTICLE V SUCCESSORS SECTION 5.01 Limitations on Mergers and Consolidations. The Company shall not consolidate with or merge with any Person, or sell, lease, convey, transfer or otherwise dispose of all or substantially all of its assets to any Person, unless: (1) either (a) the Company shall be the continuing corporation or (b) the Person formed by or surviving such consolidation or merger (if other than the Company), or to which such sale, lease, conveyance, transfer or other disposition shall be made (collectively, the "Successor"), is organized and existing under the laws of the United States, or any State thereof or the District of Columbia, and expressly assumes by supplemental indenture all of the obligations of the Company under this Indenture and the Securities; (2) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (3) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with this Indenture. -28- 36 SECTION 5.02 Successor Person Substituted. Upon any consolidation or merger of the Company or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01, any Successor formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture and each series of Securities with the same effect as if such Successor had been named as the Company herein and the predecessor Company, in the case of a sale, conveyance, transfer or other disposition, shall be released from all obligations under this Indenture and each series of Securities. ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01 Events of Default. Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the supplemental indenture or Board Resolution establishing such series of Securities or in the form of Security for such series, an "Event of Default," wherever used herein with respect to Securities of any series, occurs if: (1) the Company defaults in the payment of interest on or any Additional Amounts with respect to any Security of that series when the same becomes due and payable and such default continues for a period of 30 days; (2) the Company defaults in the payment of the principal of or premium (if any) on any Security of that series at its Maturity; (3) the Company defaults in the deposit of any mandatory sinking fund payment, when and as due by the terms of a Security of that series, and such default continues for a period of 30 days; (4) the Company fails to comply with any of its other agreements or covenants in, or provisions of, the Securities of such series or this Indenture (other than an agreement, covenant or provision that has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than that series) and such failure continues for the period and after the notice specified in the last paragraph of this Section 6.01; (5) the Company or any Significant Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law: -29- 37 (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Bankruptcy Custodian of it or for all or for a substantial part of its property, or (D) makes a general assignment for the benefit of its creditors; (6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that: (A) is for relief against the Company or any Significant Subsidiary of the Company as debtor in an involuntary case, (B) appoints a Bankruptcy Custodian of the Company or any Significant Subsidiary of the Company or a Bankruptcy Custodian for all or for a substantial part of the property of the Company or any Significant Subsidiary of the Company, or (C) orders the liquidation of the Company or any Significant Subsidiary of the Company; or (7) any other Event of Default provided with respect to Securities of that series occurs. The term "Bankruptcy Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. The Trustee shall not be deemed to know or have notice of a Default unless a Trust Officer at the Corporate Trust Office of the Trustee receives written notice at the Corporate Trust Office of the Trustee of such Default with specific reference to such Default. When a Default is cured, it ceases. A Default under clause (4) or (7) of this Section 6.01 is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of the series affected by such Default notify the Company and the Trustee, of the Default, and the Company fails to cure the Default within 90 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." -30- 38 SECTION 6.02 Acceleration. If an Event of Default with respect to Securities of any series at the time outstanding (other than an Event of Default specified in clause (5) or (6) of Section 6.01 hereof) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of that series by notice to the Company and the Trustee, may declare the principal of (or, if any such Securities are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) and accrued and unpaid interest on all then outstanding Securities of such series to be due and payable. Upon any such declaration, the amounts due and payable on such Securities shall be due and payable immediately. If an Event of Default specified in clause (5) or (6) of Section 6.01 hereof occurs, such amounts shall ipso facto become and be immediately due and payable without any declaration, notice or other act on the part of the Trustee or any Holder. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the then outstanding Securities of that series by written notice to the Trustee may rescind an acceleration and its consequences (other than nonpayment of principal of or premium or interest on or Additional Amounts with respect to the Securities) if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to Securities of that series have been cured or waived, except nonpayment of principal, premium, interest or Additional Amounts that has become due solely because of the acceleration. SECTION 6.03 Other Remedies. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of, or premium, if any, or interest on the Securities of that series or to enforce the performance of any provision of the Securities of that series or this Indenture. The Trustee may maintain a proceeding with respect to Securities of any series even if it does not possess any of the Securities of that series or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04 Waiver of Existing or Past Defaults. Subject to Sections 6.07 and 9.02, the Holders of a majority in principal amount of the then outstanding Securities of any series by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such series and its consequences (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series), except (1) a -31- 39 continuing Default or Event of Default in the payment of the principal of, or premium, if any, or interest on or any Additional Amounts with respect to any Security of such series or (2) a continued Default in respect of a provision that under Section 9.02 cannot be amended or supplemented without the consent of the Holder of each outstanding Security of such series affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default with respect to such series arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05 Control by Majority. With respect to Securities of any series, the Holders of a majority in principal amount of the then outstanding Securities of such series may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it relating to or arising under an Event of Default with respect to Securities of such series. However, the Trustee may refuse to follow any direction that conflicts with applicable law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Holders of such series, or that may involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion from Holders directing the Trustee against all losses and expenses caused by taking or not taking such action. SECTION 6.06 Limitations on Suits. Subject to Section 6.07 hereof, a Holder of a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series only if: (1) the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series; (2) the Holders of at least 25% in principal amount of the then outstanding Securities of such series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in principal amount of the Securities of that series do not give the Trustee a direction inconsistent with the request. -32- 40 A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal of and premium, if any, and interest on and any Additional Amounts with respect to that Security, on or after the respective due dates expressed in that Security, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder. SECTION 6.08 Collection Suit by Trustee. If an Event of Default specified in clause (1), (2) or (3) of Section 6.01 hereof occurs and is continuing with respect to Securities of any series, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the amount of principal, premium (if any), interest and any Additional Amounts remaining unpaid on the Securities of that series, and interest on overdue principal and premium, if any, and, to the extent lawful, interest on overdue interest, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents and to take such actions, including participating as a member, voting or otherwise, of any committee of creditors, as may be necessary or advisable 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) and the Holders allowed in any judicial proceeding relative to the Company or its creditors or properties and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any Bankruptcy Custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to 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. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. 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, -33- 41 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, subject to Article X, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to Holders for amounts due and unpaid on the Securities in respect of which or for the benefit of which such money has been collected, for principal, premium (if any), interest and any Additional Amounts ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium (if any), interest and any Additional Amounts, respectively; and Third: to the Company. The Trustee, upon prior written notice to the Company, may fix record dates and payment dates for any payment to Holders pursuant to this Article. SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorney's fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in principal amount of the then outstanding Securities of any series. ARTICLE VII TRUSTEE SECTION 7.01 Duties of Trustee. (a) If an Event of Default with respect to the Securities of any series has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture with respect to such series, and use the same degree of care and skill in such exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. -34- 42 (b) Except during the continuance of an Event of Default with respect to the Securities of any series: (1) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine such certificates and opinions to determine whether, on their face, they appear to conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) this paragraph does not limit the effect of Section 7.01(b); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to the provisions of this Section 7.01. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity reasonably satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. All money received by the Trustee with respect to Securities of any series shall, until applied as herein provided, be held in trust for the payment of the principal of, premium (if any) and interest on and Additional Amounts with respect to the Securities of that series. -35- 43 SECTION 7.02 Rights of Trustee. (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both to be provided. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. SECTION 7.03 May Hold Securities. 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 any of its Affiliates with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights and duties. However, the Trustee is subject to 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 of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof; it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee; and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication. SECTION 7.05 Notice of Defaults. If a Default or Event of Default with respect to the Securities of any series occurs and is continuing and it is known to the Trustee, the Trustee shall mail to Holders of Securities of such -36- 44 series a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium (if any) and interest on and Additional Amounts or any sinking fund installment with respect to the Securities of such series, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders of Securities of such series. SECTION 7.06 Reports by Trustee to Holders. Within 60 days after each January 31, beginning with January 31, 1999, and in any event prior to March 31 in each year, the Trustee shall mail to Holders of a series a brief report dated as of such reporting date that complies with TIA Section 313(a); provided, however, that if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date with respect to a series, no report need be transmitted to Holders of such series. The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports if and as required by TIA Sections 313(c) and 313(d). A copy of each report at the time of its mailing to Holders of a series of Securities shall be filed with the SEC and each securities exchange, if any, on which the Securities of such series are listed. The Company shall notify the Trustee if and when any series of Securities is listed on any stock exchange. SECTION 7.07 Compensation and Indemnity. The Company agrees to pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company agrees to reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company hereby indemnifies the Trustee against any loss, liability or expense incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent. The Company shall not be obligated to reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the payment obligations of the Company in this Section 7.07, the Trustee shall have, and the Company hereby grants, a lien prior to the Securities on all money or property -37- 45 held or collected by the Trustee, except that held in trust to pay principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of any series. Such lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(5) or (6) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. SECTION 7.08 Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. The Trustee may resign and be discharged at any time with respect to the Securities of one or more series by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to the Securities of such series by so notifying the Trustee and the Company. The Company may remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (3) a Bankruptcy Custodian or public officer takes charge of the Trustee or its property; or (4) 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, with respect to the Securities of one or more series, the Company shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series). Within one year after the successor Trustee with respect to the Securities of any series takes office, the Holders of a majority in principal amount of the Securities of such series may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee with respect to the Securities of any series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Securities of such series may -38- 46 petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. If the Trustee with respect to the Securities of a series fails to comply with Section 7.10, any Holder of Securities of such series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee with respect to the Securities of such series. In case of the appointment of a successor Trustee with respect to all Securities, each such successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the retiring Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. In case of the appointment of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more (but not all) series shall execute and deliver an indenture supplemental hereto in which each successor Trustee shall accept such appointment and that (1) shall confer to each successor Trustee all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall confirm that all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee. Nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee. Upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee shall have all the rights, powers and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. On the request of the Company or any successor Trustee, such retiring Trustee shall transfer to such successor Trustee all property held by such retiring Trustee as Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. Notwithstanding replacement of the Trustee or Trustees pursuant to this Section 7.08, the obligations of the Company under Section 7.07 shall continue for the benefit of the retiring Trustee or Trustees. -39- 47 SECTION 7.09 Successor Trustee by Merger, etc. Subject to Section 7.10, if the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee; provided, however, that in the case of a transfer of all or substantially all of its corporate trust business to another corporation, the transferee corporation expressly assumes all of the Trustee's liabilities hereunder. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10 Eligibility; Disqualification. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia and authorized under such laws to exercise corporate trust power, shall be subject to supervision or examination by Federal or State (or the District of Columbia) authority and shall have, or be a Subsidiary of a bank or bank holding company having, a combined capital and surplus of at least $50 million as set forth in its most recent published annual report of condition. The Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee is subject to and shall comply with the provisions of TIA Section 310(b) during the period of time required by this Indenture. Nothing in this Indenture shall prevent the Trustee from filing with the SEC the application referred to in the penultimate paragraph of TIA Section 310(b). SECTION 7.11 Preferential Collection of Claims Against Company. The Trustee is subject to and shall comply with the provisions of 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. -40- 48 ARTICLE VIII DISCHARGE OF INDENTURE SECTION 8.01 Termination of Company's Obligations. (a) Except as otherwise specified, as contemplated by Section 2.01, for Securities of any series, this Indenture shall cease to be of further effect with respect to the Securities of a series (except that the Company's obligations under Section 7.07, the Trustee's and Paying Agent's obligations under Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging the satisfaction and discharge of this Indenture with respect to the Securities of such series, when: (1) either (A) all outstanding Securities of such series theretofore authenticated and issued (other than destroyed, lost or stolen Securities that have been replaced or paid) have been delivered to the Trustee for cancellation; or (B) all outstanding Securities of such series not theretofore delivered to the Trustee for cancellation: (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company has irrevocably deposited or caused to be deposited with the Trustee as funds (immediately available to the Holders in the case of clause (i)) in trust for such purpose (x) cash in an amount, or (y) Government Obligations, maturing as to principal and interest at such times and in such amounts as will ensure the availability of cash in an amount or (z) a combination thereof, which will be sufficient, in the opinion (in the case of clauses (y) and (z)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness on the Securities of such series for principal and any interest and any Additional Amounts to the date of such deposit (in the case of Securities which have become due and -41- 49 payable) or for principal, premium, if any, and interest and any Additional Amounts to the Stated Maturity or Redemption Date, as the case may be; or (C) the Company has properly fulfilled such other means of satisfaction and discharge as is specified, as contemplated by Section 2.01, to be applicable to the Securities of such series; (2) the Company has paid or caused to be paid all other sums payable by it hereunder with respect to the Securities of such series; and (3) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect. (b) Unless this Section 8.01(b) is specified as not being applicable to Securities of series as contemplated by Section 2.01, the Company may terminate certain of its obligations under this Indenture ("covenant defeasance") with respect to the Securities of a series if: (1) the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the benefit of the Holders of Securities of such series, (i) cash in an amount, or (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts (without consideration of the reinvestment of any such amounts) as will ensure the availability of cash in an amount or (iii) a combination thereof, that is sufficient, in the opinion (in the case of clauses (ii) and (iii)) of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay, after payment of all taxes or other charges or assessments in respect thereof payable by the Trustee, the principal of and premium (if any) and any interest and Additional Amounts on all Securities of such series on each date that such principal, premium (if any), interest and Additional Amounts is due and payable and (at the Stated Maturity thereof or upon redemption as provided in Section 8.01(e)) to pay all other sums payable by it hereunder; provided that the Trustee shall have been irrevocably instructed to apply such money and/or the proceeds of such Government Obligations to the payment of said principal, premium (if any), interest and Additional Amounts with respect to the Securities of such series as the same shall become due; (2) the Company has delivered to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture with respect to the Securities of such series have been complied with, and an Opinion of Counsel to the same effect; -42- 50 (3) no Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit; (4) the Company shall have delivered to the Trustee an Opinion of Counsel from counsel reasonably acceptable to the Trustee or a tax ruling to the effect that the Holders of Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under this Section 8.01(b) and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised; (5) the Company has complied with any additional conditions specified pursuant to Section 2.01 to be applicable to the discharge of Securities of such series pursuant to this Section 8.01; (6) such deposit and discharge shall not cause the Trustee to have a conflicting interest as defined in TIA Section 310(b); and (7) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the passage of 91 days following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally. In such event, this Indenture shall cease to be of further effect (except as set forth in this paragraph), and the Trustee, on demand of the Company, shall execute proper instruments acknowledging satisfaction and discharge under this Indenture. However, the Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 5.01, 7.07, 7.08 and 8.04, the Trustee's and Paying Agent's obligations in Section 8.03 and the rights, powers, protections and privileges accorded the Trustee under Article VII shall survive until all Securities of such series are no longer outstanding. Thereafter, only the Company's obligations in Section 7.07 and the Trustee's and Paying Agent's obligations in Section 8.03 shall survive with respect to Securities of such series. After such irrevocable deposit made pursuant to this Section 8.01(b) and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under this Indenture with respect to the Securities of such series except for those surviving obligations specified above. In order to have money available on a payment date to pay principal of or premium (if any) on or interest or Additional Amounts on the Securities, the Government Obligations shall be payable as to principal or interest on or before such payment date in such amounts as will provide the necessary money. (c) If the Company has previously complied or is concurrently complying with Section 8.01(b) (other than any additional conditions specified pursuant to Section 2.01 that are -43- 51 expressly applicable only to covenant defeasance) with respect to Securities of a series, then, unless this Section 8.01(c) is specified as not being applicable to Securities of such series as contemplated by Section 2.01, the Company may elect to be discharged ("legal defeasance") from its obligations to make payments with respect to Securities of such series, if: (1) no Default or Event of Default under clauses (5) and (6) of Section 6.01 hereof shall have occurred at any time during the period ending on the 91st day after the date of deposit contemplated by Section 8.01(b) (it being understood that this condition shall not be deemed satisfied until the expiration of such period); (2) unless otherwise specified with respect to Securities of such series as contemplated by Section 2.01, the Company has delivered to the Trustee an Opinion of Counsel from counsel reasonably acceptable to the Trustee to the effect referred to in Section 8.01(b)(4) with respect to such legal defeasance; (3) the Company has complied with any other conditions specified pursuant to Section 2.01 to be applicable to the legal defeasance of Securities of such series pursuant to this Section 8.01(c); and (4) the Company has delivered to the Trustee a Company Request requesting such legal defeasance of the Securities of such series and an Officers' Certificate stating that all conditions precedent with respect to such legal defeasance of the Securities of such series have been complied with, together with an Opinion of Counsel to the same effect. In such event, the Company will be discharged from its obligations under this Indenture and the Securities of such series to pay principal of, premium (if any) and interest on, and any Additional Amounts with respect to Securities of such series, the Company's obligations under Sections 4.01, 4.02 and 5.01 shall terminate with respect to such Securities, and the entire indebtedness of the Company evidenced by such Securities shall be deemed paid and discharged. (d) If and to the extent additional or alternative means of satisfaction, discharge or defeasance of Securities of a series are specified to be applicable to such series as contemplated by Section 2.01, the Company may terminate any or all of its obligations under this Indenture with respect to Securities of a series and any or all of its obligations under the Securities of such series if it fulfills such other means of satisfaction and discharge as may be so specified, as contemplated by Section 2.01, to be applicable to the Securities of such series. (e) If Securities of any series subject to subsections (a), (b), (c) or (d) of this Section 8.01 are to be redeemed prior to their Stated Maturity, whether pursuant to any optional redemption provisions or in accordance with any mandatory or optional sinking fund provisions, the terms of the applicable trust arrangement shall provide for such redemption, and the Company shall make such arrangements as are reasonably satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company. -44- 52 SECTION 8.02 Application of Trust Money. The Trustee or a trustee reasonably satisfactory to the Trustee and the Company shall hold in trust money or Government Obligations deposited with it pursuant to Section 8.01 hereof. It shall apply the deposited money and the money from Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of the series with respect to which the deposit was made. Money and securities held in trust are not subject to Article X. SECTION 8.03 Repayment to Company. The Trustee and the Paying Agent shall promptly pay to the Company at any time upon the written request of the Company any excess money or Government Obligations (or proceeds therefrom) held by them. Subject to the requirements of any applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium (if any), interest or any Additional Amounts that remain unclaimed for two years after the date upon which such payment shall have become due. After payment to the Company, Holders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and the Paying Agent with respect to such money shall cease. SECTION 8.04 Reinstatement. If the Trustee or the Paying Agent is unable to apply any money or Government Obligations deposited with respect to Securities of any series in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Securities of such series and under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 8.01; provided, however, that if the Company has made any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or Government Obligations held by the Trustee or the Paying Agent. -45- 53 ARTICLE IX SUPPLEMENTAL INDENTURES AND AMENDMENTS SECTION 9.01 Without Consent of Holders. The Company and the Trustee may amend or supplement this Indenture or the Securities without the consent of any Holder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to comply with Section 5.01; (3) to provide for uncertificated Securities in addition to or in place of certificated Securities, or to provide for the issuance of bearer Securities (with or without coupons); (4) to provide any security for any series of Securities; (5) to comply with any requirement in order to effect or maintain the qualification of this Indenture under the TIA; (6) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series), or to surrender any right or power herein conferred upon the Company; (7) to add any additional Events of Default with respect to all or any series of the Securities (and, if such Events of Default are applicable to less than all series of Securities, specifying the series to which such Events of Default are applicable); (8) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no outstanding Security of any series created prior to the execution of such amendment or supplemental indenture that is adversely affected in any material respect by such change in or elimination of such provision; (9) to establish the form or terms of Securities of any series as permitted by Section 2.01; (10) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Section 8.01; provided, however, that any such action shall not adversely affect -46- 54 the interest of the Holders of Securities of such series or any other series of Securities in any material respect; or (11) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.08. Upon the request of the Company, accompanied by a Board Resolution, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall, subject to Section 9.06, join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and make any further appropriate agreements and stipulations that may be therein contained. After an amendment, supplement or waiver under this Section 9.01 becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver. SECTION 9.02 With Consent of Holders. Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture with the written consent (including consents obtained in connection with a tender offer or exchange offer for Securities of any one or more series or all series or a solicitation of consents in respect of Securities of any one or more series or all series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of each such series (but the terms of such offer or solicitation may vary from series to series)) of the Holders of at least a majority in principal amount of the then outstanding Securities of all series affected by such amendment or supplement (acting as one class). Upon the request of the Company, accompanied by a Board Resolution, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06, the Trustee shall join with the Company in the execution of such amendment or supplemental indenture. 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. The Holders of a majority in principal amount of the then outstanding Securities of one or more series may waive compliance in a particular instance by the Company with any provision of this Indenture with respect to Securities of such series (including waivers obtained in connection with a tender offer or exchange offer for Securities of such series or a solicitation of -47- 55 consents in respect of Securities of such series, provided that in each case such offer or solicitation is made to all Holders of then outstanding Securities of such series (but the terms of such offer or solicitation may vary from series to series)). However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 9.02 may not: (1) reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver; (2) reduce the rate of or change the time for payment of interest, including default interest, on any Security; (3) reduce the principal of, premium on or any mandatory sinking fund payment with respect to, or change the Stated Maturity of, any Security or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02; (4) reduce the premium, if any, payable upon the redemption of any Security or change the time at which any Security may or shall be redeemed; (5) change any obligation of the Company to pay Additional Amounts with respect to any Security; (6) change the coin or currency in which any Security or any premium, interest or Additional Amounts with respect thereto are payable; (7) impair the right to institute suit for the enforcement of any payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security pursuant to Sections 6.07 and 6.08, except as limited by Section 6.06; (8) make any change in the percentage of principal amount of Securities necessary to waive compliance with certain provisions of this Indenture pursuant to Section 6.04 or 6.07 or make any change in this sentence of Section 9.02; (9) modify the provisions of this Indenture with respect to the subordination of any Security in a manner adverse to the Holder thereof; or (10) waive a continuing Default or Event of Default in the payment of principal of, premium (if any) or interest on or Additional Amounts with respect to the Securities. -48- 56 An amendment under this Section may not make any change that adversely affects the rights under Article X of any holder of an issue of Senior Indebtedness unless the holders of the issue pursuant to its terms consent to the change. A supplemental indenture that changes or eliminates any covenant or other provision of this Indenture that has expressly been included solely for the benefit of one or more particular series of Securities, or that modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. The right of any Holder to participate in any consent required or sought pursuant to any provision of this Indenture (and the obligation of the Company to obtain any such consent otherwise required from such Holder) may be subject to the requirement that such Holder shall have been the Holder of record of any Securities with respect to which such consent is required or sought as of a date identified by the Company in a notice furnished to Holders in accordance with the terms of this Indenture. SECTION 9.03 Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Securities shall comply in form and substance with the TIA as then in effect. SECTION 9.04 Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his or her Security or portion of a Security if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement, or waiver becomes effective in accordance with its terms and thereafter binds every Holder. The Company may, but shall not be obligated to, fix a record date (which need not comply with Section 316(c) of the TIA) for the purpose of determining the Holders of Securities of any series entitled to consent to any amendment, supplement or waiver or to take any other action under this Indenture. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No consent shall be valid or effective for more than 90 days after such record date unless consents from Holders of the principal amount of Securities -49- 57 required hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period. After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it is of the type described in any of clauses (1) through (9) of Section 9.01 hereof. In such case, the amendment, supplement, or waiver shall bind each Holder who has consented to it and every subsequent Holder that evidences the same debt as the consenting Holder's Security. SECTION 9.05 Notation on or Exchange of Securities. If an amendment or supplement changes the terms of an outstanding Security, the Company may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security at the request of the Company regarding the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment or supplement. Securities of any series authenticated and delivered after the execution of any amendment or supplement may, and shall if required by the Company, bear a notation in form approved by the Company as to any matter provided for in such amendment or supplement. SECTION 9.06 Trustee to Sign Amendments, etc. The Trustee shall sign any amendment or supplement authorized pursuant to this Article if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall be entitled to receive, and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Opinion of Counsel provided at the expense of the Company as conclusive evidence that such amendment or supplement is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. ARTICLE X SUBORDINATION SECTION 10.01 Securities Subordinated to Senior Indebtedness. The Company and each Holder of a Security, by his acceptance thereof, agree that (a) the payment of the principal of, premium (if any) and interest on and any Additional Amounts with respect to each and all the Securities and (b) any other payment in respect of the Securities, including on account of the acquisition or redemption of Securities by the Company, is subordinated, -50- 58 to the extent and in the manner provided in this Article X, to the prior payment in full of all Senior Indebtedness of the Company, whether outstanding at the date of this Indenture or thereafter created, incurred, assumed or guaranteed, and that these subordination provisions are for the benefit of the holders of Senior Indebtedness. This Article X shall constitute a continuing offer to all Persons who, in reliance upon such provisions, become holders of, or continue to hold, Senior Indebtedness, and such provisions are made for the benefit of the holders of Senior Indebtedness, and such holders are made obligees hereunder and any one or more of them may enforce such provisions. SECTION 10.02 No Payment on Securities in Certain Circumstances. (a) Unless otherwise specified with respect to Securities of a series as contemplated by Section 2.01, no payment shall be made by or on behalf of the Company on account of the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of any series or to acquire any of such Securities (including any repurchases of such Securities pursuant to the provisions thereof at the option of the Holder of such Securities) for cash or property (other than Junior securities of the Company), or on account of any redemption provisions of such Securities, in the event of default in payment of any principal of, premium (if any) or interest on any Senior Indebtedness of the Company when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration of acceleration or otherwise (a "Payment Default"), unless and until such Payment Default has been cured or waived or otherwise has ceased to exist. (b) Unless otherwise specified with respect to Securities of a series as contemplated by Section 2.01, no payment shall be made by or on behalf of the Company on account of the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of any series or to acquire any of such Securities (including any repurchases of such Securities pursuant to the provisions thereof at the option of the Holder of such Securities) for cash or property (other than Junior securities of the Company), or on account of the redemption provisions of such Securities, in the event of any event of default (other than a Payment Default) with respect to any Designated Senior Indebtedness permitting the holders of such Designated Senior Indebtedness (or a trustee or other representative on behalf of the holders thereof) to declare such Designated Senior Indebtedness due and payable prior to the date on which it would otherwise have become due and payable, upon written notice thereof to the Company and the Trustee by any holders of Designated Senior Indebtedness (or a trustee or other representative on behalf of the holders thereof) (the "Payment Blocking Notice"), unless and until such event of default shall have been cured or waived or otherwise has ceased to exist; provided, that such payments may not be prevented pursuant to this Section 10.02(b) for more than 179 days after an applicable Payment Blocking Notice has been received by the Trustee unless the Designated Senior Indebtedness in respect of which such event of default exists has been declared due and payable in its entirety, in which case no such payment may be made until such acceleration has been rescinded or annulled or such Designated Senior Indebtedness has been paid in full. Unless otherwise specified with respect to -51- 59 Securities of a series as contemplated by Section 2.01, no event of default that existed or was continuing on the date of any Payment Blocking Notice (whether or not such event of default is on the same issue of Designated Senior Indebtedness) may be made the basis for the giving of a second Payment Blocking Notice, and only one such Payment Blocking Notice may be given in any 365-day period. (c) In furtherance of the provisions of Section 10.01, in the event that, notwithstanding the foregoing provisions of this Section 10.02, any payment or distribution of assets of the Company (other than Junior securities of the Company) shall be received by the Trustee or the Holders of the Securities of any series at a time when such payment or distribution was prohibited by the provisions of this Section 10.02, then, unless such payment or distribution is no longer prohibited by this Section 10.02, such payment or distribution (subject to the provisions of Section 10.07) shall be received and held in trust by the Trustee or such Holder or Paying Agent for the benefit of the holders of Senior Indebtedness of the Company, and shall be paid or delivered by the Trustee or such Holders or such Paying Agent, as the case may be, to the holders of Senior Indebtedness of the Company remaining unpaid or unprovided for or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness of the Company may have been issued, ratably, according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness of the Company held or represented by each, for application to the payment of all Senior Indebtedness in full after giving effect to all concurrent payments and distributions to or for the holders of such Senior Indebtedness. SECTION 10.03 Securities Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation or Reorganization. Upon any distribution of assets of the Company or upon any dissolution, winding up, total or partial liquidation or reorganization of the Company, whether voluntary or involuntary, in bankruptcy, insolvency, receivership or similar proceeding or upon assignment for the benefit of creditors: (a) the holders of all Senior Indebtedness of the Company shall first be entitled to receive payments in full before the Holders of Securities of any series are entitled to receive any payment on account of the principal of, premium (if any) or interest on or any Additional Amounts with respect to such Securities (other than Junior securities of the Company); (b) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than Junior securities of the Company), to which the Holders of Securities of any series or the Trustee on behalf of such Holders would be entitled, except for the provisions of this Article X, shall be paid by the liquidating trustee or agent or other Person making such a payment or distribution directly to the holders of such Senior Indebtedness or their representative, ratably according to the respective amounts of Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all such Senior Indebtedness -52- 60 remaining unpaid after giving effect to all concurrent payments and distributions to the holders of such Senior Indebtedness; and (c) in the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (other than Junior securities of the Company), shall be received by the Trustee or the Holders of Securities of any series or any Paying Agent (or, if the Company or any Affiliate of the Company is acting as its own Paying Agent, money for any such payment or distribution shall be segregated or held in trust) on account of the principal of, premium (if any) or interest on or any Additional Amounts with respect to the Securities of such series before all Senior Indebtedness of the Company is paid in full, such payment or distribution (subject to the provisions of Section 10.07) shall be received and held in trust by the Trustee or such Holder or Paying Agent for the benefit of the holders of such Senior Indebtedness, or their respective representatives, ratably according to the respective amounts of such Senior Indebtedness held or represented by each, to the extent necessary to make payment as provided herein of all such Senior Indebtedness remaining unpaid after giving effect to all concurrent payments and distributions and all provisions therefor to or for the holders of such Senior Indebtedness, but only to the extent that as to any holder of such Senior Indebtedness, as promptly as practical following notice from the Trustee to the holders of such Senior Indebtedness that such prohibited payment has been received by the Trustee, Holder(s) or Paying Agent (or has been segregated as provided above), such holder (or a representative therefor) notifies the Trustee of the amounts then due and owing on such Senior Indebtedness, if any, held by such holder and only the amounts specified in such notices to the Trustee shall be paid to the holders of such Senior Indebtedness. SECTION 10.04 Subrogation to Rights of Holders of Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness of the Company as provided herein, the Holders of the Securities shall be subrogated (to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions of this Article) to the rights of the holders of such Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness until all amounts owing on the Securities shall be paid in full. For the purpose of such subrogation, no such payments or distributions to the holders of such Senior Indebtedness by the Company, or by or on behalf of the Holders of the Securities by virtue of this Article X, which otherwise would have been made to such Holders shall, as between the Company and such Holders, be deemed to be payment by the Company or on account of such Senior Indebtedness, it being understood that the provisions of this Article X are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of such Senior Indebtedness, on the other hand. If any payment or distribution to which the Holders of the Securities would otherwise have been entitled but for the provisions of this Article X shall have been applied, pursuant to the provisions of this Article X, to the payment of amounts payable under Senior Indebtedness of the Company, then such Holders shall be entitled to receive from the holders of Senior Indebtedness any -53- 61 payments or distributions received by such holders of Senior Indebtedness in excess of the amount sufficient to pay all amounts payable under or in respect of such Senior Indebtedness in full. SECTION 10.05 Obligations of the Company Unconditional. Nothing contained in this Article X or elsewhere in this Indenture or in the Securities is intended to or shall impair, as between the Company and the Holders of the Securities of any series, the obligation of the Company, which is absolute and unconditional, to pay to such Holders the principal of, premium (if any) and interest on and any Additional Amounts with respect to the Securities of such series as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of such Holders and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article X, of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Notwithstanding anything to the contrary in this Article X or elsewhere in this Indenture or in the Securities, upon any distribution of assets of the Company referred to in this Article X, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or other Person making any distribution to the Trustee or to such Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article X so long as such court has been apprised of the provisions of, or the order, decree or certificate makes reference to, the provisions of this Article X. SECTION 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice. The Trustee shall not at any time be charged with knowledge of the existence of any facts that would prohibit the making of any payment to or by the Trustee unless and until a Responsible Officer of the Trustee or any Paying Agent shall have received, no later than two Business Days prior to such payment, written notice thereof from the Company or from one or more holders of Senior Indebtedness or from any representative therefor and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Sections 7.01 and 7.02, shall be entitled in all respects conclusively to assume that no such fact exists. SECTION 10.07 Application by Trustee of Amounts Deposited with It. Amounts deposited in trust with the Trustee pursuant to and in accordance with Article VIII shall be for the sole benefit of Holders of the Securities of the series for the benefit of -54- 62 which such amounts were deposited, and, to the extent allocated for the payment of Securities of such series, shall not be subject to the subordination provisions of this Article X. Otherwise, any deposits of assets with the Trustee or the Paying Agent (whether or not in trust) for the payment of principal of, premium (if any) or interest on or any Additional Amounts with respect to any Securities shall be subject to the provisions of Sections 10.01, 10.02, 10.03, and 10.04; provided that if prior to two Business Days preceding the date on which by the terms of this Indenture any such assets may become distributable for any purpose (including without limitation, the payment of either principal of, premium (if any) or interest on or any Additional Amounts with respect to any Security), a Responsible Officer of the Trustee or such Paying Agent shall not have received with respect to such assets the written notice provided for in Section 10.06, then the Trustee or such Paying Agent shall have full power and authority to receive such assets and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary that may be received by it on or after such date; and provided further that nothing contained in this Article X shall prevent the Company from making, or the Trustee from receiving or applying, any payment in connection with the redemption of Securities if the first publication of notice of such redemption (whether by mail or otherwise in accordance with this Indenture) has been made, and the Trustee has received such payment from the Company, prior to the occurrence of any of the contingencies specified in Section 10.02 or 10.03. SECTION 10.08 Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Indebtedness. No right of any present or future holders of any Senior Indebtedness to enforce the subordination provisions contained in this Article X shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms of this Indenture, regardless of any knowledge thereof that any such holder may have or be otherwise charged with. The holders of Senior Indebtedness may extend, renew, modify or amend the terms of the Senior Indebtedness or any security therefor and release, sell or exchange such security and otherwise deal freely with the Company, all without affecting the liabilities and obligations of the parties to this Indenture or the Holders of the Securities. SECTION 10.09 Trustee to Effectuate Subordination of Securities. Each Holder of a Security by his acceptance thereof authorizes and expressly directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provisions contained in this Article X and to protect the rights of the Holders of the Securities pursuant to this Indenture, and appoints the Trustee his attorney-in-fact for such purpose, including, in the event of any dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors of the Company), the filing of a claim for the unpaid balance of his Securities in the form required in said proceedings and cause said claim to be approved. If the Trustee does not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the -55- 63 expiration of the time to file such claim or claims, then the holders of the Senior Indebtedness or their representative is hereby authorized to have the right to file and is hereby authorized to file an appropriate claim for an on behalf of the Holders of said Securities. Nothing herein contained shall be deemed to authorize the Trustee or the holders of Senior Indebtedness or their representative to authorize or consent to or accept or adopt on behalf of any Holder of Securities any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee or the holders of Senior Indebtedness or their representative to vote in respect of the claim of any Holder of the Securities in any such proceeding. SECTION 10.10 Right of Trustee to Hold Senior Indebtedness. The Trustee in its individual capacity shall be entitled to all of the rights set forth in this Article X in respect of any Senior Indebtedness at any time held by it to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall be construed to deprive the Trustee of any of its rights as such holder. SECTION 10.11 Article X Not to Prevent Events of Default. The failure to make a payment on account of principal of or premium (if any) or interest on the Securities by reason of any provision of this Article X shall not be construed as preventing the occurrence of a Default or an Event of Default under Section 6.01 or in any way prevent the Holders of the Securities from exercising any right hereunder other than the right to receive payment on the Securities. SECTION 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness, and shall not be liable to any such holders (other than for its willful misconduct or negligence) if it shall in good faith mistakenly pay over or distribute to the Holders of the Securities or the Company or any other Person, cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article X or otherwise. Nothing in this Section 10.12 shall affect the obligation of any other such Person to hold such payment for the benefit of, and to pay such payment over to, the holders of Senior Indebtedness or their representative. SECTION 10.13 Article Applicable to Paying Agent. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article X shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee, provided, however, that this Section 10.13 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. -56- 64 ARTICLE XI MISCELLANEOUS SECTION 11.01 Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by operation of TIA Section 318(c), the imposed duties shall control. SECTION 11.02 Notices. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telex, facsimile or overnight air courier guaranteeing next day delivery, to the other's address: If to the Company: Seitel, Inc. 50 Briar Hollow Lane 7th Floor, West Building Houston, Texas 77027 Attention: Chief Financial Officer If to the Trustee: The First National Bank of Chicago 1 North State Street, 9th Floor Chicago, Illinois 60602 Attention: Corporate Trust Administration The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. All notices and communications shall be deemed to have been duly given at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first-class mail, postage prepaid, to the Holder's address shown on the register kept by the Registrar. Failure to mail a notice -57- 65 or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except in the case of notice to the Trustee, it is duly given only when received. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. All notices or communications, including without limitation notices to the Trustee or the Company by Holders, shall be in writing, except as otherwise set forth herein. In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice. SECTION 11.03 Communication by Holders with Other Holders. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 11.04 Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee at the expense of the Company: (1) an Officers' Certificate (which shall include the statements set forth in Section 11.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel (which shall include the statements set forth in Section 11.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. SECTION 11.05 Statements Required in Certificate or Opinion. -58- 66 Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)) and shall include: (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with. SECTION 11.06 Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or the Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 11.07 Legal Holidays. If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 11.08 No Recourse Against Others. A director, officer, employee, stockholder, partner or other owner of the Company or the Trustee, as such, shall not have any liability for any obligations of the Company under the Securities or for any obligations of the Company or the Trustee under this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Security waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of Securities. -59- 67 SECTION 11.09 Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. SECTION 11.10 No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any other Subsidiary of the Company. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 11.11 Successors. All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 11.12 Severability. 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, to the fullest extent permitted by applicable law, not in any way be affected or impaired thereby. SECTION 11.13 Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 11.14 Table of Contents; Headings, etc. The table of contents, cross-reference table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 11.15 Agent for Service of Process. The Company hereby designates CT Corporation System, currently located at 1633 Broadway, New York, New York, as its authorized agent upon whom process may be served in any action, suit or proceeding that may be instituted in any State or Federal court sitting in the County of New York of the State of New York pertaining to this Indenture or any matter arising out of or related to this Indenture, and the Company will accept the jurisdiction of such court in such action, and waive, to the fullest extent permitted by applicable law, any defense based upon lack of personal jurisdiction or venue or forum non conveniens. The Company may and shall (to the extent the -60- 68 process agent ceases to be able to be served on the basis contemplated herein), by written notice to the Trustee, designate such additional or alternative agents for service of process under this Section 11.15 that (i) maintains an office located in the Borough of Manhattan, The City of New York in the State of New York, (ii) are either (a) counsel for the Company or (b) a corporate service company which acts as agent for service of process for other persons in the ordinary course of its business and (iii) agrees to act as agent for service of process in accordance with this Section 11.15. Such notice shall identify the name of such agent for process and the address of such agent for process in the Borough of Manhattan, The City of New York, State of New York. Upon the request of any holder of a Debenture, the Trustee shall deliver such information to such holder. Notwithstanding the foregoing, there shall, at all times, be at least one agent for service of process for the Company appointed and acting in accordance with this Section 11.15. A copy of any such process shall be sent or given to the Company at the address for notices specified in Section 11.02 hereof. The Company shall maintain the designation of such authorized agent until two years after termination of the Company's obligation under this Indenture pursuant to Section 8.01. -61- 69 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written. SEITEL, INC. By: ------------------------------ Name: Title: THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By: ------------------------------ Name: Title: -62- EX-5.1 11 OPINION OF GARDERE WYNNE SEWELL & RIGGS, L.L.P. 1 EXHIBIT 5.1 August 20, 1999 Board of Directors Seitel, Inc. 50 Briar Hollow Lane Houston, Texas 77027 Ladies and Gentlemen: We have acted as counsel to Seitel, Inc., a Delaware corporation (the "Company"), in connection with the preparation of the Registration Statement on Form S-3 (the "Registration Statement") filed by the Company and each of Seitel Capital Trust I and Seitel Capital Trust II, each a statutory business trust created under the laws of the State of Delaware (the "Trusts"), with the Securities and Exchange Commission on this date relating to the registration under the Securities Act of 1933, as amended (the "Securities Act"), of the proposed issuance and sale from time to time of up to (i) $200,000,000 aggregate principal amount of the Company's (a) senior debt securities (the "Senior Debt Securities"), each series of which will be issued pursuant to a Senior Debt Indenture to be entered into between the Company and The First National Bank of Chicago, a national banking association ("First Chicago"), as trustee, as such indenture will be supplemented, in connection with the issuance of each such series, by a supplemental indenture creating such series (the "Senior Debt Indenture"); (b) subordinated debt securities (the "Subordinated Debt Securities"), each series of which will be issued pursuant to a Subordinated Debt Indenture to be entered into between the Company and First Chicago, as trustee, as such indenture will be supplemented, in connection with the issuance of each such series, by a supplemental indenture creating such series (the "Subordinated Debt Indenture"); and (c) junior subordinated debentures (the "Junior Subordinated Debentures," and, together with the Senior Debt Securities and the Subordinated Debt Securities, the "Debt Securities"), each series of which will be issued pursuant to a Junior Subordinated Debenture Indenture to be entered into between the Company and First Chicago, as trustee, as such indenture will be supplemented, in connection with the issuance of each such series, by a supplemental indenture creating such series (the "Junior Subordinated Debenture Indenture," and, together with the Senior Debt Indenture and the Subordinated Debt Indenture, the "Indentures"); (ii) $200,000,000 aggregate offering amount of shares of preferred stock, par value $0.01 per share, of the Company (the "Preferred Stock"); (iii) $200,000,000 aggregate offering amount of shares of common stock, par value $0.01 per share, of the Company (the "Common Stock"); (iv) guarantees by the Company of the preferred securities (the "Guarantees") described below pursuant to one or more guarantee agreements (each a "Guarantee Agreement") to be entered into by the Company; and (v) $200,000,000 aggregate offering amount of preferred securities (the "Preferred Securities" and, together with the Debt Securities, the Preferred Stock, the Common Stock and the Guarantees, the "Offered Securities") which may be issued by each Trust pursuant to their respective Amended and Restated Declarations of Trust. 2 Board of Directors Seitel, Inc. August 20, 1999 Page 2 As the basis for the opinions expressed below, we have examined the Certificate of Incorporation and Bylaws of the Company, each as amended, the resolutions adopted by the board of directors (the "Board of Directors") of the Company with respect to the filing of the Registration Statement and related matters (the "Board Resolutions"), the Registration Statement, the Prospectuses contained therein, forms (filed as exhibits to the Registration Statement) of the Indentures and the Guarantee Agreements, and such statutes, regulations, corporate records and documents, certificates of corporate and public officials and other instruments as we have deemed necessary or advisable for the purposes of this opinion. In giving such opinions, we have relied upon certificates of officers of the Company with respect to the accuracy of the material factual matters contained in such certificates. In such examination, we have assumed (i) that the signatures on all documents that we have examined are genuine, (ii) the authenticity of all documents submitted to us as originals, and (iii) the conformity with the original documents of all documents submitted to us as copies. In connection with this opinion, we have assumed that (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and (ii) the Offered Securities will be issued and exchanged in compliance with applicable federal and state securities laws and in the manner stated in the Registration Statement. Based upon the foregoing, subject to the qualifications set forth herein, and having regard for such legal considerations as we have deemed relevant, we are of the opinion that: 1. With respect to a series of Debt Securities, when (i) the Indenture and the Supplemental Indenture relating to such series of Debt Securities have been duly authorized and validly executed and delivered by each of the parties thereto; (ii) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended; (iii) the Board of Directors of the Company or an authorized committee thereof (the "Board") has taken all necessary corporate action to approve and establish the terms of such series of Debt Securities, to approve the issuance thereof and the terms of the offering thereof and related matters; and (iv) such Debt Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and the Supplemental Indenture relating to such series of Debt Securities and the provisions of the applicable definitive purchase, underwriting or similar agreement approved by the Board upon payment of the consideration therefor provided for therein, such Debt Securities will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof is subject to the effect of (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws relating to or affecting creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2. With respect to any series of Preferred Stock, when (i) the Board and the appropriate officers of the Company have taken all necessary corporate action to fix and approve the terms of the Preferred Stock and the terms of sale thereof (including upon conversion of Debt Securities if so provided) in accordance with the Board Resolutions, including the adoption of a Certificate of Designation for the Preferred Stock in the form required by applicable law; (ii) such Certificate of Designation has been duly filed with the Secretary of State of the State of Delaware; (iii) certificates representing the shares of the Preferred Stock have been manually signed by an authorized officer of the 3 Board of Directors Seitel, Inc. August 20, 1999 Page 3 transfer agent and registrar for the Preferred Stock and registered by such transfer agent and registrar, and delivered to the purchasers thereof; and (iv) the Company receives consideration per share for the Preferred Stock in such amount as may be determined by the Board in a form legally valid under the Delaware General Corporation Law, the issuance and sale of the shares of Preferred Stock will have been duly authorized, and such shares will be validly issued, fully paid and nonassessable. 3. With respect to the Common Stock, when (i) the Board and the appropriate officers of the Company have taken all necessary corporate action to fix and approve the terms of the sale of the Common Stock (including upon conversion of Debt Securities if so provided) in accordance with the Board Resolutions; (ii) certificates representing the shares of the Common Stock have been manually signed by an authorized officer of the transfer agent and registrar for the Common Stock and registered by such transfer agent and registrar, and delivered to the purchasers thereof; and (iii) the Company receives consideration per share for the Common Stock in such amount as may be determined by the Board in a form legally valid under the Delaware General Corporation Law, the issuance and sale of the shares of Common Stock will have been duly authorized, and such shares will be validly issued, fully paid and nonassessable. 4. With respect to a Guarantee to be issued pursuant to the applicable Guarantee Agreement, when (i) such Guarantee Agreement has been duly authorized, validly executed and delivered by each of the parties thereto and (ii) such Guarantee Agreement has been duly qualified under the Trust Indenture Act of 1939, as amended, such Guarantee will constitute a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof is subject to the effect of (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws relating to or affecting creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The opinions expressed herein are limited exclusively to the federal laws of the United States of America, the laws of the State of Texas and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. This opinion is rendered solely for the benefit of the Company and is not to be used, circulated, copied, quoted or referred to without our prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the statements made with respect to us under the caption "Legal Matters" in the Prospectus included as part of the Registration Statement. Very truly yours, /s/ William Mark Young William Mark Young, Partner EX-5.2 12 OPINION OF RICHARDS LAYTON & FINGER, L.L.P. 1 EXHIBIT 5.2 August 20, 1999 Seitel Capital Trust I Seitel Capital Trust II c/o Seitel, Inc. 50 Briar Hollow Lane 7th Floor, West Building Houston, Texas 77027 Re: Seitel Capital Trust I and Seitel Capital Trust II Ladies and Gentlemen: We have acted as special Delaware counsel for Seitel, Inc., a Delaware corporation (the "Company"), Seitel Capital Trust I, a Delaware business trust ("Trust I"), and Seitel Capital Trust II, a Delaware business trust ("Trust II"). Trust I and Trust II are hereinafter collectively referred to as the "Trusts" and sometimes hereinafter individually referred to as a "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of Trust I, as filed with the Secretary of State on August 19, 1999; (b) The Certificate of Trust of Trust II, as filed with the Secretary of State on August 19, 1999; (c) The Declaration of Trust of Trust I, dated as of August 19, 1999 among the Company and the trustees of Trust I named therein; 2 Seitel Capital Trust I Seitel Capital Trust II August 20, 1999 Page 2 (d) The Declaration of Trust of Trust II, dated as of August 19, 1999 among the Company and the trustees of Trust II named therein; (e) The Registration Statement (the "Registration Statement") on Form S-3, including a preliminary prospectus with respect to the Trusts (the "Prospectus"), relating to the Preferred Securities of the Trusts representing undivided beneficial interests in the assets of the Trusts (each, a "Preferred Security" and collectively, the "Preferred Securities"), as filed by the Company and the Trusts with the Securities and Exchange Commission on August 20, 1999; (f) A form of Amended and Restated Declaration of Trust for each of the Trusts, to be entered into between the Company, the trustees of the Trust named therein, and the holders, from time to time, of the undivided beneficial interests in the assets of such Trust (including Exhibits A, B and C thereto) (collectively, the "Declarations" and individually, a "Declaration"), attached as an exhibit to the Registration Statement; and (g) A Certificate of Good Standing for each of the Trusts, dated August 19, 1999, obtained from the Secretary of State. Initially capitalized terms used herein and not otherwise defined are used as defined in the Declarations. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (g) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (g) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that each of the Declarations will constitute the entire agreement among the parties thereto with respect to the subject matter thereof, including with respect to the creation, operation and termination of the applicable Trust, and that the Declarations and the Certificates of Trust will be in full force and effect and will not be amended, (ii) except to the extent provided in paragraph 1 below, the due 3 Seitel Capital Trust I Seitel Capital Trust II August 20, 1999 Page 3 organization or due formation, as the case may be, and valid existence in good standing of each party to the documents examined by us under the laws of the jurisdiction governing its organization or formation, (iii) the legal capacity of natural persons who are parties to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) the due authorization, execution and delivery by all parties thereto of all documents examined by us, (vi) the receipt by each Person to whom a Preferred Security is to be issued by the Trusts (collectively, the "Preferred Security Holders") of a Preferred Security Certificate for such Preferred Security and the payment for such Preferred Security, in accordance with the Declarations and the Registration Statement, and (vii) that the Preferred Securities are authenticated, issued and sold to the Preferred Security Holders in accordance with the Declarations and the Registration Statement. We have not participated in the preparation of the Registration Statement or the Prospectus and assume no responsibility for their contents. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder which are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: 1. Each of the Trusts has been duly created and is validly existing in good standing as a business trust under the Business Trust Act. 2. The Preferred Securities of each Trust will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable beneficial interests in the assets of the applicable Trust. 3. The Preferred Security Holders, as beneficial owners of the applicable Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Preferred Security Holders may be obligated to make payments as set forth in the Declaration. We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. We hereby consent to the use of our name under the heading "Legal Matters" in the Prospectus. In giving the foregoing consents, 4 Seitel Capital Trust I Seitel Capital Trust II August 20, 1999 Page 4 we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, /s/ RICHARDS, LAYTON & FINGER, P.A. EAM/rmc EX-12.1 13 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12.1 Seitel, Inc. and Subsidiaries Computation of Ratio of Earnings to Fixed Charges (in thousands)
Six Months Year Ended December 31, Ended ---------------------------------------------- June 30, 1994 1995 1996 1997 1998 1999 ------- ------- ------- ------- ------- -------- EARNINGS: Net Income $ 9,315 $ 8,679 $15,249 $31,557 $24,360 $ 5,625 Add: Extraordinary charge 304 -- -- -- -- -- Loss from discontinued operations 52 1,448 988 -- -- -- Provision for income taxes 5,681 5,898 8,863 17,422 13,623 3,727 Fixed charges 3,808 4,518 5,936 7,058 8,906 7,329 Less: Capitalized interest -- (835) (1,525) (2,105) (2,486) (1,582) Undistributed earnings of less than 50% owned affiliates -- -- -- (146) (222) -- ---------------------------------------------------------- Total earnings $19,160 $19,708 $29,511 $53,786 $44,181 $15,099 ========================================================== FIXED CHARGES: Interest expense $ 3,455 $ 3,407 $ 4,063 $ 4,609 $ 5,963 $ 5,331 Capitalized interest -- 835 1,525 2,105 2,486 1,582 Rental expense representative of interest factor 158 190 206 202 252 171 Amortization of debt discount 195 86 142 142 205 245 ---------------------------------------------------------- Total fixed charges $ 3,808 $ 4,518 $ 5,936 $ 7,058 $ 8,906 $ 7,329 ========================================================== RATIO OF EARNINGS TO FIXED CHARGES 5.0 4.4 5.0 7.6 5.0 2.1
EX-23.1 14 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our report dated March 25, 1999, incorporated by reference in Seitel, Inc.'s Form 10-K for the year ended December 31, 1998 and to all references to our Firm included in this registration statement. ARTHUR ANDERSEN LLP Houston, Texas August 20, 1999 EX-23.4 15 CONSENT OF FORREST A. GARB & ASSOCIATES, INC. 1 EXHIBIT 23.4 [FORREST A. GARB & ASSOCIATES, INC. LETTERHEAD] August 20, 1999 CONSENT OF EXPERT Ms. Debra D. Valice Seitel, Inc. 50 Briar Hollow Lane 7th Floor West Houston, TX 77027 Dear Ms. Valice: Forrest A. Garb & Associates, Inc., petroleum consultants, hereby consent to the incorporation by reference in any registration statement or other document filed with the Securities and Exchange Commission by Seitel, Inc., our January 1, 1999 reserve report published February 1, 1999, and to all references to our firm included therein. Forrest A. Garb & Associates, Inc. By: /s/ Forrest A. Garb -------------------------- Name: Forrest A. Garb -------------------------- Title: Chairman of the Board -------------------------- Dallas, Texas August 20, 1999 EX-25.1 16 STATEMENT OF ELIGIBILITY & QUALIFICATION 1 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 -------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --- ------------------------------ THE FIRST NATIONAL BANK OF CHICAGO (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 36-0899825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) THE FIRST NATIONAL BANK OF CHICAGO ONE FIRST NATIONAL PLAZA, SUITE 0286 CHICAGO, ILLINOIS 60670-0286 ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) -------------------- SEITEL, INC. (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 76-00254341 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 509 BRIAN HOLLOW LANE 7TH FLOOR, WEST HOUSTON, TEXAS 77027 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) SENIOR DEBT SECURITIES SUBORDINATED DEBT SECURITIES JUNIOR SUBORDINATED DEBENTURES GUARANTEES OF PREFERRED SECURITIES OF SEITAL CAPITAL TRUST I GUARANTEES OF PREFERRED SECURITIES OF SEITAL CAPITAL TRUST II (TITLE OF INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING 2 INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C.. (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificates of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. 2 3 Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The First National Bank of Chicago, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 16th day of August, 1999. THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE BY /S/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT * EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1998 (REGISTRATION NO. 333-51907-01). 3 4 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT August 16, 1999 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of the Indenture between Seitel, Inc. and The First National Bank of Chicago, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO BY: /S/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT 4 5 EXHIBIT 7 Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-1 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
C400 DOLLAR AMOUNTS IN THOUSANDS ---- RCFD BIL MIL THOU ---- ------------ ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD a. Noninterest-bearing balances and currency and coin(1)....................... 0081 3,809,517 1.a b. Interest-bearing balances(2)................................................ 0071 4,072,166 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) .................. 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)............ ... 1773 12,885,728 2.b 3. Federal funds sold and securities purchased under agreements to resell ........ 1350 4,684,756 3. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RCFD RC-C)....................................................................... 2122 34,304,806 4.a b. LESS: Allowance for loan and lease losses................................... 3123 411,476 4.b c. LESS: Allocated transfer risk reserve....................................... 3128 3,884 4.c d. Loans and leases, net of unearned income, allowance, and RCFD reserve (item 4.a minus 4.b and 4.c)........................................ 2125 33,889,446 4.d 5. Trading assets (from Schedule RD-D)............................................ 3545 5,100,499 5. 6. Premises and fixed assets (including capitalized leases) ...................... 2145 754,052 6. 7. Other real estate owned (from Schedule RC-M) .................................. 2150 5,244 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)................................................. 2130 201,068 8. 9. Customers' liability to this bank on acceptances outstanding .................. 2155 265,041 9. 10. Intangible assets (from Schedule RC-M)......................................... 2143 285,709 10. 11. Other assets (from Schedule RC-F).............................................. 2160 2,987,184 11. 12. Total assets (sum of items 1 through 11)....................................... 2170 68,940,410 12.
- ------------ (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 6 Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-2 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS ----------------- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C RCON from Schedule RC-E, part 1)..................................... 2200 22,163,664 13.a (1) Noninterest-bearing(1)...................................... 6631 9,740,100 13.a1 (2) Interest-bearing............................................ 6636 12,423,564 13.a2 b. In foreign offices, Edge and Agreement subsidiaries, and RCFN IBFs (from Schedule RC-E, part II)... .......................... 2200 19,273,426 13.b (1) Noninterest bearing......................................... 6631 334,741 13.b1 (2) Interest-bearing............................................ 6636 18,938,685 13.b2 14. Federal funds purchased and securities sold under agreements to repurchase: RCFD 2800 4,405,792 14 15. a. Demand notes issued to the U.S. Treasury ....................... RCON 2840 173,505 15.a b. Trading Liabilities(from Schedule RC-D)......................... RCFD 3548 4,824,567 15.b 16. Other borrowed money: RCFD a. With original maturity of one year or less...................... 2332 7,453,761 16.a b. With original maturity of more than one year................... A547 330,300 16.b c. With original maturity of more than three years ................ A548 357,737 16.c 17. Not applicable 18. Bank's liability on acceptance executed and outstanding 2920 265,041 18. 19. Subordinated notes and debentures.................................. 3200 2,600,000 19. 20. Other liabilities (from Schedule RC-G)............................. 2930 1,878,367 20. 21. Total liabilities (sum of items 13 through 20)..................... 2948 63,726,160 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus...................... 3838 0 23. 24. Common stock....................................................... 3230 200,858 24. 25. Surplus (exclude all surplus related to preferred stock) 3839 3,239,836 25. 26. a. Undivided profits and capital reserves.......................... 3632 1,813,367 26.a b. Net unrealized holding gains (losses) on available-for-sale securities.................................... ................. 8434 (37,357) 26.b c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES.............. 4336 0 26.c 27. Cumulative foreign currency translation adjustments ............... 3284 (2,454) 27. 28. Total equity capital (sum of items 23 through 27) ................. 3210 5,214,250 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28).............................. 3300 68,940,410 29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for ---- Number the bank by independent external Number auditors as of any date during 1996 .................... RCFD 6724 N/A M.1. ---- 1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external conducted in accordance with generally accepted auditing auditors standards by a certified public accounting firm which submits a report on the consolidated holding company 6 = Compilation of the bank's financial statements by external (but not on the bank separately) auditors 3 = Directors' examination of the bank conducted in 7 = Other audit procedures (excluding tax preparation work) accordance with generally accepted auditing standards by a certified public accounting firm (may be required by 8 = No external audit work state chartering authority)
- --------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. EX-25.2 17 T-1 #2 1 EXHIBIT 25.2 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 -------- STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --- ------------------------- THE FIRST NATIONAL BANK OF CHICAGO (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 36-0899825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) THE FIRST NATIONAL BANK OF CHICAGO ONE FIRST NATIONAL PLAZA, SUITE 0286 CHICAGO, ILLINOIS 60670-0286 ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) --------------------------- SEITEL CAPITAL TRUST I (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 76-00254341 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 509 BRIAN HOLLOW LANE 7TH FLOOR, WEST HOUSTON, TEXAS 77027 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) PREFERRED SECURITIES (TITLE OF INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. 2 Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C.. (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificates of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The First National Bank of Chicago, a national banking 2 3 association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 16th day of August, 1999. THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE BY /S/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT * EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1998 (REGISTRATION NO. 333-51907-01). 3 4 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT August 16, 1999 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of the Amended and Restated Trust Agreement between Seitel Capital Trust I and The First National Bank of Chicago, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO BY: /S/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT 4 5 EXHIBIT 7 Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-1 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
C400 DOLLAR AMOUNTS IN THOUSANDS ---- RCFD BIL MIL THOU ---- ------------ ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD a. Noninterest-bearing balances and currency and coin(1)....................... 0081 3,809,517 1.a b. Interest-bearing balances(2)................................................ 0071 4,072,166 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) .................. 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)............ ... 1773 12,885,728 2.b 3. Federal funds sold and securities purchased under agreements to resell ........ 1350 4,684,756 3. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RCFD RC-C)....................................................................... 2122 34,304,806 4.a b. LESS: Allowance for loan and lease losses................................... 3123 411,476 4.b c. LESS: Allocated transfer risk reserve....................................... 3128 3,884 4.c d. Loans and leases, net of unearned income, allowance, and RCFD reserve (item 4.a minus 4.b and 4.c)........................................ 2125 33,889,446 4.d 5. Trading assets (from Schedule RD-D)............................................ 3545 5,100,499 5. 6. Premises and fixed assets (including capitalized leases) ...................... 2145 754,052 6. 7. Other real estate owned (from Schedule RC-M) .................................. 2150 5,244 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)................................................. 2130 201,068 8. 9. Customers' liability to this bank on acceptances outstanding .................. 2155 265,041 9. 10. Intangible assets (from Schedule RC-M)......................................... 2143 285,709 10. 11. Other assets (from Schedule RC-F).............................................. 2160 2,987,184 11. 12. Total assets (sum of items 1 through 11)....................................... 2170 68,940,410 12.
- ------------ (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 6 Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-2 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS ----------------- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C RCON from Schedule RC-E, part 1)..................................... 2200 22,163,664 13.a (1) Noninterest-bearing(1)...................................... 6631 9,740,100 13.a1 (2) Interest-bearing............................................ 6636 12,423,564 13.a2 b. In foreign offices, Edge and Agreement subsidiaries, and RCFN IBFs (from Schedule RC-E, part II)... .......................... 2200 19,273,426 13.b (1) Noninterest bearing......................................... 6631 334,741 13.b1 (2) Interest-bearing............................................ 6636 18,938,685 13.b2 14. Federal funds purchased and securities sold under agreements to repurchase: RCFD 2800 4,405,792 14 15. a. Demand notes issued to the U.S. Treasury ....................... RCON 2840 173,505 15.a b. Trading Liabilities(from Schedule RC-D)......................... RCFD 3548 4,824,567 15.b 16. Other borrowed money: RCFD a. With original maturity of one year or less...................... 2332 7,453,761 16.a b. With original maturity of more than one year................... A547 330,300 16.b c. With original maturity of more than three years ................ A548 357,737 16.c 17. Not applicable 18. Bank's liability on acceptance executed and outstanding 2920 265,041 18. 19. Subordinated notes and debentures.................................. 3200 2,600,000 19. 20. Other liabilities (from Schedule RC-G)............................. 2930 1,878,367 20. 21. Total liabilities (sum of items 13 through 20)..................... 2948 63,726,160 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus...................... 3838 0 23. 24. Common stock....................................................... 3230 200,858 24. 25. Surplus (exclude all surplus related to preferred stock) 3839 3,239,836 25. 26. a. Undivided profits and capital reserves.......................... 3632 1,813,367 26.a b. Net unrealized holding gains (losses) on available-for-sale securities.................................... ................. 8434 (37,357) 26.b c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES.............. 4336 0 26.c 27. Cumulative foreign currency translation adjustments ............... 3284 (2,454) 27. 28. Total equity capital (sum of items 23 through 27) ................. 3210 5,214,250 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28).............................. 3300 68,940,410 29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for ---- Number the bank by independent external Number auditors as of any date during 1996 .................... RCFD 6724 N/A M.1. ---- 1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external conducted in accordance with generally accepted auditing auditors standards by a certified public accounting firm which submits a report on the consolidated holding company 6 = Compilation of the bank's financial statements by external (but not on the bank separately) auditors 3 = Directors' examination of the bank conducted in 7 = Other audit procedures (excluding tax preparation work) accordance with generally accepted auditing standards by a certified public accounting firm (may be required by 8 = No external audit work state chartering authority)
- --------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. EX-25.3 18 T-1 #3 1 EXHIBIT 25.3 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) -- ----------------- THE FIRST NATIONAL BANK OF CHICAGO (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER) A NATIONAL BANKING ASSOCIATION 36-0899825 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) THE FIRST NATIONAL BANK OF CHICAGO ONE FIRST NATIONAL PLAZA, SUITE 0286 CHICAGO, ILLINOIS 60670-0286 ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919 (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE) ----------------- SEITEL CAPITAL TRUST II (EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER) DELAWARE 76-00254341 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 509 BRIAN HOLLOW LANE 7TH FLOOR, WEST HOUSTON, TEXAS 77027 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) PREFERRED SECURITIES (TITLE OF INDENTURE SECURITIES) ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. 2 Comptroller of Currency, Washington, D.C.; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington D.C.. (b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. The trustee is authorized to exercise corporate trust powers. ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. No such affiliation exists with the trustee. ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS STATEMENT OF ELIGIBILITY. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificates of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not Applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not Applicable. 9. Not Applicable. Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The First National Bank of Chicago, a national banking 2 3 association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago and State of Illinois, on the 16th day of August, 1999. THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE BY /s/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT * EXHIBITS 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF CHICAGO, FILED AS EXHIBIT 25 TO THE REGISTRATION STATEMENT ON FORM S-3 OF U S WEST CAPITAL FUNDING, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1998 (REGISTRATION NO. 333-51907-01). 3 4 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT August 16, 1999 Securities and Exchange Commission Washington, D.C. 20549 Ladies and Gentlemen: In connection with the qualification of the Amended and Restated Trust Agreement between Seitel Capital Trust II and The First National Bank of Chicago, as Trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO BY: /s/ SANDRA L. CARUBA SANDRA L. CARUBA VICE PRESIDENT 4 5 EXHIBIT 7 Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-1 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. SCHEDULE RC--BALANCE SHEET
C400 DOLLAR AMOUNTS IN THOUSANDS ---- RCFD BIL MIL THOU ---- ------------ ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD a. Noninterest-bearing balances and currency and coin(1)....................... 0081 3,809,517 1.a b. Interest-bearing balances(2)................................................ 0071 4,072,166 1.b 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A) .................. 1754 0 2.a b. Available-for-sale securities (from Schedule RC-B, column D)............ ... 1773 12,885,728 2.b 3. Federal funds sold and securities purchased under agreements to resell ........ 1350 4,684,756 3. 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RCFD RC-C)....................................................................... 2122 34,304,806 4.a b. LESS: Allowance for loan and lease losses................................... 3123 411,476 4.b c. LESS: Allocated transfer risk reserve....................................... 3128 3,884 4.c d. Loans and leases, net of unearned income, allowance, and RCFD reserve (item 4.a minus 4.b and 4.c)........................................ 2125 33,889,446 4.d 5. Trading assets (from Schedule RD-D)............................................ 3545 5,100,499 5. 6. Premises and fixed assets (including capitalized leases) ...................... 2145 754,052 6. 7. Other real estate owned (from Schedule RC-M) .................................. 2150 5,244 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)................................................. 2130 201,068 8. 9. Customers' liability to this bank on acceptances outstanding .................. 2155 265,041 9. 10. Intangible assets (from Schedule RC-M)......................................... 2143 285,709 10. 11. Other assets (from Schedule RC-F).............................................. 2160 2,987,184 11. 12. Total assets (sum of items 1 through 11)....................................... 2170 68,940,410 12.
- ------------ (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 6 Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-2 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN THOUSANDS ----------------- LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C RCON from Schedule RC-E, part 1)..................................... 2200 22,163,664 13.a (1) Noninterest-bearing(1)...................................... 6631 9,740,100 13.a1 (2) Interest-bearing............................................ 6636 12,423,564 13.a2 b. In foreign offices, Edge and Agreement subsidiaries, and RCFN IBFs (from Schedule RC-E, part II)... .......................... 2200 19,273,426 13.b (1) Noninterest bearing......................................... 6631 334,741 13.b1 (2) Interest-bearing............................................ 6636 18,938,685 13.b2 14. Federal funds purchased and securities sold under agreements to repurchase: RCFD 2800 4,405,792 14 15. a. Demand notes issued to the U.S. Treasury ....................... RCON 2840 173,505 15.a b. Trading Liabilities(from Schedule RC-D)......................... RCFD 3548 4,824,567 15.b 16. Other borrowed money: RCFD a. With original maturity of one year or less...................... 2332 7,453,761 16.a b. With original maturity of more than one year................... A547 330,300 16.b c. With original maturity of more than three years ................ A548 357,737 16.c 17. Not applicable 18. Bank's liability on acceptance executed and outstanding 2920 265,041 18. 19. Subordinated notes and debentures.................................. 3200 2,600,000 19. 20. Other liabilities (from Schedule RC-G)............................. 2930 1,878,367 20. 21. Total liabilities (sum of items 13 through 20)..................... 2948 63,726,160 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus...................... 3838 0 23. 24. Common stock....................................................... 3230 200,858 24. 25. Surplus (exclude all surplus related to preferred stock) 3839 3,239,836 25. 26. a. Undivided profits and capital reserves.......................... 3632 1,813,367 26.a b. Net unrealized holding gains (losses) on available-for-sale securities.................................... ................. 8434 (37,357) 26.b c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES.............. 4336 0 26.c 27. Cumulative foreign currency translation adjustments ............... 3284 (2,454) 27. 28. Total equity capital (sum of items 23 through 27) ................. 3210 5,214,250 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28).............................. 3300 68,940,410 29.
Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for ---- Number the bank by independent external Number auditors as of any date during 1996 .................... RCFD 6724 N/A M.1. ---- 1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other with generally accepted auditing standards by a certified external auditors (may be required by state chartering public accounting firm which submits a report on the bank authority) 2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external conducted in accordance with generally accepted auditing auditors standards by a certified public accounting firm which submits a report on the consolidated holding company 6 = Compilation of the bank's financial statements by external (but not on the bank separately) auditors 3 = Directors' examination of the bank conducted in 7 = Other audit procedures (excluding tax preparation work) accordance with generally accepted auditing standards by a certified public accounting firm (may be required by 8 = No external audit work state chartering authority)
- --------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. -----END PRIVACY-ENHANCED MESSAGE-----