' EXHIBIT 4.2
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
AND EACH OF THE GUARANTORS PARTY HERETO
8.75% SENIOR SECURED NOTES DUE 2012
INDENTURE
Dated as of July 7, 2004
BNY MIDWEST TRUST COMPANY
as Trustee
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.10
(b)...................................................................... 7.10
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.05
(b)...................................................................... 12.03
(c)...................................................................... 12.03
313(a)...................................................................... 7.06
(b)(1)................................................................... N.A.
(b)(2)................................................................... 7.06; 7.07
(c)...................................................................... 7.06; 12.02
(d)...................................................................... 7.06
314(a)...................................................................... 4.03;12.02; 12.05
(b)...................................................................... N.A.
(c)(1)................................................................... 12.04
(c)(2)................................................................... 12.04
(c)(3)................................................................... N.A.
(d)...................................................................... N.A.
(e)...................................................................... 12.05
(f)...................................................................... N.A.
315(a)...................................................................... 7.01
(b)...................................................................... 7.05; 12.02
(c)...................................................................... 7.01
(d)...................................................................... 7.01
(e)...................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... N.A.
(b)...................................................................... 6.07
(c)...................................................................... 2.12
317(a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318(a)...................................................................... 12.01
(b)...................................................................... N.A.
(c)...................................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions........................................................................... 1
Section 1.02 Other Definitions..................................................................... 33
Section 1.03 Incorporation by Reference of Trust Indenture Act..................................... 33
Section 1.04 Rules of Construction................................................................. 33
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating....................................................................... 34
Section 2.02 Execution and Authentication.......................................................... 34
Section 2.03 Registrar and Paying Agent............................................................ 35
Section 2.04 Paying Agent to Hold Money in Trust................................................... 35
Section 2.05 Holder Lists.......................................................................... 36
Section 2.06 Transfer and Exchange................................................................. 36
Section 2.07 Replacement Notes..................................................................... 47
Section 2.08 Outstanding Notes..................................................................... 47
Section 2.09 Treasury Notes........................................................................ 47
Section 2.10 Temporary Notes....................................................................... 47
Section 2.11 Cancellation.......................................................................... 48
Section 2.12 Defaulted Interest.................................................................... 48
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.................................................................... 48
Section 3.02 Selection of Notes to Be Redeemed or Purchased........................................ 48
Section 3.03 Notice of Redemption.................................................................. 49
Section 3.04 Effect of Notice of Redemption........................................................ 49
Section 3.05 Deposit of Redemption or Purchase Price............................................... 50
Section 3.06 Notes Redeemed or Purchased in Part................................................... 50
Section 3.07 Optional Redemption................................................................... 50
Section 3.08 Mandatory Redemption.................................................................. 51
Section 3.09 Offer to Purchase by Application of Excess Proceeds................................... 51
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes...................................................................... 53
Section 4.02 Maintenance of Office or Agency....................................................... 53
Section 4.03 Reports............................................................................... 53
Section 4.04 Compliance Certificate................................................................ 54
Section 4.05 Taxes................................................................................. 55
Section 4.06 Stay, Extension and Usury Laws........................................................ 55
Section 4.07 Restricted Payments................................................................... 55
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries........................ 58
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock............................ 59
Section 4.10 Asset Sales........................................................................... 63
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Section 4.11 Transactions with Affiliates.......................................................... 64
Section 4.12 Liens................................................................................. 65
Section 4.13 Business Activities................................................................... 66
Section 4.14 Corporate Existence................................................................... 66
Section 4.15 Offer to Repurchase Upon Change of Control............................................ 66
Section 4.16 Payments for Consent.................................................................. 68
Section 4.17 Additional Note Guarantees............................................................ 68
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries............................... 68
Section 4.19 Termination of Hedge Agreement........................................................ 69
Section 4.20 Changes in Covenants When Notes Rated Investment Grade................................ 69
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.............................................. 69
Section 5.02 Successor Corporation Substituted..................................................... 70
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..................................................................... 70
Section 6.02 Acceleration.......................................................................... 72
Section 6.03 Other Remedies........................................................................ 73
Section 6.04 Waiver of Past Defaults............................................................... 73
Section 6.05 Control by Majority................................................................... 73
Section 6.06 Limitation on Suits................................................................... 73
Section 6.07 Rights of Holders of Notes to Receive Payment......................................... 74
Section 6.08 Collection Suit by Trustee............................................................ 74
Section 6.09 Trustee May File Proofs of Claim...................................................... 74
Section 6.10 Priorities............................................................................ 75
Section 6.11 Undertaking for Costs................................................................. 75
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee..................................................................... 75
Section 7.02 Rights of Trustee..................................................................... 76
Section 7.03 Individual Rights of Trustee.......................................................... 77
Section 7.04 Trustee's Disclaimer.................................................................. 77
Section 7.05 Notice of Defaults.................................................................... 77
Section 7.06 Reports by Trustee to Holders of the Notes............................................ 78
Section 7.07 Compensation and Indemnity............................................................ 78
Section 7.08 Replacement of Trustee................................................................ 79
Section 7.09 Successor Trustee by ▇▇▇▇▇▇, etc...................................................... 80
Section 7.10 Eligibility; Disqualification......................................................... 80
Section 7.11 Preferential Collection of Claims Against Company..................................... 80
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.............................. 80
Section 8.02 Legal Defeasance and Discharge........................................................ 80
Section 8.03 Covenant Defeasance................................................................... 81
Section 8.04 Conditions to Legal or Covenant Defeasance............................................ 81
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Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions............................................................................................... 82
Section 8.06 Repayment to Company.................................................................. 83
Section 8.07 Reinstatement......................................................................... 83
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes................................................... 83
Section 9.02 With Consent of Holders of Notes...................................................... 84
Section 9.03 Compliance with Trust Indenture Act................................................... 86
Section 9.04 Revocation and Effect of Consents..................................................... 86
Section 9.05 Notation on or Exchange of Notes...................................................... 86
Section 9.06 Trustee to Sign Amendments, etc....................................................... 86
ARTICLE 10
COLLATERAL AND SECURITY
Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt................ 87
Section 10.02 Ranking of Parity Liens............................................................... 87
Section 10.03 Release of Liens in Respect of Notes.................................................. 88
Section 10.04 Relative Rights....................................................................... 88
Section 10.05 Compliance with Trust Indenture Act................................................... 88
Section 10.06 Further Assurances; Insurance......................................................... 89
ARTICLE 11
NOTE GUARANTEES
Section 11.01 Guarantee............................................................................. 90
Section 11.02 Limitation on Guarantor Liability..................................................... 91
Section 11.03 Execution and Delivery of Note Guarantee.............................................. 91
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.................................... 91
Section 11.05 Releases.............................................................................. 92
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge............................................................ 93
Section 12.02 Application of Trust Money............................................................ 94
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.......................................................... 94
Section 13.02 Notices............................................................................... 94
Section 13.03 Communication by Holders of Notes with Other Holders of Notes......................... 96
Section 13.04 Certificate and Opinion as to Conditions Precedent.................................... 96
Section 13.05 Statements Required in Certificate or Opinion......................................... 96
Section 13.06 Rules by Trustee and Agents........................................................... 96
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders.............. 96
Section 13.08 Governing Law......................................................................... 97
Section 13.09 No Adverse Interpretation of Other Agreements......................................... 97
Section 13.10 Successors............................................................................ 97
Section 13.11 Severability.......................................................................... 97
Section 13.12 Counterpart Originals................................................................. 97
Section 13.13 Table of Contents, Headings, etc...................................................... 97
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EXHIBITS AND SCHEDULES
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF NOTATION OF GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
Schedule 1 GUARANTORS
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INDENTURE dated as of July 7, 2004 among ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, an
Ohio corporation, the Guarantors (as defined) and BNY Midwest Trust Company, as
trustee.
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 8.75% Senior Secured Notes due 2012 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"ACNTA" means (without duplication), as of the date of determination:
(1) the sum of:
(A) discounted future net revenue from proved crude oil and
natural gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with SEC guidelines before any state or
federal income taxes, as estimated in a reserve report prepared as
of the end of the Company's most recently completed fiscal year,
which reserve report is prepared or reviewed by independent
petroleum engineers, as increased by, as of the date of
determination, the discounted future net revenue of
(i) estimated proved crude oil and natural gas reserves
of the Company and its Restricted Subsidiaries attributable to
acquisitions consummated since the date of such year-end
reserve report, and
(ii) estimated crude oil and natural gas reserves of the
Company and its Restricted Subsidiaries attributable to
extensions, discoveries and other additions and upward
determinations of estimates of proved crude oil and natural
gas reserves (including previously estimated development costs
incurred during the period and the accretion of discount since
the prior year end) due to exploration, development or
exploitation, production or other activities which reserves
were not reflected in such year-end reserve report,
in each case calculated in accordance with SEC guidelines
(utilizing the prices utilized in such year-end reserve
report), and decreased by, as of the date of determination,
the discounted future net revenue attributable to
(iii) estimated proved crude oil and natural gas
reserves of the Company and its Restricted Subsidiaries
reflected in such year-end reserve report produced or disposed
of since the date of such year-end reserve report and
(iv) reductions in the estimated oil and gas reserves of
the Company and its Restricted Subsidiaries reflected in such
year-end reserve report since the
1
date of such year-end reserve report attributable to downward
determinations of estimates of proved crude oil and natural
gas reserves due to exploration, development or exploitation,
production or other activities conducted or otherwise
occurring since the date of such year-end reserve report,
in each case, calculated in accordance with SEC guidelines
(utilizing the prices utilized in such year-end reserve
report); provided, however, that, in the case of each of the
determinations made pursuant to clauses (1)(A)(i) through (iv)
of this definition, such increases and decreases shall be as
estimated by the Company's engineers, except that if as a
result of such acquisitions, dispositions, discoveries,
extensions or revisions, there is a Material Change which is
an increase, then such increases and decreases in the
discounted future net revenue shall be confirmed in writing by
an independent petroleum engineer;
(B) the capitalized costs that are attributable to crude oil
and natural gas properties of the Company and its Restricted
Subsidiaries to which no proved crude oil and natural gas reserves
are attributed, based on the Company's books and records as of a
date no earlier than the date of the Company's latest annual or
quarterly financial statements;
(C) the Net Working Capital on a date no earlier than the date
of the Company's latest annual or quarterly financial statements;
and
(D) the greater of (i) the net book value on a date no earlier
than the date of the Company's latest annual or quarterly financial
statements; and (ii) the appraised value, as estimated by
independent appraisers, of other tangible assets of the Company and
its Restricted Subsidiaries as of a date no earlier than the date of
the Company's latest audited financial statements (provided that the
Company shall not be required to obtain such an appraisal of such
assets if no such appraisal has been performed); minus
(2) to the extent not otherwise taken into account in the
immediately preceding clause (1), the sum of:
(A) minority interests;
(B) any net gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's latest audited
financial statements;
(C) the discounted future net revenue, calculated in
accordance with SEC guidelines (utilizing the same prices utilized
in the Company's year-end reserve report), attributable to reserves
subject to participation interests, overriding royalty interests or
other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or
which otherwise are required to be delivered to third parties;
(D) the discounted future net revenue, calculated in
accordance with SEC guidelines (utilizing the same prices utilized
in the Company's year-end reserve report), attributable to reserves
that are required to be delivered to third parties to fully satisfy
the obligations of the Company and its Restricted Subsidiaries with
respect to volumetric Production Payments on the schedules specified
with respect thereto; and
2
(E) the discounted future net revenue, calculated in
accordance with SEC guidelines, attributable to reserves subject to
dollar-denominated Production Payments that, based on the estimates
of production included in determining the discounted future net
revenue specified in paragraph (1)(A)(i) of this definition
(utilizing the same prices utilized in the Company's year-end
reserve report), would be necessary to satisfy fully the obligations
of the Company and its Restricted Subsidiaries with respect to
dollar-denominated Production Payments on the schedules specified
with respect thereto.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with,
or in contemplation of, such other Person merging with or into, or
becoming a Restricted Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Act of Required Creditors" means, as to any matter at any time:
(1) prior to the Discharge of Priority Lien Obligations, a direction
in writing delivered to the Collateral Trustee by or with the written
consent of the Required Priority Creditors; and
(2) after the Discharge of Priority Lien Obligations, a direction in
writing delivered to the Collateral Trustee by or with the written consent
of the Required Parity Creditors.
For purposes of this definition, (a) Secured Debt registered in the name
of, or beneficially owned by, the Company or any Affiliate of the Company will
be deemed not to be outstanding, and (b) votes will be determined in accordance
with the Collateral Trust Agreement.
"Additional Notes" means additional Notes (other than the Initial Notes)
issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as
part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Premium" means, with respect to any Note on any redemption
date, the greater of:
(1) 1.0% of the principal amount of the Note; or
(2) the excess of:
(A) the present value at the redemption date of (i) the
redemption price of the Note at July 15, 2008 (such redemption price
being set forth in the table appearing in
3
Section 3.07 hereof) plus (ii) all required interest payments due on
the Note through July 15, 2008, (excluding accrued but unpaid
interest to the applicable redemption date), computed using a
discount rate equal to the Treasury Rate as of such redemption date
plus 75 basis points; over
(B) the principal amount of the Note, if greater.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets
or rights (including, without limitation, any sale of hydrocarbons or
other mineral products as a result of the creation of Production Payments
and Reserve Sales); provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole shall be governed by Section
4.15 and/or Section 5.01 and not by Section 4.10; and
(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items will be deemed
to be an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets having a Fair Market Value of less than $1.0 million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary of
the Company to the Company or to a Restricted Subsidiary of the Company;
(4) the sale or lease of products, services or accounts receivable
in the ordinary course of business and any sale or other disposition of
damaged, worn-out or obsolete assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment that does not violate Section 4.07 hereof
or a Permitted Investment;
(7) a disposition of oil, natural gas or other hydrocarbons or other
mineral products in the ordinary course of business of the oil and gas
production operations of the Company and its Subsidiaries;
(8) any abandonment, relinquishment, farm-in, farm-out, lease and
sublease of developed and/or undeveloped properties made or entered into
in the ordinary course of business, but excluding any disposition as a
result of the creation of a Production Payment and Reserve Sale; and
4
(9) the trade or exchange by the Company or any Restricted
Subsidiary of the Company of any oil and gas property or interest therein
owned or held by the Company or such Restricted Subsidiary for any oil and
gas property or interest therein owned or held by another Person,
including any cash or Cash Equivalents necessary in order to achieve an
exchange of equivalent value; provided that any such cash or Cash
Equivalents received by the Company or such Restricted Subsidiary shall be
subject to Section 4.10, which the Board of Directors determines in good
faith to be of approximately equivalent value.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP; provided,
however, that if such sale and leaseback transaction results in a Capital Lease
Obligation, the amount of Indebtedness represented thereby shall be determined
in accordance with the definition of "Capital Lease Obligation."
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation or any committee ▇▇▇▇▇▇▇ ▇▇▇▇ authorized to act on behalf of
such board;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership;
(3) with respect to a limited liability company, the managing member
or members or any controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination is to be
made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet prepared in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a
penalty.
5
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person, but excluding from all of the foregoing any
debt securities convertible into Capital Stock, whether or not such debt
securities include any right of participation with Capital Stock.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the
United States government (provided that the full faith and credit of the
United States is pledged in support of those securities) having maturities
of not more than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having one of the two highest ratings
obtainable from ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's
Rating Services and, in each case, maturing within six months after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through
(5) of this definition.
"Casualty Event" means any taking under power of eminent domain or similar
proceeding and any insured loss, in each case relating to property or other
assets that constituted Collateral.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of the
properties or assets of the Company and its Subsidiaries taken as a whole
to any "person" (as that term is used in Section 13(d) of the Exchange
Act) other than a Principal or a Related Party of a Principal;
6
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation), the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares;
(4) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company or such other Person is converted
into or exchanged for cash, securities or other property, other than any
such transaction where the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for
Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of
such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance); or
(5) after an initial public offering of the Company or any direct or
indirect parent of the Company, the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing
Directors.
"Class" means (1) in the case of Parity Lien Debt, every Series of Parity
Lien Debt, taken together, and (2) in the case of Priority Lien Debt, every
Series of Priority Lien Debt, taken together.
"Clearstream" means Clearstream Banking, S.A.
"Collateral" means certain properties and assets at any time owned or
acquired by the Company or any of the other Pledgors, including a substantial
majority of the aggregate value of our proved producing reserves on a PV-10
basis, the capital stock of the Company and the Domestic Subsidiaries, except:
(1) Excluded Assets;
(2) any properties and assets in which the Collateral Trustee is
required to release its Liens pursuant to the Collateral Trust Agreement;
and
(3) any properties and assets that no longer secure the Notes or any
Obligations in respect thereof pursuant to the Collateral Trust Agreement,
provided that, in the case of clauses (2) and (3), if such Liens are
required to be released as a result of the sale, transfer or other disposition
of any properties or assets of the Company or any other Pledgor, such assets or
properties will cease to be excluded from the Collateral if the Company or any
other Pledgor thereafter acquires or reacquires such assets or properties.
"Collateral Trust Agreement" means the collateral trust agreement, dated
as of the date of this Indenture, among the Collateral Trustee, the
Administrative Agent under the Credit Agreement, the Hedge Counterparty and the
Trustee, as such agreement may be amended, modified or supplemented from time to
time.
7
"Collateral Trustee" means ▇▇▇▇▇ Fargo Bank, N.A. (as successor by merger
to ▇▇▇▇▇ Fargo Bank Minnesota, N.A.), in its capacity as collateral trustee
under the Collateral Trust Agreement, together with its successors in such
capacity.
"Company" means ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) the Fixed Charges of such Person and its Restricted Subsidiaries
for such period, to the extent that such Fixed Charges were deducted in
computing such Consolidated Net Income; plus
(4) depreciation, depletion, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that were
paid in a prior period) and other non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash
expense that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
depletion, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business, in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation, depletion and amortization and other
non-cash expenses of, a Restricted Subsidiary of the Company will be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of dividends
or similar distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
8
(2) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles will
be excluded;
(4) any write-downs of non-current assets will be excluded;
provided, however, that, to the extent they may become applicable, ceiling
limitation write-downs in accordance with generally accepted accounting
principles shall be treated as capitalized costs, as if such write-down
had not occurred; and
(5) any unrealized non-cash gains or losses or charges in respect of
hedge or non-hedge derivatives (including those resulting from the
application of FAS 133) will be excluded.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or
election.
"Corporate Trust Office of the Trustee" means the principal office of the
Trustee at which at any time its corporate trust business shall be administered,
which office at the date hereof is located at BNY Midwest Trust Company, c/o The
Bank of New York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Department, or such other address as the Trustee may designate
from time to time by notice to the Holders and the Company, or the principal
corporate trust office of any successor Trustee (or such other address as such
successor Trustee may designate from time to time by notice to the Holders and
the Company).
"Credit Agreement" means that certain Credit and Guaranty Agreement, to be
dated as of the date of this Indenture, by and among the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Credit Partners L.P. and other parties named therein, providing for up to $170.0
million aggregate principal amount of borrowings and the issuance of letters of
credit, including any related notes, Guarantees, collateral documents,
instruments and agreements executed in connection therewith, and, in each case,
as amended, restated, modified, renewed, refunded, replaced (whether upon or
after termination or otherwise) or refinanced (including by means of sales of
debt securities to institutional investors) in whole or in part from time to
time.
"Credit Agreement Agent" means, at any time, the Person serving at such
time as the "Agent" or "Administrative Agent" under the Credit Agreement or any
other representative then most recently designated in accordance with the
applicable provisions of the Credit Agreement, together with its successors in
such capacity.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such
9
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Discharge of Priority Lien Obligations" means the occurrence of all of
the following:
(1) termination or expiration of all commitments to extend credit
that would constitute Priority Lien Debt;
(2) payment in full in cash of the principal of, interest and
premium (if any) on, and fees with respect to, all Priority Lien Debt
(other than any undrawn letters of credit);
(3) discharge or cash collateralization (at the lower of (1) 105% of
the aggregate undrawn amount and (2) the percentage of the aggregate
undrawn amount required for release of liens under the terms of the
applicable Priority Lien Document) of all outstanding letters of credit
constituting Priority Lien Debt; and
(4) payment in full in cash of all other Priority Lien Obligations
that are outstanding and unpaid at the time the Priority Lien Debt is paid
in full in cash (other than any obligations for taxes, costs,
indemnifications, reimbursements, damages and other liabilities in respect
of which no claim or demand for payment has been made at such time).
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Indenture will be the
maximum amount that the Company and its Restricted Subsidiaries
10
may become obligated to pay upon the maturity of, or pursuant to any mandatory
redemption provisions of, such Disqualified Stock, exclusive of accrued
dividends.
"Dollar Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company that
was formed under the laws of the United States or any state of the United States
or the District of Columbia or that guarantees or otherwise provides direct
credit support for any Indebtedness of the Company.
"equally and ratably" means, in reference to sharing of Liens or proceeds
thereof as between holders of Secured Obligations within the same Class, that
such Liens or proceeds:
(1) will be allocated and distributed first to the Secured Debt
Representative for each outstanding Series of Secured Debt within that
Class, for the account of the holders of such Series of Secured Debt,
ratably in proportion to the principal of, and interest and premium (if
any) and reimbursement obligations (contingent or otherwise) with respect
to letters of credit, if any, outstanding (whether or not drawings have
been made under such letters of credit) on each outstanding Series of
Secured Debt within that Class when the allocation or distribution is
made, and thereafter
(2) will be allocated and distributed (if any remain after payment
in full of all of the principal of, and interest and premium (if any) and
reimbursement obligations (contingent or otherwise) with respect to
letters of credit, if any, outstanding (whether or not drawings have been
made on such letters of credit) on all outstanding Secured Obligations
within that Class) to the Secured Debt Representative for each outstanding
Series of Secured Obligations within that Class, for the account of the
holders of any remaining Secured Obligations within that Class, ratably in
proportion to the aggregate unpaid amount of such remaining Secured
Obligations within that Class due and demanded (with written notice to the
applicable Secured Debt Representative and the Collateral Trustee) prior
to the date such distribution is made.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means a public or private offer and sale of Capital
Stock (other than Disqualified Stock) of the Company.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the Euroclear
system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Excluded Assets" means each of the following:
11
(1) any lease, license, contract, general intangible, property right
or agreement to which the Company or any other Pledgor is a party or any
of its rights or interests thereunder if and only for so long as the grant
of a Lien under the Security Documents will constitute or result in a
breach, termination or default under any such lease, license, contract,
property right or agreement (other than to the extent that any such term
would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or
9-409 of the Uniform Commercial Code of any relevant jurisdiction or any
other applicable law or principles of equity); provided that such lease,
license, contract, general intangible, property right or agreement will be
an Excluded Asset only to the extent and for so long as the consequences
specified above will result and will cease to be an Excluded Asset and
will become subject to the Lien granted under the Security Documents,
immediately and automatically, at such time as such consequences will no
longer result;
(2) real property (other than Hydrocarbon Properties, pipelines and
gathering systems) owned or leased by the Company or any other Pledgor to
the extent that the lenders under the Credit Agreement and the Hedge
Counterparty under the Hedge Agreement do not require such assets to be
subject to Liens to secure the Credit Agreement and the Hedge Agreement,
respectively;
(3) all "securities" of any of the Company's "affiliates" (as the
terms "securities" and "affiliates" are used in Rule 3-16 of Regulation
S-X under the Securities Act);
(4) any other property or assets in which a Lien cannot be perfected
by the filing of a financing statement under the Uniform Commercial Code
of the relevant jurisdiction, so long as the aggregate Fair Market Value
of all such property and assets does not at any one time exceed $10.0
million; and
(5) with respect to all Secured Debt other than Parity Lien Debt
consisting of Indebtedness under the Hedge Agreement, the Hedge Letter of
Credit issued to or for the benefit of the creditors in respect of
Indebtedness under the Hedge Agreement and other hedging transactions.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement and the Hedge
Agreement) in existence on the date of this Indenture, until such amounts are
repaid
"Fair Market Value" means the value that would be paid by a willing buyer
to an unaffiliated willing seller in a transaction not involving distress or
necessity of either party, determined in good faith by the Board of Directors of
the Company (unless otherwise provided in this Indenture).
"Fixed Charge Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Fixed Charges of such Person for such period. In the event that
the specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the
12
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any
of its Restricted Subsidiaries, including through mergers or
consolidations, or any Person or any of its Restricted Subsidiaries
acquired by the specified Person or any of its Restricted Subsidiaries,
and including any related financing transactions and including increases
in ownership of Restricted Subsidiaries, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
Calculation Date will be given pro forma effect (in accordance with
Regulation S-X under the Securities Act) as if they had occurred on the
first day of the four-quarter reference period;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and
ownership interests therein) disposed of prior to the Calculation Date,
will be excluded, but only to the extent that the obligations giving rise
to such Fixed Charges will not be obligations of the specified Person or
any of its Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the Calculation
Date will be deemed to have been a Restricted Subsidiary at all times
during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the
Calculation Date will be deemed not to have been a Restricted Subsidiary
at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness will be calculated as if the rate in
effect on the Calculation Date had been the applicable rate for the entire
period (taking into account any Hedging Obligation applicable to such
Indebtedness if such Hedging Obligation has a remaining term as at the
Calculation Date in excess of 12 months).
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations, imputed interest
with respect to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net of the effect of all payments made or received
pursuant to Hedging Obligations in respect of interest rates; plus
(2) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
13
(3) any interest on Indebtedness of another Person that is
guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon; plus
(4) the product of (A) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, other than dividends on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (B) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in
each case, determined on a consolidated basis in accordance with GAAP;
provided, however, that there shall be excluded from Fixed Charges any non-cash
amortization or write-off of fees and expenses incurred in connection with the
Merger.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2)
hereof, which is required to be placed on all Global Notes issued under this
Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes deposited with or on
behalf of and registered in the name of the Depository or its nominee,
substantially in the form of Exhibit A hereto and that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).
"Guarantors" means each of:
(1) The Canton Oil & Gas Company and ▇▇▇▇ Lake Drilling, Inc.; and
(2) any other Subsidiary of the Company that executes a Note
Guarantee in accordance with the provisions of this Indenture,
and their respective successors and assigns, in each case, until the Note
Guarantee of such Person has been released in accordance with the provisions of
this Indenture.
14
"Hedge Agreement" means the ISDA Master Agreement, dated June 30, 2004,
with ▇. ▇▇▇▇ & Company that the Company will be a party to effective as of the
date of the Merger (including the schedule and credit annex thereto and the
confirmations thereunder), pursuant to which the parties thereto have entered
into certain gas price swaps, as such agreement may be amended or assigned from
time to time.
"Hedge Counterparty" means ▇. ▇▇▇▇ & Company or any successor under the
Hedge Agreement.
"Hedge Letter of Credit" means, collectively, the $40.0 million of letters
of credit issued pursuant to the letter credit facility under the Credit
Agreement or cash collateral in lieu thereof to support the Hedge Agreement and
$15.0 million of letters of credit issued pursuant to the revolving credit
facility under the Credit Agreement; provided that each such hedge letter of
credit shall be used by the Company solely to secure the Company's obligations
under the Hedge Agreement and other hedging transactions.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to floating or
from floating to fixed), interest rate cap agreements and interest rate
collar agreements;
(2) other agreements or arrangements designed to manage interest
rates or interest rate risk; and
(3) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange rates or commodity prices
including, without limitation, the Hedge Agreement.
"Hedge Outstanding Amount" means, in the case of Parity Lien Obligations
arising under hedge agreements, the amount that would be payable in the
reasonable judgment of the counterparty under the applicable hedge agreement if
such hedge agreement were terminated as the result of an event of default with
respect to the Company under such hedge agreement on the Business Day prior to
the date of such determination or, if any hedge agreement was previously
terminated, the termination amount which remains unpaid as of the Business Day
preceding such date and, in the case of the Hedge Agreement, only to the extent
that the Hedge Letter of Credit is not sufficient to pay such amount.
"Holder" means a Person in whose name a Note is registered.
"Hydrocarbon Properties" means all rights, titles, interests and estates
now owned or hereafter acquired in and to oil and gas leases, oil, gas and
mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee or
lease interests farm-ins, farm-outs, overriding royalty and royalty interests,
net profit interests, oil payments, production payment interests and similar
mineral interests, including any reserved or residual interest of whatever
nature.
"Hydrocarbons" means oil, gas, casinghead gas, condensate, distillate,
liquid hydrocarbons, coal bed methane and other gaseous hydrocarbons, all
products refined, separated, settled and dehydrated therefrom, including,
without limitation, kerosene, liquefied petroleum gas, refined lubricating oils,
diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other
minerals.
"Immaterial Subsidiary" means, as of any date, any Restricted Subsidiary
whose total assets, as of that date, are less than $100,000 and whose total
revenues for the most recent 12-month period do not exceed $100,000; provided
that a Restricted Subsidiary will not be considered to be an Immaterial
15
Subsidiary if it, directly or indirectly, guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"Indebtedness" means with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable Debt in
respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services due more than six months after such
property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes (i) all Indebtedness of others
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any Indebtedness of
any other Person and (ii) any warranties or guarantees of production or payment
by such Person with respect to any Production Payment or Reserve Sale, but
excludes other contractual obligations of such Person with respect to such
Production Payment and Reserve Sale.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $192,500,000 aggregate principal amount of
Notes issued under this Indenture on the date hereof.
"Insolvency or Liquidation Proceeding" means:
(1) any case commenced by or against the Company or any other
Pledgor under Title 11, U.S. Code or any similar federal or state law for
the relief of debtors, any other proceeding for the reorganization,
recapitalization or adjustment or marshalling of the assets or liabilities
of the Company or any other Pledgor, any receivership or assignment for
the benefit of creditors relating to the Company or any other Pledgor or
any similar case or proceeding relative to the Company or any other
Pledgor or its creditors, as such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or
liabilities or other winding up of or relating to the Company or any other
Pledgor, in each case whether or not voluntary and whether or not
involving bankruptcy or insolvency; or
16
(3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Company or any other Pledgor
are determined and any payment or distribution is or may be made on
account of such claims.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the Fair Market Value of
the Company's Investments in such Subsidiary that were not sold or disposed of
in an amount determined under Section 4.07. The acquisition by the Company or
any Subsidiary of the Company of a Person that holds an Investment in a third
Person will be deemed to be an Investment by the Company or such Subsidiary in
such third Person in an amount equal to the Fair Market Value of the Investments
held by the acquired Person in such third Person in an amount determined under
Section 4.07(b). Except as otherwise provided in this Indenture, the amount of
an Investment will be determined at the time the Investment is made and without
giving effect to subsequent changes in value.
"Investment Grade Rating" means a rating of "BBB-" or higher from Standard
& Poor's Ratings Group (or any successor thereto) and a rating of "Baa3" or
higher from ▇▇▇▇▇'▇ Investors Service, Inc. (or any successor thereto), as the
case may be.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Lien Sharing and Priority Confirmation" means:
(1) as to any Series of Parity Lien Debt, the written agreement of
the holders of such Series of Parity Lien Debt, as set forth in the
indenture, credit agreement, hedge agreement or other agreement governing
such Series of Parity Lien Debt, for the enforceable benefit of all
holders of each existing and future Series of Priority Lien Debt, each
existing and future Priority Lien Representative and each existing and
future holder of Permitted Prior Liens:
17
(A) that all Parity Lien Obligations will be and are secured
equally and ratably by all Parity Liens at any time granted by the
Company or any other Pledgor to secure any Obligations in respect of
such Series of Parity Lien Debt, whether or not upon property
otherwise constituting collateral for such Series of Parity Lien
Debt, and that all such Parity Liens will be enforceable by the
Collateral Trustee for the benefit of all holders of Parity Lien
Obligations equally and ratably;
(B) that the holders of Obligations in respect of such Series
of Parity Lien Debt are bound by the provisions of the Collateral
Trust Agreement, including the provisions relating to the ranking of
Parity Liens and the order of application of proceeds from the
enforcement of Parity Liens; and
(C) consenting to and directing the Collateral Trustee to
perform its obligations under the Collateral Trust Agreement and the
other Security Documents; and
(2) as to any Series of Priority Lien Debt, the written agreement of
the holders of such Series of Priority Lien Debt, as set forth in the
credit agreement or other agreement governing such Series of Priority Lien
Debt, for the enforceable benefit of all holders of each existing and
future Series of Parity Lien Debt, each existing and future Parity Lien
Representative and each existing and future holder of Permitted Prior
Liens:
(A) that all Priority Lien Obligations will be and are secured
equally and ratably by all Priority Liens at any time granted by the
Company or any other Pledgor to secure any Obligations in respect of
such Series of Priority Lien Debt, whether or not upon property
otherwise constituting collateral for such Series of Priority Lien
Debt, and that all such Priority Liens will be enforceable by the
Collateral Trustee for the benefit of all holders of Priority Lien
Obligations equally and ratably;
(B) that the holders of Obligations in respect of such Series
of Priority Lien Debt are bound by the provisions of the Collateral
Trust Agreement, including the provisions relating to the ranking of
Priority Liens and the order of application of proceeds from
enforcement of Priority Liens; and
(C) consenting to and directing the Collateral Trustee to
perform its obligations under the Collateral Trust Agreement and the
other Security Documents.
"Management Agreement" means that certain management services agreement,
dated as of the date of this Indenture, between the Company and the Parent.
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices and changes resulting from the incurrence
of previously estimated future development costs) of more than 25% during a
fiscal quarter in the discounted future net revenues from proved crude oil and
natural gas reserves of the Company and its Restricted Subsidiaries, calculated
in accordance with clause (1)(A) of the definition of ACNTA; provided, however,
that the following will be excluded from the calculation of Material Change:
(1) any acquisitions during the fiscal quarter of oil and gas
reserves that have been estimated by independent petroleum engineers and
with respect to which a report or reports of such engineers exist; and
18
(2) any disposition of properties existing at the beginning of such
fiscal quarter that have been disposed of in compliance with Section 4.10.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with:
(A) any Asset Sale; or
(B) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries;
and
(2) any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result of the Asset Sale, taxes paid or payable as a result of the
Asset Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness, other than Indebtedness under a Credit
Facility, secured by a Lien on the asset or assets that were the subject of such
Asset Sale and any reserve for adjustment in respect of the sale price of such
asset or assets established in accordance with GAAP.
"Net Working Capital" means:
(1) all current assets of the Company and its Restricted
Subsidiaries; minus
(2) all current liabilities of the Company and its Restricted
Subsidiaries, except current liabilities included in Indebtedness;
determined in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (A) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(B) is directly or indirectly liable as a guarantor or otherwise, or (C)
constitutes the lender;
(2) no default with respect to which (including any rights that the
holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment of the Indebtedness to be accelerated or payable prior
to its Stated Maturity; and
19
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Documents" means this Indenture, the Notes and the Security
Documents.
"Note Guarantee" means the Guarantee by each Guarantor of the Company's
obligations under this Indenture and the Notes, executed pursuant to the
provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"Obligations" means any principal (including reimbursement obligations
with respect to letters of credit whether or not drawn), interest (including all
interest accrued thereon after the commencement of any Insolvency or Liquidation
Proceeding at the rate, including any applicable post-default rate, specified in
the Priority Lien Documents, even if such interest is not enforceable, allowable
or allowed as a claim in such proceeding), premium (if any), fees,
indemnifications, reimbursements, expenses and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Oil and Gas Business" means:
(1) the acquisition, exploration, development, operation and
disposition of interests in oil, gas and other hydrocarbon properties;
(2) the gathering, marketing, distribution, treating, processing,
storage, selling and transporting of any production from such interests or
properties and the marketing of oil and gas obtained from unrelated
Persons;
(3) any business relating to exploration for or development,
production, treatment, processing, storage, transportation, gathering or
marketing of oil, gas and other minerals and products produced in
association therewith;
(4) any business relating to oilfield sales and service; and
(5) any activity that is ancillary to or necessary or appropriate
for the activities described in clauses (1) through (5) of this
definition.
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"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Parent" means Capital C Energy Operations, LP.
"Parity Lien" means a Lien granted by a security document to the
Collateral Trustee, at any time, upon any property of the Company or any other
Pledgor to secure Parity Lien Obligations.
"Parity Lien Debt" means:
(1) the Notes issued on the date of this Indenture (including any
related Exchange Notes);
(2) Indebtedness under the Hedge Agreement that was permitted to be
incurred and secured under each applicable Secured Debt Document (or as to
which the counterparties under the Hedge Agreement obtained an Officers'
Certificate at the time of incurrence to the effect that such Indebtedness
was permitted to be incurred and secured by all applicable Secured Debt
Documents);
(3) Hedging Obligations incurred in the ordinary course of business
to hedge or manage fluctuations in commodity prices (other than pursuant
to the Hedge Agreement) that is secured equally and ratably with Parity
Lien Debt by a Parity Lien that was permitted to be incurred and so
secured under each applicable Secured Debt Document;
(4) any other Indebtedness (including Additional Notes) that is
secured equally and ratably with the Parity Lien Debt by a Parity Lien
that was permitted to be incurred and so secured under each applicable
Secured Debt Document; provided that:
(A) the net proceeds are used to refund, refinance, replace,
defease, discharge or otherwise acquire or retire Priority Lien Debt
or other Parity Lien Debt; or
(B) on the date of incurrence of such Indebtedness, after
giving pro forma effect to the incurrence thereof and the
application of the proceeds therefrom, the Secured Leverage Ratio
would not be greater than 2.75 to 1.0;
provided, in the case of any Indebtedness referred to in clause (3) or (4)
above, that:
(i) on or before the date on which such Indebtedness is
incurred by the Company or the applicable Restricted Subsidiary,
such Indebtedness is designated by the Company, in an Officers'
Certificate delivered to each Parity Lien Representative and the
Collateral Trustee, as "Parity Lien Debt" for the purposes of the
Secured Debt Documents; provided that no Series of Secured Debt may
be designated as both Parity Lien Debt and Priority Lien Debt;
(ii) such Indebtedness is governed by an indenture, credit
agreement or other agreement that includes a Lien Sharing and
Priority Confirmation; and
(iii) all requirements set forth in the Collateral Trust
Agreement as to the confirmation, grant or perfection of the
Collateral Trustee's Liens to secure such Indebtedness or
Obligations in respect thereof are satisfied (and the satisfaction
of such requirements and the other provisions of this clause (C)
will be conclusively established
21
if the Company delivers to the Collateral Trustee an Officers'
Certificate stating that such requirements and other provisions have
been satisfied and that such Indebtedness is "Parity Lien Debt").
"Parity Lien Documents" means, collectively, the Hedge Agreement, the Note
Documents, this Indenture, credit agreement or other agreement governing each
other Series of Parity Lien Debt and the Security Documents (other than any
Security Documents that do not secure Parity Lien Obligations).
"Parity Lien Obligations" means Parity Lien Debt and all other Obligations
in respect thereof.
"Parity Lien Representative" means:
(1) in the case of the Notes, the Trustee;
(2) in the case of the Hedge Agreement, the Hedge Counterparty; or
(3) in the case of any other Series of Parity Debt, the trustee,
agent or representative of the holders of such Series of Parity Lien Debt
who maintains the transfer register for such Series of Parity Lien Debt;
and
(A) is appointed as a Parity Lien Representative (for purposes
related to the administration of the Security Documents) pursuant to
this Indenture, credit agreement or other agreement governing such
Series of Parity Lien Debt, together with its successors in such
capacity; and
(B) has become a party to the Collateral Trust Agreement by
executing a joinder in the form required under the Collateral Trust
Agreement.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
(A) such Person becomes a Restricted Subsidiary of the
Company; or
(B) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or
is liquidated into, the Company or a Restricted Subsidiary of the
Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10;
22
(5) any acquisition of assets or Capital Stock solely in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of
the Company;
(6) any Investments received in compromise or resolution of (A)
obligations of trade creditors or customers that were incurred in the
ordinary course of business of the Company or any of its Restricted
Subsidiaries, including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor or
customer; or (B) litigation, arbitration or other disputes with Persons
who are not Affiliates;
(7) Investments represented by Hedging Obligations;
(8) loans or advances to employees made in the ordinary course of
business of the Company or the Restricted Subsidiary of the Company in an
aggregate principal amount not to exceed $1.0 million at any one time
outstanding;
(9) repurchases of the Notes;
(10) entry into operating agreements, joint ventures, partnership
agreements, limited liability company agreements, working interests,
royalty interests, mineral leases, processing agreements, farm-in
agreements, farm-out agreements, development agreements, contracts for the
sale, transportation or exchange of oil and natural gas, unitization
agreements, pooling arrangements, joint bidding agreements, area of mutual
interest agreements, production sharing agreements or other similar or
customary agreements, transactions, properties, interests or 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, excluding however, Investments in corporations other
than any Investment received pursuant to Section 4.10; and
(11) other Investments in any Person other than an Affiliate of the
Company having an aggregate Fair Market Value (measured on the date each
such Investment was made and without giving effect to subsequent changes
in value), when taken together with all other Investments made pursuant to
this clause (11) that are at the time outstanding, not to exceed $15.0
million.
"Permitted Liens" means:
(1) Liens held by the Collateral Trustee securing Priority Lien Debt
in an aggregate principal amount not exceeding the Priority Lien Cap and
all related Priority Lien Obligations;
(2) Liens held by the Collateral Trustee equally and ratably
securing the Notes to be issued on the date of this Indenture, the Notes
Guarantees, Indebtedness under the Hedge Agreement and all future Parity
Lien Debt and other Parity Lien Obligations;
(3) Liens in favor of the Company or the Guarantors;
(4) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Subsidiary
of the Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company or the Subsidiary;
23
(5) Liens on property (including Capital Stock) existing at the time
of acquisition of the property by the Company or any Subsidiary of the
Company; provided that such Liens were in existence prior to, such
acquisition, and not incurred in contemplation of, such acquisition;
(6) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as is required in
conformity with GAAP has been made therefor;
(9) ▇▇▇▇▇ imposed by law, such as carriers', warehousemen's,
landlord's and mechanics' Liens, in each case, incurred in the ordinary
course of business;
(10) survey exceptions, easements or reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real property that were not incurred in
connection with Indebtedness and that do not in the aggregate materially
adversely affect the value of said properties or materially impair their
use in the operation of the business of such Person;
(11) Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred under this Indenture; provided, however, that:
(A) the new Lien shall be limited to all or part of the same
property and assets that secured or, under the written agreements
pursuant to which the original Lien arose, could secure the original
Lien (plus improvements and accessions to, such property or proceeds
or distributions thereof); and
(B) the Indebtedness secured by the new Lien is not increased
to any amount greater than the sum of (x) the outstanding principal
amount, or, if greater, committed amount, of the Permitted
Refinancing Indebtedness and (y) an amount necessary to pay any fees
and expenses, including premiums, related to such renewal,
refunding, refinancing, replacement, defeasance or discharge;
(12) Liens on, or related to, properties or assets to secure all or
part of the costs incurred in the ordinary course of the Oil and Gas
Business for the exploration, drilling, development, production,
processing, transportation, marketing, storage or operation thereof;
(13) Liens on pipeline or pipeline facilities that arise under
operation of law;
(14) Liens arising under operating agreements, joint venture
agreements, partnership agreements, mineral leases, processing agreements,
oil and gas leases, farm-in agreements, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil or
natural gas, unitization and pooling declarations and agreements, area of
mutual interest agreements, gas balancing and other agreements that are
customary in the Oil and Gas Business;
24
(15) Liens reserved in oil and gas mineral leases for bonus or
rental payments and for compliance with the terms of such leases;
(16) Liens securing Production Payments and Reserve Sales; provided
that such Liens are limited to the property that is subject to such
Production Payments and Reserve Sales and are incurred after the date of
this Indenture;
(17) Liens securing Indebtedness incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions
to, property, plant or equipment of such Person; provided, however, that
the Lien may not extend to any other property owned by such Person or any
of its Restricted Subsidiaries at the time the Lien is incurred (other
than assets and property affixed or appurtenant thereto), and such
Indebtedness (other than any interest thereon) secured by the Lien may not
be incurred more than 180 days after the later of the acquisition,
completion of construction, repair, improvement, addition or commencement
of full operation of the property subject to the Lien, and such
Indebtedness is incurred pursuant to Section 4.09;
(18) Liens on cash or cash equivalents securing the Hedge Agreement
or other hedging transactions to the extent that the sum of such cash or
cash equivalents constitutes the proceeds of any draw on any letter of
credit issued to secure the Hedge Agreement or such hedging transactions;
and
(19) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that
do not exceed $5.0 million at any one time outstanding.
"Permitted Payments to Parent" means, without duplication as to amounts:
(1) payments to the Parent in payment of fees not in excess of $1.0
million per annum pursuant to the Management Agreement in accordance with
Section 4.11;
(2) payments to the Parent to permit the Parent to pay reasonable
accounting, legal and administrative expenses of the Parent when due, in
an aggregate amount not to exceed $500,000 per annum; and
(3) for so long as the Company is a member of a group filing a
consolidated or combined tax return with the Parent, payments to the
Parent in respect of an allocable portion of the tax liabilities of such
group that is attributable to the Company and its Subsidiaries ("Tax
Payments"). The Tax Payments shall not exceed the lesser of (i) the amount
of the relevant tax (including any penalties and interest) that the
Company would owe if the Company were filing a separate tax return (or a
separate consolidated or combined return with its Subsidiaries that are
members of the consolidated or combined group), taking into account any
carryovers and carrybacks of tax attributes (such as net operating losses)
of the Company and such Subsidiaries from other taxable years and (ii) the
net amount of the relevant tax that the Parent actually owes to the
appropriate taxing authority. Any Tax Payments received from the Company
shall be paid over to the appropriate taxing authority within 30 days of
the Parent's receipt of such Tax Payments or refunded to the Company.
"Permitted Prior Liens" means:
(1) ▇▇▇▇▇ described in clause (1) of the definition of "Permitted
Liens;"
25
(2) Liens described in clauses (4), (5), (7), (10), (14), (15) or
(16) of the definition of "Permitted Liens;" and
(3) Permitted Liens that arise by operation of law and are not
voluntarily granted, to the extent entitled by law to priority over the
Liens created by the Security Documents.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on
the Indebtedness and the amount of all fees and expenses, including
premiums, incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged;
(3) if the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in right
of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Pledgors" means the Company, the Guarantors and any other Person (if any)
that provides collateral security for any Secured Obligations.
"Principals" means Parent and Carlyle/Riverstone Global Energy and Power
Fund II, L.P.
"Priority Lien" means a Lien granted by a security document to the
Collateral Trustee, at any time, upon any property of the Company or any other
Pledgor to secure Priority Lien Obligations.
"Priority Lien Cap" means, as of any date, the principal amount
outstanding under the Credit Agreement and/or the Indebtedness outstanding under
any other Credit Facility, in an aggregate principal amount not to exceed the
sum of the amount provided by clause (1) of the definition of Permitted Debt, as
of any date, plus the amount provided by clause (14) of the definition of
Permitted Debt, less the amount of Parity Lien Debt incurred after the date of
the indenture the net proceeds of which are used to repay Priority Lien Debt.
For purposes of this definition, all letters of credit will be valued at the
face amount thereof, whether or not drawn and all Hedging Obligations will be
valued at zero.
26
"Priority Lien Debt" means:
(1) Indebtedness under the Credit Agreement that was permitted to be
incurred and secured under each applicable Secured Debt Document (or as to
which the lenders under the Credit Agreement obtained an Officers'
Certificate at the time of incurrence to the effect that such Indebtedness
was permitted to be incurred and secured by all applicable Secured Debt
Documents);
(2) Indebtedness under any other Credit Facility that is secured
equally and ratably with the Credit Agreement by a Priority Lien that was
permitted to be incurred and so secured under each applicable Secured Debt
Document; provided, in the case of any Indebtedness referred to in this
clause (2), that:
(A) on or before the date on which such Indebtedness is
incurred by the Company or the applicable Restricted Subsidiary,
such Indebtedness is designated by the Company, in an Officers'
Certificate delivered to each Priority Lien Representative and the
Collateral Trustee, as "Priority Lien Debt" for the purposes of the
Secured Debt Documents; provided that no Series of Secured Debt may
be designated as both Priority Lien Debt and Parity Lien Debt;
(B) such Indebtedness is governed by a credit agreement or
other agreement that includes a Lien Sharing and Priority
Confirmation; and
(C) all requirements set forth in the Collateral Trust
Agreement as to the confirmation, grant or perfection of the
Collateral Trustee's Lien to secure such Indebtedness or Obligations
in respect thereof are satisfied (and the satisfaction of such
requirements and the other provisions of this clause (C) will be
conclusively established if the Company delivers to the Collateral
Trustee an Officers' Certificate stating that such requirements and
other provisions have been satisfied and that such Indebtedness is
"Priority Lien Debt"); and
(3) Hedging Obligations incurred to hedge or manage interest rate
risk with respect to Priority Lien Debt; provided that:
(A) such Hedging Obligations are secured by a Priority Lien on
all of the assets and properties that secure Indebtedness under the
Credit Facility in respect of which such Hedging Obligations are
incurred; and
(B) such Priority Lien is senior to or on a parity with the
Priority Liens securing Indebtedness under the Credit Facility in
respect of which such Hedging Obligations are incurred.
"Priority Lien Documents" means the Credit Agreement and any other Credit
Facility pursuant to which any Priority Lien Debt is incurred and the Security
Documents (other than any Security Documents that do not secure Priority Lien
Obligations).
"Priority Lien Obligations" means Priority Lien Debt and all other
Obligations in respect of Priority Lien Debt.
"Priority Lien Representative" means (1) the Credit Agreement Agent or (2)
in the case of any
27
other Series of Priority ▇▇▇▇ ▇▇▇▇, the trustee, agent or representative of the
holders of such Series of Priority ▇▇▇▇ ▇▇▇▇ who maintains the transfer register
for such Series of Priority Lien Debt and is appointed as a representative of
the Priority Lien Debt (for purposes related to the administration of the
Security Documents) pursuant to the credit agreement or other agreement
governing such Series of Priority Lien Debt.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) hereof to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"Production Payment" means Dollar-Denominated Production Payments and
Volumetric Production Payments, collectively.
"Production Payment and Reserve Sales" means the grant or transfer by the
Company or a Restricted Subsidiary of the Company to any Person of a royalty,
overriding royalty, net profits interest or Production Payment in oil and
natural gas properties, reserves or the right to receive all or a portion of the
production or the proceeds from the sale of production attributable to such
properties where, in the case of each of the foregoing, the holder of such
interest has recourse solely to such production or proceeds of production,
subject to the obligation of the grantor or transferor to operate and maintain,
or cause the subject interests to be operated and maintained, in a reasonably
prudent manner or other customary standard or subject to the obligation of the
grantor or transferor to indemnify for environmental, title or other matters
customary in connection with the transfer of such interests.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date of this Indenture, among the Company, the Guarantors and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Company,
the Guarantors and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to the purchasers of Additional Notes to register such Additional
Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note substantially in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 903 of Regulation S.
"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any Principal;
or
(2) any trust, corporation, partnership, limited liability company
or other entity, the beneficiaries, stockholders, partners, members,
owners or Persons beneficially holding an 80% or more controlling interest
of which consist of any one or more Principals and/or such other Persons
referred to in clause (1) of this definition.
"Required Parity Creditors" means, at any time, the holders of more than
50% of the sum of:
28
(1) the aggregate outstanding principal amount of Parity Lien Debt
(including outstanding letters of credit whether or not then available or
drawn);
(2) other than in connection with the exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded, would
constitute Parity Lien Debt; and
(3) in the case of Parity Lien Obligations arising under hedge
agreements, the Hedge Outstanding Amount;
For purposes of this definition, (A) Parity Lien Debt registered in the
name of, or beneficially owned by, the Company or any Affiliate of the Company
will be deemed not to be outstanding, and (B) votes will be determined in
accordance with the Collateral Trust Agreement.
"Required Priority Creditors" means, at any time, the holders of more than
50% of the sum of:
(1) the aggregate outstanding principal amount of Priority Lien Debt
(including outstanding letters of credit whether or not then available or
drawn); and
(2) other than in connection with the exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded, would
constitute Priority Lien Debt.
For purposes of this definition, (A) Priority Lien Debt registered in the
name of, or beneficially owned by, the Company or any Affiliate of the Company
will be deemed not to be outstanding, and (B) votes will be determined in
accordance with the Collateral Trust Agreement.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Sale of Collateral" means any Asset Sale involving a sale or other
disposition of Collateral.
"SEC" means the Securities and Exchange Commission.
29
"Secured Debt" means Parity Lien Debt and Priority Lien Debt.
"Secured Debt Documents" means the Parity Lien Documents and the Priority
Lien Documents.
"Secured Debt Representative" means each Parity Lien Representative and
each Priority Lien Representative.
"Secured Leverage Ratio" means, on any date, the ratio of:
(1) the aggregate principal amount of Secured Debt outstanding on
such date (including, without limitation, the Hedge Outstanding Amount
under hedge agreements constituting Parity Lien Debt) plus all
Indebtedness of Restricted Subsidiaries of the Company that are not
Guarantors outstanding on such date (and, for this purpose, letters of
credit will be deemed to have a principal amount equal to the face amount
thereof, whether or not drawn), to:
(2) the aggregate amount of the Company's Consolidated Cash Flow for
the most recent four-quarter period for which financial information is
available.
In addition, for purposes of calculating the Secured Leverage Ratio:
(1) acquisitions that have been made by the specified Person or any
of its Restricted Subsidiaries, including through mergers or
consolidations or acquisitions of assets, or any Person or any of its
Restricted Subsidiaries acquired by merger, consolidation or the
acquisition of all or substantially all of its assets by the specified
Person or any of its Restricted Subsidiaries, and including any related
financing transactions and including increases in ownership of Restricted
Subsidiaries, during the four-quarter reference period or subsequent to
such reference period and on or prior to the date on which the event for
which the calculation of the Secured Leverage Ratio is made (the "Leverage
Calculation Date") will be given pro forma effect in accordance with
Regulation S-X under the Securities Act) as if they had occurred on the
first day of the four-quarter reference period;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Leverage Calculation Date will be excluded;
(3) any Person that is a Restricted Subsidiary on the Leverage
Calculation Date will be deemed to have been a Restricted Subsidiary at
all times during such four-quarter period; and
(4) any Person that is not a Restricted Subsidiary on the Leverage
Calculation Date will be deemed not to have been a Restricted Subsidiary
at any time during such four-quarter period.
"Secured Obligations" means Parity Lien Obligations and Priority Lien
Obligations.
"Security Documents" means the Collateral Trust Agreement, each Lien
Sharing and Priority Confirmation, and all security agreements, pledge
agreements, collateral assignments, mortgages, deeds of trust, collateral agency
agreements, control agreements or other grants or transfers for security
executed and delivered by the Company or any other Pledgor creating (or
purporting to create) a Lien upon Collateral in favor of the Collateral Trustee,
in each case, as amended, modified, renewed, restated or replaced, in whole or
in part, from time to time, in accordance with its terms and the Collateral
Trust Agreement.
30
"Securities Act" means the Securities Act of 1933, as amended.
"Series of Parity Lien Debt" means, severally, the Notes, the Indebtedness
under the Hedge Agreement and each other issue or series of Parity Lien Debt for
which a single transfer register is maintained.
"Series of Priority Lien Debt" means, severally, the Indebtedness
outstanding under the Credit Agreement and any other Credit Facility that
constitutes Priority Lien Debt.
"Series of Secured Debt" means each Series of Parity Lien Debt and each
Series of Priority Lien Debt.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Special Interest" has the meaning set forth in the Registration Rights
Agreement.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of this Indenture, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency and after
giving effect to any voting agreement or stockholders' agreement that
effectively transfers voting power) to vote in the election of directors,
managers or trustees of the corporation, association or other business
entity is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and
(2) any partnership (A) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(B) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb).
"Treasury Rate" means, as of any redemption date, the yield to maturity as
of such redemption date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the redemption date to July 15, 2008; provided,
however, that if the period from the redemption date to July 15, 2008 is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.
31
"Trustee" means BNY Midwest Trust Company until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
the successor serving hereunder.
"Unrestricted Definitive Note" means a Definitive Note that does not bear
and is not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a Global Note that does not bear and is
not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 4.11 hereof, is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to
the Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (A) to
subscribe for additional Equity Interests or (B) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries.
"U.S. Person" means a U.S. Person as defined in Rule 902(k) promulgated
under the Securities Act.
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" of any specified Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (A) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (B) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of
such payment; by
(2) the then outstanding principal amount of such Indebtedness.
32
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"................................... 4.11
"Asset Sale Offer"........................................ 3.09
"Authentication Order".................................... 2.02
"Change of Control Offer"................................. 4.15
"Change of Control Payment"............................... 4.15
"Change of Control Payment Date".......................... 4.15
"Covenant Defeasance"..................................... 8.03
"DTC"..................................................... 2.03
"Event of Default"........................................ 6.01
"Excess Proceeds"......................................... 4.10
"incur"................................................... 4.09
"Legal Defeasance"........................................ 8.02
"Offer Amount"............................................ 3.09
"Offer Period"............................................ 3.09
"Paying Agent"............................................ 2.03
"Permitted Debt".......................................... 4.09
"Payment Default" ........................................ 6.01
"Purchase Date"........................................... 3.09
"Registrar"............................................... 2.03
"Restricted Payments"..................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Note Guarantees means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the Note
Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
33
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) "will" shall be interpreted to express a command;
(f) provisions apply to successive events and transactions; and
(g) references to sections of or rules under the Securities Act will be
deemed to include substitute, replacement of successor sections or rules adopted
by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $2,000 and integral multiples of $1,000.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
34
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon receipt of a written order of the Company signed
by one Officer (an "Authentication Order"), authenticate Notes for original
issue that may be validly issued under this Indenture, including any Additional
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed the aggregate principal amount of Notes authorized for issuance by the
Company pursuant to one or more Authentication Orders, except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"),
which shall be located in the Borough of Manhattan, the City of New York. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Special Interest, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if 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 in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
35
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 names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each 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 the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes shall be exchanged
by the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary
that it is unwilling or unable to continue to act as Depositary or that it
is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within
120 days after the date of such notice from the Depositary;
(2) the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for Definitive Notes
and delivers a written notice to such effect to the Trustee; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Notes.
Upon the occurrence of either of the preceding events in (1) or (2) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend. Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
36
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(1) above, the transferor
of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above;
Upon consummation of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(2)
shall be deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof.
37
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i)
a Broker-Dealer, (ii) a Person participating in the distribution of
the Exchange Notes or (iii) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph
(B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof
in the form of, a beneficial interest in a Restricted Global Note.
38
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item
(2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(F) if such beneficial interest is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
39
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of
the Exchange Notes or (iii) a Person who is an affiliate (as defined
in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for an Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, the
Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in
the appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(3) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest requests through
instructions to the Registrar from or through the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(3) shall not bear the Private
Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
40
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications
in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, and in the case of
clause (C) above, the Regulation S Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
41
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D)
or (3) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
42
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, then
the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof;
or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on
43
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes.
A Holder of Unrestricted Definitive Notes may transfer such Notes to a
Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes accepted for exchange in the Exchange Offer by
Persons that certify in the applicable Letters of Transmittal that (A)
they are not Broker-Dealers, (B) they are not participating in a
distribution of the Exchange Notes and (C) they are not affiliates (as
defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer by Persons that certify in the
applicable Letters of Transmittal that (A) they are not Broker-Dealers,
(B) they are not participating in a distribution of the Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Company.
Concurrently with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT
FROM THE REGISTRATION
44
REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4), (c)(2),
(c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this Section 2.06
(and all Notes issued in exchange therefor or substitution thereof)
shall not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who shall take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such
45
other Global Note shall be increased accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the direction of
the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance
with Section 2.02 hereof or at the Registrar's request.
(2) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(3) The Registrar shall not be required to register the transfer of
or exchange of any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Notes or Definitive Notes surrendered upon such registration of transfer
or exchange.
(5) Neither the Registrar nor the Company shall be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the day
of selection;
(B) to register the transfer of or to exchange any Note
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between
a record date and the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(7) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
46
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section 2.08
as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Guarantor, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
Guarantor, shall be considered as though 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 Notes that the Trustee knows are so
owned shall be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
47
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will dispose of
canceled Notes in accordance with its customary procedure (subject to the record
retention requirement of the Exchange Act). Upon written request, certification
of the disposition of all canceled Notes shall be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(a) the clause of this Indenture pursuant to which the redemption shall
occur;
(b) the redemption date;
(c) the principal amount of Notes to be redeemed; and
(d) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select Notes for redemption or
purchase on a pro rata basis except:
(a) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Notes are listed; or
48
(b) if otherwise required by law.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected shall be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Articles 8 or 12 hereof.
The notice shall identify the Notes to be redeemed (including the CUSIP
numbers) and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
49
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
Prior to 11:00 a.m. Eastern Time on the redemption or purchase date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Special
Interest, if any, on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest and Special Interest, if any, on, all Notes to be redeemed or
purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest shall cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase 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 Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company shall issue and, upon receipt of an Authentication Order, the Trustee
shall authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to July 15, 2007, the Company may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes (including
any Additional Notes) issued under this Indenture at a redemption price of
108.750% of the principal amount thereof, plus accrued and unpaid interest and
Special Interest, if any, to the redemption date, with the net cash proceeds of
one or more Equity Offerings or a contribution to the Company's common equity
capital made with the net cash proceeds of a concurrent offering of common stock
of the Company's direct parent; provided that:
(1) at least 65% of the aggregate principal amount of Notes
(including any Additional Notes) issued under this Indenture (excluding
Notes held by the Company and its Subsidiaries) remains outstanding
immediately after the occurrence of such redemption; and
(2) the redemption occurs within 60 days of the date of the closing
of such Equity Offering or such contribution to the Company's common
equity capital, as applicable.
(b) At any time prior to July 15, 2008, the Company may also redeem all or
a part of the Notes, upon not less than 30 nor more than 60 days' prior notice
mailed by first-class mail to each Holder's registered address, at a redemption
price equal to 100% of the principal amount of Notes redeemed plus
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the Applicable Premium as of, and accrued and unpaid interest and Special
Interest, if any, to the date of redemption, subject to the rights of Holders of
Notes on the relevant record date to receive interest due on the relevant
interest payment date.
(c) Except pursuant to Sections 3.07(a) and (b) hereof, the Notes shall
not be redeemable at the Company's option prior to July 15, 2008.
(d) On or after July 15, 2008, the Company may redeem all or a part of the
Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Special Interest, if any, on the Notes redeemed
to the applicable redemption date, if redeemed during the twelve-month period
beginning on July 15 of the years indicated below, subject to the rights of
Holders on the relevant record date to receive interest on the relevant interest
payment date:
Year Percentage
---- ----------
2008........................... 104.375%
2009........................... 102.188%
2010 and thereafter............ 100.000%
Unless the Company defaults in the payment of the redemption price,
interest shall cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(e) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets. The Asset Sale Offer shall remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than three Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company shall apply
all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Special Interest, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
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Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The notice, which shall govern the terms of the Asset Sale Offer, shall
state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer will remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment will continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may elect to have Notes purchased in integral multiples of $1,000
only;
(f) that Holders electing to have Notes purchased pursuant to any Asset
Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" attached to the Notes completed, or
transfer by book-entry transfer, to the Company, a Depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
▇▇▇▇▇▇ is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes and other pari passu
Indebtedness surrendered by holders thereof exceeds the Offer Amount, the
Company shall select the Notes and other pari passu Indebtedness to be purchased
on a pro rata basis based on the principal amount of Notes and such other pari
passu Indebtedness surrendered (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $2,000, or
integral multiples of $1,000, will be purchased); and
(i) that Holders whose Notes were purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Note, and the
Trustee, upon written request from the Company, shall authenticate and mail or
deliver (or cause
52
to be transferred by book entry) such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest and Special Interest, if any, on, the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Special Interest, if any will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
11:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Special Interest, if any, in the same manner on the dates and in the amounts set
forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Special Interest (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an Affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange, where Notes may be presented for
payment and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Company shall 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.
The Company hereby designates the Corporate Office of the Trustee as one
such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 Reports.
53
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes or cause the Trustee to furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to be
filed with the SEC on Forms 10-Q and 10-K if the Company were required to
file reports; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
All such reports shall be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K shall include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. In
addition, the Company shall file a copy of each of the reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time
periods specified in the rules and regulations applicable to such reports
(unless the SEC will not accept such a filing) and shall post the reports on its
website within those time periods.
If, at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company shall
nevertheless continue filing the reports specified in the preceding paragraph
with the SEC within the time periods specified above unless the SEC will not
accept such a filing. The Company shall not take any action for the purpose of
causing the SEC not to accept any such filings. If, notwithstanding the
foregoing, the SEC will not accept the Company's filings for any reason, the
Company shall post the reports referred to in the preceding paragraph on its
website within the time periods that would apply if the Company were required to
file those reports with the SEC.
(b) If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
paragraph (a) of this Section 4.03 shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
(c) For so long as any Notes remain outstanding, if at any time they are
not required to file with the SEC the reports required by paragraphs (a) and (b)
of this Section 4.03, the Company and the Guarantors shall furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(d) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate, one of the signers of
which shall be the Chief Executive Officer, Chief Financial Officer or Chief
Accounting Officer, 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
54
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and the Security Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture the Security Documents and
is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture the Security Documents (or, if a
Default or Event of Default has occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her 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 Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as any of the Notes are outstanding, the Company shall deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it shall 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 wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders
of the Company's or any of its Restricted Subsidiaries' Equity Interests
in their capacity as such (other than dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company and
other than dividends or distributions payable to the Company or a
Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company or any direct or indirect parent of the
Company;
55
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of the
Company or any Guarantor that is contractually subordinated to the Notes
or to any Note Guarantee (excluding any intercompany Indebtedness between
or among the Company and any of its Restricted Subsidiaries), except a
payment of interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment
(all such payments and other actions set forth in these clauses (1)
through (4) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a)
hereof; and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries since the date of this Indenture (excluding Restricted
Payments permitted by clauses (2), (3), (4), (5), (7) and (9) of paragraph
(b) of this Section 4.07), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the date of this Indenture to
the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit); plus
(B) 100% of the aggregate net proceeds received by the Company
since the date of this Indenture as a contribution to its common
equity capital or from the issue or sale of Equity Interests of the
Company (other than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company); plus
(C) to the extent that any Restricted Investment that was made
after the date of this Indenture is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such Restricted
Investment; plus
(D) to the extent that any Unrestricted Subsidiary of the
Company designated as such after the date of this Indenture is
redesignated as a Restricted Subsidiary after the date of this
Indenture, the lesser of (i) the Fair Market Value of the Company's
Investment in such Subsidiary as of the date of such redesignation
and (ii) such Fair
56
Market Value as of the date on which such Subsidiary was originally
designated as an Unrestricted Subsidiary after the date of this
Indenture; plus
(E) 100% of any dividends received by the Company or a
Restricted Subsidiary of the Company after the date of this
Indenture from an Unrestricted Subsidiary of the Company, to the
extent that such dividends were not otherwise included in the
Consolidated Net Income of the Company for such period.
(b) The provisions of Section 4.07(a) hereof shall not prohibit:
(1) the payment of any dividend or the consummation of any
irrevocable redemption within 60 days after the date of declaration of the
dividend or giving of the redemption notice, as the case may be, if at the
date of declaration or notice, the dividend or redemption payment would
have complied with the provisions of this Indenture;
(2) the making of any Restricted Payment in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to
a Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock) or from the substantially concurrent contribution
of common equity capital to the Company; provided that the amount of any
such net cash proceeds that are utilized for any such Restricted Payment
shall be excluded from clause (3)(B) of Section 4.07(a) hereof;
(3) the repurchase, redemption, defeasance or other acquisition or
retirement for value of the Company's 9-7/8% Senior Subordinated Notes due
2007 with the net proceeds of this offer of the Notes and Indebtedness
under the Credit Facilities;
(4) the repurchase, redemption, defeasance or other acquisition or
retirement for value of any Indebtedness of the Company or any Guarantor
that is contractually subordinated to the Notes or to any Note Guarantee
(in addition to that referred to in clause (3) above) with the net cash
proceeds from a substantially concurrent incurrence of Permitted
Refinancing Indebtedness;
(5) so long as no Default has occurred and is continuing or would be
caused thereby, the payment of any dividend (or, in the case of any
partnership or limited liability company, any similar distribution) by a
Restricted Subsidiary of the Company to the holders of its Equity
Interests on a pro rata basis;
(6) so long as no Default has occurred and is continuing or would be
caused thereby, the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any current or former
officer, director or employee of the Company or any of its Restricted
Subsidiaries pursuant to any equity subscription agreement, stock option
agreement, shareholders' agreement or similar agreement; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests may not exceed $2.0 million in any twelve-month
period;
(7) so long as no Default has occurred and is continuing or would be
caused thereby, the repurchase of Equity Interests deemed to occur upon
the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;
(8) so long as no Default has occurred and is continuing or would be
caused thereby, the declaration and payment of regularly scheduled or
accrued dividends to holders of any class or series of Disqualified Stock
of the Company or any Restricted Subsidiary of the Company issued
57
on or after the date of this Indenture in accordance with the Fixed Charge
Coverage Ratio test described in Section 4.09 hereof;
(9) Permitted Payments to Parent; and
(10) so long as no Default has occurred and is continuing or would
be caused thereby, other Restricted Payments in an aggregate amount not to
exceed $15.0 million since the date of this Indenture.
The amount of all Restricted Payments (other than cash) will be the Fair
Market Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any assets or securities that are required to be valued by this
Section 4.07 will be determined by the Board of Directors of the Company whose
resolution with respect thereto will be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
Fair Market Value exceeds $25.0 million.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) sell, lease or transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof shall not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness, the Credit
Facilities and the Hedging Agreement as in effect on the date of this
Indenture and any amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings of those agreements;
provided that the amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings are not materially
more restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in those agreements on the
date of this Indenture;
(2) this Indenture, the Notes and the Note Guarantees;
(3) applicable law, rule, regulation or order;
(4) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except
58
to the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(5) customary non-assignment provisions in contracts and licenses
entered into in the ordinary course of business;
(6) purchase money obligations for property acquired in the ordinary
course of business and Capital Lease Obligations that impose restrictions
on the property purchased or leased of the nature described in clause (3)
of Section 4.08(a) hereof;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by that Restricted Subsidiary
pending the sale or other disposition;
(8) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness
being refinanced;
(9) Liens permitted to be incurred under the provisions of Section
4.12 hereof that limit the right of the debtor to dispose of the assets
subject to such Liens;
(10) provisions limiting the disposition or distribution of assets
or property in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar
agreements entered into with the approval of the Company's Board of
Directors, which limitation is applicable only to the assets that are the
subject of such agreements;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(12) restrictions on cash or other deposits by parties under
agreements entered into in the ordinary course of the Oil and Gas Business
of the types described in the definition of Permitted Investments; and
(13) customary restrictions on the disposition or distribution of
assets or property in agreements entered into the ordinary course of
business of the Oil and Gas Business of the types described in the
definition of Permitted Investments.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur
Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
59
Disqualified Stock or such preferred stock is issued, as the case may be, would
have been at least 2.5 to 1, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock or the preferred stock
had been issued, as the case may be, at the beginning of such four-quarter
period.
(b) The provisions of Section 4.09(a) hereof shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Company and any Guarantor of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding under this clause (1) (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted Subsidiaries
thereunder) not to exceed:
(A) prior to July 7, 2008, the greater of (i) $170.0 million
less the aggregate amount of all Net Proceeds of Asset Sales applied
by the Company or any of its Restricted Subsidiaries since the date
of this Indenture to repay any term Indebtedness under a Credit
Facility or to repay any revolving credit Indebtedness under a
Credit Facility and effect a corresponding commitment reduction
thereunder pursuant to Section 4.10 hereof less any amount that is
released by the Hedge Counterparty under the Hedge Letter of Credit
and (ii) 30% of ACNTA as of the date of such incurrence; and
(B) on or after July 7, 2008, the greater of (i) $130.0
million less the aggregate amount of all Net Proceeds of Asset Sales
applied by the Company or any of its Restricted Subsidiaries since
the date of this Indenture to repay any term Indebtedness under a
Credit Facility or to repay any revolving credit Indebtedness under
a Credit Facility and effect a corresponding commitment reduction
thereunder pursuant to Section 4.10 hereof less any amount that is
released by the Hedge Counterparty under the Hedge Letter of Credit
and (ii) 30% of ACNTA as of the date of such incurrence less $40.0
million; provided that such amounts in the foregoing clauses (i) and
(ii) of this paragraph shall be reduced by an additional $10.0
million on each of the fifth, sixth and seventh anniversaries of the
date of this Indenture;
(2) the incurrence by the Company and any Guarantor of Indebtedness
under the Hedge Agreement;
(3) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(4) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Note Guarantees to be issued on
the date of this Indenture and the Exchange Notes and the related Note
Guarantees to be issued pursuant to the Registration Rights Agreement;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to renew, refund, refinance, replace,
defease or discharge any Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under
Section 4.09(a) hereof or clauses (3), (4), (5) or (14) of this Section
4.09(b);
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(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness and the payee is not the Company or a Guarantor, such
Indebtedness must be expressly subordinated to the prior payment in
full in cash of all Obligations then due with respect to the Notes,
in the case of the Company, or the Note Guarantee, in the case of a
Guarantor; and
(B) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary of the
Company and (ii) any sale or other transfer of any such Indebtedness
to a Person that is not either the Company or a Restricted
Subsidiary of the Company, will be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by
this clause (6);
(7) the issuance by any of the Company's Restricted Subsidiaries to
the Company or to any of its Restricted Subsidiaries of shares of
preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests
that results in any such preferred stock being held by a Person
other than the Company or a Restricted Subsidiary of the Company;
and
(B) any sale or other transfer of any such preferred stock to
a Person that is not either the Company or a Restricted Subsidiary
of the Company,
shall be deemed, in each case, to constitute an issuance of such
preferred stock by such Restricted Subsidiary that was not permitted by
this clause (7);
(8) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations in the ordinary course of business
(other than pursuant to the Hedge Agreement);
(9) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company that
was permitted to be incurred by another provision of this Section 4.09;
provided that if the Indebtedness being guaranteed is subordinated to or
pari passu with the Notes, then the Guarantee shall be subordinated or
pari passu, as applicable, to the same extent as the Indebtedness
guaranteed;
(10) in-kind obligations relating to net oil and natural gas
balancing positions arising in the ordinary course of business;
(11) any obligation arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
guarantee, adjustment of purchase price, holdback, contingency payment
obligations based on the performance of the acquired or disposed asset or
similar obligations, in each case, incurred or assumed in connection with
the acquisition or disposition of any business, asset or Capital Stock of
a Restricted Subsidiary of the Company;
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(12) the incurrence by the Company or any of the Guarantors of
Indebtedness in respect of workers' compensation claims, self-insurance
obligations, bankers' acceptances, performance and surety bonds in the
ordinary course of business;
(13) the incurrence by the Company or any of the Guarantors of
Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds, so long as such Indebtedness is covered within
five Business Days; and
(14) the incurrence by the Company or any of the Guarantors of
additional Indebtedness in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to renew, refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to this clause
(14), not to exceed $25.0 million.
The Company shall not incur, and shall not permit any Guarantor to incur,
any Indebtedness (including Permitted Debt) that is contractually subordinated
in right of payment to any other Indebtedness of the Company or such Guarantor
unless such Indebtedness is also contractually subordinated in right of payment
to the Notes and the applicable Note Guarantee on substantially identical terms;
provided, however, that no Indebtedness will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company solely
by virtue of being unsecured or by virtue of being secured on a first or junior
Lien basis.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (14) above,
or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company
shall be permitted to classify such item of Indebtedness on the date of its
incurrence, or later reclassify all or a portion of such item of Indebtedness,
in any manner that complies with this Section 4.09. Indebtedness under Credit
Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture will initially be deemed to have been
incurred on such date in reliance on the exception provided by clause (1) of the
definition of Permitted Debt. The accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, the
reclassification of preferred stock as Indebtedness due to a change in
accounting principles, and the payment of dividends on Disqualified Stock in the
form of additional shares of the same class of Disqualified Stock shall not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
for purposes of this Section 4.09; provided, in each such case, that the amount
of any such accrual, accretion or payment is included in Fixed Charges of the
Company as accrued. The amount of any premium payable on Indebtedness upon the
prepayment, redemption or other retirement for value of such Indebtedness shall
be disregarded in determining the amount of such Indebtedness. Notwithstanding
any other provision of this Section 4.09, the maximum amount of Indebtedness
that the Company or any Restricted Subsidiary may incur pursuant to this Section
4.09 shall not be deemed to be exceeded solely as a result of fluctuations in
exchange rates or currency values.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any
other Indebtedness; and
62
(3) in respect of Indebtedness of another Person secured by a Lien
on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of
determination; and
(B) the amount of the Indebtedness of the other Person.
Section 4.10 Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
Fair Market Value of the assets or Equity Interests issued or sold or
otherwise disposed of; and
(2) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash. For
purposes of this provision, each of the following shall be deemed to be
cash:
(A) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any Note Guarantee)
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability;
(B) any securities, Notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are, within 90 days by the Company or such Restricted Subsidiary,
converted by the Company or such Restricted Subsidiary into cash, to
the extent of the cash received in that conversion; and
(C) any stock or assets of the kind referred to in Section
4.10(b)(2) or (4) hereof.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, other than a Sale of Collateral, the Company (or the applicable Restricted
Subsidiary, as the case may be) may apply such Net Proceeds at its option:
(1) to repay Priority Lien Debt and, if such Priority Lien Debt is
revolving credit Indebtedness, to correspondingly reduce commitments with
respect thereto;
(2) to acquire all or substantially all of the assets of, or any
Capital Stock of, another Oil and Gas Business, if, after giving effect to
any such acquisition of Capital Stock, the Oil and Gas Business is or
becomes a Restricted Subsidiary of the Company;
(3) to make a capital expenditure; or
(4) to acquire other assets that are not classified as current
assets under GAAP and that are used or useful in an Oil and Gas Business.
(c) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale that constitutes a Sale of Collateral or from a Casualty Event, the Company
(or the Restricted Subsidiary that owned those
63
assets, as the case may be) may apply those Net Proceeds to purchase other
long-term assets that would constitute Collateral or to repay Priority Lien Debt
and, if such Priority Lien Debt is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto.
(d) Any Net Proceeds from Asset Sales or Casualty Events that are not
applied or invested as provided in Section 4.10(b) or (c) hereof shall
constitute "Excess Proceeds." If following such application or investment, the
percentage of the Company's expected production volumes hedged exceeds a range
to be agreed between the Hedge Counterparty and the Company at the time each
hedge transaction is consummated, then the Company shall terminate that portion
of the ▇▇▇▇▇▇ necessary in order to have the volumes hedged be within such
range, and shall apply Excess Proceeds to effect such termination. When the
aggregate amount of Excess Proceeds not so applied exceeds $15.0 million, within
ten days thereof, the Company shall make an Asset Sale Offer to all Holders of
Notes and all holders of other Parity Lien Debt containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets in accordance with Section 3.09 hereof to
purchase the maximum principal amount of Notes and such other Parity Lien Debt
that may be purchased out of the Excess Proceeds. The offer price in any Asset
Sale Offer shall be equal to 100% of the principal amount plus accrued and
unpaid interest and Special Interest, if any, to the date of purchase and shall
be payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture. If the aggregate principal amount of
Notes and other Parity Lien Debt tendered pursuant to such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other Parity Lien Debt to be purchased on a pro rata basis. Upon completion
of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
(e) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
compliance.
Section 4.11 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors of
the Company set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with this Section 4.11 and that
such Affiliate
64
Transaction has been approved by a majority of the disinterested
members of the Board of Directors, if any, of the Company; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, an opinion as to the fairness to the
Company or such Subsidiary of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following items shall not be deemed to be Affiliate Transactions
and, therefore, shall not be subject to the provisions of Section 4.11(a)
hereof:
(1) any employment agreement, employee benefit plan, officer or
director indemnification agreement or any similar arrangement entered into
by the Company or any of its Restricted Subsidiaries in the ordinary
course of business and payments pursuant thereto;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) transactions with a Person (other than an Unrestricted
Subsidiary of the Company) that is an Affiliate of the Company solely
because the Company owns, directly or through a Restricted Subsidiary, an
Equity Interest in, or controls, such Person;
(4) payment of reasonable directors' fees to Persons who are not
otherwise Affiliates of the Company;
(5) any issuance of Equity Interests (other than Disqualified Stock)
of the Company to Affiliates of the Company;
(6) Restricted Payments or Permitted Investments that do not violate
Section 4.07 hereof;
(7) payment of fees not in excess of $1.0 million per annum pursuant
to the Management Agreement as in effect on the date of this Indenture,
including any amendment or replacement agreement that is no more
disadvantageous to the Holders of the Notes in any material respect than
the original Management Agreement; provided that the amount of the fee
shall not exceed $1.0 million per annum at any time;
(8) payment of fees of $1,415,105, payable to Parent, upon the
consummation of the Merger;
(9) payment of fees not in excess of $5.9 million, payable to TPG
Partners II L.P., upon the consummation of the Merger, pursuant to the
Transaction Advisory Agreement as in effect on the date of this Indenture;
(10) loans or advances to employees in the ordinary course of
business not to exceed $1.0 million in the aggregate at any one time
outstanding; and
(11) Permitted Payments to Parent (without duplication of amounts
permitted pursuant to clause (7) above).
Section 4.12 Liens.
65
The Company shall not and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) securing
Indebtedness, Attributable Debt or trade payables upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under this
Indenture and the Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no longer secured
by a Lien.
Section 4.13 Business Activities.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Oil and Gas Businesses,
except to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect:
(a) its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary; and
(b) the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of that Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount of Notes
repurchased plus accrued and unpaid interest and Special Interest, if any, on
the Notes repurchased to the date of purchase, subject to the rights of Holders
on the relevant record date to receive interest due on the relevant interest
payment date (the "Change of Control Payment"). Within ten days following any
Change of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days and no later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
66
(4) that, unless the Company defaults in the payment of the Change
of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" attached to the Notes
completed, or transfer by book-entry transfer, to the Paying Agent at the
address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such ▇▇▇▇▇▇ is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.15 hereof, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 3.09 hereof or this Section 4.15 by
virtue of such compliance.
(b) On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being purchased
by the Company.
The Paying Agent will promptly mail (but in any case not later than five
days after the Change of Control Payment Date) to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and Section 3.09 hereof and purchases all Notes properly tendered
and not
67
withdrawn under the Change of Control Offer, or (2) notice of redemption has
been given pursuant to Section 3.07 hereof, unless and until there is a default
in payment of the applicable redemption price.
Section 4.16 Payments for Consent.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.17 Additional Note Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or creates
another Domestic Subsidiary after the date of this Indenture, which Domestic
Subsidiary guarantees any Priority Lien Debt, then that newly acquired or
created Domestic Subsidiary shall become a Guarantor and execute a supplemental
indenture and deliver an Opinion of Counsel satisfactory to the Trustee and
deliver an Opinion of Counsel to the Trustee within 10 Business Days of the date
on which it was acquired or created to the effect that such supplemental
indenture has been duly authorized, executed and delivered by that Domestic
Subsidiary and constitutes a valid and binding agreement of that Domestic
Subsidiary, enforceable in accordance with its terms (subject to customary
exceptions); provided that any Domestic Subsidiary that constitutes an
Immaterial Subsidiary need not become a Guarantor until such time as it ceases
to be an Immaterial Subsidiary. The form of such Note Guarantee is attached as
Exhibit D hereto.
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary designated as
Unrestricted shall be deemed to be an Investment made as of the time of the
designation and shall reduce the amount available for Restricted Payments under
Section 4.07 hereof or under one or more clauses of the definition of Permitted
Investments, as determined by the Company. That designation shall only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation
would not cause a Default.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of a resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07. If, at
any time, any Unrestricted Subsidiary would fail to meet the preceding
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 by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09, the Company shall be in default of
such covenant. The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary of the Company;
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary, and such designation shall only be
permitted if
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(1) such Indebtedness is permitted under Section 4.09 calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period; and (2) no Default or Event of Default would be in existence
following such designation.
Section 4.19 Termination of Hedge Agreement.
The Company shall not, and shall not permit any of the Guarantors to,
terminate the Hedge Agreement or the obligations thereunder during the term of
the Notes other than in connection with a partial termination in connection with
an Asset Sale or Casualty Event.
Section 4.20 Changes in Covenants When Notes Rated Investment Grade.
(a) If on any date following the date of this Indenture:
(1) the Notes have an Investment Grade Rating; and
(2) no Default or Event of Default shall have occurred and be
continuing,
then, beginning on that day and subject to the provisions of the following
paragraph, the covenants under Sections 4.07, 4.08, 4.09, 4.10, 4.11 and
5.01(a)(4) shall be suspended.
(b) Notwithstanding the foregoing, if the rating assigned by either such
rating agency should subsequently decline to below the Investment Grade Rating,
the foregoing covenants shall be reinstituted as of and from the date of such
rating decline. Calculations under the reinstated Section 4.07 shall be made as
if Section 4.07 had been in effect since the date of this Indenture except that
no default shall be deemed to have occurred solely by reason of a Restricted
Payment made while Section 4.07 was suspended.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
(a) The Company shall not, directly or indirectly: consolidate or merge
with or into another Person (whether or not the Company is the surviving
Person); or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person, unless:
(1) either: (A) the Company is the surviving Person; or (B) the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance
or other disposition has been made is either (i) a corporation organized
or existing under the laws of the United States, any state of the United
States or the District of Columbia, or (ii) a partnership or limited
liability company organized or existing under the laws of the United
States, any state thereof or the District of Columbia that has at least
one Restricted Subsidiary that is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, which corporation becomes a co-issuer of the Notes pursuant to a
supplemental indenture duly and validly executed by the Trustee;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition
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has been made assumes all the obligations of the Company under the Notes,
this Indenture and the Registration Rights Agreement pursuant to
agreements reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of
Default exists;
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been made
would, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if the same had occurred
at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09(a) hereof, and
(5) the Trustee shall have received an opinion of counsel
satisfactory to the Trustee stating that the Parity Lien granted under the
Security Documents on the Collateral to secure the Notes shall be an
enforceable and perfected second-priority Lien after giving effect to such
consolidation, merger, sale, assignment, transfer, conveyance or other
disposition.
In addition, the Company shall not, directly or indirectly, lease all or
substantially all of the properties and assets of it and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any other
Person.
(b) Section 5.01(a) shall not apply to:
(1) a merger of the Company with an Affiliate solely for the purpose
of reincorporating the Company in another jurisdiction; or
(2) any consolidation or merger, or any sale, assignment, transfer,
conveyance, lease or other disposition of assets between or among the
Company and its Restricted Subsidiaries.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
properties or assets of the Company in a transaction that is subject to, and
that complies with the provisions of, Section 5.01 hereof, the successor Person
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor Person and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets in a transaction that is subject to,
and that complies with the provisions of, Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
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(a) default for 30 days in the payment when due of interest on, or Special
Interest, if any, with respect to, the Notes;
(b) default in the payment when due (at maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on, the Notes;
(c) failure by the Company or any of its Restricted Subsidiaries to comply
with Sections 4.07, 4.09, 4.10, 4.15 or 5.01 hereof;
(d) failure by the Company or any of its Restricted Subsidiaries for 60
days after notice to the Company by the Trustee or the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding voting as a single
class to comply with any of the other agreements in this Indenture or the
Security Documents;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), including, without limitation, the Hedge Agreement, whether such
Indebtedness or Guarantee now exists, or is created after the date of this
Indenture, if that default:
(1) is caused by a failure to pay principal of, or interest or
premium, if any, on, such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
(2) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10.0 million or more;
(f) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments entered by a court or courts of competent jurisdiction
aggregating in excess of $10.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days;
(g) the occurrence of any of the following:
(1) except as permitted by this Indenture, any security document
ceases for any reason to be fully enforceable; provided, that it will not
be an Event of Default under this clause (g)(1) if the sole result of the
failure of one or more Security Documents to be fully enforceable is that
any Parity Lien purported to be granted under such Security Documents on
Collateral, individually or in the aggregate, having a Fair Market Value
of not more than $10.0 million ceases to be an enforceable and perfected
third-priority Lien, subject only to Permitted Prior Liens;
(2) any Parity Lien purported to be granted under any security
document on Collateral, individually or in the aggregate, having a Fair
Market Value in excess of $10.0 million ceases to be an enforceable and
perfected second-priority Lien, subject only to Permitted Prior Liens; or
(3) the Company or any other Pledgor, or any Person acting on behalf
of any of them, denies or disaffirms, in writing, any obligation of the
Company or any other Pledgor set forth in or arising under any security
document;
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(h) except as permitted by this Indenture, any Note Guarantee is held in
any judicial proceeding to be unenforceable or invalid or ceases for any reason
to be in full force and effect, or any Guarantor, or any Person acting on behalf
of any Guarantor, denies or disaffirms its obligations under its Note Guarantee;
(i) the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company
that, taken together, would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:
(1) commences a voluntary case;
(2) consents to the entry of an order for relief against it in an
involuntary case;
(3) consents to the appointment of a custodian of it or for all or
substantially all of its property;
(4) makes a general assignment for the benefit of its creditors; or
(5) generally is not paying its debts as they become due; and
(j) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(1) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary in an involuntary case;
(2) appoints a custodian of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary or for all or substantially all of the property of
the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary; or
(3) orders the liquidation of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (h) or (i) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary of
the Company that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes shall become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare all the Notes to be due and
payable immediately,
Upon any such declaration, the Notes shall become due and payable
immediately.
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The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may, on behalf of all of the
Holders, rescind an acceleration and its consequences, if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium or Special Interest, if
any, that has become due solely because of the acceleration) have been cured or
waived.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, subject
to the provisions of the Collateral Trust Agreement, pursue any available remedy
to collect the payment of principal, premium and Special Interest, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Special Interest, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
Subject to Article 7, in case an Event of Default occurs and is
continuing, the Trustee shall be under no obligation to exercise any of the
rights or powers under this Indenture at the request or direction of any Holders
of Notes unless such Holders have offered to the Trustee reasonable indemnity or
security against any loss, liability or expense. Except to enforce the right to
receive payment of principal, premium, if any, or interest or Special Interest,
if any, when due, no Holder of a Note may pursue any remedy with respect to this
Indenture or the Notes unless:
(a) such Holder gives to the Trustee written notice that an Event of
Default is continuing;
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(b) Holders of at least 25% in aggregate principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to the Trustee
security or indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(e) during such 60-day period, Holders of a majority in aggregate
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with such request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Special Interest,
if any, and interest on the Note, on or after the respective due dates expressed
in the Note (including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder; provided
that a Holder shall not have the right to institute any such suit for the
enforcement of payment if and to the extent that the institution or prosecution
thereof or the entry of judgment therein would, under applicable law, result in
the surrender, impairment, waiver or loss of the Lien of this Indenture upon any
property subject to such Lien.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as Trustee of an express trust against the Company for the whole amount of
principal of, premium and Special Interest, if any, and interest remaining
unpaid on, the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and
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other properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, to the
extent such money is not required to be paid to the Collateral Trustee for
application in accordance with the Collateral Trust Agreement, it shall pay out
the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium and Special Interest, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal, premium and Special Interest, if any and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
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 of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this
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Indenture and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and 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.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and 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 that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
indemnity or security against the losses, liabilities and expenses that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(h) In no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.
(i) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
(j) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as Trustee (if this Indenture has been qualified under the TIA) or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
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If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or Special
Interest, if any, or interest on, any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed by the Trustee to the Company and filed by the Trustee
with the SEC and each stock exchange on which the Notes are listed in accordance
with TIA Section 313(d). The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as
shall be agreed in writing between the Company and the Trustee. The Trustee's
compensation shall not be limited by any law on compensation of a Trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
(b) The Company and the Guarantors shall, jointly and severally, indemnify
the Trustee and any successor Trustee against any and all losses, damages,
claims, liabilities or expenses, including taxes (other than those based upon,
measured by or determined by the income of the Trustee), incurred by it arising
out of or in connection with the acceptance or administration of its duties
under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company and the Guarantors (including this Section 7.07)
and defending itself against any claim (whether asserted by the Company, the
Guarantors, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, damage, claim, liability or expense may be attributable to
its negligence or bad faith. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company or any of the Guarantors of their
obligations hereunder. The Company or such Guarantor shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. Neither the Company nor any Guarantor need pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge and the resignation or removal
of the Trustee of this Indenture.
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(d) To secure the Company's and the Guarantors' payment obligations in
this Section 7.07, the Trustee shall have a Lien prior to the Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in aggregate principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) 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 aggregate principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor ▇▇▇▇▇▇▇ does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction at the
expense of the Company (in the case of the Trustee) for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee; provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07
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hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by ▇▇▇▇▇▇, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may at any time, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) and pursuant to Section 10.03
hereof, the Collateral Trustee's Liens upon the Collateral in respect of the
Notes shall be terminated and discharged, on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and the Guarantors shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
(including the Note Guarantees), which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder:
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(a) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium and Special Interest, if
any, on, such Notes when such payments are due from the trust referred to in
Section 8.04 hereof;
(b) the Company's obligations with respect to such Notes under Article 2
and Section 4.02 hereof;
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' obligations in connection
therewith; and
(d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from each of their obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19
and 4.20 hereof and clause (4) of Section 5.01 hereof with respect to the
outstanding Notes (including the Note Guarantees) and pursuant to Section 10.03
hereof, the Collateral Trustee's Liens upon the Collateral in respect of the
Notes shall be terminated and discharged, on and after the date the conditions
set forth in Section 8.04 hereof are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Note Guarantees, the Company and the Guarantors may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant (or such Note Guarantee), whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(e) hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as shall be sufficient, in
the opinion of a nationally recognized investment bank, appraisal firm, or firm
of independent public accountants, to pay the principal of, premium and Special
Interest, if any, and interest on, the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be, and
the Company must specify whether the Notes are being defeased to such stated
date for payment or to a particular redemption date;
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(b) in the case of an election under Section 8.02 hereof, the Company must
deliver to the Trustee an Opinion of Counsel confirming that:
(1) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling; or
(2) since the date of this Indenture, there has been a change in the
applicable federal income tax law,
in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the outstanding Notes shall not
recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company must
deliver to the Trustee an Opinion of Counsel confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit) and the deposit shall
not result in a breach or violation of, or constitute a default under, any other
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Company or others; and
(g) the Company must deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent relating to
the Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become
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due thereon in respect of principal, premium and Special Interest, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium or Special
Interest, if any, or interest on, any Note and remaining unclaimed for two years
after such principal, premium or Special Interest, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Note shall thereafter be permitted to look only to the Company for payment
thereof, 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; 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 the New York Times and The Wall Street
Journal (national edition), 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 notification or publication, any unclaimed balance of such money
then remaining shall be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Notes and the Note Guarantees shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Special Interest, if any, or interest on, any Note following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
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Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
or the Note Guarantees without the consent of any Holder of Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes and Note Guarantees by a successor to
the Company or such Guarantor pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any Holder;
(e) to comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA;
(f) to make, complete or confirm any grant of Collateral permitted or
required by this Indenture or any of the Security Documents or any release of
Collateral that becomes effective as set forth in this Indenture or any of the
Security Documents;
(g) to conform the text of this Indenture, the Note Guarantees, the
Security Documents and/or the Notes to any provision of the "Description of
Notes" section of the Company's Offering Circular dated July 1, 2004, relating
to the initial offering of the Notes, to the extent that such provision in that
"Description of Notes" was intended to be a verbatim recitation of a provision
of this Indenture, the Note Guarantees, the Security Documents or the Notes;
(h) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof; or
(i) to allow any Guarantor to execute a supplemental indenture and/or a
Note Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee
may amend or supplement this Indenture (including, without limitation, Section
3.09, 4.10 and 4.15 hereof) and the Notes and the Note Guarantees with the
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes (including, without limitation, Additional Notes, if
any) voting as a single class (including, without limitation, consents obtained
in connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
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principal of, premium or Special Interest, if any, or interest on, the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture or the Notes or the Note
Guarantees may be waived with the consent of the Holders of a majority in
aggregate principal amount of the then outstanding Notes (including, without
limitation, Additional Notes, if any) voting as a single class (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall
determine which Notes are considered to be "outstanding" for purposes of this
Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it is sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes or the Note Guarantees. However,
without the consent of each Holder affected, an amendment, supplement or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note or
alter or waive any of the provisions with respect to the redemption of the Notes
(except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal of, or
premium or Special Interest, if any, or interest on, the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or interest or premium or Special Interest, if any, on, the
Notes;
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(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 3.09, 4.10 or 4.15 hereof);
(h) release any Guarantor from any of its obligations under its Note
Guarantee or this Indenture, except in accordance with the terms of this
Indenture; or
(i) make any change in the preceding amendment and waiver provisions.
In addition, any amendment to, or waiver of, the provisions of this
Indenture or any security document that has the effect of releasing any portion
of the Collateral from the Liens securing the Notes shall require the consent of
the Holders of at least 66-2/3% in aggregate principal amount of the Notes then
outstanding.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting ▇▇▇▇▇▇'s Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amended or supplemental indenture until the Board of Directors
of the Company approves it. In executing any amended or supplemental indenture,
the Trustee shall receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10
COLLATERAL AND SECURITY
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Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Parity Lien
Debt.
Notwithstanding: (1) anything to the contrary contained in the Security
Documents; (2) the time of incurrence of any Series of Parity Lien Debt; (3) the
order or method of attachment or perfection of any Liens securing any Series of
Parity Lien Debt; (4) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral; (5) the time of taking possession or control over any
Collateral; (6) that any Parity Lien may not have been perfected or may be or
have become subordinated, by equitable subordination or otherwise, to any other
Lien; or (7) the rules for determining priority under any law governing relative
priorities of Liens:
(a) all Parity Liens granted at any time by the Company or any other
Pledgor shall secure, equally and ratably, all present and future Parity Lien
Obligations; and
(b) all proceeds of all Parity Liens granted at any time by the Company or
any other Pledgor shall be allocated and distributed equally and ratably on
account of the Parity Lien Debt and other Parity Lien Obligations.
The foregoing provision is intended for the benefit of, and shall be
enforceable as a third party beneficiary by, each present and future holder of
Parity Lien Obligations, each present and future Parity Lien Representative and
the Collateral Trustee as holder of Parity Liens. The Parity Lien Representative
of each future Series of Parity Lien Debt shall be required to deliver a Lien
Sharing and Priority Confirmation to the Collateral Trustee and the Trustee at
the time of incurrence of such Series of Parity Lien Debt.
Section 10.02 Ranking of Parity Liens.
Notwithstanding: (1) anything to the contrary contained in the Security
Documents; (2) the time of incurrence of any Series of Secured Debt; (3) the
order or method of attachment or perfection of any Liens securing any Series of
Secured Debt; (4) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral; (5) the time of taking possession or control over any
Collateral; (6) that any Priority Lien may not have been perfected or may be or
have become subordinated, by equitable subordination or otherwise, to any other
Lien; or (7) the rules for determining priority under any law governing relative
priorities of Liens, all Parity Liens at any time granted by the Company or any
other Pledgor shall be subject and subordinate to all Priority Liens securing
Priority Lien Obligations up to the Priority Lien Cap.
The foregoing provision is intended for the benefit of, and shall be
enforceable as a third party beneficiary by, each present and future holder of
Priority Lien Obligations, each present and future Priority Lien Representative
and the Collateral Trustee as holder of the Priority Liens. No other Person
shall be entitled to rely on, have the benefit of or enforce those provisions.
The Parity Lien Representative of each future Series of Parity Lien Debt shall
be required to deliver a Lien Sharing and Priority Confirmation to the
Collateral Trustee and each Priority Lien Representative at the time of
incurrence of such Series of Parity Lien Debt.
In addition, the foregoing provision is intended solely to set forth the
relative ranking, as Liens, of the Liens securing Parity Lien Debt as against
the Priority Liens. Neither the Notes, the creditors in respect of Indebtedness
under the Hedge Agreement nor any holder of other Parity Lien Obligations nor
the exercise or enforcement of any right or remedy for the payment or collection
thereof are intended to be, or shall ever be by reason of the foregoing
provision, in any respect subordinated, deferred, postponed, restricted or
prejudiced.
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Section 10.03 Release of Liens in Respect of Notes.
The Collateral Trustee's Liens upon the Collateral shall no longer secure
the Notes outstanding under this Indenture or any other Obligations under this
Indenture, and the right of the Holders of the Notes and such Obligations to the
benefits and proceeds of the Collateral Trustee's Liens on the Collateral shall
terminate and be discharged:
(a) upon satisfaction and discharge of this Indenture as set forth under
Article 12 hereof;
(b) upon a Legal Defeasance or Covenant Defeasance of the Notes as set
forth under Article 8 hereof;
(c) upon payment in full and discharge of all Notes outstanding under this
Indenture and all Obligations that are outstanding, due and payable under this
Indenture at the time the Notes are paid in full and discharged;
(d) in whole or in part, with the consent of the Holders of the requisite
percentage of Notes in accordance with Article 9 hereof; or
(e) upon release of the Liens securing the Priority Lien Debt and the
Hedge Agreement; provided, however, that if, at any time following such release,
any Liens upon the Collateral are granted to secure any Priority Lien Debt or
the Hedge Agreement, then such liens shall also be granted to secure the Notes.
Section 10.04 Relative Rights.
Nothing in the Note Documents shall:
(a) impair, as between the Company and the Holders of the Notes, the
obligation of the Company to pay principal of, premium and interest and Special
Interest, if any, on the Notes in accordance with their terms or any other
obligation of the Company or any other Pledgor;
(b) affect the relative rights of Holders of Notes as against any other
creditors of the Company or any other Pledgor (other than holders of Priority
Liens, Permitted Prior Liens or other Parity Liens);
(c) restrict the right of any Holder of Notes to sue for payments that are
then due and owing (but not enforce any judgment in respect thereof against any
Collateral to the extent specifically prohibited under the Collateral Trust
Agreement);
(d) restrict or prevent any Holder of Notes, any creditor in respect of
Indebtedness under the Hedge Agreement or any holder of other Parity Lien
Obligations, the Collateral Trustee or any Parity Lien Representative from
exercising any of its rights or remedies upon a Default or Event of Default not
specifically restricted or prohibited by the Collateral Trust Agreement; or
(e) restrict or prevent any Holder of Notes, any creditor in respect of
Indebtedness under the Hedge Agreement or any holder of other Parity Lien
Obligations, the Collateral Trustee or any Parity Lien Representative from
taking any lawful action in an Insolvency or Liquidation Proceeding not
specifically restricted or prohibited by the Collateral Trust Agreement.
Section 10.05 Compliance with Trust Indenture Act.
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The Company shall comply with the provisions of TIA Section 314.
To the extent applicable, the Company shall cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of
property or securities subject to the Lien of the Security Documents, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected by or reasonably satisfactory to the Trustee. Notwithstanding anything
to the contrary in this paragraph, the Company shall not be required to comply
with all or any portion of TIA Section 314(d) if it determines, in good faith
based on advice of counsel, that under the terms of TIA Section 314(d) and/or
any interpretation or guidance as to the meaning thereof of the SEC and its
staff, including "no action" letters or exemptive orders, all or any portion of
TIA Section 314(d) is inapplicable to one or a series of released Collateral.
Section 10.06 Further Assurances; Insurance.
(a) The Company and each of the other Pledgors shall do or cause to be
done all acts and things that may be required, or that the Collateral Trustee
from time to time may reasonably request, to assure and confirm that the
Collateral Trustee holds, for the benefit of the holders of Secured Obligations,
duly created and enforceable and perfected Liens upon the Collateral (including
any property or assets that are acquired or otherwise become Collateral after
the Notes are issued), in each case, as contemplated by, and with the Lien
priority required under, the Secured Debt Documents.
If the Company or any of the Pledgors acquires any material proved
producing Hydrocarbon Properties or develops any Hydrocarbon Properties that are
producing in commercial quantities, then the Company or such Pledgor shall, not
less than semi-annually, take all such actions and execute all documents that
the Collateral Trustee may reasonably request to create in favor of the
Collateral Trustee, for the benefit of the holders of the Secured Obligations,
valid and perfected security interests in such Hydrocarbon Properties.
Upon the reasonable request of the Collateral Trustee or any Secured Debt
Representative at any time and from time to time, the Company and each of the
other Pledgors shall promptly execute, acknowledge and deliver such Security
Documents, instruments, certificates, notices and other documents, and take such
other actions as shall be reasonably required, or that the Collateral Trustee
may reasonably request, to create, perfect, protect, assure or enforce the Liens
and benefits intended to be conferred, in each case as contemplated by the
Secured Debt Documents for the benefit of the holders of Secured Obligations.
(b) The Company and the other Pledgors shall:
(1) keep their properties adequately insured at all times by
financially sound and reputable insurers;
(2) maintain such other insurance, to such extent and against such
risks (and with such deductibles, retentions and exclusions), including
fire and other risks insured against by extended coverage and coverage for
acts of terrorism, as is customary with companies in the same or similar
businesses operating in the same or similar locations, including public
liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of
any properties owned, occupied or controlled by them;
(3) maintain such other insurance as may be required by law; and
89
(4) maintain such other insurance as may be required by the Security
Documents.
(c) Upon the request of the Collateral Trustee, the Company and the other
Pledgors shall furnish to the Collateral Trustee full information as to their
property and liability insurance carriers. Holders of Secured Obligations, as a
class, shall be named as additional insureds, with a waiver of subrogation, on
all insurance policies of the Company and the other Pledgors and the Collateral
Trustee shall be named as loss payee, with 30 days' notice of cancellation or
material change, on all property and casualty insurance policies of the Company
and the other Pledgors.
ARTICLE 11
NOTE GUARANTEES
Section 11.01 Guarantee.
(a) Subject to this Article 12, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees on a second-priority basis to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that:
(1) the principal, premium and Special Interest, if any, and
interest on, the Notes shall 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 Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee hereunder
or thereunder shall 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
Notes or any of such other obligations, that same shall 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.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes 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 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 and all demands whatsoever
and covenant that this Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
90
(d) Each Guarantor agrees that 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
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Note Guarantee.
Section 11.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor shall be limited to the maximum amount that shall, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.03 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 11.01 hereof, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit D hereto shall be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section
11.01 hereof shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Note Guarantee set forth in this
Indenture on behalf of the Guarantors.
In the event that the Company or any of its Restricted Subsidiaries
creates or acquires any Domestic Subsidiary after the date of this Indenture, if
required by Section 4.17 hereof, the Company shall cause such Domestic
Subsidiary to comply with the provisions of Section 4.17 hereof and this Article
11, to the extent applicable.
Section 11.04 Guarantors May Consolidate, etc., on Certain Terms.
91
Except as otherwise provided in Section 11.05 hereof, no Guarantor may
sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless:
(a) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(b) either:
(1) subject to Section 11.05 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally assumes all the
obligations of that Guarantor under this Indenture, its Note Guarantee and
the Registration Rights Agreement on the terms set forth herein or
therein, pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee; or
(2) the Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of this Indenture, including
without limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the Note
Guarantee endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of this Indenture to be performed by the Guarantor,
such successor Person shall succeed to and be substituted for the Guarantor with
the same effect as if it had been named herein as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (b)(1) and (b)(2) above, nothing contained in this Indenture or in any
of the Notes shall prevent any consolidation or merger of a Guarantor with or
into the Company or another Guarantor, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety to
the Company or another Guarantor.
Section 11.05 Releases.
(a) The Guarantee of a Guarantor shall be released:
(1) In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of any Guarantor, in each case to a Person that is not
(either before or after giving effect to such transactions) the Company or
a Restricted Subsidiary of the Company, then such Guarantor (in the event
of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or the
corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor)
will be released and relieved of any obligations under its Note Guarantee;
provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of
Counsel to
92
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without
limitation Section 4.10 hereof, the Trustee will execute any documents
reasonably required in order to evidence the release of any Guarantor from
its obligations under its Note Guarantee.
(2) Upon designation of any Guarantor as an Unrestricted Subsidiary
in accordance with the terms of this Indenture, such Guarantor will be
released and relieved of any obligations under its Note Guarantee.
(3) If any Guarantor is released from its Guarantee of Priority Lien
Debt and the Hedge Agreement, such Guarantor will be released and relieved
of any obligations under its Note Guarantee; provided, however, that if,
at any time following such release, that Guarantor provides a Guarantee of
any Priority Lien Debt or the Hedge Agreement, then such Guarantor shall
be required to provide a Note Guarantee at such time.
(4) Upon Legal Defeasance or Covenant Defeasance in accordance with
Article 8 hereof or satisfaction and discharge of this Indenture in
accordance with Article 12 hereof, each Guarantor will be released and
relieved of any obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note Guarantee
as provided in this Section 11.05 shall remain liable for the full amount of
principal of and interest and premium and Special Interest, if any, on the Notes
and for the other obligations of any Guarantor under this Indenture as provided
in this Article 11.
ARTICLE 12
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of further effect
as to all Notes issued hereunder, when:
(a) either:
(1) all Notes that have been authenticated, except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company, have been delivered to the Trustee for
cancellation; or
(2) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or shall become due and payable within
one year and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as shall be
sufficient, without consideration of any reinvestment of interest, to pay
and discharge the entire Indebtedness on the Notes not delivered to the
Trustee for cancellation for principal, premium and Special Interest, if
any, and accrued interest to the date of maturity or redemption;
(b) no Default or Event of Default has occurred and is continuing on the
date of such deposit (other than a Default or Event of Default resulting from
the borrowing of funds to be applied to such deposit) and the deposit shall not
result in a breach or violation of, or constitute a default under, any other
93
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound;
(c) the Company or any Guarantor has paid or caused to be paid all sums
payable by it under this Indenture; and
(d) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or on the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section 12.01, the provisions of Sections 11.02 and 8.06 hereof shall
survive. In addition, nothing in this Section 12.01 shall be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with
the Trustee pursuant to Section 12.01 hereof shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium and Special Interest, if any)
and interest for whose payment such money has been deposited with the Trustee;
but such money need not be segregated from other funds except to the extent
required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 12.01 hereof 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 any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 12.01 hereof; provided that if the Company has made any payment of
principal of, premium or Special Interest, if any, or interest on, any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or Government Securities held by the Trustee or Paying Agent.
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee
to the others is duly given if in writing and delivered in Person or by first
class mail (registered or certified, return receipt
94
requested), facsimile transmission or overnight air courier guaranteeing next
day delivery, to the others' address:
If to the Company and/or any Guarantor:
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇, Esq.
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-0040
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
If to the Trustee:
BNY Midwest Trust Company
Corporate Trust Department
▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
The Company, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
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.
95
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which must include the statements set forth in Section 13.05
hereof) stating that, in the opinion of the signers, all conditions precedent
and covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which must include the statements set forth in Section 13.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
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 (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
96
No director, officer, employee, incorporator or stockholder of the Company
or any Guarantor, as such, shall have any liability for any obligations of the
Company or the Guarantors under the Notes, this Indenture, the Note Guarantees,
the Note Documents or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
All agreements of the Company in this Indenture and the Notes shall bind
its successors. All agreements of the Trustee in this Indenture shall bind its
successors. All agreements of each Guarantor in this Indenture shall bind its
successors, except as otherwise provided in Section 11.05 hereof.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
97
SIGNATURES
Dated as of July 7, 2004
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
THE CANTON OIL & GAS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
▇▇▇▇ LAKE DRILLING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
BNY MIDWEST TRUST COMPANY
By: /s/ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
[Face of Global Note]
CUSIP/CINS _________
8.75% Senior Secured Notes due 2012
No. ___ $____________
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
promises to pay to [____________] or registered assigns, the principal sum of
__________________________________________________________ DOLLARS on
_____________, 2012.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Dated: July __, 2004
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
By: _________________________________
Name:
Title:
This is one of the Global Notes referred
to in the within-mentioned Indenture:
BNY MIDWEST TRUST COMPANY,
as Trustee
By: _______________________________________
Authorized Signatory
A-1
[Back of Global Note]
8.75% Senior Secured Notes due 2012
[Insert the Global Note Legend, if applicable, pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable, pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, an Ohio corporation (the
"Company"), promises to pay interest on the principal amount of this Note
at 8.75% per annum from July 7, 2004 until maturity and shall pay the
Special Interest, if any, payable pursuant to Section 2 of the
Registration Rights Agreement referred to below. The Company will pay
interest and Special Interest, if any, semi-annually in arrears on January
15 and July 15 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an "Interest Payment Date").
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred
to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date;
provided further that the first Interest Payment Date shall be January 15,
2005. The Company will pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium,
if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect to the extent lawful; it will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Special Interest,
if any, (without regard to any applicable grace periods) from time to time
on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Special Interest, if any, to the Persons
who are registered Holders of Notes at the close of business on the
January 1 or July 1 next preceding the Interest Payment Date, even if such
Notes are canceled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal,
premium and Special Interest, if any, and interest at the office or agency
of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest
and Special Interest, if any, may be made by check mailed to the Holders
at their addresses set forth in the register of Holders; provided that
payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium and Special Interest,
if any, on, all Global Notes and all other Notes the Holders of which will
have provided wire transfer instructions to the Company or the Paying
Agent. Such payment will be in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public
and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, BNY Midwest Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
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(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of July 7, 2004 (the "Indenture") among the Company, the Guarantors and
the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the TIA. The Notes
are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Notes are
secured obligations of the Company. The Notes are secured by security
interests in the Collateral pursuant to the Security Documents.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraphs (b) and (c) of this
Paragraph 5, the Company will not have the option to redeem the Notes
prior to July 15, 2008. On or after July 15, 2008, the Company will have
the option to redeem all or a part of the Notes upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Special Interest, if any, on the Notes redeemed to the
applicable redemption date, if redeemed during the twelve-month period
beginning on July 15 of the years indicated below, subject to the rights
of Holders on the relevant record date to receive interest on the relevant
interest payment date:
Year Percentage
---- ----------
2008............................... 104.375%
2009............................... 102.188%
2009 and thereafter................ 100.000%
Unless the Company defaults in the payment of the redemption price,
interest will cease to accrue on the Notes or portions thereof called for
redemption on the applicable redemption date.
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to July 15, 2007, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount
of Notes (including any Additional Notes) issued under the Indenture at a
redemption price of 108.750% of the principal amount, plus accrued and
unpaid interest and Special Interest, if any, to the redemption date, with
the net cash proceeds of an one or more Equity Offerings or a contribution
to the Company's common equity capital made with the net cash proceeds of
a concurrent offering of common stock of the Company's direct parent;
provided that at least 65% in aggregate principal amount of the Notes
(including any Additional Notes) issued under the Indenture (excluding
Notes held by the Company and its Subsidiaries) remains outstanding
immediately after the occurrence of such redemption and the redemption
occurs within 60 days of the date of the closing of such Equity Offering
or such contribution to the Company's common equity capital, as
applicable.
(c) Notwithstanding the provisions of subparagraphs (a) or (b)
of this Paragraph 5, at any time prior to July 15, 2008, the Company may
also redeem all or a part of the Notes, upon not less than 30 nor more
than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal
amount of Notes redeemed plus the Applicable Premium as of, and accrued
and unpaid interest and Special Interest, if any, to the date of
redemption, subject to the rights of Holders of Notes on the relevant
record date to receive interest due on the relevant interest payment date.
(6) MANDATORY REDEMPTION.
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The Company is not be required to make mandatory redemption or sinking
fund payments with respect to the Notes.
(7) REPURCHASE AT THE OPTION OF HOLDER.
(a) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to each Holder to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest
and Special Interest, if any, thereon to the date of purchase, subject to
the rights of Holders on the relevant record date to receive interest due
on the relevant interest payment date (the "Change of Control Payment").
Within 30 days following any Change of Control, the Company will mail a
notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
(b) Any Net Proceeds from Asset Sales or Casualty Events that
are not applied or invested as described in Section 4.10 of the Indenture
will constitute "Excess Proceeds." If following such application or
investment, the percentage of the Company's expected production volumes
hedged exceeds a range to be agreed between the Hedge Counterparty and the
Company at the time each hedge transaction is consummated, then the
Company shall terminate that portion of the ▇▇▇▇▇▇ necessary in order to
have the volumes hedged be within such range, and shall apply Excess
Proceeds to effect such termination. When the aggregate amount of Excess
Proceeds not so applied exceeds $15.0 million, within ten days thereof,
the Company will make an Asset Sale Offer to all Holders of Notes and all
holders of other Parity Lien Debt containing provisions similar to those
set forth in the Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal
amount of Notes and such other Parity Lien Debt that may be purchased out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be
equal to 100% of the principal amount plus accrued and unpaid interest and
Special Interest, if any, to the date of purchase and will be payable in
cash. If any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company may use those Excess Proceeds for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount
of Notes and other Parity Lien Debt tendered pursuant to such Asset Sale
Offer exceeds the amount of Excess Proceeds, the Trustee will select the
Notes and such other Parity Lien Debt to be purchased on a pro rata basis.
Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
will be reset at zero. Holders of Notes that are the subject of an offer
to purchase will receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" attached
hereto.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address, except
that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction or discharge of the Indenture. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $2,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes
and fees required by
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law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed
in part. Also, the Company need not exchange or register the transfer of
any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes or the Note Guarantees may be
amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
including Additional Notes, if any, voting as a single class, and any
existing Default or Event or Default or compliance with any provision of
the Indenture or the Notes or the Note Guarantees may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture
or the Notes or the Note Guarantees may be amended or supplemented to cure
any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or a Guarantor's obligations to Holders of the
Notes and Note Guarantees in case of a merger or consolidation, to make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to comply with the requirements of
the SEC in order to effect or maintain the qualification of the Indenture
under the TIA, to make, complete or confirm any grant of Collateral
permitted or required by the Indenture or any of the Security Documents or
any release of Collateral that becomes effective as set forth in the
Indenture or any of the Security Documents, to conform the text of the
Indenture, the Note Guarantees, the Security Documents and/or the Notes to
any provision of the "Description of Notes" section of the Company's
Offering Memorandum dated July 1, 2004, relating to the initial offering
of the Notes, to the extent that such provision in that "Description of
Notes" was intended to be a verbatim recitation of a provision of the
Indenture, the Note Guarantees, the Security Documents or the Notes, to
provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Note Guarantee
with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i) default
for 30 days in the payment when due of interest on, or Special Interest,
if any, with respect to the Notes; (ii) default in the payment when due
(at maturity, upon redemption or otherwise) of the principal of, or
premium, if any, on, the Notes; (iii) failure by the Company or any of its
Restricted Subsidiaries to comply with Section 4.07, 4.09, 4.10, 4.15 or
5.01 of the Indenture; (iv) failure by the Company or any of its
Restricted Subsidiaries for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding voting as a single class to comply with any of
the other agreements in the Indenture or the Security Documents; (v)
default under one of more instruments evidencing or securing Indebtedness
of the Company or any of its Restricted Subsidiaries having an outstanding
principal amount of $10.0 million or more that has resulted in the
acceleration of the payment of such Indebtedness or failure to pay
principal of, or interest or premium, if any, when due, subject to certain
exceptions; (vi) one of more final judgments for the payment of money in
an amount of $10.0 million or more that remain undischarged for a period
of 60 days; (vii) the occurrence of (a) any Security Document ceasing to
be enforceable. with certain exceptions, (b) any Parity Lien, individually
or in the aggregate, having a Fair Market Value in excess of $10.0
million, ceasing to
A-5
be an enforceable and perfect second-priority Lien, subject to Permitted
Prior Liens or (c) the Company or any other Pledgor denies or disaffirms
in writing any obligations of the Company or any other Pledgor set forth
in or arising under any Security Document; (viii) except as permitted by
the Indenture, any Note Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor,
denies or disaffirms its obligations under its Note Guarantee; and (ix)
certain events of bankruptcy or insolvency with respect to the Company or
any of its Restricted Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes may declare all the Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes will become due and payable immediately without
further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest or premium or
Special Interest, if any) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may, on behalf of the
Holders of all of the Notes, rescind an acceleration or waive any existing
Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest
or premium or Special Interest, if any, on, or the principal of, the
Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is
required, upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of
Default.
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal
with the Company or its Affiliates, as if it were not the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company or any of the Guarantors, as
such, will not have any liability for any obligations of the Company or
the Guarantors under the Notes, the Note Guarantees 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 Note waives and releases all
such liability. The waiver and release are part of the consideration for
the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(16) 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).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set
A-6
forth in the Registration Rights Agreement dated as of July 7, 2004, among
the Company, the Guarantors and the other parties named on the signature
pages thereof or, in the case of Additional Notes, Holders of Restricted
Global Notes and Restricted Definitive Notes will have the rights set
forth in one or more registration rights agreements, if any, among the
Company, the Guarantors and the other parties thereto, relating to rights
given by the Company and the Guarantors to the purchasers of any
Additional Notes (collectively, the "Registration Rights Agreement").
(18) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes, and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed
thereon.
(19) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE
GUARANTEES.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature:_______________________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
Section 4.10 Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$______________
Date: _______________
Your Signature:______________________________________
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.: _____________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
of this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount of decrease of Trustee or
Date of Exchange of this Global Note this Global Note (or increase) Custodian
---------------- ------------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global
form.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
[Registrar address block]
Re: 8.75% Senior Secured Notes Due 2012
Reference is hereby made to the Indenture, dated as of July 7, 2004 (the
"Indenture"), among ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, as issuer (the "Company"), the
Guarantors party thereto and BNY Midwest Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A.
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believes is purchasing the beneficial interest or Definitive Note for
its own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A, and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Restricted Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and, (iii) the transaction is
not part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser)]. Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be
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subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Restricted Definitive
Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL IN A RESTRICTED DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the
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restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive Notes and
in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_______________________________________
[Insert Name of Transferor]
By:____________________________________
Name:
Title:
Dated: _______________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
[Registrar address block]
Re: 8.75% Senior Secured Notes Due 2012
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of July 7, 2004 (the
"Indenture"), among ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, as issuer (the "Company"), the
Guarantors party thereto and BNY Midwest Trust Company, as trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
C-1
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_______________________________________
[Insert Name of Transferor]
By:____________________________________
Name:
Title:
Dated: _______________________
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EXHIBIT D
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of July 7, 2004 (the "Indenture") among
▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation, (the "Company"), the Guarantors party thereto and
BNY Midwest Trust Company, as trustee (the "Trustee"), (a) the due and punctual
payment of the principal of, premium and Special Interest, if any, and interest
on, the Notes, whether at maturity, by acceleration, redemption or otherwise,
the due and punctual payment of interest on overdue principal of and interest on
the Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that 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.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Note Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the
same, (a) agrees to and shall be bound by such provisions (b) authorizes and
directs the Trustee, on behalf of such Holder, to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such
purpose.
Capitalized terms used but not defined herein have the meanings given to
them in the Indenture.
[NAME OF ▇▇▇▇▇▇▇▇▇(S)]
By: __________________________________
Name:
Title:
D-1
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of ▇▇▇▇▇▇ & ▇▇▇▇▇ Corporation (or its permitted
successor), an Ohio corporation (the "Company"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and BNY Midwest
Trust Company, as trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of July 7, 2004 providing for the
issuance of 8.75% Senior Secured Notes due 2012 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Note Guarantee and in the Indenture including but not limited
to Article 11 thereof.
4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
E-1
7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _________________________________
Name:
Title:
▇▇▇▇▇▇ & ▇▇▇▇▇ CORPORATION
By: _________________________________
Name:
Title:
THE CANTON OIL & GAS COMPANY
By: _________________________________
Name:
Title:
▇▇▇▇ LAKE DRILLING, INC.
By: _________________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, as Trustee
By: _________________________________
Authorized Signatory
E-3
SCHEDULE 1
GUARANTORS
The following schedule lists each Guarantor of the Notes as of the date of the
Indenture:
GUARANTORS STATE OF INCORPORATION OR FORMATION
---------- -----------------------------------
1. The Canton Oil & Gas Company Ohio
2. ▇▇▇▇ Lake Drilling, Inc. Michigan
Schedule 1