EX-4.2






Exhibit 4.2




BAKER HUGHES INCORPORATED




Officers’ Certificate




     In accordance with the resolutions of the Securities Committee of the Board of Directors of
Baker Hughes Incorporated (the “Company”) dated October 23, 2008, the undersigned officers of the
Company hereby adopt this Officers’ Certificate for the purpose of establishing two series of
Securities (collectively, the “Notes”) under the Indenture, dated as of October 28, 2008 (the
“Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee.
This Officers’ Certificate is executed pursuant to Section 301 of the Indenture. In addition to
the terms provided in the Indenture with respect to any series of Securities issued thereunder, the
terms of the Notes shall be as follows (capitalized terms used herein and not otherwise defined
herein having the respective meanings ascribed to them in the Indenture):




     (1) The respective titles of the two series of the Notes shall be the “6.50% Senior
Notes due 2013” (the “First Series”) and the “7.50% Senior Notes due 2018” (the “Second
Series”, and, together with the First Series, the “Series”), respectively, of the Company.




     (2) (a) The aggregate principal amount of Notes of the First Series which may be
authenticated and delivered under the Indenture is limited to $500,000,000 (plus such
additional amounts of Notes of the First Series as may be authorized for issuance from time
to time by or pursuant to a Board Resolution and set forth in an Officers’ Certificate
prior to the issuance thereof) except for Notes of the First Series authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes
of the First Series pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture.




     (b) The aggregate principal amount of Notes of the Second Series which may be
authenticated and delivered under the Indenture is limited to $750,000,000 (plus such
additional amounts of Notes of the Second Series as may be authorized for issuance from
time to time by or pursuant to a Board Resolution and set forth in an Officers’ Certificate
prior to the issuance thereof) except for Notes of the Second Series authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes
of the Second Series pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture.




     (3) The principal of the Notes shall be payable on, with respect to the First Series,
November 15, 2013 and, with respect to the Second Series, November 15, 2018.




     (4) The Notes of the First Series shall bear interest at the rate of 6.50% per annum
and the Notes of the Second Series shall bear interest at the rate of 7.50% per annum, in
each case from October 28, 2008 or the most recent May 15
or November 15 to which interest has been paid or duly provided for on the Notes.
Each May 15 or November 15 in each year, commencing May 15, 2009,



 









 







shall be an “Interest Payment Date” for the Notes. The May 1 or November 1 (whether
or not a Business Day), as the case may be, next preceding an Interest Payment Date shall
be the “Regular Record Date” for the interest payable on such Interest Payment Date.
Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day
months.




     (5) The principal of (and premium, if any) and interest on the Notes of each Series
shall be payable (x) if the Notes of a Series are Global Securities, through the relevant
Depositary or (y) if the Notes of a Series are not Global Securities, at the office or
agency of the Company maintained for that purpose in New York, New York, against surrender
of such Note in the case of any payment due at the Maturity of the principal thereof or any
payment of interest that becomes payable on a day other than an Interest Payment Date, and
in the case of clause (x) or clause (y), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts;
provided, however, that if the Notes of a Series are not Global Securities,
(i) payment of interest on an Interest Payment Date will be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Security
Register; and all other payments will be made by check against surrender of such Notes;
(ii) all payments by check will be made in next-day funds (i.e., funds that become
available on the day after the check is cashed); and (iii) notwithstanding clauses (i) and
(ii) above, with respect to any payment of any amount due on the Notes of a Series, if such
Note is in a denomination of at least $1,000,000 and the Holder thereof at the time of
surrender thereof or, in the case of any payment of interest on any Interest Payment Date,
the Holder thereof on the related Regular Record Date delivers a written request to the
Paying Agent to make such payment by wire transfer at least five Business Days before the
date such payment becomes due, together with appropriate wire transfer instructions
specifying an account at a bank in New York, New York, the Company shall make such payment
by wire transfer of immediately available funds to such account at such bank in New York
City, any such wire instructions, once properly given by a Holder as to such Notes,
remaining in effect as to such Holder and such Notes unless and until new instructions are
given in the manner described above and provided further, that
notwithstanding anything in the foregoing to the contrary, if the Notes of a Series are
Global Securities, payment shall be made pursuant to the Applicable Procedures of the
relevant Depositary. In accordance with Section 1002 of the Indenture, the “Place of
Payment” with respect to the Notes of each Series shall be New York, New York.




     (6) The Notes of a Series shall be subject to redemption, as a whole at any time or in
part from time to time, at the option of the Company, at a Redemption Price equal to the
greater of (i) 100% of the principal amount of the Notes to be redeemed or (ii) the sum of
the present values of the remaining scheduled payments of principal and interest on the
Notes to be redeemed from the Redemption Date to the Stated Maturity of the Notes to be
redeemed (exclusive of any interest accrued to the Redemption Date), discounted to the date
on which the Notes are to be redeemed on a semi-annual basis assuming a 360-



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day year consisting of twelve 30-day months, at the Treasury Rate plus 50 basis points
in the case of the First Series or 50 basis points in the case of the Second Series, plus,
in each case, any interest accrued but not paid on the Notes to be redeemed to the date on
which the Notes are to be redeemed (subject to the right of Holders on the relevant Regular
Record Date to receive interest due on the relevant Interest Payment Date). Unless the
Company defaults in payment of the Redemption Price, on and after the Redemption Date
interest will cease to accrue on the Notes or portions thereof called for redemption. If
less than all of the Notes of a Series are to be redeemed at any time, the Trustee will
select Notes for redemption on a pro rata basis. No Notes of $2,000 or less can be
redeemed in part. Notices of redemption will be delivered at least 30 but not more than 60
days before the Redemption Date to each Holder of Notes of a Series to be redeemed at its
registered address, except that notices may be mailed more than 60 days prior to a
Redemption Date if the notice is issued in connection with a Covenant Defeasance or
Defeasance with respect to the Notes of such Series or a satisfaction and discharge of the
Indenture with respect to Notes of such Series. Notice of any redemption, may, at the
Company’s discretion, be subject to one or more conditions precedent. A notice of
redemption need not set forth the exact Redemption Price but only the manner of calculation
thereof.




     “Treasury Rate” means, with respect to any Redemption Date for the Notes of a Series,
(i) the yield, under the heading which represents the average for the immediately preceding
week, appearing in the most recently published statistical release designated “H.15(519)”
or any successor publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable Treasury Issue with respect
to such Series (if no maturity is within three months before or after the Stated Maturity
for the Notes of such Series, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight line basis, rounding
to the nearest month) or (ii) if that release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for that
Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding
the Redemption Date.




     “Comparable Treasury Issue” means, with respect to the Notes of a Series, the United
States Treasury security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Notes of such Series to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the remaining
term of the Notes of such



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Series to be redeemed. “Independent Investment Banker” means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the Company.




     “Comparable Treasury Price” means with respect to any Redemption Date for any Notes
(i) the average of four Reference Treasury Dealer Quotations for that Redemption Date,
after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii)
if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the
average of all such quotations.




     “Reference Treasury Dealer” means each of Banc of America Securities LLC, Citigroup
Global Markets Inc., J.P. Morgan Securities Inc. and one other primary U.S. Government
securities dealer in New York City (each, a “Primary Treasury Dealer”) appointed by the
Trustee in consultation with the Company; provided, however, that if any of the foregoing
shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor another
Primary Treasury Dealer.




     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of
its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at
5:00 p.m. (New York City time) on the third Business Day preceding that Redemption Date.




(7) (a) So long as any of the Notes of a Series remain outstanding, subject to
paragraph 7(c) below, the Company will not, and will not permit any Restricted
Subsidiary to, issue, assume or guarantee any debt for money borrowed (“debt”) if
that debt is secured by a mortgage on any Principal Property, or on any shares of
stock or indebtedness of any Restricted Subsidiary (whether the Principal Property,
shares of stock or indebtedness is owned at or acquired after October 28, 2008),
without in any such case effectively providing that the Notes of such Series shall
be secured equally and ratably with or prior to such debt until such time as such
debt is no longer so secured by such mortgage. This restriction, however, shall not
apply to:




     (i) mortgages on property of any corporation or other Person
existing at the time such corporation or other Person becomes a
Restricted Subsidiary;




     (ii) mortgages on property of a corporation or other Person
existing at the time that corporation or other Person is merged
into or consolidated with the Company or a Restricted Subsidiary
or at the time of a sale, transfer, conveyance or the disposition
of all or substantially all of



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the properties or assets of that corporation or other Person
to the Company or a Restricted Subsidiary;




     (iii) mortgages on any property the Company or any Restricted
Subsidiary acquires, constructs or improves that secure debt
issued, assumed or guaranteed (or issued, assumed or guaranteed
pursuant to a commitment entered into) prior to, at the time of or
within 12 months after the acquisition or completion of
construction or improvement of the property (or, in the case of
property constructed or improved, if later, the commencement of
commercial operation of the property) for the purpose of financing
all or any part of the purchase price of the property or the cost
of the construction or improvement (together with, in the case of
construction or improvement, mortgages on property previously
owned by the Company or any Restricted Subsidiary to the extent
constituting unimproved real property on which the property being
constructed or the improvement is located);




     (iv) mortgages securing debt owing by the Company or any
Restricted Subsidiary to the Company or another Restricted
Subsidiary;




     (v) mortgages on property of the Company or a Restricted
Subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof,
or in favor of any other country, or any political subdivision
thereof, to secure any debt incurred for the purpose of financing
all or any part of the purchase price or the cost of construction
or improvement of the property subject to such mortgages,
including mortgages incurred in connection with pollution control,
industrial revenue or similar financings;




     (vi) mortgages existing at the date of the original issuance
of the Notes;




     (vii) mortgages on inventory to secure current liabilities of
debt; and




     (viii) any extension, renewal or replacement or successive
extensions, renewals or replacements, in whole or in part, of any
mortgage referred to in the clauses immediately above if the
amount of debt secured by the extended, renewed or replacement
mortgage does not



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exceed the amount of the debt refinanced (plus accrued
interest and premiums with respect thereto) plus transaction
expenses related thereto and such mortgage is limited to the
property secured by the original mortgage plus improvements
thereon.




     (b) So long as any of the Notes of a Series remain outstanding, subject to paragraph
7(c) below, the Company will not, and will not permit any Restricted Subsidiary to, enter
into any Sale and Leaseback Transaction of any Principal Property unless (i) the Company or
such Restricted Subsidiary would be entitled to issue, assume or guarantee debt secured by
a mortgage upon the Principal Property involved in amount at least equal to the
Attributable Debt for that transaction without equally and ratably securing the Notes of
such Series, (ii) an amount in cash equal to the Attributable Debt for that transaction is
applied prior to, at the time of or within 12 months after that transaction to the
retirement of Notes of either Series or other debt of the Company or a Restricted
Subsidiary, which by its terms matures at or is extendible or renewable at the option of
the obligor to a date more than 12 months after its creation and which, in the case of such
debt of the Company, is not subordinate in right of payment to the Notes of such Series or
(iii) prior to, at the time of or within 12 months after such transaction, the Company or a
Restricted Subsidiary uses an amount equal to the Attributable Debt for the purchase of any
asset or any interest in an asset which would qualify, after purchase, as Principal
Property. This covenant does not apply to any Sales and Leaseback Transaction (i) entered
into in connection with an industrial revenue, pollution control or similar financing or
any Sale and Leaseback Transaction or (ii) in which the only parties involved are the
Company and any Subsidiary or Subsidiaries. When calculating the amount of Attributable
Debt, any Attributable Debt for these Sale and Leaseback Transactions will be excluded.




     (c) In addition to the exceptions set forth under paragraphs 7(a) and 7(b) above, the
Company and any Restricted Subsidiary may incur debt secured by mortgages and enter into
additional Sale and Leaseback Transactions otherwise prohibited by (and not permitted under
the exceptions to) paragraphs 7(a) or 7(b) as long as the total of such debt secured by
mortgages plus the Attributable Debt in respect of such Sale and Leaseback Transactions
does not exceed 15% of the Company’s Consolidated Net Tangible Assets.




     (d) For purposes of this paragraph 7, the following terms have the meanings specified
below:




     “Attributable Debt” means, with respect to any Sale and Leaseback Transaction, as of
the time of determination, the total obligation, discounted to present value at the annual
rate equal to the discount rate which would be applicable to a capital lease obligation
with a similar term in accordance with GAAP, of a lessee for rental payments (other than
amounts required to be paid on account of property taxes, maintenance, repairs, insurance,
water rates and other



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items which do not constitute payments for property rights) during the remaining
portion of the initial term of the lease with respect to such Sale and Leaseback
Transaction.




     “Consolidated Net Tangible Assets” means the total amount of assets less applicable
reserves and other properly deductible items after deducting (a) all current liabilities
excluding any thereof which are by their terms extendible or renewable at the option of the
obligor thereon to a time more than 12 months after the time as of which the amount thereof
is being computed, and (b) all goodwill, trade names, trademarks, patents, purchased
technology, unamortized debt discount and other like intangible assets, all as determined
on a consolidated basis for the Company and its consolidated subsidiaries as set forth on
the Company’s most recent quarterly balance sheet and computed in accordance with GAAP.




     “Principal Property” means any real property, manufacturing plant, warehouse, office
building or other physical facility, or any item of marine, transportation or construction
equipment or other like depreciable assets of the Company or of any Restricted Subsidiary,
whether owned at or acquired after October 28, 2008, unless, in the opinion of the Board of
Directors, such plant or facility or other assets is not of material importance to the
total business conducted by the Company and its Restricted Subsidiaries taken as a whole.




     “Restricted Subsidiary” means:




	 	(i)	 	any Subsidiary of the Company the principal assets and
business of which are located in the United States or Canada, except
Subsidiaries the principal business of which consists of providing sales and
acquisition financing of the products of the Company or any of its
Subsidiaries or owning, leasing, dealing in or developing real estate;
	 
	 	(ii)	 	any Subsidiary of the Company that owns, indirectly through
ownership of another Subsidiary of the Company, a Principal Property located
in the United States or Canada; or
	 
	 	(iii)	 	any other Subsidiary of the Company that the Company
designates as a Restricted Subsidiary.






     “Sale and Leaseback Transaction” means any arrangement with any Person under which the
Company or any Restricted Subsidiary leases for a term of more than three years any
Principal Property that the Company or any Restricted Subsidiary has sold or transferred or
will sell or transfer to that Person. This term excludes leases of any Principal Property
the Company or any Restricted Subsidiary acquires or places in service within 180 days
prior to the arrangement.




     (8) At any time when the Company is not subject to Section 13 or Section 15(d) of the
Exchange Act, so long as any Notes of a Series remain



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outstanding, upon the request of a holder of Notes of such Series, the Company will
promptly furnish or cause to be furnished the information specified under Rule 144A(d)(4)
of the Securities Act to such holder.




     (9) The covenants set forth in paragraphs (7) and (8) hereof with respect to Notes of
a Series are applicable only to the Securities of the First Series or the Second Series, as
applicable, and are solely for the benefit of the Holders of the Notes of such Series.




     (10) The Notes shall not be subject to redemption at the option of the Holders or to a
sinking fund requirement.




     (11) The Notes shall be issuable in minimum denominations of $2,000 and multiples of
$1,000 in excess thereof.




     (12) The provisions of Section 1302 and Section 1303 of the Indenture with respect to
Defeasance of the Notes of a Series and Covenant Defeasance of the Notes of a Series,
respectively, shall be applicable to the Notes of each Series.




     (13) The Notes of each Series shall be issued initially wholly in the form of one or
more Global Securities and The Depository Trust Company shall be the initial Depositary
with respect thereto.




     (14) The forms of the Notes of the First Series and the Second Series shall be in
substantially the respective forms set forth in Exhibit 1 and Exhibit 2 attached hereto
pursuant to Article II of the Indenture.



[Signature page follows]




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     IN WITNESS WHEREOF, each of the undersigned has duly executed this Officers’ Certificate this
28th day of October, 2008.



	 	 	 	 	 
	 	 	 
	 	By:  	                            /s/ Peter A. Ragauss
 	 
	 	 	Name:  	Peter A. Ragauss 	 
	 	 	Title:  	Senior Vice President and Chief
Financial Officer 	 
	 
	 	 	 
	 	By:  	                            /s/ Sandra E. Alford
 	 
	 	 	Name:  	Sandra E. Alford 	 
	 	 	Title:  	Corporate Secretary 	 
	 



Signature Page to Officers’ Certificate




 









 








EXHIBIT 1




Form of 6.50% Senior Notes due 2013




[See attached.]




 









 





EXHIBIT 2




Form of 7.50% Senior Notes due 2018




[See attached.]