EXHIBIT 4
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PLAINS RESOURCES INC.,
SUBSIDIARY GUARANTORS
NAMED HEREIN
and
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
Trustee
_______________
INDENTURE
Dated as of July 21, 1997
_______________
$50,000,000
10 1/4%SENIOR SUBORDINATED NOTES DUE 2006, SERIES C
10 1/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES D
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CROSS-REFERENCE TABLE
Indenture Section
310(a)(1)................................................... 7.10
(a)(2).................................................... 7.10
(a)(3).................................................... N.A.
(a)(4).................................................... N.A.
(a)(5).................................................... 7.08
(b)....................................................... 7.08; 7.10
(c)....................................................... N.A.
311(a)...................................................... 7.11
(b)....................................................... 7.11
(c)....................................................... N.A.
312(a)...................................................... 2.05
(b)....................................................... 13.03
(c)....................................................... 13.03
313(a)...................................................... 7.06
(b)(1).................................................... N.A.
(b)(2).................................................... 7.06
(c)....................................................... 7.06; 13.02
(d)....................................................... 7.06
314(a)...................................................... 4.02; 4.03; 13.02
(b)....................................................... N.A.
(c)(1).................................................... 13.04
(c)(2).................................................... 13.04
(c)(3).................................................... N.A.
(d)....................................................... N.A.
(e)....................................................... 13.05
(f)....................................................... N.A.
315(a)...................................................... 7.01(b)
(b)....................................................... 7.05; 13.02
(c)....................................................... 7.01(a)
(d)....................................................... 7.01(c)
(e)....................................................... 6.11
316(a)(last sentence)....................................... 2.09
(a)(1)(A)................................................. 6.05
(a)(1)(B)................................................. 6.02; 6.04; 9.02
(a)(2).................................................... N.A.
(b)....................................................... 6.07
(c)....................................................... N.A.
317(a)(1)................................................... 6.08
(a)(2).................................................... 6.09
(b)....................................................... 2.04
318(a)...................................................... 13.01
318(c)...................................................... 13.01
_____________
N.A. means Not Applicable.
NOTE: This Cross-Reference table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.............................................. -2-
SECTION 1.02. Other Definitions........................................ -22-
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ -23-
SECTION 1.04. Rules of Construction.................................... -23-
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.......................................... -24-
SECTION 2.02. Execution and Authentication............................. -25-
SECTION 2.03. Registrar and Paying Agent............................... -26-
SECTION 2.04. Paying Agent to Hold Money in Trust...................... -27-
SECTION 2.05. Holder Lists............................................. -27-
SECTION 2.06. Transfer and Exchange.................................... -27-
SECTION 2.07. Book-Entry Provisions for Global Securities.............. -31-
SECTION 2.08. Replacement Securities................................... -31-
SECTION 2.09. Outstanding Securities................................... -32-
SECTION 2.10. Treasury Securities...................................... -32-
SECTION 2.11. Temporary Securities..................................... -32-
SECTION 2.12. Cancellation............................................. -32-
SECTION 2.13. Defaulted Interest....................................... -33-
SECTION 2.14. Private Placement Legend................................. -33-
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notice to Trustee........................................ -33-
SECTION 3.02. Selection of Securities To Be Redeemed................... -34-
SECTION 3.03. Notice of Redemption..................................... -34-
SECTION 3.04. Effect of Notice of Redemption........................... -35-
SECTION 3.05. Deposit of Redemption Price.............................. -35-
SECTION 3.06. Securities Redeemed in Part.............................. -35-
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.................................... -35-
SECTION 4.02. SEC Reports.............................................. -36-
SECTION 4.03. Compliance Certificate................................... -36-
SECTION 4.04. Maintenance of Office or Agency.......................... -37-
SECTION 4.05. Corporate Existence...................................... -37-
SECTION 4.06. Waiver of Stay, Extension or Usury Laws.................. -37-
SECTION 4.07. Payment of Taxes and Other Claims........................ -38-
SECTION 4.08. Maintenance of Properties and Insurance.................. -38-
SECTION 4.09. Limitation on Incurrence of Additional Indebtedness...... -38-
SECTION 4.10. Limitation on Senior Subordinated Indebtedness........... -39-
SECTION 4.11. Limitation on Restricted Payments........................ -39-
SECTION 4.12. Limitation on Disposition of Assets...................... -40-
SECTION 4.13. Limitation on Liens Securing Indebtedness................ -43-
SECTION 4.14. Limitation on Payment Restrictions Affecting Subsidiaries -43-
SECTION 4.15. Limitation on Transactions with Related Persons.......... -43-
SECTION 4.16. Limitation on Conduct of Business........................ -44-
SECTION 4.17. Change of Control........................................ -44-
SECTION 4.18. Provision of Financial Information....................... -46-
SECTION 4.19. Registration Rights Agreement............................ -46-
SECTION 4.20. Qualification of Indenture............................... -46-
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, etc................................ -47-
SECTION 5.02. Successor Corporation Substituted.......................... -47-
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default....................................... -48-
SECTION 6.02. Acceleration............................................ -49-
SECTION 6.03. Other Remedies.......................................... -50-
SECTION 6.04. Waiver of Past Defaults................................. -50-
SECTION 6.05. Control by Majority..................................... -50-
SECTION 6.06. Limitation on Remedies.................................. -51-
SECTION 6.07. Rights of Holders To Receive Payment.................... -51-
SECTION 6.08. Collection Suit by Trustee.............................. -51-
SECTION 6.09. Trustee May File Proofs of Claim........................ -51-
SECTION 6.10. Priorities.............................................. -52-
SECTION 6.11. Undertaking for Costs................................... -52-
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee........................................ -52-
SECTION 7.02. Rights of Trustee........................................ -53-
SECTION 7.03. Individual Rights of Trustee............................. -54-
SECTION 7.04. Trustee's Disclaimer..................................... -54-
SECTION 7.05. Notice of Defaults....................................... -54-
SECTION 7.06. Reports by Trustee to Holders............................ -55-
SECTION 7.07. Compensation and Indemnity............................... -55-
SECTION 7.08. Replacement of Trustee................................... -56-
SECTION 7.09. Successor Trustee by Merger, etc......................... -56-
SECTION 7.10. Eligibility; Disqualification............................ -57-
SECTION 7.11. Preferential Collection of Claims Against Company........ -57-
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations..................... -57-
SECTION 8.02. Application of Trust Money............................... -58-
SECTION 8.03. Repayment to Company..................................... -59-
SECTION 8.04. Reinstatement............................................ -59-
SECTION 8.05. Survival of Certain Obligations.......................... -59-
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders............................... -60-
SECTION 9.02. With Consent of Holders.................................. -60-
SECTION 9.03. Compliance with Trust Indenture Act...................... -61-
SECTION 9.04. Revocation and Effect of Consents........................ -61-
SECTION 9.05. Notation on or Exchange of Securities.................... -61-
SECTION 9.06. Trustee Protected........................................ -62-
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Securities Subordinated to Senior Indebtedness........... -62-
SECTION 10.02. Company Not To Make Payments with Respect to
Securities in Certain Circumstances...................... -62-
SECTION 10.03. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation
or Reorganization of Company............................. -63-
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SECTION 10.04. Holders To Be Subrogated to Rights of Holders of Senior
Indebtedness............................................. -64-
SECTION 10.05. Obligations of the Company Unconditional................. -65-
SECTION 10.06. Trustee Entitled To Assume Payments Not Prohibited
in Absence of Notice..................................... -65-
SECTION 10.07. Application by Trustee of Monies Deposited with It....... -66-
SECTION 10.08. Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness............. -66-
SECTION 10.09. Holders Authorize Trustee To Effectuate Subordination
of Securities............................................ -66-
SECTION 10.10. Right of Trustee To Hold Senior Indebtedness............. -67-
SECTION 10.11. Article Ten Not To Prevent Events of Default............. -67-
SECTION 10.12. Payment.................................................. -67-
ARTICLE ELEVEN
GUARANTEES
SECTION 11.01. Unconditional Guarantee.................................. -67-
SECTION 11.02. Subsidiary Guarantors May Consolidate, etc., on
Certain Terms............................................ -68-
SECTION 11.03. Release of a Subsidiary Guarantor........................ -69-
SECTION 11.04. Limitation of Subsidiary Guarantor's Liability........... -70-
SECTION 11.05. Contribution............................................. -70-
SECTION 11.06. Execution and Delivery of Guarantee...................... -70-
SECTION 11.07. Severability............................................. -71-
ARTICLE TWELVE
SUBORDINATION OF GUARANTEES
SECTION 12.01. Guarantees Subordinated to Guarantor Senior Indebtedness. -71-
SECTION 12.02. Subsidiary Guarantors Not To Make Payments with
Respect to Guarantees in Certain Circumstances........... -71-
SECTION 12.03. Guarantees Subordinated to Prior Payment of All
Guarantor Senior Indebtedness on Dissolution,
Liquidation or Reorganization of Subsidiary Guarantor.... -72-
SECTION 12.04. Holders To Be Subrogated to Rights of Holders of
Guarantor Senior Indebtedness............................ -73-
SECTION 12.05. Obligations of the Subsidiary Guarantors Unconditional... -74-
SECTION 12.06. Trustee Entitled To Assume Payments Not Prohibited in
Absence of Notice........................................ -74-
SECTION 12.07. Application by Trustee of Monies Deposited with It....... -74-
SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions
of Subsidiary Guarantors or Holders of Guarantor
Senior Indebtedness...................................... -75-
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination
of Guarantee............................................. -75-
SECTION 12.10. Right of Trustee To Hold Guarantor Senior Indebtedness... -75-
SECTION 12.11. Article Twelve Not To Prevent Events of Default.......... -76-
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SECTION 12.12 Payment.................................................. -76-
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls............................. -76-
SECTION 13.02. Notices.................................................. -76-
SECTION 13.03. Communication by Holders with Other Holders.............. -77-
SECTION 13.04. Certificate and Opinion as to Conditions Precedent....... -77-
SECTION 13.05. Statements Required in Certificate or Opinion............ -78-
SECTION 13.06. Rules by Trustee and Agents.............................. -78-
SECTION 13.07. Legal Holidays........................................... -78-
SECTION 13.08. Governing Law............................................ -78-
SECTION 13.09. No Adverse Interpretation of Other Agreements............ -78-
SECTION 13.10. No Recourse Against Others............................... -79-
SECTION 13.11. Successors............................................... -79-
SECTION 13.12. Duplicate Originals...................................... -79-
SECTION 13.13. Severability............................................. -79-
SIGNATURES
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THIS INDENTURE, dated as of July 21, 1997, is among PLAINS RESOURCES INC., a
Delaware corporation (hereinafter called the "Company"), the SUBSIDIARY
GUARANTORS (as defined hereinafter) and TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 10 1/4% Senior
Subordinated Notes due 2006, Series C and an issue of 10 1/4% Senior
Subordinated Notes due 2006, Series D (such two issues, as amended or
supplemented from time to time in accordance with the terms hereof, being herein
collectively called the "Securities"), of substantially the tenor and in the
aggregate principal amount hereinafter set forth, and to provide therefor the
Company has duly authorized the execution and delivery of this Indenture.
The 10 1/4% Senior Notes due 2006, Series C are to be issued and sold in
transactions exempt from registration under the Securities Act, pursuant to the
Purchase Agreement, and the 10 1/4% Senior Subordinated Notes due 2006, Series D
are to be issued in exchange for the 10 1/4% Senior Subordinated Notes due 2006,
Series C, pursuant to the Registration Rights Agreement.
The Company owns, directly or indirectly, all of the equity ownership of
the outstanding Voting Stock of each initial Subsidiary Guarantor, and each
initial Subsidiary Guarantor is engaged in businesses related to the businesses
of the Company and the other Subsidiary Guarantors. Each initial Subsidiary
Guarantor will derive direct and indirect benefit from the issuance of the
Securities; accordingly, each initial Subsidiary Guarantor has authorized its
guarantee of the Company's obligations under this Indenture and the Securities,
and to provide therefor the initial Subsidiary Guarantors have duly authorized
the execution and delivery of this Indenture.
All things necessary have been done on the part of the Company and the
initial Subsidiary Guarantors to make the Securities, when issued against
consideration received and executed by the Company and authenticated and
delivered by the Trustee as herein provided, the valid obligations of the
Company, to make the Guarantees, when the notations thereof on the Securities
are executed by the initial Subsidiary Guarantors, the valid obligation of the
initial Subsidiary Guarantors and to make this Indenture a valid agreement of
the Company, the initial Subsidiary Guarantors and the Trustee, in accordance
with their respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
(together with the related Guarantees) by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities (together with the related Guarantees), without preference of one
series of Securities over the other, as follows:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, (A) the sum of (i) discounted future net cash
flows from proved oil and gas reserves of the Company and its consolidated
Subsidiaries, calculated in accordance with SEC guidelines (before any state or
federal income tax), as estimated by independent petroleum engineers as of a
date no earlier than the date of the Company's latest annual consolidated
financial statements (or, in the case that the date of determination is after
the end of the first fiscal quarter of the fiscal year of the Company, as
estimated by Company engineers as of a date no earlier than the end of the most
recent fiscal quarter, which estimates shall be confirmed in writing by a report
by independent petroleum engineers in accordance with SEC guidelines in the
event of a Material Change if the amount of Adjusted Consolidated Net Tangible
Assets is required to be computed under this Indenture), (ii) the Net Working
Capital on a date no earlier than the date of the Company's latest consolidated
annual or quarterly financial statements and (iii) with respect to each other
tangible asset of the Company or its consolidated Subsidiaries, the greater of
(a) the net book value of such other tangible asset on a date no earlier than
the date of the Company's latest consolidated annual or quarterly financial
statements, and (b) the appraised value, as estimated by a qualified independent
appraiser, of such other tangible asset, as of a date no earlier than the date
that is three years prior to the date of determination (or such later date on
which the Company shall have a reasonable basis to believe that there has
occurred a material decrease in value since the determination of such appraised
value), minus (B) minority interests and, to the extent not otherwise taken into
account in determining Adjusted Consolidated Net Tangible Assets, any gas
balancing liabilities of the Company and its consolidated Subsidiaries. In
addition to, but without duplication of, the foregoing, for purposes of this
definition, "Adjusted Consolidated Net Tangible Assets" shall be calculated
after giving effect, on a pro forma basis, to (1) any Investment not prohibited
by this Indenture, to and including the date of the transaction giving rise to
the need to calculate Adjusted Consolidated Net Tangible Assets (the "Assets
Transaction Date"), in any other Person that, as a result of such Investment,
becomes a Subsidiary of the Company, (2) the acquisition, to and including the
Assets Transaction Date (by merger, consolidation or purchase of stock or
assets), of any business or assets, including, without limitation, Permitted
Industry Investments, and (3) any sales or other dispositions of assets
permitted by this Indenture (other than sales of Hydrocarbons or other mineral
products in the ordinary course of business) occurring on or prior to the Assets
Transaction Date. For purposes of calculating the ratio of the Company's
Adjusted Consolidated Net Tangible Assets to Indebtedness of the Company and its
Subsidiaries, Indebtedness of a Subsidiary that is not a Wholly Owned Subsidiary
(which Indebtedness is non-recourse to the Company or any other Subsidiary or
any of their assets) shall be included only to the extent of the Company's pro
rata ownership interest in such Subsidiary.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Guarantee, of such Subsidiary Guarantor at such date and
(y) the present fair saleable value of the assets of such Subsidiary Guarantor
at such date exceeds the amount that will be required to pay the
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probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary of such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Guarantee), excluding debt in respect of the Guarantee, as they become absolute
and matured.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset" means each of the assets that are owned by the Company or a
Subsidiary on the date of this Indenture or that are acquired by the Company or
a Subsidiary after the date of this Indenture.
"Asset Disposition" means any sale, lease, transfer, exchange or other
disposition (or series of related sales, leases, transfers, exchanges or
dispositions) of shares of Capital Stock of a Subsidiary (other than directors'
qualifying shares), or of property or assets (including any interests therein)
(each referred to for purposes of this definition as a "disposition") by the
Company or any of its Subsidiaries, including any disposition by means of a
merger, consolidation or similar transaction (other than (A) by the Company to a
Subsidiary or by a Subsidiary to the Company or a Subsidiary (in the case of a
transfer to a Subsidiary that is not a wholly owned Subsidiary, dispositions
shall be excluded pursuant to clause (A) only to the extent of the Company's
interest in such Subsidiary after giving effect to such transfer), (B) any
Investment in an Unrestricted Subsidiary not prohibited under the provisions of
Section 4.11, (C) a disposition of Hydrocarbons or other mineral products in the
ordinary course of business, and (D) the disposition of all or substantially all
of the assets of the Company in compliance with Article Five of this Indenture).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
(x) the number of years from such date to the date of each successive scheduled
principal payment of such Indebtedness multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
"Bank Credit Agreement" means the Third Amended and Restated Credit
Agreement, dated April 11, 1996, among the Company, ING (U.S.) Capital
Corporation, BankBoston, N.A., Dennorske Bank AS, ▇▇▇▇▇ Fargo Bank (Texas),
National Association, Texas Commerce Bank National Association, Comerica Bank-
Texas and ING (U.S.) Capital Corporation, as agent, as amended, modified
(without limitation as to amount), supplemented, extended, restated, replaced,
renewed or refinanced from time to time in whole or in part in one or more
credit agreements, loan agreements, instruments or similar agreements, as such
may be further amended, modified (without limitation as to amount),
supplemented, extended, restated, replaced, renewed or refinanced) from time to
time.
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person duly authorized to act on behalf of the board of directors of such
Person.
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"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day on which the New York Stock Exchange is open
for trading and which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock and any and all warrants, options and rights with respect thereto,
including each class of common stock and preferred stock of such Person.
"Capitalized Lease Obligation" means the discounted present value of the
rental obligations of any Person under any lease of Property, which in
accordance with GAAP, is required to be capitalized on the balance sheet of such
Person.
"Cash Equivalents" shall mean Permitted Obligations.
"Change of Control" means (i) an event or series of events by which any
Person or other entity or group of Persons or other entities acting in concert
as a partnership or other group (a "Group of Persons") shall, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases,
merger, consolidation or otherwise, have become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 40% or more of the combined
voting power of the then outstanding Voting Stock of the Company, (ii) during
any period of two consecutive years, Continuing Directors cease for any reason
to constitute a majority of the Board of Directors then in office, or (iii) the
direct or indirect sale, lease, exchange or other transfer of all or
substantially all of the Assets to any Person or Group of Persons.
"Company" means the party named as such above, until a successor replaces
such Person in accordance with the terms of this Indenture, and thereafter means
such successor.
"Company Properties" means all Properties, and equity, partnership or other
ownership interests therein, that are related or incidental to, or used or
useful in connection with, the conduct or operation of any business activities
of the Company or the Subsidiaries, which business activities are not prohibited
by the terms of this Indenture.
"Consolidated EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period increased (to the extent
deducted in determining Consolidated Net Income) by the sum of: (i) all income
taxes of such Person and its subsidiaries paid or accrued according to GAAP for
such period (other than income taxes attributable to extraordinary, unusual or
non-recurring gains or losses), (ii) all interest expense of such Person and its
subsidiaries paid or accrued in accordance with GAAP for such period (including
amortization of original issue discount and the interest portion of deferred
payment obligations), (iii) depreciation and depletion of such Person and its
subsidiaries, (iv) amortization of such Person and its subsidiaries including,
without limitation, amortization of capitalized debt issuance costs and (v) any
other non-cash charges to the extent deducted from Consolidated Net Income.
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"Consolidated EBITDA Coverage Ratio" means, with respect to any Person, the
ratio of (1) Consolidated EBITDA of such Person for the period (the "Pro Forma
Period") consisting of the most recent four full fiscal quarters for which
financial information in respect thereof is available immediately prior to the
date of the transaction giving rise to the need to calculate the Consolidated
EBITDA Coverage Ratio (the "Transaction Date") to (2) the aggregate Fixed
Charges which such Person will accrue during the fiscal quarter in which the
Transaction Date occurs and the three fiscal quarters immediately subsequent to
such fiscal quarter (the "Forward Period") on the aggregate amount of
Indebtedness outstanding on the Transaction Date, including any Indebtedness
proposed to be incurred on such date and excluding any Indebtedness repaid with
the proceeds of such Indebtedness (as though all such Indebtedness was incurred
or repaid on the first day of the quarter in which the Transaction Date
occurred). In addition to, but without duplication of, the foregoing, for
purposes of this definition, "Consolidated EBITDA" shall be calculated after
giving effect (without duplication), on a pro forma basis for the Pro Forma
Period (but no longer), to (a) any Investment, during the period commencing on
the first day of the Pro Forma Period to and including the Transaction Date (the
"Reference Period"), in any other Person that, as a result of such Investment,
becomes a subsidiary of such Person, (b) the acquisition, during the Reference
Period (by merger, consolidation or purchase of stock or assets) of any business
or assets, which acquisition is not prohibited by this Indenture, including but
not limited to Permitted Industry Investments, as if such acquisition had
occurred on the first day of the Reference Period, (c) any sales or other
dispositions of assets (other than sales of Hydrocarbons and other mineral
products in the ordinary course of business) occurring during the Reference
Period, in each case as if such incurrence, Investment, repayment, acquisition
or asset sale had occurred on the first day of the Reference Period and (d)
interest income reasonably anticipated by the Company to be received during the
Pro Forma Period from Investments in Permitted Obligations, which Investments
exist on the Transaction Date or will exist as a result of the transaction
giving rise to the need to calculate the Consolidated EBITDA Coverage Ratio.
For purposes of this definition, "Fixed Charges" shall be calculated after
giving effect (without duplication), on a pro forma basis for the Forward
Period, to any Indebtedness incurred or repaid on or after the first day of the
Forward Period and prior to the Transaction Date. For purposes of calculating
the Company's Consolidated EBITDA Coverage Ratio, Indebtedness of a Subsidiary
that is not a Wholly Owned Subsidiary (which Indebtedness is non-recourse to the
Company or any other Subsidiary or any of their assets) shall be included only
to the extent of the Company's pro rata ownership interest in such Subsidiary.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP, provided
that (a) the net income of (i) any Unrestricted Subsidiary and (ii) any other
Person in which such Person or any subsidiary thereof has an interest (which
interest, in the case of those Persons referred to in clause (ii), does not
cause the net income of such other Person to be consolidated with the net income
of such Person in accordance with GAAP) will be included only to the extent of
the amount of dividends or distributions actually paid to such Person or its
subsidiaries by such other Person in such period; (b) the net income of any
subsidiary of such Person that is subject to any Payment Restriction will be
excluded to the extent of such Payment Restriction; and (c) (i) the net income
(or loss) of any other Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition, (ii) any net gain (but not
loss) on the sale or other disposition by such Person or any of its subsidiaries
of assets and of the Capital Stock of any subsidiary of such Person, and (iii)
items which are extraordinary, will each be excluded; provided that in no event
shall the computation of Consolidated Net Income of the Company include
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or take into effect the premium or write-off of debt issuance costs, if any,
paid by the Company optionally to redeem or otherwise prepay the 12% Senior
Subordinated Notes due 1999 issued pursuant to the Prior Indenture or the Series
A/B Securities issued under the Series A/B Indenture.
"Consolidated Net Worth" as of any date means with respect to any Person
the amount by which the assets of such Person and its subsidiaries on a
consolidated basis exceed (i) the total liabilities of such Person and its
subsidiaries on a consolidated basis, plus (ii) Disqualified Capital Stock of
such Person or Disqualified Capital Stock of any subsidiary of such Person
issued to any Person other than such Person or another wholly owned Subsidiary
of such Person, in each case determined in accordance with GAAP.
"Contango Market Transaction" a transaction in which the Company or any
Subsidiary either (i) establishes a position using New York Mercantile Exchange
Crude Oil Futures contracts to purchase Hydrocarbons for future delivery to it,
or (ii) purchases or commits to purchase Hydrocarbons for future delivery to
it, and contemporaneously with such purchase either (a) establishes one or more
positions using New York Mercantile Exchange Crude Oil Futures contracts to
resell at a date subsequent to such delivery date, or (b) enters into a contract
with that Person or another Person to resell at a date subsequent to such
delivery date, a similar aggregate quantity and quality of Hydrocarbons as so
purchased by the Company or such Subsidiary, as applicable, and at an aggregate
price greater than the Indebtedness incurred by the Hydrocarbons so purchased by
the Company or such Subsidiary.
"Continuing Directors" means any member of the Board of Directors of the
Company on the Issue Date, any director elected since the date thereof in any
annual meeting of the stockholders upon the recommendation of the Board of
Directors of the Company and any other member of the Board of Directors of the
Company who will be recommended or elected to succeed a Continuing Director by a
majority of Continuing Directors who are then members of the Board of Directors
of the Company.
"Currency Agreement" means the obligations of any Person pursuant to any
foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person or any of its subsidiaries against
fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Disqualified Capital Stock" means, with respect to any Person, any Capital
Stock of such Person or its subsidiaries that, by its terms, by the terms of any
agreement related thereto or by the terms of any security into which,
mandatorily or at the option of the holder, it is convertible or exchangeable,
is, or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased by such Person or its subsidiaries, including at
the option of the holder, in whole or in part, or has, upon the happening of an
event or the passage of time would have, a redemption or similar payment due, in
each such case on or prior to the Maturity Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
-6-
"Exchange Offer" means the offer by the Company, pursuant to an effective
registration statement filed with the SEC, to exchange for any and all of the
Series C Securities a like aggregate principal amount of Series D Securities in
accordance with the terms and provisions of the Registration Rights Agreement.
"Exchange Offer Consummation Date" means the date on which the Exchange
Offer is consummated in accordance with the terms and provisions of the
Registration Rights Agreement.
"Fixed Charges" means, with respect to any Person, for any period, the
aggregate amount of (i) interest, whether expensed or capitalized, paid, accrued
or scheduled to be paid or accrued during such period (except to the extent
accrued in a prior period) in respect of all Indebtedness of such Person and its
consolidated subsidiaries (including (a) original issue discount on any
Indebtedness and (b) the interest portion of all deferred payment obligations,
calculated in accordance with the effective interest method, in each case to the
extent attributable to such period) and (ii) dividend requirements on
Disqualified Capital Stock of such Person and its consolidated subsidiaries
(whether in cash or otherwise (except dividends payable in shares of Qualified
Capital Stock) (non-cash dividends being valued as determined in good faith by
the Board of Directors of such Person, as evidenced by a Board Resolution))
paid, accrued or scheduled to be paid or accrued during such period (except to
the extent accrued in a prior period) and excluding items eliminated in
consolidation.
For purposes of the definition of Fixed Charges, (a) interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Board of Directors of such Person (as evidenced by
a Board Resolution) to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP; (b) interest on Indebtedness that is
determined on a fluctuating basis shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest of such Indebtedness in effect on
the date Fixed Charges are being calculated, subject to the proviso in clause
(c); (c) interest on Indebtedness that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Company may designate, (provided that, for the period following the date
on which the rate actually chosen ceases to be in effect, the Company may
designate an optional rate other than that actually chosen, which optional rate
shall be deemed to accrue at a fixed per annum equal to the rate of interest on
such optional rate in effect on the date Fixed Charges are being calculated);
and (d) Fixed Charges shall be increased or reduced by the net cost (including
amortization of discount) or benefit associated with obligations under Interest
Rate Agreements attributable to such period.
"GAAP" means generally accepted accounting principles as in effect in the
United States of America as of any date of determination.
"Guarantee" means, individually and collectively, the guarantees given by
the Subsidiary Guarantors pursuant to Article Eleven hereof, including a
notation in the Securities substantially in the form attached hereto as Exhibit
A-1.
"Guarantor Senior Indebtedness" means all Indebtedness of a Subsidiary
Guarantor (present and future) created, incurred, assumed or guaranteed by the
Subsidiary Guarantor (and all renewals, extensions, increases or refundings
thereof) (including the principal of, interest on and fees, premiums,
-7-
expenses (including costs of collection), indemnities and other amounts payable
in connection with such Indebtedness, and including any Post-Commencement
Amounts), unless the instrument governing such Indebtedness expressly provides
that such Indebtedness is not senior or superior in right of payment to the
Guarantee. Notwithstanding the foregoing, Guarantor Senior Indebtedness does not
include (i) any Indebtedness of the Subsidiary Guarantor to the Company or any
Subsidiary or any Unrestricted Subsidiary, and (ii) any amounts payable or other
liabilities to trade creditors.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Hydrocarbons" means oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all constituents, elements or compounds thereof and products refined or
processed therefrom.
"Indebtedness" means, with respect to any Person, without duplication, any
liability, contingent or otherwise, of such Person (i) 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), (ii) evidenced by bonds, notes, debentures
or similar instruments, (iii) representing the deferred and unpaid balance of
the purchase price of any property or interest therein (other than (A) any such
balance that represents an account payable or any other monetary obligation to a
trade creditor created, incurred, assumed or guaranteed by such Person in the
ordinary course of business of such Person in connection with obtaining goods,
materials or services and due within twelve months (or such longer period for
payment as is customarily extended by such trade creditor) of the incurrence
thereof, which account is not overdue by more than 150 days, according to the
original terms of sale, unless such account payable is being contested in good
faith or has been extended, and (B) the Indebtedness with respect to the
Restructure Agreement dated as of February 25, 1991 by and among the Company,
The Aetna Casualty and Surety Company and Aetna Life Insurance Company), (iv)
for the payment of a Capitalized Lease Obligation of such Person, (v) with
respect to the reimbursement of any letter of credit, banker's acceptance or
similar credit transaction, (vi) with respect to Indebtedness (as otherwise
defined in this definition) of another Person secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person
(provided that if the obligations so secured have not been assumed in full by
such Person or are not otherwise such Person's legal liability in full, then
such obligations shall be deemed to be in an amount equal to the greater of (A)
the lesser of (1) the full amount of such obligations, and (2) the fair market
value of such assets, as determined in good faith by the Board of Directors of
such Person, which determination shall be evidenced by a Board Resolution, and
(B) the amount of obligations as have been assumed by such Person or which are
otherwise such Person's legal liability), (vii) with respect to production
payments in connection with oil and gas properties of such Person, other than
any Permitted Production Payment Obligations, (viii) to the extent not otherwise
included, under Currency Agreements and Interest Rate Agreements entered into
other than in the ordinary course of such Person's business, (ix) in the case of
such Person, the liquidation preference and any mandatory redemption payment
obligations in respect of Disqualified Capital Stock, and, in the case of a
subsidiary of such Person, the liquidation preference and any mandatory
redemption payment obligations in respect of preferred stock of such subsidiary,
and (x) in respect of all Indebtedness of others which such Person has
guaranteed, endorsed with recourse (otherwise than for collection, deposit or
other similar transactions in the ordinary course of business), agreed to
purchase or repurchase or in respect of which such Person has agreed
contingently to supply or advance funds or for which such Person has otherwise
become liable; provided, however, Indebtedness arising pursuant to clause
(iii)(A) of this definition as a result
-8-
of such account payable becoming overdue by more than 150 days shall only be
deemed to be incurred at a time when Indebtedness, other than such Indebtedness,
is incurred.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Director" means any director of the Company who is neither (i)
an executive officer or an employee of the Company or of any of its Subsidiaries
or Affiliates, nor (ii) a Related Person.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization proceeding or other similar case or proceeding,
relative to such Person or to its creditors, as such, or its assets, or (b) any
liquidation, dissolution, or reorganization proceeding of such Person, 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 such Person.
"Interest Rate Agreement" means the obligations of any Person pursuant to
any interest swap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in interest rates.
"Investment" means, in respect of any Person, any investment in another
Person, whether by means of a share purchase, capital contribution, loan,
advance (other than advances to employees for moving and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
similar credit extension constituting Indebtedness of such other Person and any
guaranty of Indebtedness of any other Person. For purposes of Section 4.11 and
the definition of Permitted Unrestricted Subsidiary Investments, (i) an
"Investment" in an Unrestricted Subsidiary shall be deemed to include and be
valued at the fair market value of the net assets of any Subsidiary at the time
that such Subsidiary is designated an Unrestricted Subsidiary, and (ii) any
Investment in an Unrestricted Subsidiary shall be valued at fair market value at
the time of such Investment (except, however, when such Investment consists of a
loan or advance by a Person to another Person that is of an intercompany or
similar nature between such Persons and arises pursuant to an agreement or
understanding in the ordinary course of business relating to tax sharing,
administrative or similar arrangements, then such Investment shall be valued at
fair market value at the time that the investing Person shall have paid monies
or transferred other consideration to another Person for the benefit of the
Person in whom the agreement to make such loan or advance was made), in each
case as determined by the Board of Directors of the Company and such Subsidiary,
as applicable, in good faith.
"Issue Date" means the date of first issuance of the Series A Securities
under the Series A/B Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind
-9-
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option, right of first refusal or other similar
agreement to sell, in each case securing obligations of such Person and any
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statute or statutes) of any jurisdiction).
"Material Change" means an increase or decrease of more than 10% during a
fiscal quarter in the discounted future net cash flows (excluding changes that
result solely from changes in prices) from proved oil and gas reserves of the
Company and consolidated Subsidiaries (before any state or federal income tax);
provided, however, that the following will be excluded from the Material Change
calculation: (i) any acquisitions during the quarter of oil and gas reserves
that have been estimated by independent petroleum engineers and on which a
report or reports exist, (ii) any reserves added during the quarter attributable
to the drilling or recompletion of ▇▇▇▇▇ not included in previous reserve
estimates, but which will be included in future quarters, and (iii) any
disposition of properties existing at the beginning of such quarter that have
been disposed of as provided in Section 4.12.
"Material Subsidiary" means any Subsidiary of the Company which, as of the
relevant date of determination, would be a "significant subsidiary" as defined
in Reg. (S) 230.405 promulgated pursuant to the Securities Act as in effect on
the Issue Date, assuming the Company is the "registrant" referred to in such
definition, except that the 10% amounts referred to in such definition shall be
deemed to be 5%.
"Maturity Date" means March 15, 2006.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Net Available Proceeds" means, with respect to any Asset Disposition of
any Person, cash proceeds received (including any cash proceeds received by way
of deferred payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, and excluding any other consideration
until such time as such consideration is converted into cash) therefrom, in each
case net of all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all federal, state or local taxes required to be
accrued as a liability as a consequence of such Asset Disposition, and in each
case net of all Indebtedness which is secured by such Assets, in accordance with
the terms of any Lien upon or with respect to such Assets, or which must, by its
terms or in order to obtain a necessary consent to such Asset Disposition or by
applicable law, be repaid out of the proceeds from such Asset Disposition and
which is actually so repaid.
"Net Proceeds" means (a) in the case of any sale by the Company of
Qualified Capital Stock, the aggregate net cash proceeds received by the
Company, after payment of expenses, commissions and the like incurred in
connection therewith, and (b) in the case of any exchange, exercise, conversion
or surrender of any outstanding securities or Indebtedness of the Company for or
into shares of Qualified Capital Stock of the Company, the net book value of
such outstanding securities or Indebtedness as adjusted on the books of the
Company on the date of such exchange, exercise, conversion or surrender (plus
any additional amount required to be paid by the holder of such Indebtedness or
securities to the Company upon such exchange, exercise, conversion or surrender
and less any and all payments made to the holders of such Indebtedness or
securities, and all other expenses incurred by the Company in connection
therewith).
-10-
"Net Working Capital" means (i) all current assets of the Company and its
consolidated Subsidiaries, minus (ii) all current liabilities of the Company and
its consolidated Subsidiaries, except current liabilities included in
Indebtedness.
"Non-Recourse Indebtedness" means Indebtedness that, under the terms
thereof or pursuant to applicable law, neither the Company nor any Subsidiary of
the Company (other than a Subsidiary being designated as an Unrestricted
Subsidiary) is directly or indirectly liable for and there is no recourse
against any of the assets or properties of the Company or such Subsidiary.
"Obligations" mean the due and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the Securities and the due and punctual performance of all
other obligations of the Company under this Indenture and the Securities.
"Officer" means, with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the Treasurer of
such Person.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Officers or by an Officer and either a Secretary, Assistant
Secretary or Assistant Treasurer of such Person.
"Oil and Gas Properties" means all Properties, including equity or other
ownership interests therein, owned by such Person which have been assigned
"proved oil and gas reserves" as defined in Rule 4-10 of Regulation S-X of the
Securities Act as in effect on the Issue Date.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company (or any Subsidiary Guarantor, if applicable).
"Permitted Acquisition Indebtedness" means Indebtedness of the Company or
any Subsidiary to the extent such Indebtedness is incurred to finance the
acquisition of Oil and Gas Properties (and development costs related thereto)
and does not exceed the principal amount of $50 million with respect to any such
acquisition transaction or series of related acquisition transactions if on the
date of the incurrence (i) (A) the Adjusted Consolidated Net Tangible Assets
acquired are equal to or greater than 200% of the Indebtedness incurred, and (B)
the Adjusted Consolidated Net Tangible Assets of the Company (after giving
effect to such acquisition) are equal to or greater than 125% of the
consolidated Indebtedness of the Company and its Subsidiaries or (ii) (A) the
Property Net Revenue Coverage Ratio would have been equal to or greater than 2.5
to 1.0, (B) the Adjusted Consolidated Net Tangible Assets acquired are equal to
or greater than 150% of the Indebtedness incurred, and (C) the Adjusted
Consolidated Net Tangible Assets of the Company (after giving effect
to such acquisition) are equal to or greater than 125% of the consolidated
Indebtedness of the Company and its Subsidiaries.
"Permitted Contango Market Transaction Obligations" means Indebtedness of
the Company or any Subsidiary under letter of credit or borrowed money
obligations, or in lieu of or in addition to such letters of credit or borrowed
money, guarantees of such Indebtedness or other obligations of the Company or
any Subsidiary by the Company or any other Subsidiary, as applicable, related to
a Contango Market Transaction, provided that, (1) if the Company or such
Subsidiary has entered into
-11-
such a contract to resell at a subsequent date, as distinguished from
establishing a position using New York Mercantile Exchange Crude Oil Future
contracts to resell at a subsequent date, (A) the Person with which the Company
or such Subsidiary has such contract to sell has an investment grade credit
rating by S&P or ▇▇▇▇▇'▇, or in lieu thereof, a Person guaranteeing the payment
of such obligated Person has an investment grade credit rating by S&P or
▇▇▇▇▇'▇, or (B) such Person posts a letter of credit in favor of the Company or
such Subsidiary with respect to such contract and (2) for the period commencing
on the date the Company or such Subsidiary is obligated to take delivery of such
Hydrocarbons so purchased by it and until and including the date on which
delivery to the purchaser is fulfilled, the Company or such Subsidiary has the
right and ability to store such quantity and quality of Hydrocarbons in storage
facilities owned, leased, operated or otherwise controlled by the Company or any
Subsidiary.
"Permitted Indebtedness" means (i) Indebtedness under the Series C
Securities and any Series D Securities issued in exchange for Series C
Securities of equal principal amount; (ii) Indebtedness outstanding in an
aggregate principal amount at any one time outstanding not to exceed $100
million under the Bank Credit Agreement, plus all interest and fees under such
agreements and any guarantee of any such Indebtedness; (iii) the Guarantees of
the Securities and the Series A/B Securities (and any assumption of the
obligations guaranteed thereby); (iv) Permitted Refinancing Indebtedness; (v)
Indebtedness of the Company to any Wholly Owned Subsidiary, and any Indebtedness
of any Wholly Owned Subsidiary to the Company or to any Wholly Owned Subsidiary
of the Company; provided, that in each case, such Indebtedness has not been
incurred in contemplation of any subsequent issuance or transfer of any Capital
Stock or any other event which would result in any such Wholly Owned Subsidiary
ceasing to be a Wholly Owned Subsidiary or any other subsequent transfer of any
such Indebtedness (except to the Company or a Wholly Owned Subsidiary), and if
incurred in contemplation of any of the foregoing events, then such Indebtedness
shall be deemed to be incurred and shall be treated as an incurrence of
Indebtedness for purposes of the "Limitation on Indebtedness" covenant at the
time the Wholly Owned Subsidiary in question ceased to be a Wholly Owned
Subsidiary; (vi) Permitted Marketing Obligations and Permitted Contango Market
Transaction Obligations; (vii) Permitted Acquisition Indebtedness; (viii)
Permitted Operating Obligations; (ix) other Indebtedness outstanding at any time
in an aggregate principal amount not to exceed the greater of $15 million or
2.5% of Adjusted Consolidated Net Tangible Assets of the Company; (x)
Indebtedness outstanding on the Issue Date; and (xi) Indebtedness under any
Series B Securities issued in exchange for Series A Securities of equal
principal amount. Permitted Refinancing Indebtedness that constitutes a
refinancing of amounts referred to in clauses (ii) and (ix) shall be deemed to
be incurred pursuant to and subject to the limitations in clauses (ii) and (ix),
respectively. The Company may elect at any time that amounts of Indebtedness
incurred under clauses (ii) or (ix) be deemed to be incurred pursuant to the
first paragraph of the "Limitation on Incurrence of Additional Indebtedness"
covenant (if then permitted to be so incurred), in which event such amounts so
incurred shall be deemed not to be incurred under clause (ii) or (ix); provided,
however, any such Indebtedness deemed not to be incurred under clause (ii) shall
still be treated as Indebtedness under and governed by the Bank Credit Agreement
for purposes of all other provisions of this Indenture.
"Permitted Industry Investments" means (i) capital expenditures, including,
without limitation, acquisitions of Company Properties and interests therein;
(ii) (a) entry into operating agree ments, joint ventures, working interests,
royalty interests, mineral leases, unitization agreements, pooling arrangements
or other similar or customary agreements, transactions, properties, interests or
-12-
arrangements, and Investments and expenditures in connection therewith or
pursuant thereto, in each case made or entered into in the ordinary course of
the oil and gas business, or (b) exchanges of Company Properties for other
Company Properties of at least equivalent value as determined in good faith by
the Board of Directors of the Company; (iii) Investments by the Company or any
Subsidiary in any Subsidiary (or in any Person that becomes a Subsidiary as a
result of such Investment) that are not subject to any Payment Restriction; (iv)
Investments in the Company or another Subsidiary that are not subject to any
Payment Restriction by any Subsidiary; and (v) Investments of operating funds on
behalf of co-owners of Oil and Gas Properties of the Company or the Subsidiaries
pursuant to joint operating agreements.
"Permitted Investments" means Permitted Obligations and Permitted Industry
Investments (in each case, other than Investments in Unrestricted Subsidiaries).
"Permitted Liens" means (i) Liens for taxes, assessments and governmental
charges not yet delinquent or being contested in good faith and for such
adequate reserves have been established to the extent required by GAAP, (ii)
landlord's, carriers, warehouseman's, storage, mechanics', workmen's,
materialmen's, operator's or similar Liens arising in the ordinary course of
business, (iii) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of Company Properties or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and which do not in any case materially
detract from the Company Properties subject thereto or interfere with the
ordinary conduct of the business of the Company or the Subsidiaries, (iv) Liens
on, or related to, Properties to secure all or part of the costs incurred in the
ordinary course of business of exploration, drilling, development, production,
processing, transportation, marketing or storage, or operation thereof, (v)
Liens on pipeline or pipeline facilities, Hydrocarbons or Company Properties
which arise out of operation of law, (vi) judgment and attachment Liens not
giving rise to an Event of Default or Liens created by or existing from any
litigation or legal proceeding that are currently being contested in good faith
by appropriate proceedings and for which adequate reserves have been made, (vii)
(a) Liens upon any Property of any Person existing at the time of acquisition
thereof by the Company, (b) Liens upon any Property of a Person existing at the
time such Person is merged or consolidated with the Company or any Subsidiary or
existing at the time of the sale or transfer of any such Property of such Person
to the Company or any Subsidiary, or (c) Liens upon any Property of a Person
existing at the time such Person becomes a Subsidiary; provided that in each
case such Lien has not been created in contemplation of such sale, merger,
consolidation, transfer or acquisition, and provided further that in each such
case no such Lien shall extend to or cover any Property of the Company or any
Subsidiary other than the Property being acquired and improvements thereon,
(viii) Liens existing on the Issue Date, (ix) Liens on deposits made in the
ordinary course of business, including, without limitation, pledges or deposits
under worker's compensation, unemployment insurance and other social security
legislation and deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a similar nature
incurred in the ordinary course of business, (x) Liens in favor of collecting or
payor banks having a right of setoff, revocation, refund or chargeback with
respect to money or instruments of the Company or any Subsidiary on deposit with
or in possession of such bank, (xi) royalties, overriding royalties, revenue
interests, net revenue interests, net profit interests, reversionary interests,
production payments, production sales contracts, operating agreements and other
similar interests, properties, arrangements and agreements, all as ordinarily
exist with respect
-13-
to Company Properties, (xii) Liens upon any Property which were created solely
for the purpose of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction) of such
Property; provided that no such Lien shall extend to or cover any Property of
the Company or any Subsidiary other than the Property so acquired and
improvements thereon, (xiii) Liens securing Senior Indebtedness or Guarantor
Senior Indebtedness, whether in whole or part thereof, (xiv) with respect to any
Company Properties, Liens arising under, or in connection with, or related to,
farm-out, farm-in, joint operating, area of mutual interest agreements and/or
other similar or customary arrangements, agreements or interests that the
Company or any Subsidiary determines in good faith to be necessary for the
economic development of such Property, and (xv) Liens upon any Property securing
obligations under hedging agreements, swap agreements or other similar
agreements entered into for the purpose of protecting against fluctuations in
oil or natural gas prices.
"Permitted Marketing Obligations" means, other than Permitted Operating
Obligations or Indebtedness relating to Contango Market Transactions,
Indebtedness of the Company or any Subsidiary under letter of credit or borrowed
money obligations, or in lieu of or in addition to such letters of credit or
borrowed money, guarantees of such Indebtedness or other obligations of the
Company or any Subsidiary by any other Subsidiary or the Company, as applicable,
related to the purchase by the Company or any Subsidiary of Hydrocarbons for
which the Company or such Subsidiary has contracts to sell; provided, that in
the event that such Indebtedness or obligations are guaranteed by the Company or
any Subsidiary, then either (i) the Person with which the Company or such
Subsidiary has contracts to sell has an investment grade credit rating from S&P
or ▇▇▇▇▇'▇, or in lieu thereof, a Person guaranteeing the payment of such
obligated Person has an investment grade credit rating from S&P or ▇▇▇▇▇'▇, or
(ii) such Person posts, or has posted for it, a letter of credit in favor of the
Company and such Subsidiary with respect to all of such Person's obligations to
the Company or such Subsidiary under such contracts.
"Permitted Obligations" means the following kinds of instruments if, in the
case of instruments referred to in clauses (i) through (iv) below, on the date
of purchase or other acquisition of any such instrument by the Company or any
Subsidiary, the remaining term to maturity is not more than one year: (i)
readily marketable obligations issued or unconditionally guaranteed as to
principal and interest by the United States of America or by any agency or
authority controlled or supervised by and acting as an instrumentality of the
United States of America; (ii) repurchase obligations for instruments of the
type described in clause (i) for which delivery of the instrument is made
against payment; (iii) obligations (including, but not limited to, demand or
time deposits, bankers' acceptances and certificates of deposit) issued by a
depository institution or trust company incorporated or doing business under the
laws of the United States of America, any state thereof or the District of
Columbia or a branch or subsidiary of any such depository institution or trust
company operating outside the United States, provided that such depository
institution or trust company has, at the time of the Company's or such
Subsidiary's investment therein or contractual commitment providing for such
investment, capital, surplus or undivided profits (as of the date of such
institution's most recently published financial statements), in excess of
$100,000,000; (iv) commercial paper issued by any Person, if such commercial
paper has, at the time of the Company's or any Subsidiary's investment therein
or contractual commitment providing for such investment, credit ratings of A-1
by S&P and P-1 by ▇▇▇▇▇'▇; and (v) money market mutual or similar funds having
assets in excess of $100,000,000.
-14-
"Permitted Operating Obligations" means Indebtedness of the Company or any
Subsidiary in respect of one or more standby letters of credit, bid, performance
or surety bonds, or other reimbursement obligations, issued for the account of,
or entered into by, the Company or any Subsidiary in the ordinary course of
business (excluding obligations related to the purchase by the Company or any
Subsidiary of Hydrocarbons for which the Company or such Subsidiary has
contracts to sell), or in lieu of any thereof or in addition to any thereto,
guarantees and letters of credit supporting any such obligations and
Indebtedness (in each case, other than for an obligation for borrowed money,
other than borrowed money represented by any such letter of credit, bid,
performance or surety bond, or reimbursement obligation itself, or any guarantee
and letter of credit related thereto).
"Permitted Production Payment Obligations" means obligations with respect
to production payments entered into in the ordinary course of the Company's or
any Subsidiary's business, which obligations are non-recourse to the Company and
its Subsidiaries other than to Hydrocarbon production from the properties
subject to such obligations.
"Permitted Refinancing Indebtedness" means (a) Senior Indebtedness of the
Company or any Subsidiary, the net proceeds of which are used solely to renew,
extend, refinance, refund or repurchase outstanding Securities, including the
amount of reasonable fees and expenses and premium, if any, incurred by the
Company or such Subsidiary in connection therewith; or (b) Indebtedness of the
Company or any Subsidiary, the net proceeds of which are used to renew, extend,
refinance, refund or repurchase (including, without limitation, pursuant to a
Change of Control Offer as required by the terms of the Securities) outstanding
Indebtedness of the Company, provided that (i) if the Indebtedness (including
the Securities) being renewed, extended, refinanced, refunded or repurchased is
pari passu with or subordinated in right of payment to either the Securities or
the Guarantees, then such Indebtedness is pari passu with or subordinated in
right of payment to, as the case may be, the Securities or the Guarantees at
least to the same extent as the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, (ii) such Indebtedness is scheduled to
mature no earlier than the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, and (iii) such Indebtedness has an Average Life at the
time such Indebtedness is incurred that is greater than the Average Life of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased;
provided, further, that such Indebtedness (to the extent that such Indebtedness
constitutes Permitted Refinancing Indebtedness) is in an aggregate principal
amount (or, if such Indebtedness is issued at a price less than the principal
amount thereof, the aggregate amount of gross proceeds therefrom is) not in
excess of the aggregate principal amount then outstanding of the Indebtedness
being renewed, extended, refinanced, refunded or repurchased (or if the
Indebtedness being renewed, extended, refinanced, refunded or repurchased was
issued at a price less than the principal amount thereof, then not in excess of
the amount of liability in respect thereof determined in accordance with GAAP)
plus the amount of reasonable fees and expenses and premium, if any, incurred by
the Company or such Subsidiary in connection therewith.
"Permitted Unrestricted Subsidiary Investments" means Investments in
Unrestricted Subsidiaries in a cumulative aggregate amount (in cash or the fair
market value of property other than cash, as determined in good faith by the
Board of Directors of the Company) not to exceed the sum of (i) $25 million and
(ii) cash or cash equivalent distributions made from any Unrestricted Subsidiary
and received, after the Issue Date, as such by the Company, provided that any
amount included in this clause (ii) shall be deducted from any amounts referred
to in clause (y)(3) of Section 4.11.
-15-
Notwithstanding the foregoing, Permitted Unrestricted Subsidiary Investments
shall also include any Investments in Unrestricted Subsidiaries to the extent
such Investment consists of (A) Qualified Capital Stock of the Company or (B)
amounts referred to in clause (y)(2) of Section 4.11, which Investments shall be
excluded from the sum in the previous sentence, provided that the amount of any
Investments pursuant to clause (B) shall be deducted from amounts referred to in
clause (y)(2) of Section 4.11.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Post-Commencement Amounts" means all interest and fees accrued or accruing
after the commencement of any Insolvency or Liquidation Proceeding in accordance
with and at the contract rate (including, without limitation, any non-usurious
rate applicable upon default) and all premiums, expenses (including costs of
collection), indemnities and other amounts that would have accrued or been
incurred after the commencement of any Insolvency or Liquidation Proceeding in
any case as specified in any agreement or instrument creating, evidencing, or
governing any Senior Indebtedness or any Guarantor Senior Indebtedness, as the
case may be, whether or not, pursuant to applicable law or otherwise, the claim
for such interest, fees, premiums, expenses, indemnities or other amounts is
allowed and non-avoidable as a claim in such Insolvency or Liquidation
Proceeding.
"Prior Indenture" means the Indenture dated as of October 1, 1992 among the
Company, the "Subsidiary Guarantors" (as therein defined) and Texas Commerce
Bank National Association, successor to Ameritrust Texas National Association,
as trustee, and providing for the issue of the Company's 12% Senior Subordinated
Notes due 1999 in the aggregate principal amount of $100 million.
"Preferred Stock" of an entity means the Capital Stock of that entity which
is preferred as to the payment of dividends or the distribution of assets on any
voluntary or involuntary liquidation, over the shares of any other class or
series of Capital Stock of said entity.
The term "principal" of a debt security means the principal amount of the
security plus the premium, if any, on the security.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth in Exhibit A attached hereto.
The term "pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act, as
amended.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock, partnership
interests and other equity or ownership interests in any other Person.
-16-
"Property Net Revenue Coverage Ratio" means, with respect to Property to be
acquired by the Company or any Subsidiary, the ratio of (i) the amount equal to
(A) the revenues attributable to the sale of Hydrocarbons from such Property for
the most recent four full fiscal quarters for which financial information is
available immediately prior to the acquisition date, (the "Pro Forma Period")
minus (B) the production and general and administrative expenses attributable to
such Property during the Pro Forma Period (the "Property Net Revenue") to (ii)
the aggregate Fixed Charges the Company or any Subsidiary will accrue during the
fiscal quarter in which the acquisition date occurs and the three fiscal
quarters immediately subsequent to such fiscal quarter as a result of
Indebtedness incurred for the purpose of making such acquisition (as though all
such Indebtedness was incurred or repaid on the first day of the quarter in
which the acquisition date occurs). For purposes of this definition, Property
Net Revenue shall be calculated, after giving effect on a pro forma basis for
the Pro Forma Period, to (a) any adjustments in revenues from the sale of
Hydrocarbons as a result of fixed price or other contract arrangements entered
into as of the acquisition date and (b) any adjustments in production and
general and administrative expenses which are fixed or determinable as of the
acquisition date.
"Public Equity Offering" means an underwritten public offer and sale of
common stock (that is Qualified Capital Stock) of the Company pursuant to a
registration statement that has been declared effective by the SEC pursuant to
the Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).
"Purchase Agreement" means the Purchase Agreement dated July 18, 1997 among
the Company, the Subsidiary Guarantors and the Purchaser.
"Purchaser" means the initial purchaser of Series C Securities named in the
Purchase Agreement.
"Purchase Money Obligations" means indebtedness evidenced by a note,
debenture, bond or other security or investment (whether or not secured by any
lien or other security interest) issued to or assumed in favor of a vendor as
all or part of the purchase price of property acquired by the Company or any
Subsidiary; provided, however, that such term shall not include any account
payable or any other indebtedness incurred, created or assumed in the ordinary
course of business in connection with the obtaining of material, products or
services.
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Qualified Institutional Buyer" has the meaning attributed thereto in Rule
144A under the Securities Act.
"Rating Agency" means S&P and ▇▇▇▇▇'▇ or, if S&P or ▇▇▇▇▇'▇ shall have
ceased to be a "nationally recognized statistical rating organization" (as
defined in Rule 436 under the Act) or shall have ceased to make publicly
available a rating on any outstanding securities of any company engaged
primarily in the oil and gas business, such other organization or organizations,
as the case may be, then making publicly available a rating on the Securities as
is selected by the Company.
-17-
"Rating Date" means, in respect of each Change of Control, the date that is
immediately prior to the date of the first public announcement of an event or
series of events that results in a Change of Control.
"Rating Decline" means the occurrence on any date following the Rating Date
and prior to a date that is 90 days after the occurrence of a corresponding
Change of Control (which period shall be deemed to be extended so long as prior
to the end of such 90-day period and continuing thereafter the rating of the
Securities is under publicly announced consideration for possible downgrade by
either Rating Agency) of either of the following: (i) the rating of the
Securities by either Rating Agency within such period shall be at least one
gradation below the rating of the Securities by such Rating Agency on the
Rating Date, or (ii) either Rating Agency shall withdraw its ratings of the
Securities. A gradation shall include changes within rating categories (e.g.,
with respect to S&P a decline in a rating from BB+ to BB, or from B to B-, will
constitute a decrease of one gradation).
"Registration Default" shall have the meaning ascribed thereto in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights Agreement
dated July 23, 1997, among the Company, the Subsidiary Guarantors and the
Purchaser.
"Regulation S" means Regulation S under the Securities Act.
"Related Person" means (i) any Affiliate of the Company, (ii) any
individual or other Person who directly or indirectly holds 10% or more of the
combined voting power of the then outstanding Voting Stock of the Company, (iii)
any relative of any individual referred to in clauses (i), (ii) and (iv) hereof
by blood, marriage or adoption not more remote than first cousin and (iv) any
officer or director of the Company.
"Representative" means the indenture trustee or other trustee, agent or
representative for any issue of Senior Indebtedness or Guarantor Senior
Indebtedness.
"Restricted Debt Prepayment" means any purchase, redemption, defeasance
(including, but not limited to, in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Subsidiary, prior to the scheduled maturity or prior to any scheduled repayment
of principal or sinking fund payment, as the case may be, in respect of
Indebtedness of the Company or any Subsidiary that is subordinate in right to
the Securities or the Guarantees, provided, however, that any such acquisition
shall be deemed not to be a Restricted Debt Prepayment to the extent it is made
(x) in exchange for or with the proceeds from the substantially concurrent
issuance of Qualified Capital Stock or (y) in exchange for or with the proceeds
from the substantially concurrent issuance of Indebtedness, in a principal
amount (or, if such Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon the acceleration thereof, with an
original issue price) not to exceed the lesser of (i) the principal amount of
Indebtedness being acquired in exchange therefor (or with the proceeds
therefrom) and (ii) if such Indebtedness being acquired was issued at an
original issue discount, the original issue price thereof plus amortization of
the original issue discount at the time of the incurrence of the Indebtedness
being issued in exchange therefor (or the proceeds of which will finance such
acquisition), and provided further that any such Indebtedness shall have an
Average Life not less than the Average Life of the
-18-
Indebtedness being acquired, and shall contain subordination and default
provisions no less favorable, in any material respect, to holders of the
Securities than those contained in such Indebtedness being acquired.
"Restricted Payment" means any (i) Stock Payment, (ii) Investment (other
than Permitted Investments and other than Permitted Unrestricted Subsidiary
Investments) or (iii) Restricted Debt Prepayment.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Series C Securities or any Series D Securities
authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Indebtedness" means all Indebtedness of the Company (present and
future) created, incurred, assumed or guaranteed by the Company (and all
renewals, extensions or refundings thereof) (including the principal of,
interest on and fees, premiums, expenses (including costs of collection),
indemnities and other amounts payable in connection with such Indebtedness, and
including any Post-Commencement Amounts), unless the instrument governing such
Indebtedness expressly provides that such Indebtedness is not senior or superior
in right of payment to the Securities. Notwithstanding the foregoing, Senior
Indebtedness of the Company does not include (i) any Indebtedness of the Company
to any Subsidiary or any Unrestricted Subsidiary and (ii) any amounts payable or
other liabilities to trade creditors.
"Series A Securities" means the 10 1/4% Senior Subordinated Notes due 2006,
Series A, issued and sold pursuant to the Series A/B Purchase Agreement and the
Series A/B Indenture.
"Series A/B Indenture" means the Indenture dated as of March 15, 1996 among
the Company, the "Subsidiary Guarantors" (as therein defined) and Texas Commerce
Bank National Association, as trustee, and providing for the issuance of the
Company's 10 1/4% Senior Subordinated Notes due 2006 in the aggregate principal
amount of $150 million.
"Series A/B Purchase Agreement" means the Purchase Agreement dated March
14, 1996 among the Company, the "Subsidiary Guarantors" (as therein defined) and
"Purchasers" (as therein defined).
"Series A/B Registration Rights Agreement" means the Registration Rights
Agreement dated March 14, 1996, among the Company, the "Subsidiary Guarantors"
(as therein defined) and the "Purchasers" (as therein defined).
-19-
"Series A/B Securities" means any Series A Securities or any Series B
Securities authenticated and delivered under the Series A/B Indenture.
"Series B Securities" means the 10 1/4% Senior Subordinated Notes due 2006,
Series B, issued and sold or being issued and sold pursuant to the Series A/B
Registration Rights Agreement and the Series A/B Indenture.
"Series C Securities" means the 10 1/4% Senior Subordinated Notes due 2006,
Series C, being issued and sold pursuant to the Purchase Agreement and this
Indenture.
"Series D Securities" means the 10 1/4% Senior Subordinated Notes due 2006,
Series D, being issued and sold pursuant to the Registration Rights Agreement
and this Indenture.
"Stock Payment" means, with respect to any Person, (a) the declaration or
payment by such Person, either in cash or in property, of any dividend on
(except, in the case of the Company, dividends payable solely in Qualified
Capital Stock of the Company), or the making by such Person or any of its
subsidiaries of any other distribution in respect of, such Person's Capital
Stock or any warrants, rights or options to purchase or acquire shares of any
class of such Capital Stock (except for the issuance of Qualified Capital Stock
pursuant to the exercise thereof), or (b) the redemption, repurchase, retirement
or other acquisition for value by such Person or any of its subsidiaries,
directly or indirectly, of such Person's or any of its subsidiaries' Capital
Stock or any warrants, rights or options to purchase or acquire shares of any
class of such Capital Stock other than, in the case of the Company, through the
issuance in exchange therefor solely of Qualified Capital Stock of the Company;
provided, however, that in the case of a Subsidiary, the term "Stock Payment"
shall not include (i) any such payment with respect to its Capital Stock or
warrants, rights or options to purchase or acquire shares of any class of its
Capital Stock payable to the Company or a Wholly Owned Subsidiary, or (ii) the
payment of pro rata dividends to holders of minority interests in Capital Stock
of a Subsidiary.
A "subsidiary" of any Person means (i) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more wholly owned subsidiaries of such Person or by such Person and one
or more wholly owned subsidiaries of such Person, (ii) a partnership in which
such Person or a wholly owned subsidiary of such Person is, at the date of
determination, a general or limited partner of such partnership, but only if
such Person or its wholly owned subsidiary is entitled to receive more than
fifty percent of the assets of such partnership upon its dissolution, or (iii)
any other Person (other than a corporation or partnership) in which such Person,
a wholly owned subsidiary of such Person or such Person and one or more wholly
owned subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership interest or (y) the
power to elect or direct the election of a majority of the directors or other
governing body of such Person.
"Subsidiary" means any subsidiary of the Company; provided, that an
Unrestricted Subsidiary shall not be deemed a subsidiary of the Company for
purposes of this Indenture.
"Subsidiary Guarantor" means (i) Calumet Florida, Inc., a Delaware
corporation, Plains Marketing & Transportation Inc., a Delaware corporation,
Plains Illinois Inc., a Delaware corporation, Plains Resources International
Inc., a Delaware corporation, PMCT Inc., a Delaware
-20-
corporation, PLX Crude Lines Inc., a Delaware corporation, PLX Ingleside, a
Delaware corporation, ▇▇▇▇▇▇▇ Resources, Inc., a California corporation, ▇▇▇▇▇▇▇
Resources, L.P., a California limited partnership, and Plains Terminal &
Transfer Corporation, a Delaware corporation, (ii) each of the Company's
Subsidiaries that becomes a guarantor of the Securities in compliance with the
provisions of Article Eleven hereof and (iii) each of the Company's Subsidiaries
executing a supplemental indenture in which such Subsidiary agrees to be bound
by the terms of this Indenture.
"Transfer Restricted Security" has the meaning attributed thereto in the
Registration Rights Agreement; provided, however, that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether or not any Security is a Transfer Restricted Security.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and in force at the date as of which this Indenture was executed until
such time as this Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under the TIA, except as
provided in Section 9.03 hereof.
"Trust Officer" means any officer or assistant officer within the corporate
trust department of the Trustee assigned by the Trustee to administer its
corporate trust matters.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor.
"U.S. Legal Tender" means such coin or currency of the United States as at
the time of payment shall be legal tender for the payment of public and private
debts.
"United States" means the United States of America.
"Unrestricted Subsidiary" means (1) any subsidiary of the Company which at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors of the Company, as provided below) and (2) any subsidiary
of an Unrestricted Subsidiary. The Board of Directors of the Company may
designate any Subsidiary (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) to be an Unrestricted Subsidiary only if: (A) such
Subsidiary does not own any Capital Stock of, or own or hold any Lien on any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary; (B)
all the Indebtedness of such Subsidiary shall at the date of designation, and
will at all times thereafter, consist of Non-Recourse Indebtedness; (C) the
Company certifies that such designation complies with Section 4.11; and (D) such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially all
of the business of the Company and the Subsidiaries. Any such designation by the
Board of Directors of the Company shall be evidenced to the Trustee by filing
with the Trustee a Board Resolution of the Board of Directors of the Company
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions. If, at any time, such
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred as of such date. The Board of
Directors of the Company
-21-
may designate any Unrestricted Subsidiary to be a Subsidiary; provided that
immediately after giving effect to such designation, the Company could incur at
least $1.00 of additional Indebtedness (excluding Permitted Indebtedness)
pursuant to the first paragraph of Section 4.09 on a pro forma basis taking into
account such designation.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock (other
than directors' qualifying shares, if applicable) of which is owned by the
Company or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Agent Members"...................................... 2.07
"Bankruptcy Law"..................................... 6.01
"Change of Control Offer"............................ 4.17
"Change of Control Notice"........................... 4.17
"Change of Control Purchase Date".................... 4.17
"Custodian".......................................... 6.01
"DTC"................................................ 4.12
"Event of Default"................................... 6.01
"Funding Guarantor".................................. 11.05
"Global Security".................................... 2.01
"Legal Holiday"...................................... 13.07
"Net Proceeds Offer"................................. 4.12
"Net Proceeds Offer Amount".......................... 4.12
"Net Proceeds Payment Date".......................... 4.12
"Paying Agent"....................................... 2.03
"Payment Default".................................... 10.02
"Payment Notice"..................................... 10.02
"Payment Restriction"................................ 4.14
"Physical Securities"................................ 2.01
"Project Period"..................................... 4.12
"Registrar".......................................... 2.03
"Related Person Transaction"......................... 4.15
"Security Register".................................. 2.06
"Series A/B Net Proceeds Offer"...................... 4.12
"Series A/B Net Proceeds Offer Amount"............... 4.12
"Series A/B net Proceeds Payment Date"............... 4.12
"Subsidiary Guarantor Payment Default"............... 12.02
"Subsidiary Guarantor Payment Notice"................ 12.02
"U.S. Government Obligations"........................ 8.02
-22-
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, if used in this Indenture, have the following meanings:
"indenture securities" means the Securities and the Guarantees.
"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, the
Subsidiary Guarantors and any other obligor on the Securities or the
Guarantees.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them therein.
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 words in the plural
include the singular;
(5) any gender used in this Indenture shall be deemed to include the
neuter, masculine or feminine genders;
(6) provisions apply to successive events and transactions;
(7) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision; and
(8) when used with reference to the Securities, the expression "of
like tenor" refers to Securities of the same series.
-23-
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The definitive Securities 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 or notations of Guarantees, as the
case may be, as evidenced by their execution of such Securities or notations of
Guarantees, as the case may be.
Except as indicated in the next succeeding paragraph, Securities (including
the notations thereon relating to the Guarantees and the Trustee's certificate
of authentication) shall be issued initially in the form of one or more
permanent global Securities substantially in the form set forth in Exhibits A,
A-1 and A-2 (each being herein called a "Global Security") deposited with the
Trustee, as custodian for DTC, duly executed by the Company and authenticated by
the Trustee as hereinafter provided, and each shall bear the legend set forth on
Exhibit A hereto. Subject to the limitation set forth in Section 2.02, the
principal amounts of the Global Securities may be increased or decreased from
time to time by adjustments made on the records of the Trustee, as custodian for
DTC, as hereinafter provided.
Securities (including the notations thereon relating to the Guarantees and
the Trustee's certificate of authentication) originally issued and sold in
reliance on any exemption from registration under the Securities Act other than
Rule 144A shall be issued, and Securities originally offered and sold in
reliance on Rule 144A may be issued, in the form of permanent certificated
securities in registered form in substantially the form set forth in Exhibits A
and A-1 ("Physical Securities"). The Securities may also have such insertions,
omissions, substitutions and variations as may be permitted by or consistent
with this Indenture. The provisions of Exhibits A, A-1 and A-2 are part of this
Indenture. The Securities may have notations, legends and endorsements required
by law, stock exchange rule or usage. The Company shall approve the form of the
Securities and any notation, legend or endorsement on them. Each Security shall
be dated the date of its authentication.
The terms and provisions contained in the Securities and the Guarantees
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company, the Subsidiary Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
SECTION 2.02. Execution and Authentication.
One Officer and the Secretary or an Assistant Secretary of the Company
shall sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be reproduced on the Physical Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security shall be valid
nevertheless.
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A Security shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The aggregate principal amount of Series C Securities which may be
authenticated and delivered under this Indenture for original issue is limited
to $50,000,000, and the aggregate principal amount of Series D Securities which
may be authenticated and delivered under this Indenture for original issue is
limited to $50,000,000. The aggregate principal amount of Securities
outstanding at any one time may not exceed $50,000,000 except as provided in
Section 2.08 hereof.
The Series C Securities and the Series D Securities shall be considered
collectively to be a single class for all purposes of this Indenture, including,
without limitation, waivers, amendments, redemptions and offers to purchase.
As provided in the Registration Rights Agreement and subject to the
limitations set forth therein, at the option of the Holders, the Series C
Securities shall be exchangeable for Series D Securities of like aggregate
principal amount pursuant to the Exchange Offer.
At any time after the execution and delivery of this Indenture, the Company
may deliver Series C Securities executed by the Company and having the notations
of Guarantees executed by the Subsidiary Guarantors to the Trustee for
authentication, together with a request from the Company for the authentication
and delivery of such Series C Securities, and the Trustee in accordance with
such request shall authenticate and deliver such Series C Securities with the
notations of Guarantees thereon as provided in this Indenture. Such request
from the Company shall specify the principal amount of the Series C Securities
to be authenticated and the date on which the original issue of Series C
Securities is to be authenticated. In addition, on or prior to the Exchange
Offer Consummation Date, the Company may deliver Series D Securities executed by
the Company and having the notations of Guarantees executed by the Subsidiary
Guarantors to the Trustee for authentication, together with a request from the
Company for the authentication and delivery of such Series D Securities, and the
Trustee in accordance with such request shall authenticate and deliver such
Series D Securities with the notations of Guarantees thereon as provided in this
Indenture. Such request from the Company shall specify the principal amount of
the Series D Securities to be authenticated and the date on which the Series D
Securities are to be exchanged for an equal principal amount of Series C
Securities.
In connection with the transfer of an entire Global Security to beneficial
owners pursuant to this Section, the Global Security shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall upon a request from the Company authenticate and deliver, to
each beneficial owner identified by DTC, in exchange for its beneficial interest
in the Global Security, an equal aggregate principal amount of Physical
Securities of authorized denominations.
The Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
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The Trustee may appoint an authenticating agent to authenticate Securities.
An authenticating agent may authenticate Securities whenever the Trustee may do
so except on original issuance. 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
its Affiliates.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency designated pursuant to
Section 4.04 where Securities may be presented for registration of transfer or
for exchange (the "Registrar") and an office or agency designated pursuant to
Section 4.04 where Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. Such agency agreement shall provide for
reasonable compensation for such services. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent and shall furnish
the Trustee with an executed counterpart of any such agency agreement. If the
Company fails to maintain or act as Registrar or Paying Agent, the Trustee shall
act as such and shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be maintained by
the Company in the City of New York. The Company initially designates the
Trustee as the Registrar and Paying Agent.
SECTION 2.04. Paying Agent to Hold Money in Trust.
On or prior to each due date of the principal and interest on any Security,
the Company shall deposit with the Paying Agent immediately available funds
sufficient to pay such principal and interest becoming due. The Company shall
require each Paying Agent other than the Trustee to hold in trust for the
benefit of Holders or the Trustee all money held by such Paying Agent for the
payment of principal or interest on the Securities, and to notify the Trustee of
any Default by the Company or any Subsidiary Guarantor in making any such
payment. While any such Default continues, the Trustee may require the Paying
Agent to pay all money held by it to the Trustee. Except as provided in the
immediately preceding sentence, the Company at any time may require a Paying
Agent to pay all money held by it to the Trustee. Upon doing so, such Paying
Agent (other than the Company or a Subsidiary) shall have no further liability
for the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold as separate trust funds all money held by it as Paying Agent.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the name and addresses of
Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is not
the Registrar, the Company shall furnish or cause to be furnished to
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the Trustee at least five Business Days before each semiannual interest payment
date, and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Holders, and the Company shall otherwise comply with TIA (S)
312(a).
SECTION 2.06. Transfer and Exchange.
The Company shall cause to be kept a register (the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. At all reasonable
times and during normal business hours, the Security Register shall be open to
inspection by the Trustee.
Subject to the provisions of this Section 2.06 and Section 2.07 hereof,
upon surrender for registration of transfer of any Security at the office or
agency of the Company designated pursuant to Section 4.04 hereof, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of like
tenor and of any authorized denomination and of a like aggregate principal
amount, each such Security having the notation of Guarantees thereon.
Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, be deemed to have agreed that transfers of beneficial interests
in such Global Security may be effected only through a book-entry system
maintained by DTC (or its agent), and that ownership of a beneficial interest in
a Global Security shall be required to be reflected in book entry form.
At the option of any Holder, Securities may be exchanged for other
Securities of like tenor and of any authorized denomination and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
the office or agency of the Company designated pursuant to Section 4.04 hereof.
Further, at the option of any Holder Series C Securities may be exchanged,
pursuant to the Exchange Offer, for Series D Securities of like aggregate
principal amount, upon surrender of the Series C Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, the Subsidiary Guarantors shall execute notations of
Guarantees on, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities and the Guarantees noted thereon issued upon any
registration of transfer or exchange of Securities shall be the valid
obligations of the Company and the respective Subsidiary Guarantors, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. As a special condition
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to registration of transfer or exchange of any Transfer Restricted Securities
involving removal of a Private Placement Legend (other than pursuant to an
effective registration statement under the Securities Act), the Holder
requesting such registration of transfer or exchange shall furnish the Opinion
of Counsel called for by Section 2.14 hereof. The following additional special
conditions shall apply to the indicated types of transfers or exchanges:
(a) Respecting any requested registration of transfer or exchange of
Transfer Restricted Securities in the form of Physical Securities, such
Physical Securities shall be accompanied, in the sole discretion of the
Company, by the following additional information and documents, as
applicable:
(1) if such Physical Security is being delivered to the Registrar
by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in
substantially the form of Exhibit A-3 hereto); or
(2) if such Physical Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certification to that effect (in substantially the
form of Exhibit A-3 hereto); or
(3) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification to that
effect (in substantially the form of Exhibit A-3 hereto), a Transferee
Certificate for Institutional Accredited Investors in the form of
Exhibit A-4 hereto and an Opinion of Counsel to the effect that such
transfer is in compliance with the Securities Act; or
(4) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit A-3 hereto), a Transferor
Certificate for Regulation S Transfers in the form of Exhibit A-5
hereto and an Opinion of Counsel to the effect that such transfer is
in compliance with the Securities Act; or
(5) if such Physical Security is being transferred in reliance on
Rule 144, delivery of a certification to that effect (substantially in
the form of Exhibit A-3 hereto) and an Opinion of Counsel to the
effect that such transfer is in compliance with the Securities Act; or
(6) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the Securities
Act, a certification to that effect (in substantially the form of
Exhibit A-3 hereto) and an Opinion of Counsel to the effect that such
transfer is in compliance with the Securities Act.
(b) Respecting any requested exchange of a Physical Security for a
beneficial interest in a Global Security, such Physical Security shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents:
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(1) a certification, substantially in the form of Exhibit A-3
hereto, that such Physical Security is being transferred to a
Qualified Institutional Buyer; and
(2) written instructions directing the Registrar to make, or to
direct DTC to make, an endorsement on the Global Security to reflect
an increase in the aggregate amount of the Securities represented by
the Global Security;
whereupon the Registrar shall cancel such Physical Security and cause, or
direct DTC to cause, in accordance with the standing instructions and
procedures existing between DTC and the Registrar, the aggregate principal
amount of Securities represented by the Global Security to be increased
accordingly. If no Global Security is then outstanding, the Company shall
issue and the Trustee shall upon a request from the Company authenticate a
new Global Security in the appropriate amount.
(c) Any Person having a beneficial interest in a Global Security may
upon request to the Registrar exchange such beneficial interest for a
Physical Security. Upon receipt by the Registrar of written instructions
(or such other form of instructions as is customary for DTC) from DTC or
its nominee on behalf of any Person having a beneficial interest in a
Global Security and upon receipt by the Registrar of a written order or
such other form of instructions as is customary for DTC or the Person
designated by DTC as having such a beneficial interest containing
registration instructions and, in the case of any such transfer or exchange
of a beneficial interest in Transfer Restricted Securities, the following
additional information and documents:
(1) if such beneficial interest is being transferred to the
Person designated by DTC as being the beneficial owner, a
certification from such Person to that effect (in substantially the
form of Exhibit A-3 hereto); or
(2) if such beneficial interest is being transferred to a
Qualified Institu tional Buyer in accordance with Rule 144A under the
Securities Act, a certification to that effect (in substantially the
form of Exhibit A-3 hereto); or
(3) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of a certification to that
effect (substantially in the form of Exhibit A-3 hereto), a Transferee
Certificate for Institutional Accredited Investors in the form of
Exhibit A-4 hereto and an Opinion of Counsel to the effect that such
transfer is in compliance with the Securities Act; or
(4) if such beneficial interest is being transferred in reliance
on Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit A-3 hereto), a Transferor
Certificate for Regulation S Transfers in the form of Exhibit A-5
hereto and an Opinion of Counsel to the effect that such transfer is
in compliance with the Securities Act; or
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(5) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit A-3 hereto) and an
Opinion of Counsel to the effect that such transfer is in compliance
with the Securities Act; or
(6) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form of Exhibit A-3 hereto) and an Opinion of Counsel to the effect
that such transfer is in compliance with the Securities Act,
then the Registrar will cause, in accordance with the standing instructions
and procedures existing between DTC and the Registrar, the aggregate
principal amount of the Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of a request from the
Company, the Trustee will authenticate and deliver to the transferee a
Physical Security. Securities issued in exchange for a beneficial interest
in a Global Security pursuant to this Section 2.06(c) shall be registered
in such names and in such authorized denominations as DTC, pursuant to
instructions from Agent Members or otherwise, shall instruct the Registrar
in writing. The Registrar shall deliver such Physical Securities to the
Persons in whose names such Physical Securities are so registered.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to the Exchange Offer or Section 2.11, 3.06 or 9.05
hereof not involving any transfer.
Neither the Trustee, the Registrar nor the Company shall be required (i) to
issue, register the transfer of or exchange any Physical Security during a
period of 30 days before a selection of Securities to be redeemed, or (ii) to
register the transfer of or exchange any Physical Security so selected for
redemption in whole or in part, except the unredeemed portion of any such
Security being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Securities.
Each Global Security shall be (i) registered in the name of DTC or its
nominee, (ii) delivered to the Trustee as custodian for DTC and (iii) bear the
legend set forth in Exhibit A-2 hereto.
Members of, or participants in, DTC ("Agent Members") shall have no rights
under this Indenture with respect to any Global Security held on their behalf by
DTC, or the Trustee as its custodian, or under such Global Security, and DTC may
be treated by the Company, the Subsidiary Guarantors, the Trustee and any agent
of the Company, the Subsidiary Guarantors or the Trustee as the absolute owner
of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Subsidiary Guarantors,
the Trustee or any agent of the Company, the Subsidiary Guarantors or the
Trustee from giving effect to any written
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certification, proxy or other authorization furnished by DTC or shall impair, as
between DTC and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any Security.
Transfers of a Global Security shall be limited to transfers of such Global
Security in whole, but not in part, to DTC, its successors or their respective
nominees. Interests of beneficial owners in a Global Security may be transferred
or exchanged for Physical Securities in accordance with the rules and procedures
of DTC and the provisions of Section 2.06 hereof. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if, and only if, either (1) DTC
notifies the Company that it is unwilling or unable to continue as depositary
for the Global Security and a successor depositary is not appointed by the
Company within 90 days of such notice, (2) an Event of Default has occurred and
is continuing and the Registrar has received a request from DTC to issue
Physical Securities in lieu of all or a portion of the Global Security (in which
case the Company shall deliver Physical Securities within 30 days of such
request) or (3) the Company determines not to have the Securities represented by
the Global Security and notifies DTC and the Registrar thereof.
In connection with the transfer of an entire Global Security to beneficial
owners pursuant to this Section, the Global Security shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall upon request of the Company authenticate and deliver, to each
beneficial owner identified by DTC, in exchange for its beneficial interest in
the Global Security, an equal aggregate principal amount of Physical Securities
of authorized denominations.
The Holders of a Global Security may grant proxies or otherwise authorize
any Persons, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
SECTION 2.08. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or the Registrar or
if the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the requirements of the Trustee are met. An indemnity
bond may be required by the Trustee, the Company or any Subsidiary Guarantor
that is sufficient in the judgment of the Company, the Subsidiary Guarantors and
the Trustee to protect the Company, the Subsidiary Guarantors, the Trustee or
any Agent from any loss which any of them may suffer if a Security is replaced.
The Company may charge for its expenses (including fees and expenses of the
Trustee) in replacing a Security.
SECTION 2.09. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those cancelled by it, those delivered to it for cancellation
and those described in this Section 2.09 as not outstanding. Except as set
forth in Section 2.10, a Security does not cease to be outstanding because the
Company, the Subsidiary Guarantors or any of their respective Subsidiaries or
Affiliates holds the Security.
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If a Security is replaced pursuant to Section 2.08, 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.
SECTION 2.10. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Subsidiary Guarantor or an Affiliate of the Company shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded.
SECTION 2.11. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may prepare
and, upon written order of the Company, 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 and deliver definitive
Securities in exchange for temporary Securities surrendered to it.
SECTION 2.12. Cancellation.
The Company or any Subsidiary Guarantor at any time may deliver Securities
to the Trustee for cancellation. The Registrar and Paying Agent shall forward
to the Trustee any Securities surrendered to them for transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration,
transfer, exchange, payment or cancellation and shall destroy cancelled
Securities or retain cancelled Securities in accordance with the Trustee's
standard retention policy unless the Company directs their return to the
Company. Except as provided in Section 2.08, the Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation.
Securities that are mandatorily or optionally redeemed by the Company or
that are purchased by the Company pursuant to a Net Proceeds Offer, or pursuant
to a Change of Control Offer, or that are otherwise acquired by the Company,
will be surrendered to the Trustee for cancellation.
SECTION 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner (plus interest on such
defaulted interest to the extent lawful) to the persons who are Holders on a
subsequent special record date, in each case at the rate provided in the
Securities and in Section 4.01 hereof. The Company shall fix the special record
date and payment date. At least 10 days before the special record date, the
Company shall mail to each Holder a notice that states the special record date,
the payment date and the amount of defaulted interest to be paid.
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SECTION 2.14. Private Placement Legend.
(a) All Series C Securities issued hereunder on the Issue Date shall bear
the Private Placement Legend. Upon the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar shall deliver
only Securities that bear the Private Placement Legend unless, and the Trustee
is hereby authorized to deliver Securities without the Private Placement Legend
if, (i) there is delivered to the Trustee an Opinion of Counsel to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act or
(ii) such Security has been sold pursuant to an effective registration statement
under the Securities Act, which fact has been certified to the Trustee in an
Officers' Certificate. Upon the transfer, exchange or replacement of Securities
not bearing the Private Placement Legend, the Registrar shall deliver Securities
that do not bear the Private Placement Legend.
(b) By its acceptance of any Security bearing the Private Placement Legend,
each Holder of such a Security acknowledges the restrictions on transfer of such
Security set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Security only as provided in this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notice to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the redemption price and the
principal amount of Securities to be redeemed.
The Company shall give each notice provided for in this Section at least 35
days before the redemption date (unless a shorter notice period shall be
satisfactory to the Trustee). Any notice given pursuant to this Section 3.01
may be cancelled at any time prior to notice of such redemption being mailed to
any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed in multiples of $1,000 pro rata, by lot or
by any other method that the Trustee considers fair and appropriate and, if the
Securities are listed on any securities exchange, by a method that complies with
the requirements of such exchange. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them it selects
shall be in amounts of $1,000 or whole multiples of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be called for
redemption.
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SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail to each Holder of
Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in the payment of the redemption
price or accrued interest, interest on Securities called for redemption
ceases to accrue on and after the redemption date;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion will be
issued; and
(7) the subparagraph of paragraph 5 of the Securities pursuant to
which the Securities called for redemption are being redeemed.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the redemption date
at the redemption price. Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price, plus accrued interest to the redemption
date.
SECTION 3.05. Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the Paying
Agent immediately available funds sufficient to pay the redemption price of, and
accrued interest on, the Securities to be redeemed on that date. The Paying
Agent shall promptly return to the Company any money so deposited which is not
required for that purpose upon the written request of the Company, except with
respect to monies owed as obligations to the Trustee pursuant to Article Seven.
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If any Security called for redemption shall not be so paid upon redemption
because of the failure of the Company to comply with the preceding paragraph,
interest will continue to be payable on the unpaid principal, including from the
redemption date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Securities and in Section 4.01 hereof.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Security or Securities equal in
aggregate amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and this Indenture.
Principal of and interest on the Securities shall be considered paid on the date
due if, subject to Articles Ten and Twelve hereof, the Trustee or Paying Agent
holds on that date money deposited by the Company designated for and sufficient
to pay all principal and interest then due.
The Company shall pay interest on overdue principal at the rate borne by
the Securities and shall pay interest on overdue installments of interest at the
same rate to the extent lawful.
The Company shall notify the Trustee and any Paying Agent immediately upon
the occurrence of any Registration Default and, with respect to Additional
Interest payments pursuant to Section 4 of the Registration Rights Agreement,
the Company shall notify the Trustee and any Paying Agent prior to the date of
any interest payment of the amount of Additional Interest payable to each
Holder.
SECTION 4.02. SEC Reports.
(a) Each of the Company and the Subsidiary Guarantors shall file with the
Trustee within 15 days after it files them with the SEC 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 SEC may by rules and regulations
prescribe) which each of the Company and the Subsidiary Guarantors 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) of
the Exchange Act, the Company shall file with the Trustee such reports,
information and other documents as required pursuant to Section 4.18 hereof.
The Company and each of the Subsidiary Guarantors also shall comply with the
other provisions of TIA (S) 314(a).
(b) So long as any of the Securities remain outstanding, the Company shall
cause each annual, quarterly and other financial report mailed or otherwise
furnished by it generally to stockholders to be filed with the Trustee and
mailed to the Holders at their addresses appearing in
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the register of Securities maintained by the Registrar, in each case at the time
of such mailing or furnishing to stockholders.
(c) The Company and the Subsidiary Guarantors shall provide the Trustee
with a sufficient number of copies of all reports and other documents and
information that the Trustee may be required to deliver to Holders under this
Section 4.02.
SECTION 4.03. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer's 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) and that
to the best of such Officer's knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Securities are prohibited. Such Officers' Certificate
shall comply with TIA (S) 314(a)(4).
(b) The Company and the Subsidiary Guarantors will, so long as any of the
Securities are outstanding, deliver to the Trustee forthwith upon any Officer
becoming aware of any Default or Event of Default or default in the performance
of any covenant, agreement or condition contained in this Indenture, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company or any Subsidiary Guarantor proposes to take with respect
thereto.
(c) The Company shall promptly deliver to the Trustee an Officers'
Certificate notifying the Trustee of any refunding, refinancing or replacement
of each Bank Credit Agreement.
SECTION 4.04. Maintenance of Office or Agency.
The Company will maintain in the City of New York, an office or agency
where Securities may be surrendered for registration of transfer or exchange or
for presentation for payment and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. 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 address of the Trustee's agent
set forth in Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided that
no such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the City of New York, for
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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 4.05. Corporate Existence.
Subject to Article Five, the Company will 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 or other existence of each Material Subsidiary in
accordance with the respective organizational documents of the Company and each
Material Subsidiary and the material rights (charter and statutory) and material
franchises of the Company and the Material Subsidiaries; provided, that the
Company shall not be required to preserve any such right or franchise, or the
corporate existence of any Material Subsidiary, if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not, and
will not be, adverse to the payment and performance of the obligations under the
Securities and otherwise under this Indenture.
SECTION 4.06. Waiver of Stay, Extension or Usury Laws.
The Company and each Subsidiary Guarantor covenants (to the extent that
each may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, or usury law or other law, which would prohibit or forgive the
Company or any Subsidiary Guarantor from paying all or any portion of the
principal of and/or interest on the Securities 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 and each Subsidiary Guarantor 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 4.07. Payment of Taxes and Other Claims.
The Company and each Material Subsidiary will pay or discharge or cause to
be paid or discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Material Subsidiary or upon the income, profits or property of the Company or
any Material Subsidiary other than any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made in
accordance with GAAP, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a Lien (other than a Permitted
Lien) upon the property of the Company or any Material Subsidiary, in each case
except to the extent the failure to do so would have, in the judgment of the
Company, a material adverse effect on the Company and the Subsidiaries taken as
a whole.
SECTION 4.08. Maintenance of Properties and Insurance.
(a) The Company shall cause all material Property used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment and shall
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cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company or any Subsidiary from discontinuing the
operation or maintenance of any such Property, or disposing of it, if such
discontinuance or disposal is, in the judgment of the Company or such
Subsidiary, desirable in the conduct of its business and not adverse to the
payment and performance of the obligations under the Securities and otherwise
under this Indenture.
(b) The Company shall provide or cause to be provided, for itself and each
of its Subsidiaries, insurance (including appropriate self-insurance) against
loss or damage of the kinds that, in the reasonable, good faith opinion of the
Company are adequate and appropriate for the conduct of the business of the
Company and such Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall be
either (i) consistent with past practices of the Company or the applicable
Subsidiary or (ii) customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry, unless the failure
to provide such insurance (together with all other such failures) would not have
a material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
SECTION 4.09. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of the Subsidiaries directly
or indirectly, to issue, incur, assume, guarantee, become liable, contingently
or otherwise, with respect to or otherwise become responsible for the payment of
(collectively, "incur") any Indebtedness (other than Permitted Indebtedness);
provided, however, that if no Default or Event of Default with respect to the
Securities shall have occurred and be continuing at the time or as a consequence
at the incurrence of such Indebtedness, the Company and the Subsidiaries or any
of them may incur Indebtedness if on the date of the incurrence, (i) both (A)
the Company's Consolidated EBITDA Coverage Ratio would have been greater than
2.5 to 1.0 and (B) the Company's Adjusted Consolidated Net Tangible Assets are
equal to or greater than 150% of Indebtedness of the Company and the
Subsidiaries, or (ii) the Company's Adjusted Consolidated Net Tangible Assets
are equal to or greater than 200% of Indebtedness of the Company and the
Subsidiaries.
For purposes of determining any particular amount of Indebtedness incurred
under this Section 4.09, (i) guarantees of Indebtedness otherwise included in
the determination of such amount shall not also be included and (ii) any
Indebtedness incurred by the Company or any Subsidiary incurred for, or related
to, a Person other than another Subsidiary or the Company, as applicable, shall
be deemed to be in an amount equal to the greater of (i) the lesser of (A) the
full amount of the Indebtedness of such other Person or (B) the fair market
value of the assets and properties of the Company or such Subsidiary, as to
which the holder or holders of such Indebtedness are expressly limiting the
obligations of the Company or such Subsidiary, the value of which assets and
properties of the Company or any Subsidiary will be determined in good faith by
the Board of Directors of the Company or such Subsidiary, as applicable (which
determination shall be evidenced by a Board Resolution of the applicable
Person), and (ii) the amount of the Indebtedness of such other Person as has
been expressly contractually assumed or guaranteed by the Company or such
Subsidiary.
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Notwithstanding anything to the contrary in this Section 4.09, no
Subsidiary that is not already a Subsidiary Guarantor shall incur any
Indebtedness with respect to any Indebtedness of the Company or any other
Subsidiary unless such Subsidiary, the Company and the Trustee execute and
deliver a supplemental indenture evidencing such Subsidiary's Guarantee of the
Securities, such Guarantee to be a senior subordinated unsecured obligation of
such Subsidiary.
SECTION 4.10. Limitation on Senior Subordinated Indebtedness.
The Company will not, directly or indirectly, issue, assume, guarantee,
incur or otherwise become liable for any Indebtedness which is both subordinate
or junior in right of payment to any Senior Indebtedness and senior or superior
in right of payment to the Securities. The Subsidiary Guarantors will not,
directly or indirectly, issue, assume, guarantee, incur or otherwise become
liable for any Indebtedness which is both subordinate or junior in right of
payment to any Guarantor Senior Indebtedness and senior or superior in right of
payment to the Guarantees.
SECTION 4.11. Limitation on Restricted Payments.
The Company will not, and will not permit any of the Subsidiaries to,
directly or indirectly, make any Restricted Payment, if at the time of such
Restricted Payment, or on a pro forma basis after giving effect thereto:
(x) a Default or an Event of Default under this Indenture has occurred
and is continuing;
(y) the aggregate amount expended for all Restricted Payments
subsequent to the Issue Date exceeds the sum of (without duplication):
(1) 50% of aggregate Consolidated Net Income (net of losses
resulting from full costs ceiling writedowns attributable to any oil
and gas properties of the Company or any Subsidiary) of the Company
(or if such Consolidated Net Income is a loss, minus 100% of such
loss) earned on a cumulative basis during the period beginning on the
Issue Date and ending on the last date of the Company's fiscal quarter
immediately preceding such Restricted Payment; plus
(2) 100% of the aggregate Net Proceeds, received by the Company
from any Person other than a Subsidiary from the issuance and sale
subsequent to the Issue Date of Qualified Capital Stock (excluding (A)
any Qualified Capital Stock paid as a dividend on any Capital Stock or
as interest on any Indebtedness, (B) the issuance of Qualified Capital
Stock upon the conversion of, or in exchange for, any Qualified
Capital Stock and (C) any Qualified Capital Stock with regard to
issuances and sales financed directly or indirectly using funds
borrowed from the Company or any Subsidiary, until and to the extent
such borrowing is repaid); plus
(3) to the extent not otherwise included in Consolidated Net
Income, dividends, repayments of loans or advances, or other transfers
of assets, in each case to the Company or a Subsidiary after the Issue
Date from any Unrestricted Subsidiary or from the redesignation of an
Unrestricted Subsidiary as a Subsidiary (valued in
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each case as provided in the definition of Investment) other than
amounts constituting Permitted Unrestricted Subsidiary Investments;
and
(4) $15 million; or
(z) the Company would not be able to incur $1.00 of additional
Indebtedness (excluding Permitted Indebtedness) as provided in the first
paragraph of Section 4.09.
The foregoing provisions of this covenant will not prevent the payment of
any dividend within 60 days after the date of its declaration if the dividend
would have been permitted on the date of declaration; provided, however, that
payments made in accordance with this paragraph shall be counted for purposes of
computing amounts expended pursuant to subclause (y) in the immediately
preceding paragraph.
SECTION 4.12. Limitation on Disposition of Assets.
The Company will not, and will not permit any Subsidiary to, make any Asset
Disposition unless:
(i) in the case of any Asset Disposition or series of related Asset
Dispositions having a fair market value of more than $10 million, the
Company or such Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value, the determination of
which, including the value of all non-cash consideration, must be approved
in good faith by the Board of Directors of the Company and such Subsidiary,
if any,
(ii) the proceeds from any Asset Disposition (other than any Asset
Disposition or series of related Asset Dispositions that have a value of
less than $1 million) consist of cash and Cash Equivalents or Permitted
Industry Investments or any combination of the foregoing; provided that the
Company or such Subsidiary may accept proceeds from such Asset Disposition
in other than cash and Cash Equivalents or Permitted Industry Investments
or any combination of the foregoing if the aggregate amount of all proceeds
from all Asset Dispositions after the Issue Date, that are other than cash
and Cash Equivalents or Permitted Industry Investments after such Asset
Disposition does not exceed 15% of Adjusted Consolidated Net Tangible
Assets at the date of such Asset Disposition,
(iii) within 365 days following the receipt of the Net Available
Proceeds from such Asset Disposition, 100% of the Net Available Proceeds
from such Asset Disposition are applied by the Company or such Subsidiary:
(a) to the payment of Indebtedness under the Bank Credit
Agreement and the payment of any other Senior Indebtedness;
(b) at the Company's option to the extent that such Net Available
Proceeds are not applied to Senior Indebtedness, to Permitted Industry
Investments made by the Company or a Subsidiary (or, to the extent not
so applied during such 365 day period, to Permitted Industry
Investments specifically identified during such 365 day period
reasonably anticipated in good faith by the Board of Directors of the
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Company to be expended within 180 days after being specifically
identified (such 180-day period, the "Project Period")); and
(c) to the extent that any Net Available Proceeds are not applied
to Senior Indebtedness or applied or to be applied to Permitted
Industry Investments, to make an offer to purchase (the "Series A/B
Net Proceeds Offer") (on a business day (the "Series A/B Net Proceeds
Payment Date") not later than the later of (1) 365 days following the
receipt of such Net Available Proceeds or (2) in the case of
application of proceeds intended to be applied under clause (b), 35
business days following any Project Period) the Series A/B Securities
at a price equal to 100% of the principal amount of the Series A/B
Securities plus accrued interest to the Series A/B Net Proceeds
Payment Date, and
(iv) to the extent that any Net Available Proceeds are not applied to
Senior Indebtedness or applied or to be applied to Permitted Industry
Investments or to a Series A/B Net Proceeds Offer, to make an offer to
purchase (the "Net Proceeds Offer") (on a business day (the "Net Proceeds
Payment Date") not later than 90 business days following the Series A/B Net
Proceeds Payment Date) the Securities at a price equal to 100% of the
principal amount of the Securities plus accrued interest to the Net
Proceeds Payment Date.
Notwithstanding the foregoing, the Company and its Subsidiaries will not be
required to apply any Net Available Proceeds in accordance with such provisions
except to the extent that the Net Available Proceeds from all Asset Dispositions
which are not applied in accordance with such provisions exceed $5 million.
Notice of a Net Proceeds Offer to purchase the Securities will be made on
behalf of the Company not less than 25 business days nor more than 60 business
days before the Net Proceeds Payment Date. Securities tendered to the Company
pursuant to a Net Proceeds Offer will cease to accrue interest after the Net
Proceeds Payment Date. The Company will not be entitled to any credit against
the above obligations for the principal amount of Securities previously acquired
by the Company. For purposes of this covenant, the term "Net Proceeds Offer
Amount" means the principal of outstanding Securities in an aggregate principal
amount equal to any remaining Net Available Proceeds.
To exercise the repurchase right, the Holder must deliver on or before the
fifth calendar day prior to the Net Proceeds Payment Date, written notice to the
Company (or an agent designated by the Company for such purpose) of the Holder's
exercise of such right, together with (i) the Security or Securities with
respect to which the right is being exercised, duly endorsed for transfer with
the form entitled "Option of Holder to Elect Purchase" on the reverse side of
the Security completed, and (ii) if the Net Proceeds Payment Date falls between
any record date for the payment of interest on the Securities and the next
succeeding interest payment date, an amount equal to the interest which the
Holder is entitled to receive on such interest payment date; provided, however,
that with respect to Securities held of record by The Depository Trust Company
("DTC"), the Company or its designated agent may accept as tendered for
repurchase pursuant to this Section Securities tendered by means of book entry
in accordance with the normal procedures of DTC, provided that any such interest
amount shall be delivered by the Holder to the Company or its designated agent.
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On the Net Proceeds Payment Date, the Company will (i) accept for payment
Securities or portions thereof tendered pursuant to the Net Proceeds Offer in an
aggregate principal amount equal to the Net Proceeds Offer Amount or such lesser
amount of Securities as has been tendered, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
so tendered in an aggregate principal amount equal to the Net Proceeds Offer
Amount or such lesser amount, and (iii) deliver or cause to be delivered to the
Trustee, Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof tendered to the Company. If the aggregate
principal amount of Securities tendered exceeds the Net Proceeds Offer Amount,
the Trustee will select the Securities to be purchased on a pro rata basis based
on the principal amount of Securities so tendered. The Paying Agent will
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the purchase price, and the Company will execute and the Trustee
will promptly authenticate and mail or make available for delivery to such
Holders of Physical Securities a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
will be promptly mailed or delivered to the Holder thereof. The Company will
publicly announce the results of the Net Proceeds Offer on or as soon as
practicable after the Net Proceeds Payment Date. For purposes of this Section
4.12, the Trustee will act as the Paying Agent.
SECTION 4.13. Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of the Subsidiaries to,
create, incur, assume or suffer to exist any Liens (other than Permitted Liens)
upon any of their respective Properties securing (i) any Indebtedness of the
Company, unless the Securities are equally and ratably secured or (ii) any
Indebtedness of any Subsidiary Guarantor, unless the Securities or the
Guarantees, as the case may be, are equally and ratably secured; provided that
if such Indebtedness is expressly subordinated to the Securities or the
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Securities or the Guarantees, with the same relative
priority as such Subordinated Indebtedness will have with respect to the
Securities or the Guarantees, as the case may be.
SECTION 4.14. Limitation on Payment Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create or suffer to exist or allow to become effective any
consensual encumbrance or restriction of any kind (i) on the ability of any of
the Subsidiaries (a) to pay dividends or make other distributions on its Capital
Stock or make payments on any Indebtedness owed to the Company or any other
Subsidiary, (b) to make loans or advances to the Company or any other
Subsidiary, or (c) to transfer any of its Property to the Company or any other
Subsidiary; or (ii) on the ability of such Person or any other subsidiary of
such Person to receive or retain any such (a) dividends, distributions or
payments, (b) loans or advances, or (c) transfers of Property (any such
restriction being referred to herein as a "Payment Restriction"), except for
such encumbrances or restrictions existing under or by reason of (A) the Bank
Credit Agreement as in effect on the Issue Date, (B) customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of the Company or any Subsidiary, (C) any instrument governing Indebtedness of a
Person acquired by the Company or a Subsidiary at the time of such acquisition,
which encumbrance or restriction is not applicable to any Person, other than the
Person, or the Property of the Person, so acquired, provided that such
Indebtedness was not incurred in anticipation of such acquisition, (D) with
respect to clauses (i)(c)
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and (ii)(c) above, Purchase Money Obligations for Property acquired in the
ordinary course of business, (E) Indebtedness existing pursuant to a written
agreement in effect on the Issue Date, (F) Indebtedness under the Series A/B
Indenture, (G) Indebtedness under this Indenture, or (H) Indebtedness incurred
to refinance, refund, extend or renew Indebtedness referred to in clauses (A),
(C), (D), (E), (F) or (G) above; provided that the Payment Restrictions
contained therein are not materially more restrictive than those provided for in
the Indebtedness being refinanced, refunded, extended or renewed.
SECTION 4.15. Limitation on Transactions with Related Persons.
Neither the Company nor any of the Subsidiaries will (i) sell, lease,
transfer or otherwise dispose of any of its Property to, (ii) purchase any
property from, (iii) make any Investment (other than Permitted Unrestricted
Subsidiary Investments and other Investments in accordance with the provisions
of Section 4.11) in, or (iv) enter into any contract or agreement with or for
the benefit of, a Related Person of the Company or any Subsidiary (other than
the Company or any such Subsidiary in which no Related Person (other than the
Company or another Wholly Owned Subsidiary) owns, directly or indirectly, an
equity interest) (a "Related Person Transaction"), other than Related Person
Transactions which are on terms (which terms are in writing) no less favorable
to the Company or a Subsidiary, as applicable, than could be obtained in a
comparable arm's length transaction from an unaffiliated party; provided that,
if the Company or any Subsidiary enters into a Related Person Transaction or
series of Related Person Transactions involving or having an aggregate value of
more than $5 million, such Related Person Transaction will have been approved by
a majority of the Independent Directors of the Company. Notwithstanding
anything to the contrary in the foregoing, the foregoing restrictions shall not
apply to (i) Related Person Transactions that are approved by the Board of
Directors of the Company and such Subsidiary, if applicable, as in the best
interests of the Company or such Subsidiary, which transactions together with
all other Related Person Transactions in a related series involve or have an
aggregate value not exceeding $1 million in each fiscal year; (ii) fees and
compensation paid to or agreements with officers, directors, employees or
consultants of the Company or any Subsidiary in each case that are reasonable,
as determined by the Board of Directors or senior management thereof in good
faith; and (iii) Restricted Payments that are not prohibited by Section 4.11.
SECTION 4.16. Limitation on Conduct of Business.
The Company and the Subsidiaries will be operated in a manner such that
their business activities will be the oil and gas business, including the
exploration for and the development, acquisition, production, processing,
marketing, storage and transportation of, Hydrocarbons and other related energy
and natural resources businesses, and such other businesses as are reasonably
necessary or desirable to facilitate the conduct and operations of the foregoing
businesses.
SECTION 4.17. Change of Control.
(a) Upon the occurrence of a Change of Control and a corresponding Rating
Decline, the Company shall be obligated to make an offer to purchase (a "Change
of Control Offer") all of the then outstanding Securities from the Holders of
such Securities, at a purchase price (the "Change of Control Purchase Price")
equal to 101% of the aggregate principal amount of such Securities, plus accrued
and unpaid interest, if any, to the Change of Control Purchase Date (as defined
below), in
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accordance with the procedures set forth in paragraphs (b), (c) and
(d) of this Section. The Company shall, subject to the provisions described
below, be required to purchase all Securities properly tendered pursuant to a
Change of Control Offer and not withdrawn.
(b) The Change of Control Offer shall remain open for at least 20 Business
Days and until the close of business on the fifth Business Day prior to the
Change of Control Purchase Date (as defined below).
(c) Not later than the 30th day following the occurrence of the Rating
Decline corresponding to any Change of Control (or, in the event the Rating
Decline occurs prior to the corresponding Change of Control, not later than the
30th day following the occurrence of the Change of Control), the Company shall
mail to the Trustee and to each Holder of the Securities a notice (the "Change
of Control Notice") stating:
(1) that a Change in Control and corresponding Rating Decline has
occurred and that such Holder has the right to require the Company to
repurchase such Holder's Securities, or portion thereof, at the Change of
Control Purchase Price;
(2) any information regarding such Change of Control required to be
furnished pursuant to Rule 13e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day and no earlier than 30 days nor later than 60
days after the occurrence of a Rating Decline that follows a Change of
Control (or, in the event the Rating Decline occurs prior to the
corresponding Change of Control, no earlier than 30 days nor later than 60
days following the occurrence of the Change of Control);
(4) that any Security, or portion thereof, not tendered or accepted
for payment will continue to accrue interest:
(5) that unless the Company defaults in making payments therefor, or
payment is otherwise prevented, any Security, or portion thereof, accepted
for payment pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have his
Securities repurchased in accordance with paragraph (d) of this Section.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to exercise a repurchase right.
(d) To exercise the repurchase right, the Holder must deliver, on or before
the fifth calendar day prior to the Change of Control Purchase Date, written
notice to the Company (or an agent designated by the Company for such purpose)
of the Holder's exercise of such right, together with (i) the Security or
Securities with respect to which the right is being exercised, duly endorsed for
transfer with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security
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completed, and (ii) if the Change of Control Purchase Date falls between any
record date for the payment of interest on the Securities and the next
succeeding interest payment date, an amount equal to the interest which the
Holder is entitled to receive on such interest payment date; provided, however,
that with respect to Securities held of record by DTC, the Company or its
designated agent may accept as tendered for repurchase pursuant to this Section
Securities tendered by means of a book entry in accordance with the normal
procedures of DTC, provided that any such interest amount shall be delivered by
the Holder to the Company or its designated agent. Notwithstanding the
foregoing, if prior to the date that a Change of Control Notice is required to
be mailed, a notice of optional redemption of all of the outstanding Securities
has been mailed in accordance with the terms of this Indenture, the Company's
obligation to send the Change of Control Notice shall be suspended (unless the
Company shall default in the payment of the redemption price or accrued
interest).
(e) On the Change of Control Purchase Date, the Company shall (i) accept
for payment Securities or portions thereof tendered pursuant to the Change of
Control Notice, (ii) if the Company appoints a depository or Paying Agent,
deposit with such depository or Paying Agent money sufficient to pay the
purchase price of all Securities or portions thereof so tendered and (iii)
deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof tendered to the Company.
DTC, the Company or the Paying Agent, as the case may be, shall promptly mail to
the Holder of Securities so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate and mail to such Holders of
Physical Securities a new Security equal in principal amount to any unpurchased
portion of the Security surrendered. The Company will publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Purchase Date. For purposes of this Section 4.17, the Trustee
shall act as the Paying Agent.
(f) The Company, to the extent applicable and if required by law, will
comply with Sections 13 and 14 of the Exchange Act and the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and
any other federal and state securities laws, rules and regulations which may
then be applicable to any offer by the Company to purchase the Securities
pursuant to the provisions of this Section 4.17.
SECTION 4.18. Provision of Financial Information.
The Company shall file on a timely basis with the SEC, to the extent such
filings are accepted by the SEC and whether or not the Company has a class of
securities registered under the Exchange Act, the annual reports, quarterly
reports and other documents that the Company would be required to file if it
were subject to Section 13 or 15 of the Exchange Act. The Company shall also
file with the Trustee (with exhibits), and provide to each Holder of Securities
(without exhibits), without cost to such Holder, copies of such reports and
documents within 15 days after the date on which the Company files such reports
an documents with the SEC or the date on which the Company would be required to
file such reports and documents if the Company were so required and, if filing
such reports and documents with the SEC is not accepted by the SEC or is
prohibited under the Exchange Act, the Company shall supply at its cost
copies of such reports and documents (including any exhibits thereto) to any
Holder of Securities promptly upon written request.
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SECTION 4.19. Registration Rights Agreement.
The Company will comply with all of the terms and provisions of the
Registration Rights Agreement, including, without limitation, its obligation to
pay Additional Interest (as defined therein) and to notify the Trustee
immediately of the occurrence of any Registration Default (as defined therein)
thereunder.
SECTION 4.20. Qualification of Indenture.
The Company shall qualify this Indenture under the TIA in accordance with
the terms and conditions of the Registration Rights Agreement and shall pay all
costs and expenses (including attorneys' fees for the Company and the Trustee)
incurred in connection therewith. In connection with any such qualification of
this Indenture under the TIA, the Trustee shall be entitled to receive from the
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate with or merge with any Person or convey,
transfer or lease all or substantially all of its Property to any Person,
unless:
(1) the Company survives such merger or the Person formed by such
consolidation or into which the Company is merged or that acquires by
conveyance or transfer, or which leases, all or substantially all of the
Property of the Company is a corporation organized and existing under the
laws of the United States, any state thereof or the District of Columbia
and expressly assumes, by supplemental indenture, the due and punctual
payment of the principal of and interest on all the Securities and the
performance of every other covenant and obligation of the Company under
this Indenture;
(2) immediately before and after giving effect to such transaction no
Default or Event of Default exists;
(3) immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of the Company (or, if not the Company,
the surviving or transferee entity) is equal to or greater than the
Consolidated Net Worth of the Company immediately before such transaction;
and
(4) immediately after giving effect to such transaction on a pro forma
basis, the Company (or, if not the Company, the surviving or transferee
entity) would be able to incur $1.00 of additional Indebtedness (excluding
Permitted Indebtedness) under the test described in the first paragraph of
Section 4.09.
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The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Indenture.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, merger, lease, conveyance or transfer in accordance
with Section 5.01, the successor Person formed by such consolidation or into
which the Company is merged or to which such lease, conveyance or transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein and thereafter (except in the
case of a lease) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Securities.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs upon:
(1) default in the payment of principal of the Securities when due at
maturity, upon repurchase, upon acceleration or otherwise, including
failure of the Company to repurchase the Securities required to be
repurchased, at the required purchase price, upon a Change of Control and
corresponding Rating Decline or in the event of a Net Proceeds Offer, and
failure to make any optional redemption payment, whether or not such
payment is prohibited by Articles Ten or Twelve;
(2) default in the payment of any installment of interest on the
Securities when due (including any interest payable in connection with
optional redemption payments) and continuance of such default for 30 days,
whether or not such payment is prohibited by Articles Ten or Twelve;
(3) default on any other Indebtedness of the Company, any Subsidiary
Guarantor or any other Subsidiary if either (a) such default results from
the failure to pay principal of or interest on any such Indebtedness when
due which aggregates in excess of $5 million and continuance of such
default beyond any applicable cure, forbearance or notice period, or (b) as
a result of such default, the maturity of such Indebtedness has been
accelerated prior to its scheduled maturity, without such default and
acceleration having been rescinded or annulled within a period of 10 days,
and the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness in default, or the maturity of which
has been so accelerated, aggregates $5 million or more;
(4) default in the performance, or breach, of any other covenant of
the Company or any Subsidiary Guarantor in this Indenture and failure to
remedy such default within a
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period of 60 days after written notice thereof from the Trustee or Holders
of 25% in principal amount of the outstanding Securities;
(5) the entry by a court of one or more judgments or orders against
the Company, any Subsidiary Guarantor or any other Subsidiary in an
aggregate amount in excess of $10 million and which are not covered by
insurance written by third parties that has not been vacated, discharged,
satisfied or stayed pending appeal within 60 days from the entry thereof;
(6) a Guarantee by a Subsidiary Guarantor that is a Material
Subsidiary shall cease to be in full force and effect (other than a release
of a Guarantee by designation of a Subsidiary Guarantor as an Unrestricted
Subsidiary) or any Subsidiary Guarantor shall deny or disaffirm its
obligations with respect thereto;
(7) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for all
or substan tially all of its property,
(D) makes a general assignment for the benefit of its creditors,
or
(E) admits in writing that it generally is unable to pay its
debts as the same become due;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief (with respect to the petition commencing such
case) against the Company or any Material Subsidiary in an involuntary
case or proceeding,
(B) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its respective property,
or
(C) orders the liquidation of the Company or any Material
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
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SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in clauses
(7) and (8)) under Section 6.01 occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the
outstanding Securities may declare the unpaid principal of (or the Change of
Control purchase price if the Event of Default includes failure to pay the
Change of Control purchase price), and accrued and unpaid interest on, all the
Securities then outstanding to be due and payable, by a notice in writing to the
Company (and to the Trustee, if given by Holders) and upon any such declaration
such principal and accrued and unpaid interest shall become immediately due and
payable, notwithstanding anything contained in this Indenture or the Securities
to the contrary. If an Event of Default specified in clauses (7) or (8) above
occurs, all unpaid principal of, and accrued interest on, the Securities then
outstanding will become due and payable, without any declaration or other act on
the part of the Trustee or any Holder. Except as set forth in the first
sentence of this paragraph, the Company hereby waives presentment, demand,
notice of dishonor, notice of acceleration, notice of intent to accelerate, and
all other notices and demands.
The Holders of a majority in principal amount of the then outstanding
Securities, by written notice to the Company, the Subsidiary Guarantors and the
Trustee, may rescind and annul a declaration of acceleration and its
consequences if (1) the Company or any Subsidiary Guarantor has paid or
deposited with such Trustee a sum sufficient to pay (A) all overdue installments
of interest on all the Securities, (B) the principal of any Securities that has
become due otherwise than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in the Securities, (C) to the
extent that payment of such interest is lawful, interest on the defaulted
interest at the rate or rates prescribed therefor in the Securities, and (D) all
money paid or advanced by the Trustee thereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; (2) all Events of Default, other than the non-payment of the
principal of any Securities that have become due solely by such declaration of
acceleration, have been cured or waived as provided in this Indenture; and (3)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. No such rescission will affect any subsequent Event of
Default or impair any right consequent thereon.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue, in
its own name and as trustee of an express trust, any available remedy by
proceeding at law or in equity to collect the payment of principal or interest
on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
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SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of at least a majority in
principal amount of Securities then outstanding by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default or Event of Default in payment of principal or interest on the
Securities, including any optional redemption payments or Change of Control or
Net Proceeds Offer payments.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the Securities will 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 such Trustee, provided that (1) such direction is not in conflict with any
rule of law or with this Indenture and (2) the Trustee may take any other action
deemed proper by such Trustee that is not inconsistent with such direction.
SECTION 6.06. Limitation on Remedies.
No Holder of any of the Securities will have any right to institute any
proceeding, judicial or otherwise, or for the appointment of a receiver or
trustee or pursue any remedy under this Indenture, unless:
(1) such Holder has previously given notice to the Trustee of a
continuing Event of Default,
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities have made written request to such Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee under this Indenture,
(3) such Holder or Holders have offered to such Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request,
(4) such Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding, and
(5) no direction inconsistent with such written request has been given
to such Trustee during such 30-day period by the Holders of a majority in
principal amount of the outstanding Securities.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over other Holders.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the Holder of any
Securities will have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on
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such Securities on the stated maturity therefor and to institute suit for the
enforcement of any such payment, and such right may not be impaired without the
consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal specified in
Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any Subsidiary Guarantor for the whole amount of principal of and interest on
the Securities remaining unpaid and such further amounts as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation and expenses of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders allowed in any judicial proceedings relative to the Company, the
Subsidiary Guarantors, their creditors or their property and may collect and
receive any money or other property payable or deliverable on any such claims
and to distribute the same.
(b) 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 Six, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders of Senior Indebtedness to the extent required by
Article Ten;
Third: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Fourth: To the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
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SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by Holders of more than 10% in principal amount of the then
outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it by this Indenture and use the
same degree of care and skill in such exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth (or incorporated by reference) in this Indenture and no others.
(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 or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph (c) does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by an officer of the Trustee, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05 or any other direction permitted by this
Indenture, and the Trustee shall be entitled from time to time to request
such a direction.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall be under no obligation and may refuse to perform any
duty or exercise any right or power unless it receives indemnity 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.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on and shall be protected in acting or refraining
from acting upon any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney, to the
extent reasonably required by such inquiry or investigation.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(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.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) For all purposes under this Indenture, the Trustee shall not be deemed
to have notice or knowledge of any Event of Default (other than under Section
6.01(1) or (2)) unless a Trust Officer knows of such Event of Default or unless
written notice of any Event of Default (other than under Section 6.01(1) or (2))
is received by the Trustee at its address in Section 13.02 hereof and such
notice references the Securities generally, the Company or this Indenture.
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or its
Subsidiaries or Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
of the proceeds from the Securities, and it shall not be responsible for any
statement in the Securities other than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Holder pursuant to Section 13.02 a notice of the
Default within 90 days after it occurs. Except in the case of a Default in any
payment on any Security, the Trustee may withhold the notice if and so long as
the board of directors, executive committee or a trust committee of its
directors and/or officers in good faith determines that withholding the notice
is in the interests of Holders.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after each March 15, beginning with March 15, 1998, the
Trustee shall mail to each Holder a brief report dated as of such May 15 that
complies with TIA (S) 313(a), but only if such report is required in any year
under TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and
313(c).
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each stock exchange on which the Securities are listed. The
Company shall notify the Trustee in writing if the Securities become listed on
any national securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay the Trustee from time to time reasonable compensation
(including compensation for extraordinary services relating to default
administration) for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances incurred by it. Such
expenses may include the reasonable compensation and expenses of the Trustee's
agents and counsel.
The Trustee shall not be under any obligation to institute any suit, or
take any remedial action under this Indenture, or to enter any appearance or in
any way defend any suit in which it may be a defendant, or to take any steps in
the execution of the trusts created hereby or thereby or in the enforcement of
any rights and powers under this Indenture, until it shall be indemnified to its
satisfaction against any and all reasonable expenses, disbursements and advances
incurred or made
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by the Trustee in accordance with any provision of this Indenture, including
compensation for services, costs, expenses, outlays, counsel fees and other
disbursements, and against all liability not due to its negligence or willful
misconduct. The Company shall indemnify the Trustee against any loss or
liability incurred by it in connection with the acceptance and administration of
the trust and its duties hereunder as Trustee, Registrar and/or Paying Agent,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Trustee shall notify the Company of any claim for which
it may seek indemnity; however, unless the position of the Company is prejudiced
by such failure, the failure of the Trustee to promptly notify the Company shall
not limit its right to indemnification. The Company shall defend each such
claim and the Trustee shall cooperate in the defense. The Trustee may retain
separate counsel and the Company shall reimburse the Trustee for the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through the Trustee's negligence or willful
misconduct.
To satisfy the Company's payment obligations in this Section, the Trustee
shall have a claim prior to that of the Holders of the Securities on all money
or property held or collected by the Trustee, except that held in trust to pay
principal of and interest on particular Securities.
When the Trustee incurs expenses or renders services after the occurrence
of any Event of Default specified in Sections 6.01(7) or (8), 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.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee, in writing. 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;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting as Trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee, subject to the claim provided for in Section 7.07, the
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resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee. Any successor Trustee shall comply with TIA
(S) 310(a)(5).
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust assets to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided such corporation or association shall be otherwise eligible and
qualified under this Article.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a). The Trustee shall always have a combined capital and surplus
of at least $100,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall also comply with TIA (S) 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a). A Trustee who has resigned
or been removed shall be subject to TIA (S) 311(a) to the extent indicated
therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.
(a) This Indenture shall cease to be of further effect (subject to Section
8.05) when all outstanding Securities theretofore authenticated and issued
hereunder have been delivered (other than any Securities which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.07) to the Trustee for cancellation and the Company has paid all
sums payable hereunder and under the Securities.
(b) In addition to the provisions of Section 8.01(a), at the Company's
option, either (i) the Company and the Subsidiary Guarantors shall be deemed to
have been discharged from their obligations with respect to the Securities and
the provisions of this Indenture (subject to Section 8.05)
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on the 91st day after the applicable conditions set forth below have been
satisfied or (ii) the Company and the Subsidiary Guarantors shall cease to be
under any obligation to comply with any term, provision or condition set forth
in Sections 4.02, 4.03, 4.07 through 4.18, 5.01 and the last paragraph of
Section 11.01 with respect to the Securities at any time after the applicable
conditions set forth below have been satisfied:
(1) the Company or any Subsidiary Guarantor shall have deposited or
caused to be deposited irrevocably with the Trustee as trust funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders (i) money, or (ii) U.S. Government Obligations,
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide (without any reinvestment of such
interest or principal), not later than one day before the due date of any
payment, money or (iii) a combination of (i) and (ii), in an amount
sufficient, in the opinion (with respect to (ii) and (iii)) of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee at or prior to the time of
such deposit, to pay and discharge each installment of principal of and
interest on the outstanding Securities on the dates such installments are
due;
(2) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or a
Subsidiary Guarantor or any Subsidiary is a party or by which any of them
is bound, as evidenced to the Trustee in an Officers' Certificate delivered
to the Trustee concurrently with such deposit;
(3) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders 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 and will be subject to federal income
tax on the same amount and in the same manner and at the same time as would
have been the case if such option had not been exercised, and, in the case
of the Securities being discharged pursuant to clause (i) of this Section
8.01(b), accompanied by a ruling to that effect received from or published
by the Internal Revenue Service (it being understood that (A) such Opinion
of Counsel shall also state, if applicable, that such ruling is consistent
with the conclusions reached in such Opinion of Counsel and (B) the Trustee
shall be under no obligation to investigate the basis of correctness of
such ruling);
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section 8.01 will not result in any of the Company, the Trustee or the
trust created by the Company's deposit of funds hereunder becoming or being
deemed to be an "investment company" under the Investment Company Act of
1940, as amended;
(5) the Company or any Subsidiary Guarantor shall have paid or duly
provided for payment of all amounts then due to the Trustee pursuant to
Section 7.07; and
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(6) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
(c) The Company or any Subsidiary Guarantor may make an irrevocable deposit
pursuant to this Section 8.01 only if at such time it is not prohibited from
doing so under the provisions of Articles Ten and Twelve of this Indenture and
the Company shall have delivered to the Trustee and any Paying Agent an
Officers' Certificate to that effect.
SECTION 8.02. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with the provisions of the Securities and this Indenture to the
payment of principal of and interest on the Securities. Money and securities so
held in trust are not subject to the subordination provisions of Articles Ten or
Twelve and need not be segregated from other funds except to the extent required
by law.
The term "U.S. Government Obligations" means direct obligations of the
United States for the payment of which the full faith and credit of the United
States is pledged.
SECTION 8.03. Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any money or securities held by them at any time in excess of amounts
required to pay principal of or interest on the Securities. The Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for one year;
provided, however, that the Trustee or such Paying Agent before being required
to make any such repayment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each such Holder notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing any unclaimed balance of such money then
remaining will be paid to the Company. After repayment to the Company, any
Holder entitled to such money shall thereafter, as an unsecured general
creditor, look (unless an applicable law designates another Person) only to the
Company for payment, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Subsidiary Guarantors' obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 8.01; provided, however, that if the Company or any Subsidiary
Guarantor has made any payment of interest on or principal of any Securities
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because of the reinstatement of its obligations, the Company or such Subsidiary
Guarantor shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
SECTION 8.05. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this Indenture and of the
Securities referred to in Section 8.01(a) and (b)(i), the respective obligations
of the Company, the Subsidiary Guarantors and the Trustee under Sections 2.02,
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 4.01 (with respect to Section 8.01(a)),
4.04, 6.07, 7.07, 7.08, 8.02, 8.03, 8.04, 11.03, and 11.04 shall survive until
the Securities are no longer outstanding, and thereafter the obligations of the
Company and the Trustee under Sections 7.07, 8.02, 8.03 and 8.04 shall survive.
Nothing contained in this Article Eight shall abrogate any of the obligations or
duties of the Trustee under this Indenture.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Sections 5.01 or 11.02;
(3) to provide for uncertificated Securities in addition to
certificated Securities;
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(5) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder.
Notwithstanding the above, the Trustee and the Company may not make any
change that adversely affects the legal rights of any Holders hereunder.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee may amend or supplement this Indenture or the
Securities with the written consent of the Subsidiary Guarantors and the Holders
of at least a majority of the principal amount of the Securities then
outstanding, and the Holders of a majority in principal amount of the
Securities, together with the Subsidiary Guarantors, may waive compliance by the
Company with any provision of this Indenture or the Securities. However, without
the consent of each Holder affected, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:
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(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of interest on the Securities;
(3) reduce the principal amount of the Securities or extend the
maturity schedule of the Securities or modify the redemption or repurchase
provisions of the Securities;
(4) waive a default in the payment of the principal or interest on the
Securities;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in the subordination of the Securities in a manner
that is adverse to the Holders; or
(7) make any change in Section 6.04 or Section 6.07 hereof or in this
sentence of this Section 9.02.
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. Any amendment, waiver or consent shall be deemed effective upon
receipt by the Trustee of the necessary consents and shall not require execution
of any supplemental indenture to be effective.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of each Security affected
thereby, with a copy to the Trustee, 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, waiver, consent or supplemental indenture. Except as
otherwise provided in Section 6.04 and this Section 9.02, the Holders of a
majority in aggregate principal amount of the Securities then outstanding may
waive compliance in a particular instance by the Company or the Subsidiary
Guarantors with any provisions of this Indenture or the Securities.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of a Security
shall bind 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, until an
amendment, supplement or waiver becomes effective, any such Holder or
subsequent Holder may revoke the consent as to his Security or portion of a
Security. For such revocation to be effective, the Trustee must receive the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.
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After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it makes a change described in any of clauses (1) through
(7) of Section 9.02. In that case the amendment, supplement or waiver shall bind
each Holder of a Security who has consented to it and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
SECTION 9.06. Trustee Protected.
The Trustee shall sign any amendment or supplement or waiver authorized
pursuant to this Article if the amendment or supplement or waiver does not
adversely affect the rights of the Trustee. If it does adversely affect the
rights of the Trustee, the Trustee may but need not sign it. In signing such
amendment or supplement or waiver the Trustee shall be entitled to receive, and
(subject to Article Seven) shall be fully protected in relying upon, an Opinion
of Counsel stating that such amendment or supplement or waiver is authorized or
permitted by and complies with this Indenture. The Company may not sign an
amendment or supplement until the Board of Directors of the Company approves it.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Securities Subordinated to Senior Indebtedness.
The Company agrees, and each Holder by its acceptance thereof likewise
agrees, that the payment of principal of and interest on the Securities is
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Indebtedness, whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed or guaranteed. No payment on any Guarantee shall constitute payment "on
behalf of" the Company within the meaning of this Article Ten; provided that a
payment by a Subsidiary Guarantor on a Guarantee shall constitute a payment "on
behalf of" the Company within the meaning of this Article Ten in the event that
any guarantee by such Subsidiary of Indebtedness under the Bank Credit Agreement
shall have been determined by a court of competent jurisdiction to be invalid or
unenforceable, in whole or in part.
This Article Ten 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 and/or each of them may enforce such
provisions. No amendment of any provision of this Article Ten shall be
effective as against any holder of Senior Indebtedness who has not consented
thereto.
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SECTION 10.02. Company Not To Make Payments with Respect to Securities in
Certain Circumstances.
(a) No payment may be made by the Company or on behalf of the Company on
account of principal of or interest on the Securities or to acquire or
repurchase any of the Securities or on account of the redemption provisions of
the Securities (i) upon the maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, unless and until all such Senior Indebtedness
is first paid in full or (ii) upon the happening of any default in payment of
any principal of or interest on any Senior Indebtedness when the same becomes
due and payable (a "Payment Default"), unless and until such Payment Default
shall have been cured or waived or shall have ceased to exist.
(b) Upon the happening of a default or event of default (other than a
Payment Default) with respect to any Senior Indebtedness, as such default or
event of default is defined therein or in the instrument under which it is
outstanding, and, upon written notice thereof given to the Company and the
Trustee by any holders of such Senior Indebtedness or their Representative (a
"Payment Notice"), then, unless and until such default or event of default shall
have been cured or waived or shall have ceased to exist or the Representative
gives its written approval, no payment shall be made by or on behalf of the
Company on account of principal of or interest on the Securities or to acquire
or repurchase any of the Securities or on account of the redemption provisions
of the Securities; provided, however, that these provisions will not prevent the
making of any payment for more than 179 days after the due date of the first
principal or interest payment on the Securities after a Payment Notice shall
have been given. Notwithstanding the foregoing, (i) not more than one Payment
Notice shall be given within a period of 360 consecutive days and (ii) a Payment
Notice may only be given (A) if more than $5 million of Senior Indebtedness is
outstanding under the Bank Credit Agreement at the time of such notice, by the
Representative or (B) if $5 million or less of Senior Indebtedness is
outstanding under the Bank Credit Agreement at the time of such notice, by a
holder or holders (or the Representative of holders) of at least $5 million
principal amount of Senior Indebtedness.
(c) In the event that, notwithstanding the provisions of this Section
10.02, the Company shall make any payment to the Trustee or the Holders on
account of any principal of or interest on the Securities, or to acquire or
repurchase any of the Securities or on account of the redemption provisions of
the Securities, after the happening of a Payment Default or after receipt by the
Company and the Trustee of a Payment Notice as provided in this Section 10.02,
then, unless and until such default or event of default shall have been cured or
waived or shall have ceased to exist, such payment (subject to the provisions of
Sections 10.06 and 10.07) shall be held by the Trustee or Holders, as the case
may be, in trust for the benefit of, and shall be paid over and delivered to,
the holders of Senior Indebtedness (pro rata as to each of such holders on the
basis of the respective amounts of Senior Indebtedness held by them) or their
Representative as their respective interests may appear, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in accordance with its terms, after giving
effect to any concurrent payment or distribution or provision therefor to the
holders of Senior Indebtedness. The Company shall give prompt written notice to
the Trustee of any default under any Senior Indebtedness or under any agreement
pursuant to which Senior Indebtedness may have been issued.
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SECTION 10.03. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of
Company.
Upon any distribution of assets of the Company or payment on behalf of the
Company with respect to the Securities in the event of any Insolvency or
Liquidation Proceeding with respect to the Company:
(a) the holders of Senior Indebtedness shall be entitled to receive
payment in full of such Senior Indebtedness before the Holders are entitled
to receive any direct or indirect payment or distribution of any cash,
property or security on account of the principal of or interest on or any
other payment with respect to the Securities;
(b) any direct or indirect payment or distribution of assets of or on
behalf of the Company of any kind or character, whether in cash, property
or securities, to which the Holders or the Trustee on behalf of the Holders
would be entitled except for the provisions of this Article Ten (including
specifically, without limitation, any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness
of the Company being subordinated to the payment of the Securities, which
may be payable or deliverable in respect of the Securities in any such
Insolvency or Liquidation Proceeding), shall be paid by the liquidating
trustee or agent or other person making such payment or distribution
directly to the holders of Senior Indebtedness or their Representative, to
the extent necessary to make payment in full of all Senior Indebtedness
remaining unpaid, whether or not due, including specifically, without
limitation, all Post-Commencement Amounts, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness; and
(c) in the event that notwithstanding the foregoing provisions of this
Section 10.03, any direct or indirect payment or distribution of assets of
or on behalf of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or the Holders on
account of any principal of or interest on the Securities (including
specifically, without limitation, any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness
of the Company being subordinated to the payment of the Securities, which
may be payable or deliverable in respect of the Securities in any such
Insolvency or Liquidation Proceeding) before all Senior Indebtedness is
paid in full, whether or not due, including specifically, without
limitation, all Post-Commencement Amounts, such payment or distribution
(subject, with regard to the Trustee, to the provisions of Sections 10.06
and 10.07) shall be received and held in trust for and shall be paid over
to the holders of the Senior Indebtedness remaining unpaid or their
Representative, for application to the payment of such Senior Indebtedness
until all such Senior Indebtedness shall have been paid in full whether or
not due, including specifically, without limitation, all Post-Commencement
Amounts, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
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SECTION 10.04. Holders To Be Subrogated to Rights of Holders of Senior
Indebtedness.
After the payment in full of all Senior Indebtedness, the Holders shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness (equally and ratably with the holders of all other Indebtedness of
the Company which by its express terms is subordinate and subject in right of
payment to Senior Indebtedness of the Company to substantially the same extent
as the Securities are so subordinate and subject in right of payment and which
is entitled to like rights and subrogation as a result of payments made to the
holders of such Senior Indebtedness), until all amounts owing on the Securities
shall be paid in full, and for the purpose of such subrogation no payments or
distributions to the holders of the Senior Indebtedness by or on behalf of the
Company or by or on behalf of the Holders by virtue of this Article which
otherwise would have been made to the Holders shall, as between the Company and
the Holders, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article Ten
are and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of the Senior Indebtedness, on the
other hand. Nothing in this Section 10.04 shall be deemed to give the Holders
the benefits of any rights to any collateral securing such Senior Indebtedness
as to which such Holders may become subrogated pursuant to this Section 10.04.
SECTION 10.05. Obligations of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Security is intended to or shall impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and interest on the Securities 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 the 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 Ten of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy. Upon any distribution of assets
of the Company referred to in this Article Ten, the Trustee, subject to the
provisions of Sections 7.01 and 7.02, and the Holders 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 the 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 Ten.
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 which would prohibit the making of any payment to or by
the Trustee or the taking of any other action by the Trustee, unless, subject to
Section 10.07 hereof, it shall have received at its corporate trust department
written notice thereof from the Company or from one or more holders of Senior
Indebtedness or from any Representative thereof; and, prior to the receipt of
any such written notice,
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the Trustee, subject to the provisions of Article Seven and Section 10.07 below,
shall be entitled to assume conclusively that no such facts exist. 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 Indebtedness (or a Representative
on behalf of such holder) to establish that such notice has been given by a
holder of Senior Indebtedness or a Representative on behalf of any such holder
or holders.
SECTION 10.07. Application by Trustee of Monies Deposited with It.
Except as provided in Section 8.02, any deposit of monies by the Company
with the Trustee or any Paying Agent (whether or not in trust) for the payment
of the principal of or interest on any Securities shall be subject to the
provisions of Sections 10.01, 10.02, 10.03 and 10.04 except that, if prior to
12:00 noon, New York City time, on the first Business Day prior to the date on
which by the terms of this Indenture any such monies may become payable for any
purpose (including, without limitation, the payment of either the principal or
the interest on any Security) the Trustee or, in the case of any such deposit of
monies with a Paying Agent, the Paying Agent shall not have received with
respect to such monies the notice provided for in Section 10.06, then the
Trustee or such Paying Agent, as the case may be, shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such first Business Day. 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 Indebtedness to
participate in any payment or distribution pursuant to this Article Ten, the
Trustee may request such person to furnish evidence to the reasonable sat
isfaction of the Trustee as to the amount of Senior Indebtedness 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 Ten, and if such evidence is not furnished the Trustee
may defer any payment to such person pending judicial determination as to the
right of such person to receive such payment.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness but shall have only such obligations to such holders as are
expressly set forth in this Article Ten.
SECTION 10.08. Subordination Rights Not Impaired by Acts or Omissions of Company
or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination as provided herein 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 of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. Without
limiting the foregoing, the holders of Senior Indebtedness of the Company may
extend, renew, modify or amend the terms of the Senior Indebtedness of the
Company or any security therefor or guaranty thereof and release, sell or
exchange such security and release such guaranty and otherwise deal freely with
the Company, all without affecting the provisions of this Article Ten.
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SECTION 10.09. Holders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder 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 provided in this Article Ten and appoints the
Trustee his attorney-in-fact for such purpose, including, in the event of any
Insolvency or Liquidation Proceeding with respect to the Company, the immediate
filing of a claim for the unpaid balance of its or his Securities in the form
required in said proceedings and the causing of 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 expiration of the time to file
such claims, then the holders of Senior Indebtedness are hereby authorized to
have the right to file and are hereby authorized to file an appropriate claim
for and on behalf of such Holder.
SECTION 10.10. Right of Trustee To Hold Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article Ten 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 Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal or interest by reason
of any provision in this Article Ten shall not be construed as preventing the
occurrence of an Event of Default under Section 6.01.
SECTION 10.12. Payment.
For purposes of this Article Ten, a payment with respect to any Security or
with respect to principal of or interest on any Security shall include, without
limitation, payment of principal of and interest on any Security, any depositing
of funds under Article Eight, any payment on account of any mandatory or
optional repurchase or redemption of any Security (including payments pursuant
to Article Three or Section 4.01, 4.12 or 4.17) and any payment or recovery on
any claim (whether for rescission or damages and whether based on contract,
tort, duty imposed by law, or any other theory of liability) relating to or
arising out of the offer, sale or purchase of any Security.
ARTICLE ELEVEN
GUARANTEES
SECTION 11.01. Unconditional Guarantee.
Each Subsidiary Guarantor hereby unconditionally, jointly and severally,
guarantees (such guarantee to be referred to herein as the "Guarantee") to each
Holder of Securities authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, the full and prompt performance of the
Company's obligations under this Indenture and the Securities and that:
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(1) the principal of and interest on the Securities will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the
Securities, if any, to the extent lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and
(2) in case of any extension of time of payment or renewal of any
Securities or of any such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise,
subject, however, in the case of clauses (1) and (2) above, to the limitations
set forth in Section 11.04.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. Each Subsidiary Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice, notice of intent to
accelerate, notice of acceleration, and all other notices and all demands
whatsoever and covenants that this Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and in this Guarantee. If any Holder or the Trustee is required by
any court or otherwise to return to the Company, any Subsidiary Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Subsidiary Guarantor, any amount paid by the Company or
any Subsidiary Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Six for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article Six, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of this Guarantee.
The Company agrees to cause each Person (other than an Unrestricted
Subsidiary) that shall become a Material Subsidiary after the date of this
Indenture to execute and deliver a supplement to this Indenture pursuant to
which such Person will guarantee the payment of the Securities on the same terms
and conditions as the Guarantees by the Subsidiary Guarantors.
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SECTION 11.02. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Articles Four and Five, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety, to the
Company or another Subsidiary Guarantor.
(b) Except as set forth in Articles Four and Five hereof, nothing contained
in this Indenture or in any of the Securities shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into a corporation or corporations
other than the Company or a Subsidiary Guarantor (whether or not affiliated with
the Subsidiary Guarantor), or successive consolidations or mergers in which a
Subsidiary Guarantor or its successor or successors shall be a party or parties,
or shall prevent any sale or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to a corporation other
than the Company or another Subsidiary Guarantor (whether or not affiliated with
the Subsidiary Guarantor) authorized to acquire and operate the same; provided,
however, that, subject to Section 11.02(a) and 11.03, (i) immediately after such
transaction, and giving effect thereto, no Default or Event of Default shall
have occurred as a result of such transaction and be continuing, (ii) such
transaction shall not violate any of the covenants in Sections 4.01 through
4.17, and (iii) each Subsidiary Guarantor hereby covenants and agrees that, upon
any such consolidation, merger, sale or conveyance, such Subsidiary Guarantor's
Guarantee set forth in this Article Eleven, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, shall be expressly assumed (in the event
that the Subsidiary Guarantor is not the surviving corporation in the merger),
by supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the corporation formed by such consolidation, or
into which the Subsidiary Guarantor shall have merged, or by the corporation
that shall have acquired such property. In the case of any such consolidation,
merger, sale or conveyance and upon the assumption by the successor corporation,
by supplemental indenture executed and delivered to the Trustee and satisfactory
in form to the Trustee of the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Subsidiary
Guarantor, such successor corporation shall succeed to and be substituted for
the Subsidiary Guarantor with the same effect as if it had been named herein as
a Subsidiary Guarantor.
SECTION 11.03. Release of a Subsidiary Guarantor.
Upon the sale or disposition of a Subsidiary Guarantor (or substantially
all of its assets), which is otherwise in compliance with the terms of this
Indenture, including but not limited to the provisions of Section 11.02, such
Subsidiary Guarantor shall be deemed released from all of its Guarantee and
related obligations in this Indenture; provided that any such termination shall
occur only to the extent that all obligations of such Subsidiary Guarantor under
all of its guarantees of, and under all of its pledges of assets or other
security interests which secure, other Indebtedness of the Company or any
Subsidiary shall also terminate or be released upon such sale or transfer. Each
Subsidiary Guarantor that is designated as an Unrestricted Subsidiary in
accordance with this Indenture shall be released from all of its Guarantee and
related obligations set forth in this Indenture for so long as it remains an
Unrestricted Subsidiary. The Trustee shall deliver an appropriate instrument
evidencing such release upon receipt of a request by the Company accompanied by
an Officers' Certificate and an
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Opinion of Counsel certifying that such sale or other disposition was made by
the Company in accordance with the provisions of this Indenture. Any Subsidiary
Guarantor not so released remains liable for the full amount of principal of and
interest on the Securities as provided in this Article Eleven.
SECTION 11.04. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor and by its acceptance hereof each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Subsidiary Guarantor pursuant to its Guarantee not constitute a fraudulent
transfer or conveyance for purposes of any federal or state law. To effectuate
the foregoing intention, the Holders and each Subsidiary Guarantor hereby
irrevocably agree that the obligations of each Subsidiary Guarantor under the
Guarantee shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities (including, but not limited to,
Guarantor Senior Indebtedness of each Subsidiary Guarantor) of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Guarantee or pursuant to Section
11.05, result in the obligations of such Subsidiary Guarantor under the
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law. This Section 11.04 is for the benefit of the creditors of
each Subsidiary Guarantor, and, for purposes of applicable fraudulent transfer
and fraudulent conveyance law, any Indebtedness of a Subsidiary Guarantor
pursuant to the Bank Credit Agreement shall be deemed to have been incurred
prior to the incurrence by such Subsidiary Guarantor of its liability under the
Guarantee.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Guarantee, such Funding Guarantor shall be
entitled to a contribution from each other Subsidiary Guarantor in a pro rata
amount based on the Adjusted Net Assets of each Subsidiary Guarantor (including
the Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Subsidiary Guarantor's obligations with respect to the
Guarantee.
SECTION 11.06. Execution and Delivery of Guarantee.
To evidence its Guarantee set forth in Section 11.01, each Subsidiary
Guarantor hereby agrees to execute the Guarantee in substantially the form of
Exhibit A-1 to be endorsed on each Security ordered to be authenticated and
delivered by the Trustee and each Subsidiary Guarantor agrees that this
Indenture shall be executed on behalf of each Subsidiary Guarantor by its
President or one of its Vice Presidents and attested to by an Officer. Each
Subsidiary Guarantor hereby agrees that its Guarantee set forth in Section 11.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Security a notation of such Guarantee. Each such Guarantee shall be signed
on behalf of each Subsidiary Guarantor by one Officer, (who shall have been duly
authorized by all requisite corporate actions) prior to the authentication of
the Security on which it is endorsed, and the delivery of such Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the Guarantee set forth in this Indenture on behalf of the
Subsidiary
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Guarantors. Such signatures upon the Guarantee may be by manual or facsimile
signature of such officers and may be imprinted or otherwise reproduced on the
Guarantee, and in case any such officer who shall have signed the Guarantee
shall cease to be such officer before the Security on which such Guarantee is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Company, such Security nevertheless may be authenticated and delivered
or disposed of as though the person who signed the Guarantee had not ceased to
be such officer of the Subsidiary Guarantor.
SECTION 11.07. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEES
SECTION 12.01. Guarantees Subordinated to Guarantor Senior Indebtedness.
The Subsidiary Guarantors agree, and each Holder by its acceptance thereof
likewise agrees, that the payments by the Subsidiary Guarantors in respect of
the Guarantees are subordinated in right of payment, to the extent and in the
manner provided in this Article Twelve, to the prior payment in full of all
Guarantor Senior Indebtedness, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed or guaranteed.
This Article Twelve shall constitute a continuing offer to all persons who,
in reliance upon such provisions, become holders of, or continue to hold,
Guarantor Senior Indebtedness, and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness, and such holders and/or each of
them may enforce such provisions. No amendment of any provision of this Article
Twelve shall be effective as against any holder of Guarantor Senior Indebtedness
who has not consented thereto.
SECTION 12.02. Subsidiary Guarantors Not To Make Payments with Respect to
Guarantees in Certain Circumstances.
(a) No payment may be made by the Subsidiary Guarantors in respect of the
Guarantees (i) upon the maturity of any Guarantor Senior Indebtedness by lapse
of time, acceleration or otherwise, unless and until all such Guarantor Senior
Indebtedness is first paid in full or (ii) upon the happening of any default in
respect of the payment of any Guarantor Senior Indebtedness when the same
becomes due and payable (a "Subsidiary Guarantor Payment Default"), unless and
until such Subsidiary Guarantor Payment Default shall have been cured or waived
or shall have ceased to exist.
(b) Upon the happening of a default or event of default (other than a
Subsidiary Guarantor Payment Default) with respect to any Guarantor Senior
Indebtedness, as such default or event of default is defined therein or in the
instrument under which it is outstanding, and, upon written notice thereof given
to the Subsidiary Guarantors and the Trustee by any holders of such Guarantor
Senior
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Indebtedness or their Representative (a "Subsidiary Guarantor Payment Notice"),
then, unless and until such default or event of default shall have been cured or
waived or shall have ceased to exist or the Representative gives its written
approval, no payment shall be made by the Subsidiary Guarantors in respect of
the Guarantees; provided, however, that these provisions will not prevent the
making of any payment for more than 179 days after the due date of payment on
the Guarantees after a Subsidiary Guarantor Payment Notice shall have been
given. Notwithstanding the foregoing, (i) not more than one Subsidiary Guarantor
Payment Notice shall be given within a period of 360 consecutive days and (ii) a
Subsidiary Guarantor Payment Notice may only be given (A) if more than $5
million of Guarantor Senior Indebtedness is outstanding under the Bank Credit
Agreement at the time of such notice, by the Representative or (B) if $5 million
or less of Guarantor Senior Indebtedness is outstanding under the Bank Credit
Agreement at the time of such notice, by a holder or holders (or the
Representative of holders) of at least $5 million principal amount of Guarantor
Senior Indebtedness.
(c) In the event that, notwithstanding the provisions of this Section
12.02, the Subsidiary Guarantors shall make any payment in respect of the
Guarantees, after the happening of a Subsidiary Guarantor Payment Default or
after receipt by the Subsidiary Guarantors and the Trustee of a Subsidiary
Guarantor Payment Notice as provided in this Section 12.02, then, unless and
until such default or event of default shall have been cured or waived or shall
have ceased to exist, such payment (subject to the provisions of Sections 12.06
and 12.07) shall be held by the Trustee or Holders, as the case may be, in trust
for the benefit of, and shall be paid over and delivered to, the holders of
Guarantor Senior Indebtedness (pro rata as to each of such holders on the basis
of the respective amounts of Guarantor Senior Indebtedness held by them) or
their Representative, as their respective interests may appear, for application
to the payment of all Guarantor Senior Indebtedness remaining unpaid to the
extent necessary to pay all Guarantor Senior Indebtedness in full in accordance
with its terms, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of Guarantor Senior Indebtedness. The
Subsidiary Guarantors shall give prompt written notice to the Trustee of any
default under any Guarantor Senior Indebtedness or under any agreement pursuant
to which Guarantor Senior Indebtedness may have been issued.
SECTION 12.03. Guarantees Subordinated to Prior Payment of All Guarantor
Senior Indebtedness on Dissolution, Liquidation or
Reorganization of Subsidiary Guarantor.
Upon any distribution of assets of any Subsidiary Guarantor in the event of
any Insolvency or Liquidation Proceeding with respect to any Subsidiary
Guarantor:
(a) the holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full of such Guarantor Senior Indebtedness before the
Holders are entitled to receive any direct or indirect payment or
distribution of any cash, property or security on account of any payment in
respect of the Guarantees;
(b) any direct or indirect payment or distribution of assets of the
Subsidiary Guarantors of any kind or character, whether in cash, property
or securities, to which the Holders or the Trustee, on behalf of the
Holders, would be entitled except for the provisions of this Article Twelve
(including specifically, without limitation, any payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of
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such Subsidiary Guarantor being subordinated to any payment in respect of
the Guarantees, which may be payable or deliverable in respect of the
Guarantees in any such Insolvency or Liquidation Proceeding), shall be paid
by the liquidating trustee or agent or other person making such payment or
distribution directly to the holders of Guarantor Senior Indebtedness or
their Representative, to the extent necessary to make payment in full of
all Guarantor Senior Indebtedness remaining unpaid whether or not due,
including specifically, without limitation, all Post-Commencement Amounts,
after giving effect to any concurrent payment or distribution to the
holders of such Guarantor Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 12.03, any direct or indirect payment or distribution of
assets of any Subsidiary Guarantor of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or the
Holders (including specifically, without limitation, any payment or
distribution which may be payable or deliverable by reason of the payment
of any other Indebtedness of such Subsidiary Guarantor being subordinated
to the payment of the Guarantees, which may be payable or deliverable in
respect of the Guarantees in any such Insolvency or Liquidation Proceeding)
before all Guarantor Senior Indebtedness is paid in full, whether or not
due, including specifically, without limitation, all Post-Commencement
Amounts, such payment or distribution (subject, with regard to the Trustee,
to the provisions of Sections 12.06 and 12.07) shall be received and held
in trust for and shall be paid over to the holders of the Guarantor Senior
Indebtedness remaining unpaid or their Representative, for application to
the payment of such Guarantor Senior Indebtedness until all such Guarantor
Senior Indebtedness shall have been paid in full, whether or not due,
including specifically, without limitation, all Post-Commencement Amounts,
after giving effect to any concurrent payment or distribution to the
holders of such Guarantor Senior Indebtedness.
The Company or the Subsidiary Guarantors shall give prompt written
notice to the Trustee of any dissolution, winding up, liquidation or
reorganization of any Subsidiary Guarantor.
SECTION 12.04. Holders To Be Subrogated to Rights of Holders of Guarantor
Senior Indebtedness.
After the payment in full of all Guarantor Senior Indebtedness, the Holders
shall be subrogated, to the rights of the holders of Guarantor Senior
Indebtedness to receive payments or distributions of assets of the Subsidiary
Guarantors applicable to the Guarantor Senior Indebtedness (equally and ratably
with the holders of all other Indebtedness which by its express terms is
subordinate and subject in right of payment to Guarantor Senior Indebtedness to
substantially the same extent as the Guarantees are so subordinate and subject
in right of payment and which is entitled to like rights and subrogation as a
result of payments made to the holders of such Senior Indebtedness) until all
amounts owing on the Securities shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of the Guarantor
Senior Indebtedness by or on behalf of the Subsidiary Guarantors or by or on
behalf of the Holders by virtue of this Article Twelve which otherwise would
have been made to the Holders shall, as between the Subsidiary Guarantors and
the Holders, be deemed to be payment by the Subsidiary Guarantors to or on
account of the Guarantor Senior Indebtedness, it being understood that the
provisions of this Article Twelve are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one
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hand, and the holders of the Guarantor Senior Indebtedness, on the other hand.
Nothing in this Section 12.04 shall be deemed to give the Holders the benefits
of any rights to any collateral securing such Senior Indebtedness as to which
such Holders may become subrogated pursuant to this Section 12.04.
SECTION 12.05. Obligations of the Subsidiary Guarantors Unconditional.
Nothing contained in this Article Twelve or elsewhere in this Indenture or
in any Security is intended to or shall impair, as between the Subsidiary
Guarantors and the Holders, the obligation of the Subsidiary Guarantors under
the Guarantees, or is intended to or shall affect the relative rights of the
Holders and creditors of the Subsidiary Guarantors other than the holders of the
Guarantor 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 Twelve of the holders of Guarantor Senior Indebtedness in
respect of cash, property or securities of the Subsidiary Guarantors received
upon the exercise of any such remedy. Upon any distribution of assets of the
Subsidiary Guarantors referred to in this Article Twelve, the Trustee, subject
to the provisions of Sections 7.01 and 7.02, and the Holders 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 the Holders of the
Securities, for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Guarantor Senior Indebtedness and other
indebtedness of the Subsidiary Guarantors, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Twelve.
SECTION 12.06. 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 which would prohibit the making of any payment to or by
the Trustee, unless, subject to Section 12.07 below, it shall have received at
its corporate trust department written notice thereof from the Subsidiary
Guarantors or from one or more holders of Guarantor Senior Indebtedness or from
any Representative thereof; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Article Seven and Section
12.07 below, shall be entitled to assume conclusively that no such facts exist.
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 Guarantor Senior Indebtedness
(or a Representative on behalf of such holder) to establish that such notice has
been given by a holder of Guarantor Senior Indebtedness or a Representative on
behalf of any such holder or holders.
SECTION 12.07. Application by Trustee of Monies Deposited with It.
Except as provided in Section 8.02, any deposit of monies by the Subsidiary
Guarantor with the Trustee or any Paying Agent (whether or not in trust) for any
payment in respect of the Guarantees shall be subject to the provisions of
Sections 12.01, 12.02, 12.03 and 12.04 except that, if prior to 12:00 noon, New
York City time, on the first Business Day prior to the date on which by the
terms of this Indenture any such monies may become payable for any purpose, the
Trustee or, in the case of any such deposit of monies with a Paying Agent, the
Paying Agent shall not have received with respect to such monies the notice
provided for in Section 12.06, then the Trustee or such Paying
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Agent, as the case may be, shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such first Business Day. 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 Guarantor Senior Indebtedness to participate in any
payment or distribution pursuant to this Article Twelve, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Guarantor Senior Indebtedness 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
Twelve, and if such evidence is not furnished the Trustee may defer any payment
to such person pending judicial determination as to the right of such person to
receive such payment.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness but shall have only such obligations to such
holders as are expressly set forth in this Article Twelve.
SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions of
Subsidiary Guarantors or Holders of Guarantor Senior
Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Subsidiary Guarantor or by any act or failure to act by any such holder, or
by any noncompliance by any Subsidiary Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with. Without limiting the foregoing, the holders of
Guarantor Senior Indebtedness may extend, renew, modify or amend the terms of
the Guarantor Senior Indebtedness or any security therefor or guaranty thereof
and release, sell or exchange such security and release such guaranty and
otherwise deal freely with any Subsidiary Guarantor, all without affecting the
provisions of this Article Twelve.
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination of
Guarantee.
Each Holder 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 provided in this Article Twelve and appoints the
Trustee his attorney-in-fact for such purpose, including, in the event of any
Insolvency or Liquidation Proceeding with respect to any Subsidiary Guarantor,
the immediate filing of a claim for the unpaid balance of its or his Securities
pursuant to the Guarantee in the form required in said proceedings and the
causing of 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 expiration of the time to file such claims, then the holders of
Guarantor Senior Indebtedness are hereby authorized to have the right to file
and are hereby authorized to file an appropriate claim for and on behalf of such
Holder.
SECTION 12.10. Right of Trustee To Hold Guarantor Senior Indebtedness.
The Trustee shall be entitled to all of the rights set forth in this
Article Twelve in respect of any Guarantor Senior Indebtedness at any time held
by it to the same extent as any other holder of
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Guarantor Senior Indebtedness, and nothing in this Indenture shall be construed
to deprive the Trustee of any of its rights as such holder.
SECTION 12.11. Article Twelve Not To Prevent Events of Default.
The failure to make a payment on account of the Guarantees by reason of any
provision in this Article Twelve shall not be construed as preventing the
occurrence of an Event of Default under Section 6.01.
SECTION 12.12. Payment.
For purposes of this Article Twelve, a payment with respect to any
Guarantee or with respect to principal of or interest on any Security or any
Guarantee shall include, without limitation, payment of principal of and
interest on any Security, any depositing of funds under Article Eight, any
payment on account of any mandatory or optional repurchase or redemption of any
Security (including payments pursuant to Article Three or Section 4.01, 4.12 or
4.17) and any payment or recovery on any claim (whether for rescission or
damages and whether based on contract, tort, duty imposed by law, or any other
theory of liability) relating to or arising out of the offer, sale or purchase
of any Security.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of TIA (S) 318(c), the imposed duties shall control.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in writing and
delivered in person or mailed by certified or registered mail (return receipt
requested) addressed as follows or by facsimile transmission:
If to the Company or any Subsidiary Guarantor:
Plains Resources Inc.
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▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Secretary and Chief Financial Officer
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If to the Trustee:
Texas Commerce Bank National Association
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Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President, Corporate Trust Department
For purposes of the Company's obligation hereunder to maintain an office or
agency in the City of New York for purposes of surrendering Securities, the
address of the Trustee's agent is:
Texas Commerce Trust Company of New York
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
Windows 20 and ▇▇
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The Company or any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed to him by
first-class mail at his address as it appears on the registration books of the
Registrar and shall be sufficiently given to him if so mailed within the time
prescribed.
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, it is duly given, whether
or not the addressee receives it. If the Company mails notice or communications
to Holders it shall mail a copy to the Trustee and each Agent at the same time.
All notices or communications shall be in writing.
SECTION 13.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Securities. The Company,
the Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company and/or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
and/or such Subsidiary Guarantor, as the case may be, shall furnish to the
Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, the conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, such conditions precedent have been complied with.
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SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each 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 each 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 each such
person, such covenant or condition has been complied with.
SECTION 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules for its
functions.
SECTION 13.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banks and
trust companies in the City of New York are not required by law or executive
order to be open. If a payment date is a Legal Holiday at a place of payment,
payment may be made at the place on the next succeeding day that is not a Legal
Holiday, without additional interest.
SECTION 13.08. Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
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SECTION 13.10. No Recourse Against Others.
All liability described in paragraph 19 of the Securities of any director,
officer, employee or stockholder, as such, of the Company, the Subsidiary
Guarantors or the Trustee is waived and released.
SECTION 13.11. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 13.12. Duplicate 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
instrument.
SECTION 13.13. 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 not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
Dated: July 21, 1997
PLAINS RESOURCES INC.
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, Trustee
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---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Trust Officer
SUBSIDIARY GUARANTORS:
CALUMET FLORIDA, INC., a Delaware
corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
PLAINS ILLINOIS INC., a Delaware corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
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PLAINS MARKETING & TRANSPORTATION
INC. a Delaware corporation
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
PLAINS RESOURCES INTERNATIONAL INC.,
a Delaware corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
PMCT INC., a Delaware corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
PLX CRUDE LINES INC., a Delaware corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
PLX INGLESIDE INC., a Delaware corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
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▇▇▇▇▇▇▇ RESOURCES, INC.,
a California corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
PLAINS TERMINAL & TRANSFER
CORPORATION, a Delaware corporation
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
▇▇▇▇▇▇▇ RESOURCES, L.P.,
a California limited partnership
BY: ▇▇▇▇▇▇▇ RESOURCES, INC.,
a California corporation, General Partner
By /c/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
-81-
EXHIBIT A
[Form of Security]
[If a Series C Security or a Series D Security constituting a Transfer
Restricted Security --
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE ORIGINAL
ISSUANCE OF THE NOTES EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTES
EVIDENCED HEREBY, EXCEPT (A) TO PLAINS RESOURCES INC. (THE "COMPANY"), (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, AS TRUSTEE, A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE NOTES EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRUSTEE), (D) OUTSIDE THE UNITED STATES TO FOREIGN PURCHASERS IN OFFSHORE
TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTES EVIDENCED HEREBY ARE TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE NOTES EVIDENCED HEREBY WITHIN THREE YEARS AFTER THE ORIGINAL
ISSUANCE OF SUCH NOTES, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO TEXAS COMMERCE BANK NATIONAL ASSOCIATION, AS REGISTRAR. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AND TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, AS TRANSFER AGENT, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE
REMOVED AFTER THE EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE
NOTES EVIDENCED HEREBY IF THE PROVISIONS OF SECTION 2.14(a)(1) OF THE INDENTURE
ARE SATISFIED. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM IN
REGULATION S UNDER THE SECURITIES ACT.
A-1
REGISTERED
10 1/4% SENIOR SUBORDINATED NOTE DUE 2006
No. R- $
PLAINS RESOURCES INC.
(a Delaware corporation)
promises to pay to ______________________________
or registered assigns
the principal sum of ____________________ Dollars on March 15, 2006
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Dated: PLAINS RESOURCES INC.
Attest: By:
Secretary President
[Seal]
Authenticated:
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Trustee
By
Authorized Signatory
OR
as Authenticating Agent
By
Authorized Signatory
[Seal]
A-2
[Reverse Side of Security]
PLAINS RESOURCES INC.
10 1/4% Senior Subordinated Note Due 2006
1. Interest.
Plains Resources Inc., a Delaware corporation (the "Company"), promises to
pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on March 15 and
September 15 of each year, commencing [if a Series C Security - on September 15,
1997 and continuing semiannually thereafter, on March 15 and September 15 in
each year] [if a Series D Security - on the first March 15 or September 15
following the original issuance of the Series D Securities and continuing
semiannually thereafter, on March 15 and September 15 in each year, from the
date of the original issuance of the Series D Securities], or from the most
recent date to which interest has been paid or duly provided for, until the
principal hereof is paid or duly provided for. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. Accrued but unpaid interest on
any Series C Security that is exchanged for a Series D Security pursuant to the
Registration Rights Agreement shall be paid on or before the first interest
payment date on the Series D Securities.
The interest rate on the Securities is subject to increase under certain
circumstances described in the Registration Rights Agreement.
The Company shall pay interest on overdue principal of and interest on
overdue installments of interest, to the extent lawful, at a rate equal to the
rate of interest otherwise payable on the Securities.
2. Method of Payment.
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the March 1 or
September 1 immediately preceding the interest payment date even though
Securities are cancelled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal of and interest on the
Securities in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
interest by check payable in such money or by wire transfer of immediately
available funds. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar.
Initially, the Trustee will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
A-3
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture dated as of July 21,
1997 (the "Indenture") among the Company, the Subsidiary Guarantors, and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the
date of the Indenture. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Securities are
general unsecured subordinated obligations of the Company limited to $50,000,000
aggregate principal amount, except as otherwise provided in the Indenture.
Payment on each Security is guaranteed on a senior subordinated basis, jointly
and severally, by the Subsidiary Guarantors pursuant to Articles Eleven and
Twelve of the Indenture.
5. Optional Redemption.
At any time on or after March 15, 2001, the Company may, at its option,
redeem all or any portion of the Securities at the redemption prices (expressed
as percentages of the principal amount of the Securities) set forth below, plus,
in each case, accrued interest thereon to the applicable redemption date, if
redeemed during the 12-month period beginning March 15, of the years indicated
below:
Year Percentage
2001........................ 105.1250%
2002........................ 103.4167%
2003........................ 101.7083%
2004 and thereafter 100.0000%
In addition, at any time on or prior to March 15, 1999, up to $15,000,000 in
aggregate principal amount of Securities may be redeemed, at the option of the
Company, upon not less than 30 or more than 60 days' notice, from the Net
Proceeds of a Public Equity Offering, at a price equal to 110.25% of the
principal amount thereof, together with accrued and unpaid interest to the date
of redemption, provided that at least $35,000,000 in aggregate principal amount
of Securities remains Outstanding immediately after such redemption and that
such redemption occurs within 60 days following the closing of such Public
Equity Offering.
In the case of any redemption of Securities, interest installments due and
payable on or prior to the date of redemption will be payable to Holders of such
Securities of record at the close of business on the relevant Record Date
referred to on the face hereof. Securities (or portions thereof) for whose
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the date of redemption. In the event of
redemption or purchase of this Series __ Security in part only, a new Series __
Security or Securities for the unredeemed or unpurchased portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.
The Securities do not have the benefit of any sinking fund obligations.
A-4
6. Notice of Redemption.
Notice of redemption will be mailed to the Holder's registered address at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed. If less than all Securities are to be
redeemed, the Trustee shall select pro rata the Securities to be redeemed in
multiples of $1,000. Securities in denominations larger than $1,000 may be
redeemed in part.
7. Subordination.
The Securities are subordinated to Senior Indebtedness. To the extent
provided in the Indenture, Senior Indebtedness must be paid before the
Securities may be paid. The Company agrees, and each Holder by accepting a
Security agrees, to such subordination and authorizes the Trustee to give it
effect.
8. Change of Control.
Upon the occurrence of a Change of Control and a corresponding Rating
Decline, the Company shall be obligated to make an offer to purchase all of the
then outstanding Securities (a "Change of Control Offer"), and shall purchase,
on a Business Day (the "Change of Control Purchase Date") not more than 60 nor
less than 30 days following the occurrence of a Rating Decline following a
Change of Control (or, in the event the Rating Decline occurs prior to the
corresponding Change of Control not more than 60 nor less than 30 days following
the occurrence of the Change of Control), all of the then outstanding Notes
validly tendered pursuant to such Change of Control Offer, at a purchase price
(the "Change of Control Purchase Price") equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the Change of Control
Purchase Date. The Change of Control Offer is required to remain open for at
least 20 Business Days and until the close of business on the fifth Business Day
prior to the Change of Control Purchase Date.
In order to effect such Change of Control Offer, the Company shall, not
later than the 30th day after the occurrence of the Rating Decline corresponding
to such Change of Control (or, in the event the Rating Decline occurs prior to
the corresponding Change of Control, not later than the 30th day following the
occurrence of the Change of Control), mail to the Trustee and to each Holder of
the Notes notice of the Change of Control Offer, which notice shall govern the
terms of the Change of Control Offer and shall state, among other things, the
procedures that Holders of the Notes must follow to accept the Change of Control
Offer.
9. Net Proceeds Offer.
In the event of certain Asset Dispositions, the Company may be required to
make a Net Proceeds Offer to purchase all or any portion of each Holder's
Securities, at 100% of the principal amount of the Securities plus accrued
interest to the Net Proceeds Payment Date.
A-5
10. Restrictive Covenants.
The Indenture imposes certain limitations on, among other things, the
ability of the Company to merge or consolidate with any other Person or sell,
lease or otherwise transfer all or substantially all of its properties or
assets, the ability of the Company or the Subsidiaries to dispose of certain
assets, to pay dividends and make certain other distributions and payments, to
make certain investments or redeem, retire, repurchase or acquire for value
shares of capital stock, to incur additional Indebtedness or incur encumbrances
against certain property, to engage in other business activities, and to enter
into certain transactions with Related Persons, all subject to certain
limitations described in the Indenture.
11. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption. Also, it need not transfer or exchange any Securities for a
period of 30 days before a selection of Securities to be redeemed.
12. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it for
all purposes and neither the Company, the Trustee nor any Agent shall be
affected by notice to the contrary.
13. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for one
year, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, all liability of the Trustee and such Paying Agents with
respect to such money shall cease.
14. Amendment, Supplement, Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Securities, and any past default or noncompliance
with any provision may be waived with the consent of the Holders of a majority
in principal amount of the Securities. Without the consent of any Holder, the
Company may amend or supplement the Indenture or the Securities to, among other
things, cure any ambiguity, defect or inconsistency or to provide for
uncertificated Securities in addition to certificated Securities or to make any
change that does not adversely affect the rights of any Holder.
15. Successor Corporation.
When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor corporation will be
released from those obligations.
A-6
16. Defaults and Remedies.
An event of default generally is: default in payment of principal on the
Securities; default for 30 days in payment of interest on the Securities;
failure by the Company or any Subsidiary Guarantor for 60 days after notice to
comply with any of its other agreements in the Indenture; certain defaults under
or acceleration prior to maturity of other indebtedness; certain final judgments
against the Company or Subsidiaries; a failure of any Guarantee of a Material
Subsidiary to be in full force and effect or denial by any Subsidiary Guarantor
of its obligations with respect thereto; and certain events of bankruptcy or
insolvency. Subject to certain limitations in the Indenture, if an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Securities may declare all the
Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization relating to the Company, all outstanding Securities shall become
due and payable immediately without further action or notice. Holders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Company must furnish an annual compliance
certificate to the Trustee.
17. Trustee Dealings with Company.
Texas Commerce Bank National Association, the Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Subsidiaries or
Affiliates with the same rights it would have if it were not Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company, any
Subsidiary Guarantor or the Trustee, shall not have any liability for any
obligations of the Company, any Subsidiary Guarantor or the Trustee, under the
Securities or the 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 are
part of the consideration for the issue of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or an authenticating
agent signs the certificate of authentication on the other side of this
Security.
20. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT
TEN (=joint tenants with right of survivorship and not as tenants in common),
CUST (=Custodian), and U/G/M/A (=Uniform Gifts to Minors Act).
A-7
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to Holders. No representation is
made as to the accuracy of such numbers as printed on the Securities and
reliance may be placed only on the other identification numbers printed hereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to: Secretary, Plains
Resources Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
22. Exchange Option.
[If a Series C Security -- At the option of the Holders hereof, the Series
C Securities may be exchanged, pursuant to the Registration Rights Agreement,
for a like aggregate principal amount of Series D Securities.]
A-8
[Form of Assignment]
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
__________________________________________________
__________________________________________________
(Insert assignee's soc. sec. or tax ID no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this
Security)
Date: ____________________
Signature Guarantee: __________________________________________
A-9
[Form of Option of Holder to Elect Purchase]
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.12 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.12 [ ]
Section 4.17 [ ]
If you want to have only part of this Security purchased by the Company
pursuant to Section 4.12 or 4.17 of the Indenture, state the amount (in integral
multiples of $1,000):
$_______________________
Date: __________________ Signature: _____________________________________
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee: _______________________________
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
[Form of Notation on Security
Relating to Guarantee]
GUARANTEE
Subject to the limitations set forth in the Indenture, the Subsidiary
Guarantors (as defined in the Indenture referred to in the Security upon which
this notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor or additional Subsidiary Guarantor
under the Indenture) have unconditionally guaranteed (a) the due and punctual
payment of the principal of and interest on the Securities, whether at maturity,
acceleration, redemption or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest on the Securities, if any, to
the extent lawful, (c) the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee, all in accordance with the terms
set forth in the Indenture, and (d) in case of any extension of time of payment
or renewal of any Securities or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
No stockholder, officer, director or incorporator, as such, past, present
or future, of the Subsidiary Guarantors shall have any personal liability under
this Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
This Guaranty shall be binding upon each Subsidiary Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof and
in the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Security upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
A-1-1
The obligations of the Subsidiary Guarantors to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly subordinated
to all Guarantor Senior Indebtedness to the extent set forth in Article Twelve
of the Indenture and reference is hereby made to such Indenture for the precise
terms of such subordination.
Subsidiary Guarantors:
PLAINS MARKETING & TRANSPORTATION
INC., a Delaware corporation
By________________________________________
Vice President
PLX INGLESIDE INC., a Delaware corporation
By________________________________________
Vice President
PLAINS RESOURCES INTERNATIONAL INC.,
a Delaware corporation
By________________________________________
Vice President
PMCT INC., a Delaware corporation
By________________________________________
Vice President
▇▇▇▇▇▇▇ RESOURCES, INC., a California
corporation
By________________________________________
Vice President
A-1-2
PLAINS TERMINAL & TRANSFER
CORPORATION, a Delaware corporation
By________________________________________
Vice President
▇▇▇▇▇▇▇ RESOURCES, L.P., a California
limited partnership
By: ▇▇▇▇▇▇▇ RESOURCES, INC., a
California corporation, General Partner
By________________________________________
Vice President
CALUMET FLORIDA, INC., a Delaware corporation
By________________________________________
Vice President
PLAINS ILLINOIS INC., a Delaware corporation
By________________________________________
Vice President
PLX CRUDE LINES INC., a Delaware corporation
By________________________________________
Vice President
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[Form of Legend For Global Securities]
Any Global Security authenticated and delivered hereunder shall bear a
legend in addition to the Private Placement Legend, if required pursuant to
Section 2.14, in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR
BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-2-1
EXHIBIT A-3
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10 1/4% Senior Notes due 2006, Series C, and
10 1/4% Senior Notes due 2006, Series D
(the "Securities"), of Plains Resources Inc.
-----------------------------------------------
This Certificate relates to $_______ principal amount of Securities held in
the form of *[ ] a beneficial interest in a Global Security or *[ ] Physical
Securities by _______________ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in exchange
for its beneficial interest in the Global Security held by DTC a Physical
Security or Physical Securities in definitive, registered form of authorized
denominations and in an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[ ] has requested that the Registrar by written order exchange or register
the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Securities and the restrictions on
transfers thereof as provided in Section 2.06 of such Indenture, and that the
transfer of these Securities does not require registration under the Securities
Act of 1933, as amended (the "Act") because *:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of subparagraph (a)(1) or (c)(1) of Section
2.06 of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act).
[ ] Such Security is being transferred in reliance on Regulation S under
the Act.
[ ] Such Security is being transferred in reliance on Rule 144 under the
Act.
A-3-1
[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor."
_______________________________________________
[INSERT NAME OF TRANSFEROR]
By: ___________________________________________
[Authorized Signatory]
Date: _______________________
______________
* Check applicable box.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS TO
INSTITUTIONAL ACCREDITED INVESTORS
----------------------------------
__________________________________, _______
Texas Commerce Bank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Plains Resources Inc. Indenture (the "Indenture")
relating to 10 1/4% Senior Notes due 2006, Series C,
or 10 1/4% Senior Notes due 2006, Series D
------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 10 1/4% Senior Notes due 2006,
Series C, or 10 1/4% Series Notes due 2006, Series D (the "Securities"), of
Plains Resources Inc. (the "Company"), we confirm that:
1. We have received such information as we deem necessary in order to
make our investment decision.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities may not be offered
or sold within the United States or to, or for the account or benefit of, U.S.
persons except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities, we will do so only (A) to the
Company or any subsidiary thereof, (B) inside the United States in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to the Trustee a signed letter
substantially in the form hereof, (D) outside the United States in accordance
with Regulation S under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing Securities from us a
notice advising such purchaser that resales of the Securities are restricted as
stated herein.
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4. We understand that, on any proposed resale of Securities, we will be
required to furnish to you and the Company, such certification, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Securities purchased by us will bear a legend to the
foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be, for an indefinite period.
6. We are acquiring the Securities purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion, for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act.
You and the Company and your and their respective counsel are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ______________________________________
[Authorized Signatory]
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▇▇▇▇▇▇▇ ▇-▇
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION
WITH REGULATION S TRANSFERS
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__________________________________, ____
Texas Commerce Bank National Association
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Plains Resources Inc. ("the Company")
10 1/4% Senior Notes due 2006, Series C, and
10 1/4% Senior Notes due 2006, Series D (the "Securities")
----------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knew that the transaction had been pre-
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
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You and the Company and your and their respective counsel are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or a
copy thereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby. Defined terms
used herein without definition have the respective meanings provided in
Regulation S.
Very truly yours,
[Name of Transferor]
By: __________________________________________
[Authorized Signature]
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