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EXHIBIT 4.2
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HS RESOURCES, INC.
AND
SUBSIDIARY GUARANTORS
$150,000,000
9-1/4% Senior Subordinated Notes due 2006
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INDENTURE
Dated as of November 27, 1996
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▇▇▇▇▇▇ TRUST AND SAVINGS BANK
Trustee
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TABLE OF CONTENTS
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ARTICLE 1 Definitions and Incorporation by Reference . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . 21
ARTICLE 2 The Securities . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . 21
SECTION 2.02. Execution and Authentication . . . . . . . . . . . . 21
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . 22
SECTION 2.04. Paying Agent To Hold Money in Trust . . . . . . . . 22
SECTION 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.06. Replacement Securities . . . . . . . . . . . . . . . 23
SECTION 2.07. Outstanding Securities . . . . . . . . . . . . . . . 23
SECTION 2.08. Temporary Securities . . . . . . . . . . . . . . . . 23
SECTION 2.09. Cancellation . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.10. Defaulted Interest . . . . . . . . . . . . . . . . . 23
SECTION 2.11. CUSIP Numbers . . . . . . . . . . . . . . . . . . . 24
ARTICLE 3 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . 24
SECTION 3.02. Selection of Securities To Be Redeemed . . . . . . . 24
SECTION 3.03. Notice of Redemption . . . . . . . . . . . . . . . . 25
SECTION 3.04. Effect of Notice of Redemption . . . . . . . . . . . 24
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . 25
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . 25
ARTICLE 4 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . 25
SECTION 4.02. Commission Reports . . . . . . . . . . . . . . . . . 26
SECTION 4.03. Limitation on Indebtedness . . . . . . . . . . . . . 26
SECTION 4.04. Limitation on Restricted Payments . . . . . . . . . 27
SECTION 4.05. Limitation on Payment Restrictions Affecting Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.06. Limitation on Asset Sales . . . . . . . . . . . . . 30
SECTION 4.07. Limitation on Transactions with Affiliates . . . . . 32
SECTION 4.08. Limitation on Issuance and Sale of Capital Stock of
Restricted Subsidiaries . . . . . . . . . . . . . . . 33
SECTION 4.09. Change of Control . . . . . . . . . . . . . . . . . 34
SECTION 4.10. Limitation on Liens . . . . . . . . . . . . . . . . 34
SECTION 4.11. Limitation on Layered Indebtedness . . . . . . . . . 35
SECTION 4.12. Future Guarantors . . . . . . . . . . . . . . . . . 35
SECTION 4.13. Maintenance of Office or Agency . . . . . . . . . . 35
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SECTION 4.14. Money for the Security Payments to be Held in Trust 35
SECTION 4.15. Payment of Taxes and Other Claims . . . . . . . . . 36
SECTION 4.16. Corporate Existence . . . . . . . . . . . . . . . . 36
SECTION 4.17. Compliance Certificate . . . . . . . . . . . . . . . 36
SECTION 4.18. Further Instruments and Acts . . . . . . . . . . . . 37
SECTION 4.19. Prohibition on Company and Guarantors Becoming
Investment Companies. . . . . . . . . . . . . . . . . 37
SECTION 4.20. Stay, Extension and Usury Laws . . . . . . . . . . . 37
ARTICLE 5 Successor Company . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.01. Merger, Consolidation and Sale of Substantially All
Assets . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.02. When a Subsidiary Guarantor May Merge or Transfer
Assets . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 6 Defaults and Remedies . . . . . . . . . . . . . . . . . . . 40
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . 40
SECTION 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . 42
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . 42
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . 43
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . 43
SECTION 6.07. Rights of Holders to Receive Payment . . . . . . . . 43
SECTION 6.08. Collection Suit by Trustee . . . . . . . . . . . . . 43
SECTION 6.09. Trustee May File Proofs of Claim . . . . . . . . . . 43
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . 44
ARTICLE 7 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . 44
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . 45
SECTION 7.03. Individual Rights of Trustee . . . . . . . . . . . . 46
SECTION 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . 47
SECTION 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . 47
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . 47
SECTION 7.07. Compensation and Indemnity . . . . . . . . . . . . . 47
SECTION 7.08. Replacement of Trustee . . . . . . . . . . . . . . . 48
SECTION 7.09. Successor Trustee by Merger . . . . . . . . . . . . 48
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . 49
SECTION 7.11. Preferential Collection of Claims Against Company . 49
ARTICLE 8 Discharge of Indenture; Defeasance . . . . . . . . . . . . . 49
SECTION 8.01. Discharge of Liability on Securities . . . . . . . . 49
SECTION 8.02 Defeasance . . . . . . . . . . . . . . . . . . . . . 49
SECTION 8.03. Conditions to Defeasance . . . . . . . . . . . . . . 50
SECTION 8.04. Application of Trust Money . . . . . . . . . . . . . 51
SECTION 8.05. Repayment to Company . . . . . . . . . . . . . . . . 51
SECTION 8.06. Indemnity for Government Obligations . . . . . . . . 51
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SECTION 8.07. Reinstatement . . . . . . . . . . . . . . . . . . . 51
ARTICLE 9 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.01. Without Consent of Holders . . . . . . . . . . . . . 52
SECTION 9.02. With Consent of Holders. . . . . . . . . . . . . . . 52
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . 53
SECTION 9.04. Revocation and Effect of Consents and Waivers . . . 53
SECTION 9.05. Notation on or Exchange of Securities . . . . . . . 54
SECTION 9.06. Trustee To Sign Amendments . . . . . . . . . . . . . 54
SECTION 9.07. Payment for Consent . . . . . . . . . . . . . . . . 54
ARTICLE 10 Subordination of the Securities . . . . . . . . . . . . . . 54
SECTION 10.01. Agreement to Subordinate . . . . . . . . . . . . . 54
SECTION 10.02. Liquidation; Dissolution; Bankruptcy . . . . . . . 55
SECTION 10.03. Default on Senior Indebtedness . . . . . . . . . . 57
SECTION 10.04. Security Payments Permitted if No Default . . . . . 58
SECTION 10.05. When Security Payment Must Be Paid Over . . . . . . 58
SECTION 10.06. Notices by the Company . . . . . . . . . . . . . . 58
SECTION 10.07. Subrogation . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.08. Relative Rights . . . . . . . . . . . . . . . . . . 59
SECTION 10.09. Subordination May Not Be Impaired by the Company . 59
SECTION 10.10. Distribution of Notice to Representative . . . . . 59
SECTION 10.11. Rights of Trustee and Paying Agent . . . . . . . . 59
SECTION 10.12. Consent of Holders of Specified Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 60
SECTION 10.13. Contractual Subordination . . . . . . . . . . . . . 60
ARTICLE 11 Subsidiary Guaranties . . . . . . . . . . . . . . . . . . . 60
SECTION 11.01 Guaranties . . . . . . . . . . . . . . . . . . . . . 60
SECTION 11.02 Limitation on Liability . . . . . . . . . . . . . . 62
SECTION 11.03 Successors and Assigns . . . . . . . . . . . . . . . 62
SECTION 11.04 No Waiver . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11.05 Modification . . . . . . . . . . . . . . . . . . . 62
SECTION 11.06 Release of Subsidiary Guarantor . . . . . . . . . . 62
SECTION 11.07 Execution of Supplemental Indenture for Future
Subsidiary Guarantors . . . . . . . . . . . . . . . 63
ARTICLE 12 Subordination of Subsidiary Guaranties . . . . . . . . . . . 63
SECTION 12.01. Agreement to Subordinate . . . . . . . . . . . . . 63
SECTION 12.02. Liquidation; Dissolution; Bankruptcy . . . . . . . 64
SECTION 12.03. Default on Subsidiary Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 65
SECTION 12.04. Guarantee Payments Permitted if No Default . . . . 67
SECTION 12.05. When Guaranty Payment Must Be Paid Over . . . . . . 67
SECTION 12.06. Notices by a Subsidiary Guarantor . . . . . . . . . 67
SECTION 12.07. Subrogation . . . . . . . . . . . . . . . . . . . . 67
SECTION 12.08. Relative Rights . . . . . . . . . . . . . . . . . . 68
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SECTION 12.09. Subordination May Not be Impaired by the Subsidiary
Guarantor . . . . . . . . . . . . . . . . . . . . . 68
SECTION 12.10. Distribution or Notice to Representative . . . . . 68
SECTION 12.11. Rights of Trustee and Paying Agent . . . . . . . . 68
SECTION 12.12. Consent of Holders of Subsidiary Guarantor Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 69
SECTION 12.13. Contractual Subordination . . . . . . . . . . . . . 69
ARTICLE 13 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 13.01. Compliance Certificates and Opinions . . . . . . . 69
SECTION 13.02. Form of Documents Delivered to Trustee . . . . . . 70
SECTION 13.03. Acts of Holders . . . . . . . . . . . . . . . . . . 70
SECTION 13.04. Trust Indenture Act Controls . . . . . . . . . . . 71
SECTION 13.05. Notices . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 13.06. Communication by Holders with Other Holders . . . . 72
SECTION 13.07. When Securities Disregarded . . . . . . . . . . . . 72
SECTION 13.08. Rules by Trustee, Paying Agent and Registrar . . . 73
SECTION 13.09. Legal Holidays . . . . . . . . . . . . . . . . . . 73
SECTION 13.10. Governing Law . . . . . . . . . . . . . . . . . . . 73
SECTION 13.11. No Recourse Against Others . . . . . . . . . . . . 73
SECTION 13.12. Submission to Jurisdiction; Appointment of Agent
for Service of Process; Waiver of Immunities . . . . 73
SECTION 13.13. Successors . . . . . . . . . . . . . . . . . . . . 74
SECTION 13.14. Multiple Originals . . . . . . . . . . . . . . . . 74
SECTION 13.15. Table of Contents; Headings . . . . . . . . . . . . 74
Appendix A Provisions Relating to Initial
Securities and Exchange Securities
Exhibit 1 to
Appendix A Form of Initial Security
Exhibit A Form of Exchange Security
Exhibit B Form of Supplemental Indenture
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INDENTURE dated as of November 27, 1996, among HS RESOURCES, INC., a
Delaware corporation (the "Company"), certain of the Company's subsidiaries
signatory hereto (each, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors") and ▇▇▇▇▇▇ TRUST AND SAVINGS BANK, an Illinois banking
corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Company's 9-1/4%
Senior Subordinated Notes Due 2006 (the "Initial Securities") and, if and when
issued pursuant to a registered exchange for the Initial Securities, the
Company's 9-1/4% Senior Subordinated Notes Due 2006 (the "Exchange Securities"
and, together with the Initial Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Indebtedness" means, with respect to the Company, Indebtedness
of a Person existing at the time such Person becomes a Restricted Subsidiary.
"Additional Assets" means (i) any Property (other than cash, Permitted
Short-Term Investments or securities) used in the Oil and Gas Business or any
business ancillary thereto, (ii) Investments in any other Person engaged in the
Oil and Gas Business or any business ancillary thereto (including the
acquisition from third parties of Capital Stock of such Person) as a result of
which such other Person becomes a Restricted Subsidiary made in compliance with
the definition of the term "Restricted Subsidiary" and Section 4.04, (iii) the
acquisition from third parties of Capital Stock of a Restricted Subsidiary,
(iv) the costs of acquiring, exploiting, developing, exploring, producing or
operating in respect of oil and gas properties or (v) Permitted Business
Investments.
"Adjusted Consolidated Net Tangible Assets" means, without duplication,
as of the date of determination, (i) the sum of (A) discounted future net cash
flows from proved oil and gas reserves of the Company and its Restricted
Subsidiaries, calculated in accordance with Commission guidelines (before any
state or Federal income tax), as estimated by the Company and reviewed by
independent petroleum engineers as of a date no earlier than the date of the
Company's latest annual consolidated financial statements (or, in the case that
the date of determination is after the end of the first fiscal quarter of the
fiscal year of the Company, as estimated by the Company's engineers as of a
date no earlier than the end of the most recent fiscal quarter, which estimates
shall be confirmed by independent petroleum engineers in accordance with
Commission guidelines in the event of a Material Change), (B) the Net Working
Capital on a date no earlier than the date of the Company's latest consolidated
annual or quarterly financial statements and (C) with respect to each other
tangible asset (including undeveloped acreage) of the Company or its Restricted
Subsidiaries, the greater of (1) the net book value of such other tangible
asset on a date no earlier than the date of the Company's latest consolidated
annual or quarterly financial statements and (2) the appraised value, as
estimated by a qualified independent appraiser, of such other tangible asset,
as of a date no earlier than the date of the Company's latest audited financial
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statements, minus (ii) minority interests and, to the extent not otherwise
taken into account in determining Adjusted Consolidated Net Tangible Assets,
any gas balancing liabilities of the Company and its Restricted Subsidiaries.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the amount by which the fair value of the Property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guaranty, of such Subsidiary Guarantor at such date.
"Affiliate" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (ii)
which beneficially owns or holds directly or indirectly 10% or more of any
class of the Voting Stock of such specified Person or of any Subsidiary of such
specified Person. For the purposes of this definition, "control," when used
with respect to any specified Person, means the power to direct the management
and policies of such Person directly or indirectly, whether through the
ownership of Voting Stock, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Asset Sale" means (i) any direct or indirect sale, transfer,
assignment, lease, conveyance or other disposition (including, without
limitation, dispositions pursuant to any merger, consolidation, Investment or
Production Payment and Reserve Sale) by the Company or any of its Restricted
Subsidiaries in any single transaction or series of transactions having a Fair
Market Value in excess of $1,000,000 of (A) shares of Capital Stock or other
ownership interests of another Person (including Capital Stock of Unrestricted
Subsidiaries) or (B) any other Property of the Company or any of its Restricted
Subsidiaries, and (ii) the issuance of Capital Stock (including, without
limitation, pursuant to any merger, consolidation, recapitalization or similar
transaction) by a Restricted Subsidiary to a Person other than the Company or a
Wholly Owned Restricted Subsidiary in any single transaction or series of
transactions having a Fair Market Value in excess of $1,000,000.
Notwithstanding the preceding sentence, for purposes of Section 4.06, the term
"Asset Sale" shall not include: (i) the sale or transfer of Permitted Short-
Term Investments, inventory, accounts receivable or other Property (excluding
the sale or transfer of oil and gas in place and other interests in real
property) in the ordinary course of business; (ii) the lease, farm-out or
abandonment of any oil and gas property in the ordinary course of business of
the Company and its Restricted Subsidiaries and in a manner customary in the
Oil and Gas Business; (iii) the disposition of Property received in settlement
of debts (including, without limitation, under any bankruptcy or similar
proceeding) owing to the Company or any Restricted Subsidiary as a result of
foreclosure, perfection or enforcement of any Lien or debt, which debts were
owing to the Company or any Restricted Subsidiary in the ordinary course of
business of the Company or such Restricted Subsidiary; (iv) the transfer of
Property to an Unrestricted Subsidiary or other Person to the extent that such
transfer constitutes a Restricted Payment made pursuant to and in compliance
with Section 4.04; (v) any disposition of all or substantially all of the
Property of the Company and its Restricted Subsidiaries taken as a whole made
subject to and in compliance with Section 5.01; (vi) the disposition of any
Property by the Company or a Restricted Subsidiary to the Company or a
Restricted Subsidiary; (vii) any issuance of Capital Stock made by a Material
Restricted Subsidiary that results in such Material Restricted Subsidiary no
longer being a Subsidiary of the Company, which issuance was made subject to
and in compliance with Section 5.01; and (viii) any Production Payment and
Reserve Sale created, incurred, issued, assumed or guaranteed in connection
with the financing of, and within 60 days after, the acquisition of the
Property that is subject thereto.
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"Assigned Restricted Subsidiary Indebtedness" means Indebtedness of a
Restricted Subsidiary to the Company that the Company has assigned to the
lenders under the Bank Credit Facility, as collateral securing Indebtedness of
the Company under the Bank Credit Facility.
"Average Life" means, with respect to any Indebtedness, as at any date
of determination, the quotient obtained by dividing (i) the sum of the products
of (A) the number of years (and any portion thereof) from the date of
determination to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund or mandatory
redemption payment requirements) of such Indebtedness multiplied by (B) the
amount of each such principal payment by (ii) the sum of all such principal
payments.
"Bank Credit Facility" means collectively, one or more senior credit
facilities or commercial paper facilities with banks or other institutional
lenders (including, without limitation, the credit facility pursuant to the
Amended and Restated Credit Agreement, dated June 14, 1996, as amended, among
the Company, The Chase Manhattan Bank, as Agent, and certain banks), together
with any security and related documents, as all such credit facilities and
documents may be amended, supplemented, extended, increased, refinanced or
replaced from time to time. For purposes of determining whether Indebtedness
under the Bank Credit Facility constitutes Permitted Indebtedness and only for
such purposes, Indebtedness Incurred in reliance on clause (i) of Section
4.03(a) shall not be deemed to constitute Indebtedness Incurred in reliance on
clause (i) of the definition of the term "Permitted Indebtedness."
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
Federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolutions" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions are authorized or
obligated by law or executive order to close in New York, New York and Chicago,
Illinois and, with respect to any payment of cash or delivery of securities,
the place of such payment or delivery.
"Capitalized Lease Obligation" of any Person means the obligation of
such Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes
in accordance with GAAP, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP. For purposes of
Section 4.10, a Capitalized Lease Obligation shall be deemed to be secured by a
Lien on the Property being leased.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to subscribe for or to acquire an equity
interest in such Person; provided, however, that "Capital Stock" shall not
include Redeemable Stock.
"Change of Control" shall be deemed to occur if (i) any "person" or
"group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange
Act or any successor provision to either of the foregoing, including any group
acting for the purpose of acquiring,
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holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act), other than any one or more of the Permitted Holders, becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of 40%
or more of the total voting power of all classes of the Voting Stock of the
Company and/or warrants or options to acquire such Voting Stock, calculated on
a fully diluted basis, (ii) the sale, lease, conveyance or transfer of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole (other than to any Wholly Owned Restricted Subsidiary) shall
have occurred, (iii) the stockholders of the Company shall have approved any
plan of liquidation or dissolution of the Company, (iv) the Company
consolidates with or merges into another Person or any Person consolidates with
or merges into the Company in any such event pursuant to a transaction in which
the outstanding Voting Stock of the Company is reclassified into or exchanged
for cash, securities or other property, other than any such transaction where
(A) the outstanding Voting Stock of the Company is reclassified into or
exchanged for Voting Stock of the surviving corporation that is Capital Stock
and (B) the holders of the Voting Stock of the Company immediately prior to
such transaction own, directly or indirectly, not less than a majority of the
Voting Stock of the surviving corporation immediately after such transaction or
(v) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Company's Board of Directors (together
with any new directors whose election or appointment by such board or whose
nomination for election by the stockholders of the Company was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Company's Board of Directors then in office.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after
the execution of this instrument, such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture, until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Consolidated Interest Coverage Ratio" means, as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company and its consolidated Restricted Subsidiaries for the
four full fiscal quarters immediately prior to the Transaction Date to (ii) the
aggregate Consolidated Interest Expense of the Company and its Restricted
Subsidiaries that is anticipated to accrue during a period consisting of the
fiscal quarter in which the Transaction Date occurs and the three fiscal
quarters immediately subsequent thereto (based upon the pro forma amount and
maturity of, and interest payments in respect of, Indebtedness of the Company
and its Restricted Subsidiaries expected by the Company to be outstanding on
the Transaction Date), assuming for the purposes of this measurement the
continuation of market interest rates prevailing on the Transaction Date and
base interest rates in respect of floating interest rate obligations equal to
the base interest rates on such obligations in effect as of the Transaction
Date, provided, that if the Company or any of its Restricted Subsidiaries is a
party to any Interest Rate Protection Agreement which would have the effect of
changing the interest rate on any Indebtedness of the Company or any of its
Restricted Subsidiaries for such four quarter period (or a portion thereof),
the resulting rate shall be used for such four quarter period or portion
thereof; provided, further, that any Consolidated Interest Expense with respect
to Indebtedness incurred or retired by the Company or any of its Restricted
Subsidiaries during the fiscal quarter in which the Transaction Date occurs
shall be calculated as if such Indebtedness was so incurred or retired on the
first day of the fiscal quarter in which the Transaction Date
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occurs. In addition, if since the beginning of the four full fiscal quarter
period preceding the Transaction Date, (i) the Company or any of its Restricted
Subsidiaries shall have engaged in any Asset Sale, EBITDA for such period shall
be reduced by an amount equal to the EBITDA (if positive), or increased by an
amount equal to the EBITDA (if negative), directly attributable to the assets
which are the subject of such Asset Sale for such period calculated on a pro
forma basis as if such Asset Sale and any related retirement of Indebtedness
had occurred on the first day of such period or (ii) the Company or any of its
Restricted Subsidiaries shall have acquired any material assets, EBITDA shall
be calculated on a pro forma basis as if such asset acquisitions had occurred
on the first day of such four fiscal quarter period.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, (i) the sum of (A) the aggregate amount of
cash and noncash interest expense (including capitalized interest) of such
Person and its Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP in respect of Indebtedness
(including, without limitation, (1) any amortization of debt discount, (2) net
costs associated with Interest Rate Protection Agreements (including any
amortization of discounts), (3) the interest portion of any deferred payment
obligation, (4) all accrued interest, and (5) all commissions, discounts,
commitment fees, origination fees and other fees and charges owed with respect
to any Bank Credit Facility and other Indebtedness paid, accrued or scheduled
to be paid or accrued during such period; (B) Preferred Stock and Redeemable
Stock dividends of such Person and of its Restricted Subsidiaries (if such
dividends are paid to a Person other than such Person or its Wholly Owned
Restricted Subsidiaries) declared and payable other than in kind; (C) the
portion of any rental obligation of such Person or its Restricted Subsidiaries
in respect of any Capitalized Lease Obligation allocable to interest expense in
accordance with GAAP; (D) the portion of any rental obligation of such Person
or its Restricted Subsidiaries in respect of any Sale and Leaseback Transaction
that is Indebtedness allocable to interest expense (determined as if such
obligation were treated as a Capitalized Lease Obligation); and (E) to the
extent any Indebtedness of any other Person (other than Restricted
Subsidiaries) is Guaranteed by such Person or any of its Restricted
Subsidiaries, the aggregate amount of interest paid, accrued or scheduled to be
paid or accrued by such other Person during such period attributable to any
such Indebtedness; less (ii) to the extent included in (i) above, amortization
or write-off of deferred financing costs of such Person and its Restricted
Subsidiaries during such period; in the case of both (i) and (ii) above, after
elimination of intercompany accounts among such Person and its Restricted
Subsidiaries and as determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided that there shall be excluded therefrom, without
duplication, (i) items classified as extraordinary (other than the tax benefit
of the utilization of net operating loss carry-forwards and alternative minimum
tax credits); (ii) any gain or loss, net of taxes, on the sale or other
disposition of assets (including the Capital Stock of any other Person) in
excess of $1,000,000, from any sale or disposition, or series of related sales
or dispositions (but in no event shall this clause (ii) apply to the sale of
oil and gas inventories in the ordinary course of business); (iii) the net
income of any Subsidiary of such specified Person to the extent the transfer to
that Person of that income is restricted by contract or otherwise, except for
any cash dividends or cash distributions actually paid by such Subsidiary to
such Person during such period; (iv) the net income (or net loss) of any other
Person in which such specified Person or any of its Restricted Subsidiaries has
an ownership interest (which ownership interest does not cause the net income
of such other Person to be consolidated with the net income of such specified
Person in accordance with GAAP or is an interest in a consolidated Unrestricted
Subsidiary), except to the extent of the amount of cash dividends or other cash
5
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distributions actually paid to such Person or its Restricted Subsidiaries by
such other Person during such period; (v) the net income (or net loss) of any
Person acquired by such specified Person or any of its Restricted Subsidiaries
in a pooling-of-interests transaction for any period prior to the date of such
acquisition; (vi) any gain or loss, net of taxes, realized on the termination
of any employee pension benefit plan; (vii) any adjustments of a deferred tax
liability or asset pursuant to Statement of Financial Accounting Standards No.
109 which result from changes in enacted tax laws or rates; and (viii) the
cumulative effect of a change in accounting principles.
"Consolidated Net Worth" of any Person means the stockholders' equity of
such Person and its Restricted Subsidiaries, as determined on a consolidated
basis in accordance with GAAP, less (to the extent included in stockholders'
equity) amounts attributable to Redeemable Stock of such Person or its
Restricted Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian
or similar official under any Bankruptcy Law.
"Default" means any event, act or condition the occurrence of which is,
or after notice or the passage of time or both would be, an Event of Default.
"EBITDA" means with respect to any Person for any period, the
Consolidated Net Income of such Person and its consolidated Restricted
Subsidiaries for such period, plus (i) the sum of, to the extent reflected in
the consolidated income statement of such Person and its Restricted
Subsidiaries for such period from which Consolidated Net Income is determined
and deducted in the determination of such Consolidated Net Income, without
duplication, (A) income tax expense (but excluding income tax expense relating
to (1) sales or other disposition of assets (including the Capital Stock of any
other Person) resulting in a net gain in excess of $1,000,000 and (2) the
redemption or retirement of any Indebtedness prior to its Stated Maturity), (B)
Consolidated Interest Expense, (C) depreciation and depletion expense, (D)
amortization expense, (E) exploration expense, (F) any loss, net of taxes, in
connection with the redemption or retirement of any Indebtedness prior to its
Stated Maturity, and (G) any other noncash charges, including, without
limitation, unrealized foreign exchange losses; less (ii) the sum of, to the
extent reflected in the consolidated income statement of such Person and its
Restricted Subsidiaries for such period from which Consolidated Net Income is
determined and added in the determination of such Consolidated Net Income,
without duplication, (A) income tax recovery (but excluding income tax recovery
relating to (1) sales or other dispositions of assets (including the Capital
Stock of any other Person) resulting in a net loss in excess of $1,000,000 and
(2) the redemption or retirement of any Indebtedness prior to its Stated
Maturity), (B) any gain, net of taxes, in connection with the redemption or
retirement of any Indebtedness prior to its Stated Maturity and (C) unrealized
foreign exchange gains.
"Equity Offering" means a bona fide underwritten sale to the public of
Capital Stock of the Company pursuant to a registration statement (other than a
Form S-8 or any other form relating to securities issuable under any employee
benefit plan of the Company) that is declared effective by the Commission
following the Issue Date and resulting in aggregate gross proceeds to the
Company of at least $30,000,000.
"Event of Default" has the meaning specified in Section 6.01.
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"Excess Proceeds" has the meaning specified in Section 4.06.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Exchanged Properties" means oil and gas properties received by the
Company or a Restricted Subsidiary in trade or as a portion of the total
consideration for other such properties.
"Exchange Rate Contract" means, with respect to any Person, any currency
swap agreements, forward exchange rate agreements, foreign currency futures or
options, exchange rate collar agreements, exchange rate insurance and other
agreements or arrangements, or any combination thereof, designed and entered
into in order to provide protection against fluctuations in currency exchange
rates, and entered into in the ordinary course of business of such Person.
"Existing Unrestricted Subsidiary" means Resource Gathering Systems,
Inc., a California corporation.
"Fair Market Value" means, with respect to any assets to be transferred
pursuant to any Asset Sale or Sale and Leaseback Transaction or any non-cash
consideration or property transferred or received by any Person, the fair
market value of such consideration or property as determined in good faith by
(i) any officer of the Company if such fair market value is less than
$10,000,000 and (ii) the Board of Directors of the Company as evidenced by a
certified resolution delivered to the Trustee if such fair market value is
equal to or in excess of $10,000,000.
"GAAP" means United States generally accepted accounting principles as
in effect on the date of this Indenture, unless stated otherwise.
"Guarantee" by any Person means any obligation, contingent or otherwise,
of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the "primary obligor") in any manner, whether
directly or indirectly, and including, without limitation, any Lien on the
assets of such Person securing obligations of the primary obligor and any
obligation of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase or payment of) any security for the payment of
such Indebtedness, (ii) to purchase Property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "Guaranteed,"
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided, however, that a Guarantee by any Person shall not include
(A) endorsements by such Person for collection or deposit, in either case, in
the ordinary course of business or (B) a contractual commitment by one Person
to invest in another Person for so long as such Investment is reasonably
expected to constitute a Permitted Investment under clause (ii) of the
definition of Permitted Investments.
"Holder" means the Person in whose name a Security is registered on the
Registrar's books.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
extend, assume, Guarantee or become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Indebtedness or other obligation on the
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13
balance sheet of such Person (and "Incurrence," "Incurred," "Incurrable" and
"Incurring" shall have meanings correlative to the foregoing); provided,
however, that a change in GAAP that results in an obligation of such Person
that exists at such time, and is not theretofore classified as Indebtedness,
becoming Indebtedness shall not be deemed an Incurrence of such Indebtedness.
For purposes of this definition, Indebtedness of the Company or a Restricted
Subsidiary held by a Wholly Owned Restricted Subsidiary shall be deemed to be
Incurred by the Company or such Restricted Subsidiary in the event such Wholly
Owned Restricted Subsidiary ceases to be a Wholly Owned Restricted Subsidiary
or in the event such Indebtedness is transferred to a Person other than the
Company or a Wholly Owned Restricted Subsidiary. For purposes of this
definition, any non-interest bearing or other discount Indebtedness shall be
deemed to have been Incurred only on the date of the original issuance thereof.
"Indebtedness" means at any time (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any Obligation of such Person for
borrowed money, (ii) any Obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including, without
limitation, any such Obligations incurred in connection with the acquisition of
Property, assets or businesses, (iii) any reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) any Obligation of such
Person issued or assumed as the deferred purchase price of Property or
services, (v) any Capital Lease Obligation of such Person, (vi) the maximum
fixed redemption or repurchase price of Redeemable Stock of such Person at the
time of determination, (vii) any payment obligation of such Person under
Permitted Hedging Agreements at the time of determination, (viii) any
obligation to pay rent or other payment amounts of such Person with respect to
any Sale and Leaseback Transaction to which such Person is a party and (ix) any
obligation of the type referred to in clauses (i) through (viii) of this
paragraph of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed or is responsible or liable,
directly or indirectly, as obligor, Guarantor or otherwise; provided that
Indebtedness shall not include Production Payments and Reserve Sales. For
purposes of this definition, the maximum fixed repurchase price of any
Redeemable Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture; provided, however, that
if such Redeemable Stock is not then permitted to be repurchased, the
repurchase price shall be the book value of such Redeemable Stock. The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional Obligations as described above and the maximum
liability at such date in respect of any contingent Obligations described
above.
Notwithstanding the foregoing, so long as any principal of, premium, if
any, on or interest on the 9-7/8% Notes remains outstanding, for purposes of
the subordination provisions of this Indenture, the Securities and any
Subsidiary Guaranties (and to the extent used therein, any applicable
definitions and other provisions, if any), and only for such purposes,
"Indebtedness" means (without duplication), with respect to any Person, (i) any
liability or obligation, contingent or otherwise, of such Person (A) for
borrowed money, (B) evidenced by bonds, notes, debentures or similar
instruments, (C) with respect to the reimbursement of any letter of credit or
banker's acceptance, (D) representing the balance deferred and unpaid of the
purchase price of any property (except any such balance that constitutes a
trade payable or accrued liability in the ordinary course of business that is
not overdue by more than 120 days or is being contested in good faith), (E) for
the payment of money relating to a Capitalized Lease Obligation or (F) in
respect of Interest Rate Protection Agreements; (ii) direct and indirect
Guarantees or similar agreements, contingent or
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otherwise, in respect of any Obligation of others of the types described in the
preceding clause (i); (iii) any Obligation or liability secured by a consensual
Lien to which the property or assets of such Person are subject, regardless of
whether the Obligations secured thereby shall have been assumed by or shall
otherwise be such Person's legal liability; (iv) with respect to such Person,
the liquidation preference and any mandatory redemption payment obligations in
respect of Redeemable Stock; and (v) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any liability of the kind described in any of the preceding clauses (i), (ii),
(iii) and (iv).
"Initial Subsidiary Guarantors" means HSRTW, Inc., a Delaware
corporation, and Orion Acquisition Inc., a Delaware corporation.
"Interest Rate Protection Agreement" means, with respect to any Person,
any interest rate swap agreement, forward rate agreement, interest rate cap or
other rate hedge arrangement to or under which such Person is a party or a
beneficiary, and, in the case of the Company and its Restricted Subsidiaries,
only to the extent such agreements are related to payment obligations on
Indebtedness of the Company and its Restricted Subsidiaries permitted by the
terms of Section 4.03 and are entered into in the ordinary course of business
of the Company and its Restricted Subsidiaries.
"Investment" means, with respect to any Person (i) any amount paid by
such Person, directly or indirectly (such amount to be the Fair Market Value of
such Capital Stock, securities or Property at the time of transfer), to any
other Person for Capital Stock or other securities of, or as a capital
contribution to, any other Person or (ii) any direct or indirect loan or
advance to any other Person (other than accounts receivable of such Person
arising in the ordinary course of business); provided, however, that
Investments shall not include extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices and any increase in
the equity ownership in any Person resulting from retained earnings of such
Person.
"Issue Date" means the date upon which the Securities first were issued
and authenticated under this Indenture.
"Lien" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance, preference,
priority or other security or similar agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing). For
purposes of Section 4.10, a Capitalized Lease Obligation shall be deemed to be
secured by a Lien on the Property being leased.
"Liquid Securities" means securities (i) of an issuer that is not an
Affiliate of the Company, (ii) that are publicly traded on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market and (iii)
as to which the Company is not subject to any restrictions on sale or transfer
(including any volume restrictions under Rule 144 under the Securities Act or
any other restrictions imposed by the Securities Act) or as to which a
registration statement under the Securities Act covering the resale thereof is
in effect for as long as the securities are held; provided that securities
meeting the requirements of clauses (i), (ii) and (iii) above shall be treated
as Liquid Securities from the date of receipt thereof until and only until the
earlier of (x) the date on which such securities are sold or exchanged for cash
or Permitted Short-Term Investments and (y) 180 days following the date of
receipt of such securities. In the event such securities are not sold or
exchanged for cash or cash equivalents within 180 days of receipt thereof, for
purposes of determining whether
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15
the transaction pursuant to which the Company or a Restricted Subsidiary
received the securities was in compliance with Section 4.06, such securities
shall be deemed not to have been Liquid Securities at any time.
"Material Change" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than 20% during a fiscal quarter
in the estimated discounted future net cash flows from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (i)(A) of the definition of Adjusted Consolidation Net
Tangible Assets; provided, however, that the following will be excluded from
the calculation of Material Change: (i) any acquisitions during the quarter of
oil and gas reserves with respect to which the Company's estimate of the
discounted future net cash flows from proved oil and gas reserves has been
confirmed by independent petroleum engineers and (ii) any dispositions of
Properties existing at the beginning of such quarter that have been disposed of
in compliance with Section 4.06.
"Material Restricted Subsidiary" means any Restricted Subsidiary that
directly or indirectly (including through its Subsidiaries) owns or controls
Property constituting all or substantially all of the Property of the Company
and its Restricted Subsidiaries taken as a whole.
"Net Available Cash" from an Asset Sale means cash proceeds received
therefrom (including (i) any cash proceeds received by way of deferred payment
of principal pursuant to a note or installment receivable or otherwise, but
only as and when received, and (ii) the Fair Market Value of Liquid Securities
and Permitted Short-Term Investments, and excluding (A) any consideration
received in the form of assumption of Indebtedness of the Company or any
Restricted Subsidiary, and (B) except to the extent subsequently converted to
cash, Liquid Securities or Permitted Short-Term Investments, consideration
constituting Exchanged Properties or consideration other than Permitted
Consideration), in each case net of (i) all legal, title and recording
expenses, commissions and other fees and expenses incurred, and all Federal,
state, foreign and local taxes required to be paid or accrued as a liability
under GAAP as a consequence of such Asset Sale, (ii) all payments (which
payments are made in a manner that results in the permanent reduction in the
balance of such Indebtedness and, if applicable, a permanent reduction in any
outstanding commitment for future Incurrences of Indebtedness thereunder) made
by the Company and its Restricted Subsidiaries on any Indebtedness (but
specifically excluding Indebtedness of the Company and its Restricted
Subsidiaries assumed in connection with such Asset Sale) which is secured by
any assets subject to such Asset Sale, in accordance with the terms of any Lien
upon such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale or by applicable law, be repaid out of the proceeds
from such Asset Sale, (iii) all distributions and other payments required to be
made to minority interest holders in Restricted Subsidiaries or joint ventures
as a result of such Asset Sale, and (iv) the deduction of appropriate amounts
to be provided by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset Sale and
retained by the Company or any Restricted Subsidiary after such Asset Sale (to
the extent such reserves are not subsequently reversed); provided, however,
that (A) in the event that any consideration for an Asset Sale (which would
otherwise constitute Net Available Cash) is required to be held in escrow
pending determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Available Cash only at
such time as it is released to the Company or its Restricted Subsidiaries from
escrow; and (B) any Exchanged Properties and any consideration other than
Permitted Consideration received in connection with an Asset Sale which are
subsequently converted to cash, Liquid Securities or Permitted Short-Term
Investments shall be deemed to be Net Available Cash at such time and shall
thereafter be applied in accordance with Section 4.06.
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"Net Working Capital" means (i) all current assets of the Company and
its Restricted Subsidiaries, less (ii) all current liabilities of the Company
and its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements of the Company
prepared in accordance with GAAP.
"9-7/8% Notes" means the 9-7/8% Senior Subordinated Notes due 2003 of
the Company in the original aggregate principal amount of $75,000,000.
"9-7/8% Notes Asset Sale Offer" means an offer by the Company to
purchase 9-7/8% Notes required by the indenture pursuant to which the 9-7/8%
Notes were issued as a result of a sale by the Company or a Restricted
Subsidiary of certain assets, as more particularly set forth in Section 10.16
of such indenture.
"Obligation" means any principal, interest, premium, penalty, fee and
any other liability payable under the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the Chief Financial Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers
meeting the requirements set forth in Section 13.01 and delivered to the
Trustee.
"Oil and Gas Business" means the business of exploiting, exploring for,
developing, acquiring, producing, processing, gathering, marketing, storing,
transporting, selling, hedging or swapping hydrocarbons or trading positions
with respect thereto and/or with respect to transportation rates or basis
differentials and other related energy businesses.
"Oil and Gas Liens" means (i) Liens on a specific oil or gas property or
any interest therein, construction thereon or improvement thereto to secure all
or any part of the costs incurred for surveying, exploration, drilling,
extraction, development, operation, production, construction, alteration,
repair or improvement of, in, under or on such property and the plugging and
abandonment of ▇▇▇▇▇ located thereon (it being understood that, in the case of
oil and gas producing properties, or any interest therein, costs incurred for
"development" shall include costs incurred for all facilities relating to such
properties or to projects, ventures or other arrangements of which such
properties form a part or which relate to such properties or interests); (ii)
Liens on an oil and/or gas producing property to secure obligations incurred or
guarantees of obligations incurred in connection with or necessarily incidental
to commitments for the purchase or sale of, or the transportation or
distribution of, the products derived from such property; (iii) Liens arising
under partnership agreements, oil and gas leases, overriding royalty
agreements, net profits agreements, production payment agreements, royalty
trust agreements, partnership agreements, limited liability company agreements,
farm-out agreements, division orders, contracts for the sale, purchase,
exchange, transportation, gathering or processing of oil, gas or other
hydrocarbons, unitizations and pooling designations, declarations, orders and
agreements, development agreements, operating agreements, production sales
contracts, area of mutual interest agreements, gas balancing or deferred
production agreements, injection, repressuring and recycling agreements, salt
water or other disposal agreements, seismic or geophysical permits or
agreements, and other agreements which are customary in the Oil and Gas
Business, provided in all instances that such Liens are limited to the assets
that are the subject of the relevant agreement; (iv) Liens arising in
connection with Production Payments and Reserve Sales; and (v) Liens on
pipelines or pipeline facilities that arise by operation of law.
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"Oil and Gas Purchase, Sale and/or Swap Contract" means, with respect to
any Person, any oil and gas purchase, sale and/or swap agreements and other
agreements or arrangements, or any combination thereof, financially tied to oil
and gas prices, transportation or basis fluctuations or differentials that are
customary in the Oil and Gas Business and, in the case of the Company and its
Restricted Subsidiaries, which are entered into by the Company and its
Restricted Subsidiaries in the ordinary course of their business.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Order" means a written order signed in the name of the Company by an
Officer and delivered to the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company (or a
Subsidiary Guarantor) that is pari passu in right of payment with the
Securities (or a Subsidiary Guaranty, as appropriate).
"Pari Passu Offer" means an offer by the Company to purchase Pari Passu
Indebtedness (other than the 9-7/8% Notes) required by the indenture or other
agreement or instrument pursuant to which such Pari Passu Indebtedness was
issued as a result of a sale by the Company or a Restricted Subsidiary of
certain assets.
"Paying Agent" has the meaning specified in Section 2.03.
"Permitted Business Investments" means Investments and expenditures made
in the ordinary course of, and of a nature that is or shall have become
customary in, the Oil and Gas Business as a means of actively exploiting,
exploring for, acquiring, developing, processing, gathering, storing, marketing
or transporting oil and gas through agreements, transactions, interests or
arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives customarily
achieved through the conduct of Oil and Gas Business jointly with third
parties, including, without limitation, (i) ownership interests in oil and gas
properties or gathering, transportation, processing, storage or related systems
and (ii) Investments and expenditures in the form of or pursuant to operating
agreements, process agreements, farm-in agreements, farm-out agreements,
development agreements, area of mutual interest agreements, unitization
agreements, pooling arrangements, joint bidding agreements, service contracts,
joint venture agreements, partnership agreements, limited liability company
agreements, subscription agreements, stock purchase agreements and other
similar agreements with third parties (including Unrestricted Subsidiaries).
"Permitted Consideration" has the meaning assigned to such term in
Section 4.06.
"Permitted Designee" means (i) a spouse or a child of a Permitted
Holder, (ii) trusts whose sole beneficiaries are Permitted Holders or spouses
or children of Permitted Holders, (iii) in the event of the death or
incompetence of a Permitted Holder, his estate, heirs, executor, administrator,
committee or other personal representative or (iv) any Person so long as a
Permitted Holder owns at least 51% of the voting power of all classes of the
Voting Stock of such Person.
"Permitted Hedging Agreements" means Interest Rate Protection
Agreements, Exchange Rate Contracts and Oil and Gas Purchase, Sale and/or Swap
Contracts.
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"Permitted Holders" means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
their Permitted Designees.
"Permitted Indebtedness" has the meaning specified in Section 4.03.
"Permitted Investments" has the meaning specified in Section 4.04.
"Permitted Liens" means any and all of the following: (i) Liens existing
as of the Issue Date; (ii) Liens securing the Securities, the Subsidiary
Guaranties and other obligations arising under this Indenture; (iii) any Lien
existing on any Property of a Person at the time such Person is merged or
consolidated with or into the Company or a Subsidiary Guarantor or becomes a
Restricted Subsidiary that is a Subsidiary Guarantor (and not incurred in
anticipation of such transaction), provided that such Liens are not extended to
other Property of the Company or the Subsidiary Guarantors; (iv) any Lien
existing on any Property at the time of the acquisition thereof (and not
incurred in anticipation of such transaction), provided that such Liens are not
extended to other Property of the Company or the Subsidiary Guarantors; (v) any
Lien incidental to the normal conduct of the business of the Company or the
Subsidiary Guarantors, the ownership of their Property or the conduct in the
ordinary course of their business (including, without limitation, (A)
easements, rights of way and similar encumbrances, (B) rights or title of
lessors under leases (other than Capitalized Lease Obligations), (C) rights of
collecting banks having rights of setoff, revocation, refund or chargeback with
respect to money or instruments of the Company or the Subsidiary Guarantors or
on deposit with or in the possession of such banks, (D) Liens imposed by law,
including without limitation, Liens under workers' compensation or similar
legislation and mechanics', carriers', warehousemen's, materialmen's,
suppliers' and vendors' Liens, (E) Liens incurred to secure performance of
obligations with respect to statutory or regulatory requirements, performance
or return-of-money bonds, surety bonds or other obligations of a like nature
and incurred in a manner consistent with industry practice, and (F) Liens on
deposits made in the ordinary course of business), in each case which are not
incurred in connection with the borrowing of money, the obtaining of advances
or credit or the payment of the deferred purchase price of Property and which
do not in the aggregate impair in any material respect the use of Property in
the operation of the business of the Company and its Restricted Subsidiaries
taken as a whole; (vi) Liens for taxes, assessments and governmental charges
not yet due or the validity of which are being contested in good faith by
appropriate proceedings, promptly instituted and diligently conducted, and for
which adequate reserves have been established to the extent required by GAAP;
(vii) judgment and attachment Liens not giving rise to an Event of Default or
Liens created by or existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate proceedings, promptly
instituted and diligently conducted, and for which adequate reserves have been
made to the extent required by GAAP; (viii) Liens securing Permitted Hedging
Agreements of the Company and its Restricted Subsidiaries; (ix) Oil and Gas
Liens Incurred in the ordinary course of the business of the Company and its
Restricted Subsidiaries; (x) purchase money security interests (including,
without limitation, Capitalized Lease Obligations) granted in connection with
the acquisition of fixed assets in the ordinary course of business of the
Company and its Restricted Subsidiaries, provided, that (A) such Liens attach
only to the Property so acquired with the purchase money Indebtedness secured
thereby and (B) such Liens secure only Indebtedness that is not in excess of
the purchase price of such Property; (xi) Liens to secure Permitted Non-
Recourse Indebtedness; (xii) Liens resulting from the deposit of funds or
evidences of Indebtedness in trust for the purpose of decreasing Indebtedness
of the Company or any of its Subsidiaries so long as such deposit of funds is
permitted under Section 4.04; (xiii) Liens resulting from a pledge of Capital
Stock of a Person that is not a Restricted Subsidiary; (xiv) Liens to secure
any permitted extension, renewal, refinancing, refunding or exchange (or
successive extensions, renewals, refinancings, refundings or exchanges), in
whole or in part, of or for any Indebtedness
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secured by Liens referred to in clauses (i), (ii), (iii), (iv) and (x) above;
provided, however, that (A) such new Lien shall be limited to all or part of
the same Property that secured the original Lien, plus improvements on such
Property and (B) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (1) the outstanding principal
amount of the Indebtedness secured by such original Lien immediately prior to
such extension, renewal, refinancing, refunding or exchange and (2) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement; and (xv) Liens in
favor of the Company. Notwithstanding anything in this paragraph to the
contrary, the term "Permitted Liens" does not include Liens resulting from the
creation, incurrence, issuance, assumption or Guarantee of any Production
Payment and Reserve Sale other than (1) Production Payments and Reserve Sales
in connection with the acquisition of Properties after the Issue Date, provided
that any such Liens created in connection therewith are created, incurred,
issued, assumed or guaranteed in connection with the financing of, and within
60 days after, the acquisition of the Property that is subject thereto, or (2)
Production Payments and Reserve Sales other than those described in clause (1)
of this sentence to the extent such Production Payments and Reserve Sales
constitute Asset Sales made pursuant to and in compliance with Section 4.06.
"Permitted Non-Recourse Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary Incurred in connection with the acquisition by the
Company or such Restricted Subsidiary of any Property with respect to which (i)
the holders of such Indebtedness agree that they will look solely to the
Property so acquired and securing such Indebtedness, and neither the Company
nor any Restricted Subsidiary (A) provides direct or indirect credit support,
including any undertaking, agreement or instrument that would constitute
Indebtedness (other than the grant of a Lien on such acquired Property) or (B)
is directly or indirectly liable for such Indebtedness, and (ii) no default
with respect to such Indebtedness would cause, or permit (after notice or
passage of time or otherwise), according to the terms thereof, any holder (or
any representative of any such holder) of any other Indebtedness of the Company
or a Restricted Subsidiary to declare, a default on such other Indebtedness or
cause the payment, repurchase, redemption, defeasance or other acquisition or
retirement for value thereof to be accelerated or payable prior to any
scheduled principal payment, scheduled sinking fund payment or maturity.
"Permitted Refinancing Indebtedness" means Indebtedness ("new
Indebtedness") Incurred in exchange for, or the proceeds of which are used to
refinance, other Indebtedness ("old Indebtedness"), provided, however, that (i)
such new Indebtedness is in an aggregate principal amount not in excess of the
sum of (A) the aggregate principal amount then outstanding of the old
Indebtedness (or, if such old Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination), and
(B) an amount necessary to pay any fees and expenses, including premiums
related to such exchange or refinancing, (ii) such new Indebtedness has a
Stated Maturity no earlier than the Stated Maturity of the old Indebtedness,
(iii) such new Indebtedness has an Average Life to Stated Maturity at the time
such new Indebtedness is Incurred that is equal to or greater than the Average
Life to Stated Maturity of the old Indebtedness at such time and (iv) such new
Indebtedness is subordinated in right of payment to Senior Indebtedness of the
Company (or, if applicable, a Subsidiary Guarantor) and the Securities to at
least the same extent, if any, as the old Indebtedness.
"Permitted Short-Term Investments" means (i) Investments in U.S.
Government Obligations maturing within one year of the date of acquisition
thereof, (ii) Investments in demand accounts, time deposit accounts,
certificates of deposit, bankers acceptances and money market deposits maturing
within one year of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America or
any State thereof that is a member of the Federal Reserve System having
capital, surplus
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and undivided profits aggregating in excess of $500,000,000 and whose long-term
indebtedness is rated "A" (or higher) according to ▇▇▇▇▇'▇ Investors Service
Inc., (iii) Investments in demand accounts, time deposit accounts, certificates
of deposit, bankers acceptances and money market deposits maturing within one
year of the date of acquisition thereof issued by a Canadian bank to which the
Bank Act (Canada) applies having capital, surplus and undivided profits
aggregating in excess of U.S. $500,000,000, (iv) investments in deposits
available for withdrawal on demand with any commercial bank which is organized
under the laws of any country in which the Company or any Restricted Subsidiary
maintains an office or is engaged in the Oil and Gas Business, provided that
(A) all such deposits have been made in such accounts in the ordinary course of
business and (B) such deposits do not at any one time exceed $10,000,000 in the
aggregate, (v) repurchase and reverse repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(i) entered into with a bank meeting the qualifications described in either
clause (ii) or (iii), (vi) Investments in commercial paper, maturing not more
than 270 days after the date of acquisition, issued by a corporation (other
than an Affiliate of the Company) organized and in existence under the laws of
the United States of America or any State thereof with a rating at the time as
of which any Investment therein is made of "P-1" (or higher) according to
▇▇▇▇▇'▇ Investors Service Inc. or "A-1" (or higher) according to Standard &
Poor's Ratings Group, and (vii) Investments in any money market mutual fund
having assets in excess of $250,000,000 substantially all of which consist of
obligations of the types described in clauses (i), (ii), (v) and (vi) hereof.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or government or
any agency or political subdivision thereof or other entity.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment
of dividends and/or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
capital stock of at least one other class of such Person; provided, however,
that "Preferred Stock" shall not include Redeemable Stock.
"Principal Agent" means, on any date, (i) if the Bank Credit Facility
shall remain in effect on such date, the administrative agent(s) (or the
institution(s) performing similar functions) under the Bank Credit Facility and
(ii) if the Bank Credit Facility is no longer in effect on such date, the
administrative agent(s) (or the institution(s) performing similar functions)
with respect to the Specified Senior Indebtedness (or, if applicable, Specified
Senior Indebtedness of such Subsidiary Guarantor) having the highest principal
amount (including all revolving credit, letter of credit and other working
capital commitments) on such date.
"Principal Subsidiary Indebtedness Agent" means, on any date, the
administrative agent(s) (or institution(s) performing similar functions) with
respect to the Specified Senior Indebtedness of a Subsidiary Guarantor having
the highest principal amount (including all revolving credit, letter of credit
and other working capital commitments) on such date.
"Production Payments and Reserve Sales" means the grant or transfer to
any Person of a royalty, overriding royalty, net profits interest, production
payment (whether volumetric or dollar denominated), partnership interest or
other interest in oil and 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 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
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obligation of the grantor or transferor to indemnify for environmental, title
or other matters customary in the Oil and Gas Business.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed or
tangible or intangible, including, without limitation, Capital Stock and other
securities issued by any other Person (but excluding Capital Stock or other
securities issued by such first mentioned Person).
"Redeemable Stock" of any Person means any equity security of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is or could become required to be redeemed for cash or
other Property or is or could become redeemable for cash or other Property at
the option of the holder thereof, in whole or in part, on or prior to the first
anniversary of the Stated Maturity of the Securities; or is or could become
exchangeable at the option of the holder thereof for Indebtedness at any time
in whole or in part, on or prior to the first anniversary of the Stated
Maturity of the Securities; provided, however, that "Redeemable Stock" shall
not include any security by virtue of the fact that it may be exchanged or
converted at the option of the holder for Capital Stock of the Company having
no preferences as to dividends or liquidation over any other Capital Stock of
the Company.
"Registrar" has the meaning specified in Section 2.03.
"Representative" means any trustee, agent or representative (if any) for
the holders of any Indebtedness that constitutes Senior Indebtedness or
Subsidiary Guarantor Senior Indebtedness.
"Responsible Officer" means, when used with respect to the Trustee, any
officer assigned to the Corporate Trust Office, including any vice president,
assistant vice president, assistant secretary or any other officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Payment" means any or all of the following actions: (i) the
declaration or payment of any dividend on, or any distribution to holders of,
any shares of the Company's Capital Stock or Redeemable Stock (other than
dividends or distributions payable solely in shares of Capital Stock of the
Company or in options, warrants or other rights to purchase or acquire Capital
Stock of the Company); (ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock or Redeemable Stock of the Company or
any Affiliate thereof (other than a Restricted Subsidiary) or any options,
warrants or other rights to acquire such Capital Stock or Redeemable Stock;
(iii) any principal payment on or repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to any scheduled principal payment,
scheduled sinking fund payment or maturity, of any Pari Passu Indebtedness or
Subordinated Indebtedness, except (A) a 9-7/8% Notes Asset Sale Offer, (B) a
Pari Passu Offer, (C) to the extent of Excess Proceeds remaining after
compliance with Section 4.06, and to the extent required by the indenture or
other agreement or instrument pursuant to which any Subordinated Indebtedness
was issued, an offer to purchase such Subordinated Indebtedness upon a
disposition of assets, and (D) upon a "Change of Control" (even if such event
is not a Change of Control under this Indenture) to the extent required by the
indenture or other agreement or instrument pursuant to which any Pari Passu
Indebtedness or Subordinated Indebtedness was issued, provided the Company is
then in compliance with Section 4.09; (iv) the making of any Investment (other
than any Permitted Investment); or (v) the occurrence of any deemed Restricted
Payment under (A) Section 4.08, or (B) the definition of the term "Unrestricted
Subsidiary."
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"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the date of this Indenture, unless such Subsidiary of the
Company is an Unrestricted Subsidiary or is designated as an Unrestricted
Subsidiary pursuant to the terms of this Indenture. The Company will not, and
will not permit any of its Restricted Subsidiaries to, take any action or enter
into any transaction or series of transactions that would result in a Person
becoming a Restricted Subsidiary (whether through an acquisition or otherwise)
unless immediately after giving effect to such transaction or transactions on a
pro forma basis, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.03.
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement (excluding, however, any such arrangement
between such Person and a Wholly Owned Restricted Subsidiary of such Person or
between one or more Wholly Owned Restricted Subsidiaries of such Person)
pursuant to which Property is sold or transferred by such Person or a
Restricted Subsidiary of such Person and is thereafter leased back from the
purchaser or transferee thereof by such Person or one of its Restricted
Subsidiaries.
"Security" has the meaning stated in the first paragraph of this
Indenture and more particularly means any Security authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the Obligations of the Company with respect
to (i) Indebtedness of the Company under the Bank Credit Facility and any
renewal, refunding, refinancing, replacement or extension thereof and (ii) any
other Indebtedness of the Company (other than the Securities), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed, and any renewal, refunding, refinancing, replacement or extension
thereof, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities. Notwithstanding the foregoing, Senior Indebtedness
shall not include (i) Indebtedness of the Company to a Subsidiary of the
Company, (ii) amounts owed for goods, materials or services purchased in the
ordinary course of business, (iii) Indebtedness (other than Indebtedness under
the Bank Credit Facility) incurred in violation of this Indenture, (iv) amounts
payable or any other Indebtedness to employees of the Company or any Subsidiary
of the Company, (v) any liability for Federal, state, local or other taxes owed
or owing by the Company, (vi) any Indebtedness of the Company that, when
incurred and without regard to any election under Section 1111(b) of the United
States Bankruptcy Code, was without recourse to the Company, (vii) Indebtedness
evidenced by the 9-7/8% Notes and (viii) Indebtedness evidenced by the
Securities.
"Senior Indebtedness of a Subsidiary Guarantor" or "Subsidiary Guarantor
Senior Indebtedness" means the Obligations of a Subsidiary Guarantor with
respect to (i) Indebtedness under the Bank Credit Facility and any renewal,
refunding, refinancing, replacement or extension thereof, (ii) Assigned
Restricted Subsidiary Indebtedness and (iii) any other Indebtedness of a
Subsidiary Guarantor (other than the Subsidiary Guaranties), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed, and any renewal, refunding, refinancing, replacement or extension
thereof, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Subsidiary Guaranties. Notwithstanding the foregoing, Senior
Indebtedness of a Subsidiary Guarantor shall not include (i) Indebtedness of a
Subsidiary Guarantor to the Company or a Subsidiary of the Company, (ii)
amounts owed for
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goods, materials or services purchased in the ordinary course of business,
(iii) Indebtedness (other than Indebtedness under the Bank Credit Facility)
incurred in violation of this Indenture, (iv) amounts payable or any other
Indebtedness to employees of the Company or any Subsidiary of the Company, (v)
any liability for Federal, state, local or other taxes owed or owing by such
Subsidiary Guarantor, (vi) any Indebtedness of a Subsidiary Guarantor that,
when incurred and without regard to any election under Section 1111(b) of the
United States Bankruptcy Code, was without recourse to such Subsidiary
Guarantor, (vii) Indebtedness evidenced by the 9-7/8% Notes and any guaranties
thereof and (viii) Indebtedness evidenced by the Securities and the Subsidiary
Guaranties.
"Significant Subsidiary" means, at any date of determination, (i) any
Subsidiary (other than TWTTC) of a Person that, together with its Subsidiaries,
(A) for the most recent fiscal year of the Company, accounted for more than 5%
of the consolidated revenues of such Person and its Subsidiaries or (B) as of
the end of such fiscal year, was the owner of more than 5% of the consolidated
assets of such Person and its Subsidiaries, and (ii) TWTTC if TWTTC, together
with its Subsidiaries, as of the end of the most recent fiscal year of the
Company, was the owner of more than 10% of the consolidated assets of the
Company and its Subsidiaries, in each case all as set forth on the most
recently available consolidated financial statements of such Person for such
fiscal year.
"Specified Senior Indebtedness" means (i) Indebtedness of the Company
under the Bank Credit Facility and (ii) so long as no Indebtedness under the
Bank Credit Facility is outstanding, on any date of determination, any Senior
Indebtedness if the sum of (A) the outstanding principal amount of all Senior
Indebtedness plus (B) the amount of unused revolving credit, letter of credit
and working capital commitments of lenders included in such Senior
Indebtedness, is not less than $20,000,000 on such date.
"Specified Senior Indebtedness of a Subsidiary Guarantor" means (i)
Assigned Restricted Subsidiary Indebtedness of such Subsidiary Guarantor, (ii)
Indebtedness of such Subsidiary Guarantor under the Bank Credit Facility and
(iii) so long as no Assigned Restricted Subsidiary Indebtedness of such
Subsidiary Guarantor and no Indebtedness of such Subsidiary Guarantor under the
Bank Credit Agreement are outstanding, on any date of determination, any Senior
Indebtedness of such Subsidiary Guarantor if the sum of (A) the outstanding
principal amount of all such Senior Indebtedness of such Subsidiary Guarantor
plus (B) the amount of unused revolving credit, letter of credit and working
capital commitments of lenders included in such Senior Indebtedness of such
Subsidiary Guarantor, is not less than $20,000,000 on such date.
"Stated Maturity" when used with respect to any security or any
installment of principal thereof or interest thereon, means the date specified
in such security as the fixed date on which the principal of such security or
such installment of principal or interest is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such contingency has
occurred).
"Subordinated Indebtedness" means Indebtedness of the Company (or a
Subsidiary Guarantor) that is expressly subordinated in right of payment to the
Securities (or a Subsidiary Guaranty, as appropriate).
"Subsidiary" of a Person means (i) another Person which is a corporation
a majority of whose Voting Stock is at the time, directly or indirectly, owned
or controlled by (A) the first Person, (B) the first Person and one or more of
its Subsidiaries or (C) one or more of the first Person's Subsidiaries or (ii)
another Person which is not a corporation (A) at least 50% of the ownership
interest of which and (B) the power to elect or direct the election of a
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majority of the directors or other governing body of which are controlled by
Persons referred to in clause (i)(A), (i)(B) or (i)(C) above.
"Subsidiary Guarantors" means (i) as of the Issue Date, the Initial
Subsidiary Guarantors, and (ii) thereafter, unless released from such
Subsidiary Guaranties as permitted by this Indenture, the Initial Subsidiary
Guarantors and any other Restricted Subsidiary that becomes a guarantor of the
Securities in compliance with the provisions of this Indenture and executes a
supplemental indenture agreeing to be bound by the terms of this Indenture.
"Subsidiary Guaranty" means an unconditional guaranty of the Securities
given by any Restricted Subsidiary pursuant to the terms of Article 11 of this
Indenture.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provision of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"TWTTC" means Tide West Trading & Transport Company, an Oklahoma
corporation.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"Unrestricted Subsidiary" means (i) the Existing Unrestricted
Subsidiary, (ii) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and (iii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary (i) owns any
Capital Stock, Redeemable Stock or Indebtedness of, or owns or holds any Lien
on any Property of, the Company or any other Subsidiary of the Company that is
not a Subsidiary of the Subsidiary to be so designated or (ii) is obligated,
directly or indirectly, with respect to any Indebtedness other than
Unrestricted Subsidiary Indebtedness; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if
such Subsidiary has assets greater than $1,000, then such designation would be
permitted under Section 4.04 as a "Restricted Payment." The designation of a
Restricted Subsidiary as an Unrestricted Subsidiary shall be deemed to cause a
Restricted Payment to be made at the time of such designation in an amount
equal to that portion of the Fair Market Value of such Restricted Subsidiary
represented by the Company's direct and indirect ownership interest in such
Subsidiary. Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or of any Restricted Subsidiary will be
classified as a Restricted Subsidiary. Notwithstanding the foregoing sentence,
the Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving pro
forma effect to such designation (i) the Company could incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under Section 4.03,
and (ii) no Default shall have occurred and be continuing. Any such designation
by the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of a resolution of the Board of Directors giving effect
to such designation and an Officers' Certificate certifying such resolution and
certifying that such designation complies with the foregoing provisions.
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"Unrestricted Subsidiary Indebtedness" means Indebtedness of an
Unrestricted Subsidiary (i) as to which neither the Company nor any Restricted
Subsidiary is directly or indirectly liable (by virtue of the Company or any
such Restricted Subsidiary being the primary obligor on, guarantor of, or
otherwise liable in any respect for such Indebtedness) and (ii) which, upon the
occurrence of a default with respect thereto, does not result in, or permit any
holder (or any representative of any such holder) of any Indebtedness of the
Company or a Restricted Subsidiary to declare (with the passage of time or the
giving of notice or otherwise), a default on any Indebtedness of the Company or
any Restricted Subsidiary or cause the payment, repurchase, redemption,
defeasance or other acquisition or retirement for value thereof to be
accelerated or payable prior to any scheduled principal payment, scheduled
sinking fund payment or maturity.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian, with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced
by such depository receipt.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Restricted Subsidiary" means, at any time, a Restricted
Subsidiary all of the Voting Stock of which (except directors' qualifying
shares) is at the time owned, directly or indirectly, by the Company and its
other Wholly Owned Restricted Subsidiaries.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
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All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meanings assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(7) provisions apply to successive events and transactions; and
(8) references to agreements and other instruments include
subsequent amendments and waivers but only to the extent not prohibited
by this Indenture.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities and the Exchange Securities are set forth in Appendix A,
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to Appendix A which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such
notation, legend or endorsement is in a form acceptable to the Company). Each
Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit 1 to Appendix A and Exhibit A are part of the
terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
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A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange.
The Company may have one or more co-registrars and one or more additional
paying agents; provided, however, that so long as ▇▇▇▇▇▇ Trust and Savings Bank
shall be the Trustee, without the consent of the Trustee, there shall be no
more than one Registrar or Paying Agent. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement
the provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07. The Company or any of its domestically incorporated Wholly Owned
Restricted Subsidiaries may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all money held by the Paying
Agent for the payment of principal of or interest on the Securities and shall
notify the Trustee of any default by the Company in making any such payment.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
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 Holders. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee, in writing at least five 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 Holders.
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SECTION 2.06. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.07. Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases to
be outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser, in which
event the replacement Security shall cease to be outstanding, subject to the
provisions of Section 8-405 of the Uniform Commercial Code.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal, premium and interest payable on that date with respect to
the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Holders on that date pursuant to the terms of this Indenture, then on and after
that date such Securities (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.08. Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Securities and deliver them in exchange for temporary Securities.
SECTION 2.09. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such destruction
to the Company. The Company may not issue new Securities to replace Securities
it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.10. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the Persons who are
Holders on a subsequent special record date. The Company shall fix or cause to
be fixed any such special record date and payment date to the
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reasonable satisfaction of the Trustee and shall promptly mail to each Holder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
SECTION 2.11. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify
the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee considers fair and appropriate and in accordance with methods generally
used at the time of selection by fiduciaries in similar circumstances. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them that the Trustee selects shall be in amounts of $1,000 or
a whole multiple of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called
for redemption. The Trustee shall notify the Company promptly of the
Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
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(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after the
redemption date; and
(7) 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 Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section at least 45 days before the redemption date.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to
the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or a Paying Agent holds in New York, New York in accordance with this Indenture
money sufficient to pay all principal and interest then due and the Trustee or
the Paying Agent, as the case may be, is not prohibited from paying such money
to the Holders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
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SECTION 4.02. Commission Reports. So long as any Securities are
outstanding, the Company will file with the Commission and furnish to the
Holders of Securities all quarterly and annual financial information required
to be contained in a filing with the Commission on Forms 10-Q and 10-K,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual consolidated financial
statements only, a report thereon by the Company's independent auditors.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall file with the Commission and provide the Trustee and Holders and
prospective Holders (upon request) with such annual reports and such
information, documents and other reports as are specified in such Sections and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections;
provided, however, that the Company shall not be required to file any report,
document or other information with the Commission if the Commission does not
permit such filing.
SECTION 4.03. Limitation on Indebtedness.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) unless, after giving pro forma effect to the
application of the proceeds thereof, no Default or Event of Default would occur
as a consequence of such Incurrence or be continuing following such Incurrence
and either (i) after giving pro forma effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds thereof, the
Consolidated Interest Coverage Ratio would be at least 2.5 to 1.0 or (ii) such
Indebtedness is Permitted Indebtedness.
(b) "Permitted Indebtedness" means:
(i) Indebtedness under the Bank Credit Facility, provided
that the aggregate principal amount of all such Indebtedness under the Bank
Credit Facility at any one time outstanding does not exceed the greater of (A)
$275,000,000 and (B) an amount equal to the sum of (1) $170,000,000 and (2) 15%
of Adjusted Consolidated Net Tangible Assets determined as of the date of the
Incurrence of such Indebtedness; provided, however, that the maximum amount
available to be outstanding under the Bank Credit Facility shall be permanently
reduced by the amount of Net Available Cash from Asset Sales used to
permanently repay Indebtedness under the Bank Credit Facility and not
subsequently reinvested in Additional Assets or used to permanently reduce
other Indebtedness to the extent permitted pursuant to Section 4.06;
(ii) Indebtedness arising under this Indenture, including
without limitation the Securities and the Subsidiary Guaranties;
(iii) Indebtedness owed to the Company or any of its
Wholly Owned Restricted Subsidiaries by any of its Restricted Subsidiaries or
Indebtedness owed by the Company to any of its Wholly Owned Restricted
Subsidiaries (but only so long as such Indebtedness is held by the Company or a
Wholly Owned Restricted Subsidiary);
(iv) Indebtedness under Permitted Hedging Agreements of
the Company and its Restricted Subsidiaries (including guaranties thereof by
the Company or another Restricted Subsidiary, as applicable);
(v) Indebtedness in connection with one or more standby
letters of credit, Guarantees, performance bonds or other reimbursement
obligations issued in the
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ordinary course of business of the Company and its Restricted Subsidiaries and
not in connection with the borrowing of money or the obtaining of advances or
credit (other than advances or credit on open account, includable in current
liabilities, for goods and services in the ordinary course of business of the
Company and its Restricted Subsidiaries and on terms and conditions which are
customary in the Oil and Gas Business and other than the extension of credit
represented by such letter of credit, Guarantee or performance bond itself);
(vi) obligations relating to net oil or gas balancing
positions arising in the ordinary course of business of the Company and its
Restricted Subsidiaries which are customary in the Oil and Gas Business;
(vii) Permitted Non-Recourse Indebtedness of the Company
or any of its Restricted Subsidiaries;
(viii)Indebtedness outstanding on the Issue Date that is
not repaid with the proceeds of the Offering and not otherwise permitted in
clauses (i) through (vii) above;
(ix) Indebtedness not otherwise permitted to be Incurred
pursuant to this subsection (b), provided that the aggregate principal amount
of all Indebtedness incurred pursuant to this clause (ix), together with all
Indebtedness Incurred pursuant to clause (x) of this subsection in respect of
Indebtedness previously Incurred pursuant to this clause (ix), at any one time
outstanding does not exceed $25,000,000;
(x) Permitted Refinancing Indebtedness Incurred in
exchange for, or the proceeds of which are used to refinance, (A) Indebtedness
referred to in clauses (ii), (viii) and (ix) of this subsection (including
Indebtedness previously incurred pursuant to this clause (x)) or (B)
Indebtedness Incurred pursuant to clause (a)(i) of this Section; and
(xi) accounts payable or other obligations of the Company
or any Restricted Subsidiary to trade creditors created or assumed by the
Company or such Restricted Subsidiary in the ordinary course of business in
connection with the obtaining of goods or services.
SECTION 4.04. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
if, at the time of and after giving effect to the proposed Restricted Payment
(i) any Default or Event of Default would have occurred and be continuing, (ii)
the Company could not incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 4.03 or (iii) the aggregate
amount expended or declared for all Restricted Payments from the Issue Date
would exceed the sum (without duplication) of the following:
(1) 50% of the aggregate Consolidated Net Income of the Company accrued on a
cumulative basis commencing on the last day of the fiscal quarter
immediately preceding the Issue Date, and ending on the last day of the
fiscal quarter ending on or immediately preceding the date of such
proposed Restricted Payment (or, if such aggregate Consolidated Net
Income shall be a loss, minus 100% of such loss), plus
(2) the aggregate net cash proceeds or the Fair Market Value of Property
other than cash received by the Company on or after the Issue Date, from
the issuance or sale (other than to a Subsidiary of the Company) of
Capital Stock of the Company or any options, warrants or rights to
purchase Capital Stock of the Company, plus
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(3) the aggregate net cash proceeds received by the Company as capital
contributions to the Company (other than from a Subsidiary of the
Company) on or after the Issue Date, plus
(4) the aggregate net cash proceeds received by the Company upon the
exercise of any options, warrants or rights to purchase shares of
Capital Stock of the Company (other than from a Subsidiary of the
Company) on or after the Issue Date, plus
(5) the aggregate net cash proceeds received on or after the Issue Date by
the Company from the issuance or sale (other than to any Subsidiary of
the Company) of convertible debt or convertible Redeemable Stock that
has been converted into or exchanged for Capital Stock of the Company,
together with the aggregate cash received by the Company at the time of
such conversion or exchange, plus
(6) to the extent not otherwise included in the Company's Consolidated Net
Income, an amount equal to the net reduction in any Investment made by
the Company and its Restricted Subsidiaries subsequent to the Issue Date
in any Person resulting from (a) payments of interest on debt,
dividends, repayments of loans or advances, or other transfers or
distributions of Property, in each case to the Company or any Restricted
Subsidiary from any Person, and in an amount not to exceed the book
value of such Investment previously made in such Person that was treated
as a Restricted Payment, or (b) the designation of any Unrestricted
Subsidiary as a Restricted Subsidiary, in each case in an amount not to
exceed the lesser of (x) the book value of such Investment previously
made in such Unrestricted Subsidiary that was treated as a Restricted
Payment, and (y) the Fair Market Value of such Unrestricted Subsidiary,
plus
(7) $15,000,000.
(b) The limitations set forth in paragraph (a) above do not prevent the
Company or any Restricted Subsidiary from making the following Restricted
Payments so long as, at the time thereof, no Default or Event of Default shall
have occurred and be continuing (except in the case of clause (i) below under
which a Restricted Payment may be made even if a Default or Event of Default
has occurred and is continuing):
(i) the payment of any dividend on Capital Stock of the Company
or any Restricted Subsidiary within 60 days after the declaration
thereof, if at such declaration date such dividend could have been paid
in compliance with paragraph (a) above;
(ii) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company or any Restricted
Subsidiary, in exchange for, or out of the aggregate net cash proceeds
of, a substantially concurrent issuance and sale (other than to a
Subsidiary of the Company) of Capital Stock of the Company;
(iii) the making of any principal payment on or the repurchase,
redemption, defeasance or other acquisition or retirement for value,
prior to any scheduled principal payment, scheduled sinking fund payment
or maturity, of any Pari Passu Indebtedness or Subordinated Indebtedness
(other than Redeemable Stock) in exchange for, or out of the aggregate
net cash proceeds of, a substantially concurrent issuance and sale
(other than to a Subsidiary of the Company) of Capital Stock of the
Company;
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(iv) the making of any principal payment on or the repurchase,
redemption, defeasance or other acquisition or retirement for value of
Pari Passu Indebtedness or Subordinated Indebtedness in exchange for, or
out of the aggregate net cash proceeds of, a substantially concurrent
Incurrence (other than a sale to a Subsidiary of the Company) of Pari
Passu Indebtedness or Subordinated Indebtedness so long as such new
Indebtedness is Permitted Refinancing Indebtedness and such new
Indebtedness (1) has an Average Life to Stated Maturity that is longer
than the Average Life to Stated Maturity of the Securities and (2) has a
Stated Maturity for its final scheduled principal payment that is at
least 91 days later than the Stated Maturity of the final scheduled
principal payment of the Securities; and
(v) loans made to officers, directors and employees of the
Company or any Restricted Subsidiary approved by the Board of Directors
(or a duly authorized officer), the proceeds of which are used (1) to
purchase common stock of the Company in connection with a restricted
stock or employee stock purchase plan, or to exercise stock options
received pursuant to an employee or director stock option plan or other
incentive plan, in a principal amount not to exceed the exercise price
of such stock options and (2) to refinance loans, together with accrued
interest thereon, made pursuant to item (1) of this clause (v),
provided, however, that such loans do not exceed $7,500,000 at any one
time outstanding.
The actions described in clauses (i), (ii), (iii) and (v) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be taken
in accordance with this paragraph (b) but shall reduce the amount that would
otherwise be available for Restricted Payments under paragraph (a) (provided
that any dividend paid pursuant to clause (i) of this paragraph (b) shall
reduce the amount that would otherwise be available under paragraph (a) when
declared, but not also when subsequently paid pursuant to such clause (i)), and
the actions described in clause (iv) of this paragraph (b) shall be Restricted
Payments that shall be permitted to be taken in accordance with this paragraph
(b) but shall not reduce the amount that would otherwise be available for
Restricted Payments under paragraph (a).
(c) "Permitted Investments" means any and all of the following: (i)
Permitted Short-Term Investments; (ii) Investments in property, plant and
equipment used in the ordinary course of business and Permitted Business
Investments; (iii) Investments by a Restricted Subsidiary in the Company; (iv)
Investments by the Company or any Restricted Subsidiary in any Restricted
Subsidiary; (v) Investments by the Company or any Restricted Subsidiary in a
Person, if such Person or a Subsidiary of such Person will, as a result of the
making of such Investment and all other contemporaneous related transactions,
become a Restricted Subsidiary or be merged or consolidated with or transfer or
convey all or substantially all of its assets to the Company or a Restricted
Subsidiary; (vi) Investments in Persons in the Oil and Gas Business (other than
Restricted Subsidiaries) intended to promote the Company's strategic business
objectives in an amount not to exceed $20,000,000 at any one time outstanding
(which Investments shall be deemed to be no longer outstanding only upon the
return of capital thereof); (vii) Investments in the form of securities
received from Asset Sales, provided that such Asset Sales are made in
compliance with Section 4.06; (viii) Investments in negotiable instruments held
for collection, lease, utility and other similar deposits, and stock,
obligations or other securities received in settlement of debts (including,
without limitation, under any bankruptcy or other similar proceeding) owing to
the Company or any of its Restricted Subsidiaries as a result of foreclosure,
perfection or enforcement of any Liens or Indebtedness, in each of the
foregoing cases in the ordinary course of business of the Company or such
Restricted Subsidiary; (ix) Investments in the form of Permitted Hedging
Agreements of the Company and its Restricted Subsidiaries; (x) relocation
allowances, advances and loans to officers, directors and employees of the
Company or any of its Restricted Subsidiaries in the ordinary course of
business, provided such items do not
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exceed $2,500,000 at any one time outstanding; and (xi) Investments not
otherwise permitted to be made pursuant to this subsection in an amount not to
exceed $5,000,000 at any one time outstanding.
SECTION 4.05. Limitation on Payment Restrictions Affecting
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create, assume or otherwise cause or suffer to exist
or to become effective any consensual encumbrance or restriction on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or Redeemable Stock held by the Company or a
Restricted Subsidiary, (ii) make payments in respect of any Indebtedness owed
to the Company or any of its Restricted Subsidiaries, (iii) make loans or
advances to the Company or any of its Restricted Subsidiaries or (iv) transfer
any of its assets to the Company or any of its Restricted Subsidiaries, other
than:
(A) consensual encumbrances or restrictions required by a Bank
Credit Facility that are not more restrictive than those in effect under the
Bank Credit Facility on the Issue Date;
(B) with respect to clause (iv) above, customary provisions
restricting subletting, assignment, pledging or transfer of any Property that
is a lease, license, contract or similar type of Property;
(C) consensual encumbrances or restrictions in instruments
governing Indebtedness of a Person acquired by the Company or any Restricted
Subsidiary at the time of such acquisition, provided that such Indebtedness was
not Incurred in anticipation of such acquisition;
(D) with respect to clause (iv) above, restrictions contained in
purchase money obligations for property acquired in the ordinary course of
business;
(E) with respect to clause (iv) above, customary restrictions
contained in asset sale agreements limiting the transfer of such assets pending
the closing of such sale; and
(F) consensual encumbrances or restrictions in instruments
governing Indebtedness Incurred to refinance, refund, extend or renew
Indebtedness referred to in clauses (C) and (D) above, provided that the
payment restrictions contained therein are not more restrictive taken as a
whole than those provided for in the Indebtedness being refinanced, refunded,
extended or renewed.
SECTION 4.06. Limitation on Asset Sales.
(a) The Company will not, and will not permit any Restricted Subsidiary
to, consummate any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the Property subject to
such Asset Sale and (ii) all of the consideration paid to the Company or such
Restricted Subsidiary in connection with such Asset Sale is in the form of
cash, Permitted Short-Term Investments, Exchanged Properties, Liquid Securities
or the assumption by the purchaser of liabilities of the Company (other than
liabilities of the Company that are by their terms subordinated to the
Securities), liabilities of any Subsidiary Guarantor that made such Asset Sale
(other than liabilities of a Subsidiary Guarantor that are by their terms
subordinated to such Subsidiary Guarantor's Subsidiary Guaranty), or
liabilities of any Restricted Subsidiary that made such Asset Sale and which is
not a Subsidiary Guarantor, in each case as a result of which the Company and
its Restricted Subsidiaries are no longer liable ("Permitted Consideration");
provided, however, that the
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Company and its Restricted Subsidiaries shall be permitted to receive Property
other than Permitted Consideration if, after giving pro forma effect to such
Asset Sale, the aggregate Fair Market Value (evaluated at the time of such
Asset Sale) of all such Property other than Permitted Consideration received
from Asset Sales made after the Issue Date, which Property is held by the
Company or any Restricted Subsidiary at the time of such Asset Sale, shall not
exceed 10% of Adjusted Consolidated Net Tangible Assets.
(b) The Net Available Cash from Asset Sales may be applied by the
Company or a Restricted Subsidiary, to the extent the Company or such
Restricted Subsidiary elects (or is required by the terms of any Senior
Indebtedness), (i) to prepay, repay or purchase Senior Indebtedness of the
Company or a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary
(in each case excluding Indebtedness owed to the Company or an Affiliate of the
Company) in a manner that results in the permanent reduction in the balance of
such Indebtedness and, if applicable, a permanent reduction in any outstanding
commitment for future Incurrences of Indebtedness thereunder; (ii) to reinvest
in Additional Assets (including by means of an Investment in Additional Assets
by a Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary); (iii) to purchase Securities or 9-7/8% Notes
pursuant to a 9-7/8% Notes Asset Sale Offer (excluding Securities or 9-7/8%
Notes owned by the Company or an Affiliate of the Company); or (iv) in such
other manner as the Company or such Restricted Subsidiary may elect in
compliance with the other provisions of this Indenture.
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with clauses (i), (ii) and (iii) of the preceding subsection within
360 days from the date of such Asset Sale shall constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $10,000,000, the Company
will make an offer to purchase Securities having an aggregate principal amount
equal to the aggregate amount of Excess Proceeds (the "Prepayment Offer") at a
purchase price equal to 100% of the principal amount of such Securities plus
accrued and unpaid interest thereon (if any) to the Purchase Date (as defined
below) (the "Prepayment Offer Payment") in accordance with the procedures set
forth in this Section, but, if the terms of any Pari Passu Indebtedness require
that a Pari Passu Offer be made contemporaneously with the Prepayment Offer,
then the Excess Proceeds shall be prorated between the Prepayment Offer and
such Pari Passu Offer in accordance with the aggregate outstanding principal
amounts of the Securities and such Pari Passu Indebtedness, and the aggregate
principal amount of Securities for which the Prepayment Offer is made shall be
reduced accordingly. If the aggregate principal amount of Securities tendered
by Holders thereof exceeds the amount of available Excess Proceeds, then such
Excess Proceeds will be allocated pro rata according to the principal amount of
the Securities tendered and the Trustee will select the Securities to be
purchased by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers fair and
appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances. To the extent that any
portion of the amount of Excess Proceeds remains after compliance with the
second sentence of this subsection and provided that all Holders of Securities
have been given the opportunity to tender their Securities for purchase as
described in the following subsection in accordance with this Indenture, the
Company or such Restricted Subsidiary may use such remaining amount for general
corporate purposes otherwise permitted under this Indenture and the amount of
Excess Proceeds will be reset to zero.
(d) Within five Business Days after 360 days from the date of an
Asset Sale, the Company shall, if it is obligated to apply an amount equal to
any Excess Proceeds (or any portion thereof) to fund an offer to purchase the
Securities, send a written Prepayment Offer notice, by first-class mail, to the
holders of the Securities (the "Prepayment Offer Notice"), accompanied by such
information regarding the Company and its Subsidiaries as the
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Company in good faith believes will enable such holders of the Securities to
make an informed decision with respect to the Prepayment Offer. The Prepayment
Offer Notice will state, among other things, (1) that the Company is offering
to purchase Securities pursuant to the provisions of Section 4.06 of this
Indenture, (2) the purchase price and purchase date, which shall be subject to
any contrary requirements of applicable law, no less than 30 days nor more than
60 days after the date the Prepayment Offer Notice is mailed (the "Purchase
Date"), (3) that any Securities (or any portions thereof) accepted for payment
(and duly paid on the Purchase Date) pursuant to the Prepayment Offer shall
cease to accrue interest after the Purchase Date, (4) that any Securities (or
portions thereof) not properly tendered will continue to accrue interest, (5)
the aggregate principal amount of Securities to be purchased, (6) a description
of the procedure which holders of Securities must follow in order to tender
their Securities and the procedures that holders of Securities must follow in
order to withdraw an election to tender their Securities for payment, and (7)
all other instructions and materials necessary to enable holders to tender
Securities pursuant to the Prepayment Offer.
(e) On the Purchase Date, the Company will (i) accept for payment
Securities or portions thereof properly tendered pursuant to the Prepayment
Offer, (ii) deposit with the Paying Agent in immediately available funds an
amount equal to the Prepayment Offer Payment in respect of Securities or
portions thereof so tendered and (iii) deliver, or cause to be delivered, to
the Trustee the Securities so accepted together with an Officers' Certificate
listing the Securities or portions thereof tendered to the Company and accepted
for payment. The Paying Agent shall promptly mail to each holder of Securities
so accepted payment in an amount equal to the Prepayment Offer Payment for such
Securities and the Trustee shall promptly authenticate and mail to each holder
a new Securities in a principal amount equal to any unpurchased portion of the
Securities surrendered, if any; provided, that each such new Security shall be
in a principal amount of $1,000 or any integral multiple thereof. The Company
will announce publicly the results of a Prepayment Offer on or as soon as
practicable after the Purchase Date.
(f) The Company will comply, to the extent applicable, with the
requirements of Rules 13e-4 and 14e-1 under the Exchange Act and any other
securities laws or regulations thereunder to the extent such laws and
regulations are applicable in connection with the purchase of Securities as
described above. To the extent that the provisions of any securities laws or
regulations conflict with the provisions relating to the Prepayment Offer, the
Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations described above by virtue
thereof.
SECTION 4.07. Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or suffer to
exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate of the Company unless (i) such transaction or
series of related transactions is on terms that are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction in arm's-length dealings with an
unrelated third party, (ii) with respect to a transaction or series of related
transactions involving payments in excess of $1,000,000 in the aggregate, the
Company delivers an Officers' Certificate to the Trustee certifying that such
transaction complies with clause (i) above, and (iii) with respect to a
transaction or series of transactions involving payments in excess of
$5,000,000 in the aggregate, the Company delivers an Officers' Certificate to
the Trustee certifying that (A) such transaction complies with clause (i) above
and (B) such transaction or series of related transactions has been approved by
a majority of the disinterested directors of the Board of Directors of the
Company.
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(b) The limitations of the preceding subsection do not apply
to:
(i) the payment of reasonable and customary regular fees to
directors of the Company or any of its Restricted Subsidiaries who are
not employees of the Company or any of its Restricted Subsidiaries;
(ii) indemnities of officers and directors of the Company or any
Subsidiary consistent with such Person's bylaws and applicable statutory
provisions;
(iii) any employee compensation and other benefit arrangements
entered into by the Company or any of its Subsidiaries in the ordinary
course of business;
(iv) relocation allowances, advances and loans made to officers,
directors and employees of the Company and its Restricted Subsidiaries
provided such items do not exceed $2,500,000 in the aggregate at any one
time outstanding;
(v) transactions among the Company and its Restricted
Subsidiaries;
(vi) loans constituting Restricted Payments made pursuant to and
in compliance with Section 4.04(b)(v); and
(vii) the gas gathering agreement between the Company and the
Existing Unrestricted Subsidiary as in effect on the Issue Date and oil
and gas operating agreements entered into in the ordinary course of
business by the Company and its Restricted Subsidiaries in a manner
consistent with the current practice of the Company and its Restricted
Subsidiaries as of the Issue Date so long as such operating agreements
are in a form customary in the Oil and Gas Business.
SECTION 4.08. Limitation on Issuance and Sale of Capital Stock
of Restricted Subsidiaries. The Company will not (i) permit any Restricted
Subsidiary to issue any Capital Stock (including, without limitation, pursuant
to any merger, consolidation, recapitalization or similar transaction) other
than to the Company or a Wholly Owned Restricted Subsidiary or (ii) permit any
Person other than the Company or a Restricted Subsidiary to own any Capital
Stock of any other Restricted Subsidiary (other than directors' qualifying
shares), except for (A) a sale to a Person of the Capital Stock of a Restricted
Subsidiary, which sale was made by the Company or a Restricted Subsidiary
subject to, and in compliance with, as appropriate, either Section 4.04 or
Section 4.06, and such Person's subsequent ownership of such Capital Stock of
such Restricted Subsidiary, (B) the issuance of Capital Stock by a Restricted
Subsidiary to a Person other than the Company or a Wholly Owned Restricted
Subsidiary, which issuance was made subject to and in compliance with Section
4.06, and such Person's subsequent ownership of such Capital Stock and (C) the
ownership of Capital Stock of a Restricted Subsidiary owned by a Person at the
time such Restricted Subsidiary became a Restricted Subsidiary or acquired by
such Person in connection with the formation of the Restricted Subsidiary (and
in the case of the formation of such Restricted Subsidiary, the issuance of
such Capital Stock). If a Person (other than a Material Restricted Subsidiary)
whose Capital Stock was issued or sold in a transaction described in this
Section is, as a result of such transaction, no longer a Restricted Subsidiary,
then any Capital Stock of such Person retained by the Company or a Restricted
Subsidiary shall be treated as a Restricted Payment made at the time of such
transaction in an amount equal to that portion of the Fair Market Value of such
Person represented by such retained Capital Stock.
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SECTION 4.09. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of
Securities shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of such Holder's
Securities pursuant to the offer described below (the "Change of Control
Offer") at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the purchase date
(the "Change of Control Payment").
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder stating, among other things: (i) that a
Change of Control has occurred and a Change of Control Offer is being made
pursuant to this Indenture and that all Securities (or portions thereof)
properly tendered will be accepted for payment; (ii) the purchase price and the
purchase date, which shall be, subject to any contrary requirements of
applicable law, no fewer than 30 days nor more than 60 days from the date the
Company notifies the Holders of the occurrence of the Change of Control (the
"Change of Control Payment Date"); (iii) that any Securities (or portions
thereof) accepted for payment (and duly paid on the Change of Control Payment
Date) pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date; (iv) that any Securities (or portions
thereof) not properly tendered will continue to accrue interest; (v) a
description of the transaction or transactions constituting the Change of
Control; (vi) the procedures that Holders of Securities must follow in order to
tender their Securities (or portions thereof) for payment and the procedures
that Holders of Securities must follow in order to withdraw an election to
tender Securities (or portions thereof) for payment; and (vii) all other
instructions and materials necessary to enable Holders to tender Securities
pursuant to the Change of Control Offer.
(c) On the Change of Control Payment Date, the Company will
(i) accept for payment Securities or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent in
immediately available funds an amount equal to the Change of Control Payment in
respect of Securities or portions thereof so tendered and (iii) deliver, or
cause to be delivered, to the Trustee the Securities so accepted together with
an Officers' Certificate listing the Securities or portions thereof tendered to
the Company and accepted for payment. The Paying Agent shall promptly mail to
each Holder of Securities so accepted payment in an amount equal to the Change
of Control Payment for such Securities and the Trustee shall promptly
authenticate and mail to each holder a new Securities in a principal amount
equal to any unpurchased portion of the Securities surrendered, if any;
provided, that each such new Security shall be in a principal amount of $1,000
or any integral multiple thereof. The Company will announce publicly the
results of a Change in Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(d) The Company will comply, to the extent applicable, with the
requirements of Rules 13e-4 and 14e-1 under the Exchange Act, and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the purchase of Securities in
connection with a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions relating to the
Change of Control Offer, the Company will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
described above by virtue thereof.
SECTION 4.10. Limitation on Liens. The Company will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, create, incur, assume or suffer to exist any Lien on or with respect to
any Property of the Company or such
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Restricted Subsidiary, whether owned on the Issue Date or acquired after the
Issue Date, or any interest therein or any income or profits therefrom, unless
the Securities (and, in the case of a Restricted Subsidiary, a Subsidiary
Guaranty from such Subsidiary) are secured equally and ratably with (or prior
to) any and all other obligations secured by such Lien, except that the Company
and its Restricted Subsidiaries may enter into, create, incur, assume or suffer
to exist Liens securing Senior Indebtedness, Liens securing Senior Indebtedness
of a Subsidiary Guarantor, Liens securing Indebtedness of a Restricted
Subsidiary that is not a Subsidiary Guarantor and Permitted Liens.
SECTION 4.11. Limitation on Layered Indebtedness.
(a) The Company will not Incur any Indebtedness which is subordinated
or junior in right of payment to any Senior Indebtedness unless such
Indebtedness constitutes Indebtedness which is junior to, or pari passu with,
the Securities in right of payment.
(b) The Company will not permit any Subsidiary Guarantor to, and no
Subsidiary Guarantor will, Incur any Indebtedness that is subordinated or
junior in right of payment to any other Indebtedness of such Subsidiary
Guarantor unless such Indebtedness is, by its terms, pari passu with or
subordinated in right of payment to such Subsidiary Guarantor's Subsidiary
Guaranty.
SECTION 4.12 Future Guarantors. The Company shall cause any
Restricted Subsidiary that becomes a Significant Subsidiary (and any
Significant Subsidiary that was previously an Unrestricted Subsidiary which
becomes a Restricted Subsidiary) after the Issue Date to execute and deliver to
the Trustee a supplemental indenture in the form of Exhibit B hereto pursuant
to which such Significant Subsidiary will become a Subsidiary Guarantor and
shall Guarantee payment of the Securities as provided in Section 11.07.
SECTION 4.13. Maintenance of Office or Agency. The Company
shall maintain in The City of New York, an office or agency where Securities
may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities 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, and the Company hereby appoints the
Trustee its agent to receive all presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all of such purposes, and
may from time to time rescind such designations; provided that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation and any change in the location of any such other office or
agency.
SECTION 4.14. Money for the Security Payments to be Held in
Trust. If the Company, any Subsidiary of the Company or any of their
respective Affiliates shall at any time act as Paying Agent with respect to the
Securities, such Paying Agent shall, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the principal (and premium, if any) or interest so
becoming due until such
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money shall be paid to such Persons or otherwise disposed of as herein
provided, and shall promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents with
respect to the Securities, it shall, prior to or on each due date of the
principal of (and premium, if any) or interest on any of the Securities,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Paying Agent shall promptly
notify the Trustee of the Company's action or failure so to act.
Any funds deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Securities and remaining unclaimed for two years after
the date upon which such payment shall have become due, shall be paid to the
Company on Order or, if then held by the Company, shall be discharged from such
trust; provided, however, that the Company shall cause to be published at least
once in a newspaper of general circulation in The City of New York or mailed to
each Holder entitled to such unclaimed funds, notice that such funds remain
unclaimed and that, after a date specified therein, which shall be a date not
less than 30 days from the date of such publication or mailing, any unclaimed
balance of such money remaining as of such date shall be repaid to the Company.
After repayment to the Company, Holders entitled to such funds shall look only
to the Company for payment without interest thereon, as an unsecured general
creditor, and the Trustee and the Paying Agent shall have no further liability
with respect to such trust money, and the Company shall not be a trustee in
respect of such funds.
SECTION 4.15. Payment of Taxes and Other Claims. The Company
shall pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any of its Subsidiaries or upon the
income, profits or property of the Company or any of its Subsidiaries and (b)
all material lawful claims for labor, materials and supplies which, if unpaid,
might by law become a Lien upon the property of the Company or any of its
Subsidiaries; provided that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made.
SECTION 4.16. Corporate Existence. The Company will, and will
cause each of its Significant Subsidiaries to, preserve and keep in full force
and effect its corporate existence in accordance with applicable law, except as
permitted in Sections 5.01 and 5.02; provided, however, that the Company may
terminate the corporate existence of any Significant Subsidiary that is not a
Subsidiary Guarantor if, in the good faith judgment of the Board of Directors,
such termination is desirable in the conduct of the business of the Company and
its Restricted Subsidiaries and is not disadvantageous in any material respect
to the Holders.
SECTION 4.17. Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe
the Default, its status and what action the Company is taking or proposes to
take with respect thereto. The Company also shall comply with TIA Section
314(a)(4).
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SECTION 4.18. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.19. Prohibition on Company and Guarantors Becoming
Investment Companies. None of the Company or the Subsidiary Guarantors shall
become an "investment company" as defined in the Investment Company Act of
1940, as amended.
SECTION 4.20. Stay, Extension and Usury Laws. The Company and
each of the Subsidiary 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 of 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 (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.
ARTICLE 5
Successor Company
SECTION 5.01. Merger, Consolidation and Sale of Substantially
All Assets.
(a) The Company (i) will not merge or consolidate with or into any other
Person (whether or not the Company is the surviving entity), and (ii) will not
and will not permit its Restricted Subsidiaries to, directly or indirectly,
sell, transfer, assign, lease, convey or otherwise dispose of all or
substantially all of the Property of the Company and its Restricted
Subsidiaries taken as a whole in any one transaction or a series of
transactions (including, without limitation, dispositions pursuant to mergers,
consolidations, Investments and Production Payments and Reserve Sales), in each
case unless:
(A) the Surviving Entity shall be a corporation organized
and existing under the laws of the United States of America or a
State thereof or the District of Columbia;
(B) if the Company is not the Surviving Entity, the
Surviving Entity expressly assumes, by supplemental indenture
satisfactory to the Trustee, executed and delivered to the
Trustee by the Surviving Entity, the due and punctual payment of
the principal of, premium, if any, and interest on all the
Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Company (and in the case
of clause (ii) above, the Company and the Surviving Entity shall
both be considered as the issuer of the Securities);
(C) in the case of the sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all of
the Property of the Company and its Restricted Subsidiaries taken
as a whole, such Property shall have been transferred as an
entirety or virtually as an entirety to one Person;
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(D) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis, no
Default or Event of Default shall have occurred and be
continuing;
(E) except in the case of a merger of the Company with a
Restricted Subsidiary, immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the
Surviving Entity would be able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under
Section 4.03;
(F) except in the case of a merger of the Company with a
Restricted Subsidiary, immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the
Surviving Entity shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company
immediately prior to the transaction or series of transactions;
(G) if the Company is not the Surviving Entity, then (1)
each Subsidiary Guarantor (unless it is the Surviving Entity)
shall have executed and delivered to the Trustee a supplemental
indenture satisfactory to the Trustee confirming that such
Subsidiary Guarantor's Subsidiary Guaranty remains in full force
and effect and guarantees the Surviving Entity's obligations
under this Indenture and the Securities, (2) each Significant
Subsidiary of the Surviving Entity (determined immediately after
giving effect to such transaction or series of transactions on a
pro forma basis) shall have executed and delivered to the Trustee
a supplemental indenture satisfactory to the Trustee pursuant to
which such Person becomes a Subsidiary Guarantor and guarantees
the Securities pursuant to the terms of a Subsidiary Guaranty and
(3) in the case of clause (ii) above, the Company shall have
executed and delivered to the Trustee a supplemental indenture
satisfactory to the Trustee pursuant to which the Company
confirms its obligations for the due and punctual payment of the
principal of, premium, if any, and interest on all the
Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Company; and
(H) the Company and, if the Company is not the Surviving
Entity, the Surviving Entity, each shall have delivered to the
Trustee Officers' Certificates (attaching the calculations to
demonstrate compliance with clauses (E) and (F) above) and an
Opinion of Counsel, each stating that such merger, consolidation
or disposition and any such supplemental indentures comply with
the above provisions and that all conditions precedent relating
to such transaction or transactions have been complied with.
The term "Surviving Entity" shall mean the Person referred to in
clauses (i) and (ii) above (1) formed by or surviving any such merger or
consolidation involving the Company or (2) to which any such sale, transfer,
assignment, lease, conveyance or other disposition is made.
(b) In addition to, and not in limitation of, subsection (a) above,
(i) the Company will not permit any Material Restricted Subsidiary to merge or
consolidate with or into any other Person (whether or not such Material
Restricted Subsidiary survives such merger or consolidation), and (ii) the
Company will not permit any Material Restricted Subsidiary to directly or
indirectly issue Capital Stock or Redeemable Stock in a single transaction or a
series of transactions (including, without limitation, engaging in any
recapitalization or
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similar transaction) if, after giving effect to such issuance (and all possible
conversions, exercises and similar events with respect to any such stock
(whether or not then convertible or exercisable) in order to reach a fully
diluted, fully converted basis), such Material Restricted Subsidiary would no
longer be a Subsidiary of the Company, in each case unless:
(A) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis, no
Default or Event of Default shall have occurred and be
continuing;
(B) except in the case of a merger of a Material
Restricted Subsidiary with the Company or a Wholly Owned
Restricted Subsidiary, immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the
Company would be able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section
4.03;
(C) except in the case of a merger of a Material
Restricted Subsidiary with the Company or a Wholly Owned
Restricted Subsidiary, immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the
Company shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Company immediately prior
to the transaction or series of transactions;
(D) the Material Restricted Subsidiary Survivor shall have
executed and delivered to the Trustee, as appropriate, either (1)
a supplemental indenture satisfactory to the Trustee confirming
that such Material Restricted Subsidiary Survivor's Subsidiary
Guaranty remains in full force and effect and guarantees the
Company's obligations under this Indenture and the Securities, or
(2) a supplemental indenture satisfactory to the Trustee pursuant
to which such Material Restricted Subsidiary Survivor becomes a
Subsidiary Guarantor and guarantees the Securities pursuant to
the terms of a Subsidiary Guaranty; and
(E) the Company and such Material Restricted Subsidiary
Survivor each shall have delivered to the Trustee Officers'
Certificates (in the case of the Company, attaching the
calculations to demonstrate compliance with clauses (B) and (C)
above) and an Opinion of Counsel, each stating that such merger,
consolidation or issuance and any such supplemental indentures
comply with the above provisions and that all conditions
precedent relating to such transaction or transactions have been
complied with.
The term "Material Restricted Subsidiary Survivor" shall
mean (1) in the case of clause (i) above, the Person surviving
any such merger or consolidation or (2) in the case of clause
(ii) above, such Material Restricted Subsidiary.
(c) With respect to each transaction or series of transactions
described in subsections (a) and (b) above, giving effect to such transaction
or series of transactions on a pro forma basis shall include, without
limitation, (i) treating any Indebtedness not previously the obligation of the
Company or any of its Restricted Subsidiaries which becomes an obligation of
the Company or any of its Restricted Subsidiaries in connection with or as a
result of such transaction or series of transactions as having been Incurred at
the time of such transaction or series of transactions, and (ii) giving effect
to any Indebtedness Incurred or anticipated to be Incurred in connection with
such transaction or series of transactions.
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SECTION 5.02. When a Subsidiary Guarantor May Merge or Transfer
Assets. Each Subsidiary Guarantor may merge or consolidate with or dispose of
its assets to the Company or a Wholly Owned Restricted Subsidiary that is a
Subsidiary Guarantor except to the extent any such transaction is limited by
Section 5.01. In addition, each Subsidiary Guarantor may merge or consolidate
with or dispose of its assets to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary that is a Subsidiary Guarantor), regardless of
whether such Person is an Affiliate of such Subsidiary Guarantor, if: (i)
immediately after such transaction, and giving effect thereto, no Default or
Event of Default has occurred and is continuing;(ii) such transaction was
subject to, and consummated in compliance with, as appropriate, either Section
4.06 or Section 5.01; and (iii) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
transaction complies with the above provisions and that all conditions
precedent relating to such transaction have been complied with.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. Whenever used herein, an
"Event of Default" means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(a) the Company shall fail to make any payment of interest on
the Securities within 30 days after any such amount becomes due in
accordance with the terms thereof;
(b) the Company shall fail to make any payment of principal of
(or premium, if any, on) the Securities when due in accordance with the
terms thereof, whether upon maturity, acceleration, call for redemption,
call for purchase under Section 4.06 or Section 4.09 or otherwise;
(c) the Company and any Subsidiary Guarantor shall fail to
observe or perform any other covenant or agreement contained in the
Securities or this Indenture and such failure continues for a period of
60 days after written notice of such failure has been sent to the
Company by the Trustee specifying such default and requiring it to be
remedied and stating that such notice is a "Notice of Default";
(d) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if
any, on) or interest on any Indebtedness (other than Permitted Non-
Recourse Indebtedness) of the Company (other than the Securities) or any
Restricted Subsidiary for money borrowed when due (whether resulting
from maturity, acceleration, mandatory redemption or otherwise), or any
other default causing acceleration of any Indebtedness (other than
Permitted Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary for money borrowed, provided that the aggregate principal
amount of such Indebtedness shall exceed $5,000,000; and specifically
including, without limitation, any such default under or acceleration of
any Indebtedness (other than Permitted Non-Recourse Indebtedness)
directly or indirectly resulting or derived from, or caused by, a
default under or acceleration of any Permitted Non-Recourse
Indebtedness;
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(e) one or more final judgments or orders by a court of
competent jurisdiction are entered against the Company or any Restricted
Subsidiary in an uninsured or unindemnified aggregate amount in excess
of $5,000,000 and such judgments or orders are not discharged, waived,
stayed, satisfied or bonded for a period of 60 consecutive days;
(f) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or files a request or
petition for a writ of execution to initiate bankruptcy
proceedings or have itself adjudicated as bankrupt;
(ii) consents to the entry of an order for relief against
it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or
for any substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors; or
(v) proposes or agrees to an accord or composition in
bankruptcy between itself and its creditors;
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company or any
Restricted Subsidiary or for any substantial part of the property
of the Company or any Restricted Subsidiary;
(iii) orders the winding up or liquidation of the Company
or any Restricted Subsidiary;
(iv) adjudicates the Company or a Restricted Subsidiary
as bankrupt or insolvent; or
(v) ratifies an accord or composition in bankruptcy
between the Company or a Restricted Subsidiary and the respective
creditors thereof;
and the order or decree remains unstayed and in effect for 60
days; or
(h) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of this Indenture and
such Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms
its obligations under its Subsidiary Guaranty.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default described in clause (f) or (g) above) with respect to the
Securities at the time outstanding shall occur and be continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities by written notice may declare the
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principal amount of the Securities to be due and payable immediately. If an
Event of Default described in clause (f) or (g) above with respect to the
Securities at the time outstanding shall occur, the principal amount of all the
Securities will automatically, and without any action by the Trustee or any
Holder, become immediately due and payable.
After any such acceleration, but before a judgment or decree
based on acceleration, the Holders of a majority in aggregate principal amount
of the outstanding Securities may rescind and annul such acceleration if
(a) the Company or any Subsidiary Guarantor has paid or
deposited with the Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursement and
advances of the Trustee, its agents and counsel,
(ii) all overdue installments of interest on all
Securities;
(iii) the principal of (and premium, if any, on ) any
Securities that have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or
rates prescribed therefor in the Securities, and
(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate prescribed
therefor in the Securities;
(b) all Events of Default, other than the nonpayment of
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 6.04;
(c) the annulment of such acceleration would not conflict with
any judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.02 cannot be amended
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without the consent of each Holder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Section 7.01, that the Trustee determines is unduly prejudicial
to the rights of other Holders, it being understood that the Trustee shall have
no duty to ascertain whether or not such actions or forbearances are unduly
prejudiced to such Holders, or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking
or not taking such action.
SECTION 6.06. Limitation on Suits. No Holder of any Securities
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or a trustee,
or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default with respect to the Securities;
(ii) the Holders of at least 25% in aggregate principal amount of
the outstanding Securities have made written request, and such Holder or
Holders have offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee; and
(iii) the Trustee has failed to institute such proceeding, and
has not received from the Holders of a majority in aggregate principal
amount of the outstanding Securities a direction inconsistent with such
request, within 60 days after such notice, request and offer.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, 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.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(a) or (b) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or
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applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder
to make 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 it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to the
extent required by Article 10;
THIRD: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Holder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Securities.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
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(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture 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 liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this subsection does not limit the effect of subsection (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b) and (c) of this Section.
(e) 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.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
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(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
Officer's Certificate, or other certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document unless requested in writing
to do so by the Holders of not less than a majority in aggregate principal
amount of the Securities then outstanding; provided, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Company or,
if advanced by the Trustee, shall be repaid by the Company upon demand.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions, or agreements on the
part of the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein and shall be entitled in
connection herewith to examine the books, records and premises of the Company.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
(j) Except for (i) a default under Section 6.01(a) or (b) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any Default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less
than 25% in aggregate principal amount of the Securities then outstanding; as
used herein, the term "actual knowledge" means the actual fact or statement of
knowing, without any duty to make any investigation with regard thereto.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-
registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
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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 Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within 90 days after it occurs. Except in the
case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as the
Trustee in good faith determines that withholding the notice is in the
interests of Holders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Holder a brief report dated as of such date that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Sections
313(b) and 313(c).
A copy of each report at the time of its mailing to Holders shall
be filed with the Commission and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay
to the Trustee promptly upon request from time to time the compensation for its
services as agreed to by the Trustee and the Company. 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 out-of-pocket expenses incurred or made by it, including
costs of collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
reasonable expense (including reasonable attorneys' fees) incurred by it in
connection with the acceptance and administration of this trust and the
performance of its duties hereunder. 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 of its obligations
hereunder. The Company shall defend the claim and the Trustee may have
separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct, negligence or bad faith. The Company need not pay for any
settlement made by the Trustee without the Company's consent, such consent not
to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(f) or (g) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
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SECTION 7.08. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
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, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
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SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with 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
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.06) for
cancellation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee cash in U.S. dollars, U.S. Government Obligations or a combination
thereof sufficient to pay at maturity or upon redemption all outstanding
Securities, including premium and interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.06), and
premium, if any, and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Sections
8.01(b), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Notwithstanding subsection (a) above, the Company's obligations in
Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08, 8.05, 8.06 and 8.07 shall survive
until the Securities have been paid in full. Thereafter, the Company's
obligations in Sections 7.07, 8.05 and 8.06 shall survive.
SECTION 8.02 Defeasance.
(a) Subject to Sections 8.02(d) and 8.03, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.12, 4.15, 5.01(a)(E) and 5.01(a)(F) and
the operation of Sections 6.01(d), 6.01(e), 6.01(f) and 6.01(g) (but, in the
case of Sections 6.01(f) and (g), with respect only to Significant
Subsidiaries) ("covenant defeasance option"). The Company may exercise its
legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
(b) If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections
6.01(d), 6.01(e), 6.01(f) and 6.01(g) (but, in the case of Sections 6.01(f) and
(g), with respect only to Significant Subsidiaries). If the Company
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exercises its legal defeasance option or its covenant defeasance option, each
Subsidiary Guarantor shall be released from all its obligations under its
Subsidiary Guaranty.
(c) Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(d) Notwithstanding subsection (a) above, the Company's obligations
in Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08, 8.05, 8.06 and 8.07 shall
survive until the Securities have been paid in full. Thereafter, the Company's
obligations in Section 7.07, 8.05 and 8.06 shall survive.
SECTION 8.03. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
cash in U.S. dollars, U.S. Government Obligations or a combination
thereof for the payment of principal of, interest on and premium, if
any, on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal, premium and
interest when due on all the Securities to maturity or redemption, as
the case may be;
(3) 123 days pass after the deposit is made and during the 123-
day period no Default specified in Sections 6.01(f) or (g) with respect
to the Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) 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 will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will 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 defeasance had
not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts,
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in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3.
SECTION 8.04. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant
to this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal, premium and interest on the Securities.
SECTION 8.05. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon Order any money held by them for
the payment of principal of, premium, if any, or interest on any Securities
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided, however, that the Company shall cause to be
published at least once in a newspaper of general circulation in The City of
New York or mailed to each Holder entitled to such unclaimed funds, notice that
such funds remain unclaimed and that, after a date specified therein, which
shall be a date not less than 30 days from the date of such publication or
mailing, any unclaimed balance of such money remaining as of such date shall be
repaid to the Company. After repayment to the Company, Holders entitled to
such funds shall look only to the Company for payment without interest thereon,
as an unsecured general creditor, and the Trustee and the Paying Agent shall
have no further liability with respect to such money.
SECTION 8.06. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article 8 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 obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
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ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders.
(a) The Company, the Subsidiary Guarantors and the Trustee may
amend this Indenture or the Securities without notice to or consent of any
Holder:
(i) to cure any ambiguity, omission, defect or
inconsistency;
(ii) to provide for the assumption of the obligations of
the Company under this Indenture upon the merger, consolidation
or sale or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a
whole and certain other events specified in Section 5.01;
(iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(iv) to comply with any requirement of the Commission in
order to effect or maintain the qualification of this Indenture
under the TIA;
(v) to make any change that does not adversely affect the
rights of any Holder of Securities in any material respect;
(vi) to add or remove Subsidiary Guarantors pursuant to
the procedures set forth in this Indenture; and
(vii) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company.
(b) An amendment under this Section may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness of the Company or any Subsidiary Guarantor then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change in
writing.
(c) After an amendment under this Section becomes effective,
the Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders.
(a) The Company, the Subsidiary Guarantors and the Trustee, with
the written consent of the Holders of at least a majority of the principal
amount of the Securities, may
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execute supplemental indentures or amendments adding any provisions to or
changing or eliminating any of the provisions of this Indenture or modifying
the rights of the Holders of the Securities, except that no supplemental
indenture, amendment or wavier, without the consent of each Holder affected
thereby, may:
(i) reduce the principal amount of Securities whose
Holders must consent to an amendment or waiver;
(ii) reduce the rate of or extend the time for payment of
interest on any Securities;
(iii) change the currency in which any amount due in
respect of the Securities is payable;
(iv) reduce the principal of or any premium on or change
the Stated Maturity of any Securities or alter the redemption or
repurchase provisions with respect thereto;
(v) reduce the relative ranking of any Securities;
(vi) release any security that may have been granted in
respect of the Securities;
(vii) make any change in Article 10 or Article 12 that
adversely affects the rights of any Holder under Article 10 or
Article 12;
(viii) impair the right of any Holder to institute suit
for enforcement of any payment on or with respect to such
Holder's Securities or any Subsidiary Guaranty; or
(ix) make any change in Sections 6.04, 6.07 or 9.02.
(b) It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent approves the substance thereof.
(c) An amendment under this Section may not make any change
that adversely affects the rights under Article 10 or Article 12 of any holder
of Senior Indebtedness of the Company or any Subsidiary Guarantor then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change in
writing.
(d) After an amendment under this Section becomes effective,
the Company shall mail to Holders a notice briefly describing such amendment.
The failure to give such notice to all Holders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the Trust
Indenture Act as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment or a waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of that Security or
portion of the Security that
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evidences the same debt as the consenting Holder's Security, even if notation
of the consent or waiver is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Holder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
(b) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding subsection, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid
or effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder
of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Subordination of the Securities
SECTION 10.01 Agreement to Subordinate.
Notwithstanding any other provision to the contrary in this Indenture,
the Company covenants and agrees, and each Holder by accepting a Security
covenants and agrees, that the principal of (and premium, if any) and interest
on the Indebtedness now or hereafter evidenced by the Securities and this
Indenture are subordinated in right of payment, to the extent and in the manner
provided in this Article, to the prior payment in full in cash of all
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existing and future Senior Indebtedness, and that the subordination provisions
set forth in this Article are for the benefit of, and shall be enforceable
directly by, the holders of Senior Indebtedness.
Each Holder authorizes and directs the Trustee on such Holder's behalf
to take such action as may be necessary or appropriate, in the sole discretion
of the Trustee, to acknowledge or effectuate the subordination between the
Holders and the holders of Senior Indebtedness as provided in this Article and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes, including, in the event of any voluntary or involuntary liquidation
or dissolution of the Company, whether total or partial, or in a bankruptcy,
reorganization, insolvency, receivership, dissolution, assignment for the
benefit of creditors, marshalling of assets or similar proceeding relating to
the Company or its property, the timely filing of a claim for the unpaid
balance of such Holder's Securities in the form required in said proceeding and
cause said claim to be approved. If the Trustee does not file a proper claim
or proof of debt in the form required in such proceeding prior to 20 days
before the expiration of the time to file such claim or claims, then the
Principal Agent is hereby authorized to have the right to file and is hereby
authorized to file an appropriate claim for and on behalf of the Holders;
provided, however, that any such claim filed by the Principal Agent shall be
superseded by the claim, if any, subsequently filed by the Trustee.
Each Holder by accepting a Security acknowledges and agrees that the
subordination provision set forth in this Article are, and are intended to be,
an inducement and consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness, and such holder of Senior Indebtedness shall be deemed
conclusively to have relied upon such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness, and
such holder is made an obligee hereunder and may enforce directly such
subordination provisions.
SECTION 10.02 Liquidation; Dissolution; Bankruptcy
Upon any payment or distribution (whether in cash, property, debt,
equity or other securities, a combination thereof or otherwise) to creditors or
equity holders of the Company in a voluntary or involuntary liquidation or
dissolution of the Company, whether total or partial, or in bankruptcy,
reorganization, insolvency, receivership, dissolution, assignment for the
benefit of creditors, marshalling of assets or similar proceeding relating to
the Company or its property:
(a) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of all amounts due or to become due on
or in respect of all Senior Indebtedness before Holders shall be
entitled to receive any Security Payment (as defined in Section
10.03(a)); and
(b) until all Senior Indebtedness is paid in full in cash, any
Security Payment (as defined in Section 10.03(a)) to which Holders would
be entitled but for this Article shall be made to holders of Senior
Indebtedness, as their interests may appear.
Upon any prepayment, payment or distribution referred to in this
Article, the Trustee and the Holders shall be entitled to rely upon any order
or decree of a court of competent jurisdiction in which such proceedings are
pending for the purpose of ascertaining the identity of Persons entitled to
participate in such payment or distribution, the holders of Senior
Indebtedness, the amount thereof or payable thereon and all other facts
pertinent
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thereto or to this Article, and the Trustee and the Holders shall be entitled
to rely upon a certificate of the liquidating trustee or agent or other Person
(including any Representative of holders of Senior Indebtedness) making any
payment or distribution to the Trustee or to the Holders for the purpose of
ascertaining the identity of Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any Person, as a holder of Senior Indebtedness, to participate in any payment
or distribution pursuant to this Section, the Trustee may requires such Person
(at the expense of the Holders) to furnish evidence to the reasonable
satisfaction of the Trustee, acting in good faith, as to the amount of such
Senior Indebtedness held by such Person, as to the extent to which such Person
is entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this Section, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive
payment.
For purposes of this Article, a distribution may consist of cash,
securities or other property, by set-off or otherwise; provided that, for
purposes of this Article only, the words "cash, securities or other property"
shall not be deemed to include securities of the Company or any other
corporation ("Reorganization Securities") provided for by a plan of
reorganization or readjustment of the Company the payment of which is
subordinated, at least to the extent provided in this Article with respect to
the Securities, to the payment of all Senior Indebtedness that may at the time
be outstanding; provided, further, that (a) all Senior Indebtedness is assumed
by the new corporation, if any, resulting from any such reorganization or
readjustment, (b) no right, remedy, power, privilege or Lien of any holder of
Senior Indebtedness is, without the consent of such holder, altered by such
reorganization or readjustment, (c) the stated maturity date of the
Reorganization Securities is not earlier than the later of the stated maturity
date of the Securities or two years after the stated maturity of the Senior
Indebtedness, (d) no amortization of principal of Reorganization Securities is
required prior to the stated maturity date of the Reorganization Securities,
(e) the interest rate on the Reorganization Securities is not greater than the
nondefault interest rate on the Securities, (f) no scheduled interest payments
on the Reorganization Securities shall be made in cash while the Senior
Indebtedness is outstanding, (g) the principal amount of the Reorganization
Securities on the date of issuance thereof does not exceed the outstanding
principal amount of the Securities on the date of commencement of the
bankruptcy case pursuant to which the Reorganization Securities are issued, (h)
the circumstances requiring redemption or defeasance of the Reorganization
Securities are not broader than those requiring redemption or defeasance of the
Securities and (i) the covenants, representations and warranties and events of
default applicable to the Reorganization Securities are not materially more
restrictive or burdensome than those contained in this Indenture.
The consolidation or merger of the Company with or into any Person, or
the sale, assignment, transfer, lease, conveyance or other disposition of all
or substantially all of the Company's assets to any Person, upon the terms and
conditions set forth in Article 5, shall not be deemed to be liquidation,
dissolution or reorganization or similar proceeding relating to the Company for
purposes of this Section if the Person formed by or surviving such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made, shall, as a part of such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition, comply with the conditions set forth in Article 5.
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SECTION 10.03 Default on Senior Indebtedness.
(a) Upon any Senior Indebtedness becoming due and payable,
whether at the stated maturity thereof or by acceleration or otherwise,
such Senior Indebtedness shall first be irrevocably and indefeasibly
paid in full in cash, or the immediate payment thereof duly provided for
in cash, before the Company or any Person acting on behalf of the
Company shall directly or indirectly pay, prepay, redeem, retire,
repurchase or otherwise acquire for value, or make any deposit pursuant
to Article 8 in respect of, or make any other prepayment, payment or
distribution (whether in cash, property, securities or a combination
thereof or otherwise) on account of the principal of (or premium, if
any) or interest on, any Securities (each, a "Security Payment").
(b) No Security Payment shall be made if, at the time of such
Security Payment there exists a default in payment of all or any portion
of any principal of (and premium, if any) and interest and fees,
expenses, costs and other obligations on Senior Indebtedness, and such
default shall not have been cured or waived in writing or the benefits
of this sentence waived in writing by or on behalf of the holders of
such Senior Indebtedness.
(c) In addition, during the continuance of any event of
default (other than a default referred to in subsection (b) of this
Section 10.03) with respect to any Specified Senior Indebtedness, as
such event of default is defined therein or in the instrument under
which such Specified Senior Indebtedness is outstanding, permitting the
holders of such Specified Senior Indebtedness to accelerate the maturity
thereof under the terms of such Specified Senior Indebtedness, and upon
written notice of such event of default given by the Principal Agent to
the Trustee, with a copy to the Company (the delivery of such shall not
affect the validity of the notice to the Trustee), then, unless and
until such event of default shall have been cured or waived or shall
have ceased to exist, no Security Payment shall be made; provided, that
if the holders of the Specified Senior Indebtedness to which the default
relates have not declared such Specified Senior Indebtedness to be
immediately due and payable within 179 days after the occurrence of such
default (or have declared such Specified Senior Indebtedness to be
immediately due and payable and within such period have rescinded such
declaration of acceleration), then, subject to the provisions of Section
10.02 and 10.03(a), the Company shall resume making any and all unpaid
scheduled Security Payments. Any period during which any Security
Payment is prohibited pursuant to the immediately preceding sentence is
referred to in this Article as a "payment blockage period."
Notwithstanding any other provisions of this Article or any other
provision of this Indenture, in no event shall a payment blockage period
under this Article extend beyond 179 days from the date on which such
payment blockage period commenced. Not more than one payment blockage
period may be commenced within any consecutive 365-day period with
respect to the Securities. For all purposes of this Article, no event
of default that existed or was continuing on the date of the
commencement of any payment blockage period with respect to the
Specified Senior Indebtedness initialing such payment blockage period
shall be, or be made, the basis for the commencement of a second payment
blockage period by the holder or holders of such Specified Senior
Indebtedness at any time after the 365-day period referred to in the
previous sentence unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days.
(d) The Company covenants that it will, upon request of the
Trustee, deliver an Officers' Certificate (with copies thereof to the
Representative of each class of Senior Indebtedness) showing in
reasonable detail the Senior Indebtedness
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outstanding as of the date of such Officers' Certificate and the
Representative of each class of Senior Indebtedness. The Trustee may
conclusively rely thereon except to the extent that it shall have
received, from the Representative of any class of Senior Indebtedness,
notice in writing controverting any of the statements made therein. Not
less than 10 days prior to making any distribution in respect of Senior
Indebtedness pursuant to this Section, the Trustee shall deliver to each
Representative of any class of Senior Indebtedness copies of the most
recent Officers' Certificate filed with it by the Company pursuant to
this subsection (d).
(e) In the event that the Securities are declared due and
payable before their Stated Maturity in accordance with Article 6, then
and in such event the holders of Senior Indebtedness outstanding at the
time the Securities so become due and payable shall be entitled to
receive payment in full in cash of all amounts due or to become due on
or in respect of such Senior Indebtedness (whether or not an event of
default has occurred thereunder or such Senior Indebtedness is, or has
been declared to be, due and payable prior to the date on which it
otherwise would ave become due and payable) before the Holders shall be
entitled to receive any Security Payment.
SECTION 10.04 Security Payments Permitted if No Default.
Nothing contained in this Article or elsewhere in this Indenture, or in
any of the Securities, shall prevent the Company or any Person acting on behalf
of the Company, at any time except as otherwise provided in Section 10.02 from
making any Security Payment.
SECTION 10.05 When Security Payment Must Be Paid Over.
In the event that any Security Payment is made to the Trustee or the
Holders that, because of this Article, should not have been so made or may not
be paid over to the Holders, such Security Payment shall be held by the Trustee
or the Holders who receive such Security Payment, as the case may be, for the
benefit of, and shall forthwith be paid over or delivered to, the holders of
the Senior Indebtedness remaining unpaid or their Representatives, as their
interests may appear, to the extent necessary to irrevocably and indefeasibly
pay such Senior Indebtedness in full in cash in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness.
SECTION 10.06 Notices by the Company.
The Company shall promptly notify the Trustee, each Paying Agent and the
Principal Agent of any facts known to the Company that would cause a Security
Payment to violate this Article, but failure to give such notice shall not
affect the subordination provided in this Article of the Securities to Senior
Indebtedness. Without limiting the foregoing, if payment of the Securities is
accelerated because of an Event of Default, the Company shall promptly notify
the Principal Agent of the acceleration.
SECTION 10.07 Subrogation.
After all Senior Indebtedness is irrevocably and indefeasibly paid in
full in cash and until the Securities are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to Holders have been applied to the payment of
Senior Indebtedness. A distribution made under this Article to holders of
Senior Indebtedness which otherwise would have been made to Holders is not, as
between the Company and the Holders, payment by the Company on Senior
Indebtedness.
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SECTION 10.08 Relative Rights.
This Article defines the relative rights of Holders and holders of
Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay
the principal of (and premium, if any) and interest on the Securities in
accordance with their terms;
(b) affect the relative rights of Holders and creditors of the
Company other than holders of Senior Indebtedness; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive prepayment, payments
and distributions otherwise payable to Holders.
If the Company fails because of this Article to pay the principal of (or
premium, if any) or interest on a Security on the due date or upon the
acceleration thereof, the failure is still a Default or Event of Default.
SECTION 10.09 Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by (a) any act or failure to act by the Company or by its failure to comply
with this Indenture, (b) any release of any collateral or any guarantor or any
Person of the Company's obligations under the Senior Indebtedness, (c) any
amendment, supplement, extension, renewal, restatement or other modification of
the Senior Indebtedness, (d) any settlement or compromise of any Senior
Indebtedness, (e) the unenforceability of any of the Senior Indebtedness or (f)
the failure of any holder of Senior Indebtedness to pursue claims against the
Company.
SECTION 10.10 Distribution of Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11 Rights of Trustee and Paying Agent.
The Trustee or any Payment Agent may continue to make payments in
respect of the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payment unless,
not less than three Business Days prior to the date of any such payment, a
Responsible Officer of the Trustee receives written notice reasonably
satisfactory to it that payments in respect of the Securities may not be made
under this Article. Only the Company, a Representative (satisfactorily
identified to the Trustee) or a holder of a class of Senior Indebtedness that
has no Representative (satisfactorily identified to the Trustee) may give the
notice. Prior to the receipt of such notice, the Trustee and any Paying Agent
shall be entitled in all respects to assume that no such facts exist. In any
case, the Trustee shall have no responsibility to the holders of Senior
Indebtedness for payments made to Holders by the Company or any Paying Agent
unless cash payments are made at the direction of the Trustee after receipt of
such notice referred to above.
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Neither the Trustee nor any Payment Agent shall be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have it were not Trustee.
This Section is solely for the benefit of the Trustee and any Payment
Agents and shall not limit the obligations of the Holders under Section 10.05.
SECTION 10.12 Consent of Holders of Specified Senior Indebtedness.
The provisions of this Article (including the definitions contained in
this Article and references to this Article contained in this Indenture) shall
not be amended, waived or modified in a manner that would adversely affect the
rights of the holders of any Specified Senior Indebtedness, and no such
amendment, waiver or modification shall become effective, unless the holders of
such Specified Senior Indebtedness shall have consented in writing (in
accordance with the provisions of the agreement governing such Specified Senior
Indebtedness) to such amendment, waiver or modification.
SECTION 10.13 Contractual Subordination.
This Article 10 represents a bona fide agreement of contractual
subordination pursuant to Section 510(b) of the United States Bankruptcy Code.
ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of, premium, if any, and interest on the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under this
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Each Subsidiary Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article 11 notwithstanding any extension
or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives
notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of
any default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the Trustee
for the Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of such Subsidiary Guarantor.
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Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner set forth
in Article 12, subordinated and subject in right of payment to the prior
payment in full of the principal of and premium, if any, and interest on all
Senior Indebtedness of the Subsidiary Guarantor giving such Subsidiary Guaranty
and each Subsidiary Guaranty is made subject to such provisions of this
Indenture.
Except as expressly set forth in Sections 8.02, 11.02 and 11.06, the
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of
the Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of such Subsidiary Guarantor or would otherwise operate as
a discharge of such Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of, premium, if any, or
interest on any Obligation is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Subsidiary
Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of, premium, if any, or interest on any Obligation when and as the
same shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Subsidiary
Guarantor hereby promises to and will, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (i) the unpaid amount of such
Obligations, (ii) accrued and unpaid interest on such Obligations (but only to
the extent not prohibited by law) and (iii) all other monetary Obligations of
the Company to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations and all obligations to which the Obligations
are subordinated as provided in Article 12. Each Subsidiary Guarantor further
agrees that, as between it, on the one hand, and the Holders and the Trustee,
on the other hand, (x) the maturity of the Obligations Guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of such Subsidiary
Guarantor's Subsidiary Guaranty herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6, such Obligations (whether or not due
and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of this Section.
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Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally. To effectuate the
foregoing intention, the obligations of each Subsidiary Guarantor shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guaranty or pursuant to its contribution
obligations hereunder, result in the obligations of such Subsidiary Guarantor
under its Subsidiary Guaranty not constituting a fraudulent conveyance or
fraudulent transfer under federal, state or foreign law. Each Subsidiary
Guarantor that makes a payment or distribution under a Subsidiary Guaranty
shall be entitled to a contribution from each other Subsidiary Guarantor in a
pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor.
SECTION 11.03. Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Article 11 at law, in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.06. Release of Subsidiary Guarantor. Any Subsidiary
Guarantor that is no longer a Significant Subsidiary may, by execution and
delivery to the Trustee of a supplemental indenture satisfactory to the Trustee
(attaching the calculations to demonstrate such status), be released from its
Subsidiary Guaranty and cease to be a Subsidiary Guarantor. Any Subsidiary
Guarantor that is designated an Unrestricted Subsidiary pursuant to and in
compliance with the terms of this Indenture shall be released from and relieved
of its obligations under its Subsidiary Guaranty upon execution and delivery of
a supplemental indenture satisfactory to the Trustee. Such supplemental
indenture shall be accompanied by an Officers' Certificate and an Opinion of
Counsel, each stating that such supplemental indenture and release of the
Subsidiary Guaranty complies with the provisions of this
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Indenture and that all conditions precedent to such supplemental indenture and
release of the Subsidiary Guaranty have been complied with.
SECTION 11.07. Execution of Supplemental Indenture for Future
Subsidiary Guarantors. Each Subsidiary which is required to become a
Subsidiary Guarantor pursuant to Section 4.12 shall, and the Company shall
cause each such Subsidiary to, promptly execute and deliver to the Trustee a
supplemental indenture in the form of Exhibit B hereto pursuant to which such
Subsidiary shall become a Subsidiary Guarantor under this Article 11 and shall
guarantee the Obligations. Concurrently with the execution and delivery of
such supplemental indenture, the Company shall deliver to the Trustee an
Opinion of Counsel to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors' rights generally and to
the principles of equity, whether considered in a proceeding at law or in
equity, the Subsidiary Guaranty of such Subsidiary Guarantor is a legal, valid
and binding obligation of such Subsidiary Guarantor, enforceable against such
Subsidiary Guarantor in accordance with its terms.
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01 Agreement to Subordinate.
Notwithstanding any other provision to the contrary in this Indenture,
each Subsidiary Guarantor covenants and agrees, and each Holder by accepting a
Security covenants and agrees, that all payments by such Subsidiary Guarantor
in respect of its Subsidiary Guarantee are subordinated in right of payment, to
the extent and in the manner provided in this Article, to the prior payment in
full in cash of all existing and future Senior Indebtedness of such Subsidiary
Guarantor, and that the subordination provisions set forth in this Article are
for the benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness of such Subsidiary Guarantor.
Each Holder authorizes and directs the Trustee on such Holder's behalf
to take such action as may be necessary or appropriate, in the sole discretion
of the Trustee, to acknowledge or effectuate the subordination between the
Holders and the holders of Subsidiary Guarantor Senior Indebtedness as provided
in this Article and appoints the Trustee as such Holder's attorney-in-fact for
any and all such proposes, including, in the event of any voluntary or
involuntary liquidation or dissolution of a Subsidiary Guarantor, whether total
or partial, or in a bankruptcy, reorganization, insolvency, receivership,
dissolution, assignment of the benefit of creditors, marshalling of assets or
similar proceeding relating to a Subsidiary Guarantor or its property, the
timely filing of a claim for the unpaid balance of such Holder's Securities in
the form required in said proceeding and cause said claim to be approved. If
the Trustee does not file a property claim or proof to debt in the form
required in such proceeding prior to 20 days before the expiration of the time
to exile such claim or claims, then the Principal Subsidiary Indebtedness Agent
is hereby authorized to have the right to file and is hereby authorized to file
an appropriate claim for and on behalf of the Holders; provided, however, that
any such claim filed by such Principal Subsidiary Indebtedness Agent shall be
superseded by the claim, if any, subsequently filed by the Trustee.
Each Holder by accepting a Security acknowledges and agrees that the
subordination provisions set forth in this Article are, and are intended to be,
an inducement and
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consideration to each holder of any Subsidiary Guarantor Senior Indebtedness,
whether such Subsidiary Guarantor Senior Indebtedness was created before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Subsidiary Guarantor Senior Indebtedness, and such
holder of Subsidiary Guarantor Senior Indebtedness shall be deemed conclusively
to have relied upon such subordination provisions in acquiring and continuing
to hold, or in continuing to hold, such Subsidiary Guarantor Senior
Indebtedness, and such holder is made an obligee hereunder and may enforce
directly such subordination provisions.
SECTION 12.02 Liquidation; Dissolution; Bankruptcy
Upon any payment or distribution (whether in cash, property, debt,
equity or other securities, a combination thereof or otherwise) to creditors or
equity holders of a Subsidiary Guarantor in a voluntary or involuntary
liquidation or dissolution of such Subsidiary Guarantor, whether total or
partial, or in bankruptcy, reorganization, insolvency, receivership,
dissolution, assignment for the benefit of creditors, marshalling of assets or
similar proceeding relating to such Subsidiary Guarantor or its property:
(a) holders of Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor shall be entitled to receive payment in full
in cash of all amounts due or to become due on or in respect of all such
Subsidiary Guarantor Senior Indebtedness before Holders shall be
entitled to receive any payment by such Subsidiary Guarantor in respect
of its Subsidiary Guaranty or distribution of any assets or securities
of such Subsidiary Guarantor (each, a "Guaranty Payment"); and
(b) until all Subsidiary Guarantor Senior Indebtedness of such
Subsidiary Guarantor is paid in full in cash, any Guaranty Payment to
which Holders would be entitled but for this Article shall be made to
holders of Subsidiary Guarantor Senior Indebtedness of such Subsidiary
Guarantor, as their interests may appear.
Upon any payment or distribution referred to in this Article, the
Trustee and the Holders shall be entitled to rely upon any order or decree of a
court of competent jurisdiction in which such proceedings are pending for the
purpose of ascertaining the identity of Persons entitled to participate in such
payment or distribution, the holders of Subsidiary Guarantor Senior
Indebtedness, the amount thereof or payable thereon and all other facts
pertinent thereto or to this Article, and the Trustee and the Holders shall be
entitled to rely upon a certificate of the liquidating trustee or agent or
other Person (including any Representative of holders of Subsidiary Guarantor
Senior Indebtedness) making any payment or distribution to the Trustee or to
the Holders for the purpose of ascertaining the identity of Persons entitled to
participate in such payment or distribution, the holders of Subsidiary
Guarantor Senior Indebtedness, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any
Person, as a holder of Subsidiary Guarantor Senior Indebtedness, the
participate in any payment or distribution pursuant to this Section, the
Trustee may request such Person (as the expense of the Holders) to furnish
evidence to the reasonable satisfaction of the Trustee, acting in good faith,
as to the amount of such Subsidiary Guarantor Senior Indebtedness held by such
Person, as to the extent to which such Person is entitled to participate in
such payment or distribution, and as to the other facts pertinent to the rights
of such Person under this Section, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive payment.
For purposes of this Article, a distribution may consist of cash,
securities or other property, by set-off or otherwise, provided that, for
purposes of this Article only, the words
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"cash, securities or other property" shall not be deemed to include securities
of a Subsidiary Guarantor or any other corporation ("Subsidiary Guarantor
Reorganization Securities") provided for by a plan of reorganization or
readjustment of a Subsidiary Guarantor the payment of which is subordinated, at
least to the extent provided in this Article with respect to its Subsidiary
Guaranty, to the payment of all Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor that may at the time be outstanding, provided,
further, that (a) all such Subsidiary Guarantor Senior Indebtedness is assumed
by the new corporation, if any, resulting from any such reorganization or
readjustment, (b) no right, remedy, power, privilege or Lien of any holder of
such Subsidiary Guarantor Senior Indebtedness is, without the consent of such
holder, altered by such reorganization or readjustment, (c) the stated maturity
date of the Subsidiary Guarantor Reorganization Securities is not earlier than
the later of the stated maturity date of the Securities or two years after the
stated maturity of such Subsidiary Guarantor Senior Indebtedness, (d) no
amortization of principal of Subsidiary Guarantor Reorganization Securities is
required prior to the stated maturity date of the Subsidiary Guarantor
Reorganization Securities, (e) the interest rate on the Subsidiary Guarantor
Reorganization Securities is not greater than the nondefault interest rate on
the Securities, (f) no scheduled interest payments on the Subsidiary Guarantor
Reorganization Securities shall be made in cash while such Subsidiary Guarantor
Senior Indebtedness is outstanding, (g) the principal amount of the Subsidiary
Guarantor Reorganization Securities on the date of issuance thereof does not
exceed the outstanding principal amount of the Securities on the date of
commencement of the bankruptcy case pursuant to which the Subsidiary Guarantor
Reorganization Securities are issued, (h) the circumstances requiring
redemption or defeasance of the Subsidiary Guarantor Reorganization Securities
are not broader than those requiring redemption or defeasance of the Securities
and (i) the covenants, representations and warranties and events of default
applicable to the Subsidiary Guarantor Reorganization Securities are not
materially more restrictive or burdensome than those contained in this
Indenture.
The consolidation or merger of a Subsidiary Guarantor with or into any
Person, or the sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of such Subsidiary Guarantor's assets
to any Person, in compliance with the terms and conditions set forth in
Sections 5.01 and 5.02, shall not be deemed to be a liquidation, dissolution or
reorganization or similar proceeding relating to such Subsidiary Guarantor for
purposes of this Section.
SECTION 12.03 Default on Subsidiary Guarantor Senior Indebtedness.
(a) Upon any Subsidiary Guarantor Senior Indebtedness of a
Subsidiary Guarantor becoming due and payable, whether at the stated
maturity thereof or by acceleration or otherwise, such Subsidiary
Guarantor Senior Indebtedness shall first be irrevocably and
indefeasibly paid in full in cash, or the immediate payment thereof duly
provided for in cash, before such Subsidiary Guarantor or any Person
acting on behalf of such Subsidiary Guarantor shall directly or
indirectly make any Guaranty Payment.
(b) No Guaranty Payment shall be made by a Subsidiary
Guarantor if, at the time of such Guaranty Payment, there exists a
default in payment of all or any portion of any principal of (and
premium, if any) and interest and fees, expenses, costs and other
Obligations on Subsidiary Guarantor Senior Indebtedness of such
Subsidiary Guarantor, and such default shall not have been cured or
waived in writing or the benefits of this sentence waived in writing by
or on behalf of the holders of such Subsidiary Guarantor Senior
Indebtedness.
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(c) In addition, during the continuance of any event of
default (other than a default referred to in subsection (b) of this
Section 12.03) with respect to any Subsidiary Guarantor Senior
Indebtedness, as such event of default is defined therein or in the
instrument under which such Subsidiary Guarantor Senior Indebtedness is
outstanding, permitting the holders of such Specified Senior
Indebtedness of a Subsidiary Guarantor to accelerate the maturity
thereof under the terms of such Specified Senior Indebtedness of a
Subsidiary Guarantor, and upon written notice of such event of default
given by the Principal Subsidiary Indebtedness Agent to the Trustee,
with a copy to the Company (the delivery of which shall not affect the
validity of the notice to the Trustee), then, unless and until such
event of default shall have been cured or waived or shall have ceased to
exist, no Guaranty Payment shall be made; provided, that if the holders
of the Specified Senior Indebtedness of a Subsidiary Guarantor to which
the default relates have not declared such Specified Senior Indebtedness
of a Subsidiary Guarantor to be immediately due and payable within 179
days after the occurrence of such default (or have declared such
Specified Senior Indebtedness of a Subsidiary Guarantor to be
immediately due and payable and within such period have rescinded such
declaration of acceleration), then, subject to the provisions of Section
12.02 and 12.03(a), Guaranty Payments may be made. Any period during
which any Guaranty Payment is prohibited pursuant to the immediately
preceding sentence is referred to in this Article as a "payment blockage
period." Notwithstanding any other provision of this Article or any
other provision of this Indenture, in no event shall a payment blockage
period under this Article extend beyond 179 days from the date on which
such payment blockage period commenced. Not more than one payment
blockage period may be commenced within any consecutive 365-day period.
For all purposes of this Article, no event of default that existed or
was continuing on the date of the commencement of any payment blockage
period with respect to the Specified Senior Indebtedness of a Subsidiary
Guarantor initialing such payment blockage period shall be, or be made,
the basis for the commencement of a second payment blockage period by
the holder or holders of such Specified Senior Indebtedness of a
Subsidiary Guarantor at any time after the 365-day period referred to in
the previous sentence unless such event of default shall have been cured
or waived for a period of not less than 90 consecutive days. In
addition, for purposes of this Article, neither the Company nor any of
its Subsidiaries shall be deemed to be a holder of any Specified Senior
Indebtedness of a Subsidiary Guarantor.
(d) Each Subsidiary Guarantor covenants that it will, upon
request of the Trustee, deliver an Officers' Certificate (with copies
thereof to the Representative of each class of Subsidiary Guarantor
Senior Indebtedness of such Subsidiary Guarantor) showing in reasonable
detail the Subsidiary Guarantor Senior Indebtedness of such Subsidiary
Guarantor outstanding as of the date of such Officers' Certificate and
the Representative of each class of such Subsidiary Guarantor Senior
Indebtedness. The Trustee may conclusively rely thereon except to the
extent that it shall have received, from the Representative of any class
of such Subsidiary Guarantor Senior Indebtedness, notice in writing
controverting any of the statements made therein. Not less than 10 days
prior to making any distribution in respect of Subsidiary Guarantor
Senior Indebtedness of a Subsidiary Guarantor pursuant to this Section,
the Trustee shall deliver to each Representative of any class of such
Subsidiary Guarantor Senior Indebtedness copies of the most recent
Officers' Certificate filed with it by such Subsidiary Guarantor
pursuant to this subsection (d).
(e) In the event that the Securities are declared due and
payable before their Stated Maturity in accordance with Article 6, then
and in such event the holders of Subsidiary Guarantor Senior
Indebtedness of any Subsidiary Guarantor outstanding
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at the time the Securities so become due and payable shall be entitled
to receive payment in full in cash of all amounts due or to become due
on or in respect of such Subsidiary Guarantor Senior Indebtedness
(whether or not an event of default has occurred thereunder or such
Subsidiary Guarantor Senior Indebtedness is, or has been declared to be,
due and payable prior to the date on which it otherwise would have
become due and payable) before the Holders shall be entitled to receive
any Guaranty Payment.
SECTION 12.04 Guaranty Payments Permitted if No Default.
Nothing contained in this Article or elsewhere in this Indenture, or in
any of the Securities, shall prevent a Subsidiary Guarantor or any Person
acting on behalf of a Subsidiary Guarantor, at any time except as otherwise
provided in Section 12.02 or 12.03, from making any Guaranty Payment.
SECTION 12.05 When Guaranty Payment Must Be Paid Over.
In the event that any Guaranty Payment is made to the Trustee or the
Holders that, because of this Article, should not have been so made or may not
be paid over to the Holders, such Guaranty Payment shall be held by the Trustee
or the Holders who receive such Guaranty Payment, as the case may be, for the
benefit of, and shall forthwith be paid over or delivered to, the holders of
the Subsidiary Guarantor Senior Indebtedness remaining unpaid or their
Representatives, as their interests may appear, to the extent necessary to
irrevocably and indefeasibly pay such Subsidiary Guarantor Senior Indebtedness
in full in cash or in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of such Subsidiary
Guarantor Senior Indebtedness.
SECTION 12.06 Notices by a Subsidiary Guarantor.
Each Subsidiary Guarantor shall promptly notify the Trustee, each Paying
Agent and the Principal Subsidiary Indebtedness Agent of any facts known to
such Subsidiary Guarantor that would cause a Guaranty Payment to violate this
Article, but failure to give such notice shall not affect the subordination
provided in this Article of any Subsidiary Guarantee to Subsidiary Guarantor
Senior Indebtedness.
SECTION 12.07 Subrogation.
After all Subsidiary Guarantor Senior Indebtedness is irrevocably and
indefeasibly paid in full in cash and until the Securities are paid in full,
Holders shall be subrogated to the rights of holders of Subsidiary Guarantor
Senior Indebtedness to receive distributions applicable to Subsidiary Guarantor
Senior Indebtedness to the extent that distributions otherwise payable to
Holders have been applied to the payment of Subsidiary Guarantor Senior
Indebtedness. A distribution made under this Article to holders of Subsidiary
Guarantor Senior Indebtedness which otherwise should have been made to Holders
is not, as between a Subsidiary Guarantor and the Holders, payment by such
Subsidiary Guarantor on Subsidiary Guarantor Senior Indebtedness.
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SECTION 12.08 Relative Rights.
This Article defines the relative rights of Holders and holders of
Subsidiary Guarantor Senior Indebtedness. Nothing in this Indenture shall:
(a) impair, as between a Subsidiary Guarantor and the Holders,
the obligation of a Subsidiary Guarantor, which is absolute and
unconditional, to make any Guaranty Payment in accordance with the terms
of its Subsidiary Guaranty;
(b) affect the relative rights of Holders and creditors of a
Subsidiary Guarantor other than holders of Subsidiary Guarantor Senior
Indebtedness of such Subsidiary Guarantor; or
(c) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Subsidiary Guarantor Senior Indebtedness to receive
prepayment, payments and distributions otherwise payable to Holders.
If a Subsidiary Guarantor fails because of this Article to pay the
principal of (or premium, if any) or interest on a Security on the due date or
upon the acceleration thereof, the failure is still a Default or Event of
Default.
SECTION 12.09 Subordination May Not be Impaired by the Subsidiary
Guarantor.
No right of any holder of Subsidiary Guarantor Senior Indebtedness to
enforce the subordination of the Obligation of a Subsidiary Guarantor pursuant
to its Subsidiary Guaranty shall be impaired by (a) any act or failure to act
by such Subsidiary Guarantor or by its failure to comply with this Indenture,
(b) any release of any collateral or any guarantor or any Person or such
Subsidiary Guarantor's obligations under its Subsidiary Guarantor Senior
Indebtedness, (c) any amendment, supplement, extension, renewal, restatement or
other modification of any Subsidiary Guarantor Senior Indebtedness, (d) any
settlement or compromise of any Subsidiary Guarantor Senior Indebtedness, (e)
the unenforceability of any of the Subsidiary Guarantor Senior Indebtedness of
such Subsidiary Guarantor or (f) the failure of any holder of Subsidiary
Guarantor Senior Indebtedness of such Subsidiary Guarantor to pursue claims
against such Subsidiary Guarantor.
SECTION 12.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Subsidiary Guarantor Senior Indebtedness, the distribution may be made and the
notice given to their Representative (if any).
SECTION 12.11 Rights of Trustee and Paying Agent.
The Trustee or any Paying Agent may continue to make payments in respect
of the Securities and shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payment unless, not less than
three Business Days prior to the date of any such payment, a Responsible
Officer of the Trustee receives written notice reasonably satisfactory to it
that payments in respect of the Notices may not be made under this Article.
Only a Subsidiary Guarantor, a Representative (satisfactorily identified to the
Trustee) or a holder of a class of Subsidiary Guarantor Senior Indebtedness
that has no Representative (satisfactorily identified to the Trustee) may give
the notice. Prior to the receipt of such notice, the Trustee and any Paying
Agent shall be entitled in all respects to
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assume that no such facts exist. In any case, the Trustee shall have no
responsibility to the holders of Subsidiary Guarantor Senior Indebtedness for
payments made to Holders by a Subsidiary Guarantor or any Paying Agent unless
such payments are made at the direction of the Trustee after receipt of such
notice referred to above.
Neither the Trustee nor any Paying Agent shall be deemed to owe any
fiduciary duty to the holders of Subsidiary Guarantor Senior Indebtedness.
The Trustee in its individual or any other capacity may hold Subsidiary
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee.
This Section is solely for the benefit of the Trustee and any Paying
Agents and shall not limit the obligations of the Holders under Section 12.05.
SECTION 12.12 Consent of Holders of Subsidiary Guarantor Senior
Indebtedness.
The provisions of this Article (including the definitions contained in
this Article and references to this Article contained in this Indenture) shall
not be amended, waived or modified in a manner that would adversely affect the
rights of the holders of any Specified Senior Indebtedness of a Subsidiary
Guarantor, and no such amendment, waiver or modification shall become
effective, unless the holders of such Specified Senior Indebtedness of a
Subsidiary Guarantor shall have consented in writing (in accordance with the
provisions of the Agreement governing such Specified Senior Indebtedness of a
Subsidiary Guarantor) to such amendment, waiver or modification.
SECTION 12.13 Contractual Subordination.
This Article represents a bona fide agreement of contractual
subordination pursuant to Section 510(b) of the United States Bankruptcy Code.
ARTICLE 13
Miscellaneous
SECTION 13.01. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee, to
the extent required by the TIA or this Indenture, (i) an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant, compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
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(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 13.02. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, and may
state that it is so based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 13.03. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage of Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such specified percentage
of Holders in person or by agents duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are received by the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Sections 7.01 and 7.02) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The
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fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient, including the execution of such
instrument or writing without more.
(c) The ownership, principal amount and serial numbers of Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. Such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not earlier than the date 30 days prior to the first
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
SECTION 13.04. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which
is required to be included in this Indenture by the Trust Indenture Act, the
required provision shall control. If any provision of this Indenture modifies
or excludes any provision of the TIA that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
SECTION 13.05. Notices. Any notice or communication shall be in
writing and delivered in person, or sent by registered or certified mail, by
air courier guaranteeing overnight delivery or by fax (promptly confirmed by
telephone) and addressed as follows:
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if to the Company or any Subsidiary Guarantor:
HS Resources, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
HS Resources, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Indenture Trust Division/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication sent to a Holder shall be sent to the
Holder at the Holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so sent within the time
prescribed.
Failure to send a notice or communication to a Holder or any
defect in it shall not effect its sufficiency with respect to other Holders.
If a notice or communication is given in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.06. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders with
respect to their rights under this Indenture or the Securities. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).
SECTION 13.07. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
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SECTION 13.08. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of Holders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.09. Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or a day on which banking institutions are not required to be open in
the State of New York and the State of Illinois. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.
SECTION 13.10. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State
of New York but without giving effect to applicable principles of conflicts of
law to the extent that the application of the laws of another jurisdiction
would be required thereby.
SECTION 13.11. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Securities.
SECTION 13.12 Submission to Jurisdiction; Appointment of Agent
for Service of Process; Waiver of Immunities.
(a) The Company and each Subsidiary Guarantor hereby
irrevocably, to the fullest extent it may do so under applicable law, submits
to the jurisdiction of any New York State or federal court sitting in the
Borough of Manhattan, The City of New York and to the courts of its own
corporate domicile with respect to all actions brought against it as a
defendant in respect of any suit, action or proceeding or arbitral award
arising out or relating to this Indenture, the Securities or any transaction
contemplated hereby or thereby (a "Proceeding"), and irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts, to the fullest extent it may do so under
applicable law. The Company and each Subsidiary Guarantor irrevocably waives,
to the fullest extent it may do so under applicable law, trial by jury and any
objection which it may now or hereafter have to the laying of the venue of any
such Proceeding brought in any such court and any claim that any such
Proceeding brought in any such court has been brought in an inconvenient forum.
The Company and each Subsidiary Guarantor acknowledges that it has, by separate
written instrument, irrevocably appointed CT Corporation System (the "Process
Agent"), with an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its
authorized agent to receive on behalf of the Company and each Subsidiary
Guarantor and its property service of copies of the summons and compliant and
any other process which may be served in any proceeding, and that the Process
Agent has accepted such appointment. If for any reason such Process Agent
shall cease to be such agent for service of process, the Company and each
Subsidiary Guarantor shall forthwith appoint a new agent of recognized standing
for service of process in the State of New York, United States and deliver to
the Trustee a copy of the new agent's acceptance of that appointment within 30
days. Nothing herein shall affect the right of the Trustee, any Paying Agent
or any Holder to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Company or the
Subsidiary Guarantors in any other court of competent jurisdiction.
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(b) Service may be made by delivering by hand a copy of such
process to the Company or the Subsidiary Guarantors, as the case may be, in
care of the Process Agent at the address specified above. The Company and the
Subsidiary Guarantors hereby irrevocably authorize and direct the Process Agent
to accept such service on their behalf. Failure of the Process Agent to give
notice to the Company or the Subsidiary Guarantors or failure of the Company or
the Subsidiary Guarantors to receive notice of such service of process shall
not affect in any way the validity of such service on the Process Agent or the
Company or the Subsidiary Guarantors. As an alternative method of service, the
Company and the Subsidiary Guarantors also irrevocably consent to the service
of any and all process in any such proceeding by the delivery by hand of copies
of such process to the Company or the Subsidiary Guarantors, as the case may
be, at the applicable address specified in Section 13.05 hereof or at the
address most recently furnished in writing by the Company or the Subsidiary
Guarantors to the Trustee. The Company and the Subsidiary Guarantors covenant
and agree that they shall take any and all reasonable action, including the
execution and filing of any and all documents, that may be necessary to
continue the designation of the Process Agent specified above in full force and
effect during the term of the Securities, and to cause the Process Agent to
continue to act as such.
(c) The Company and the Subsidiary Guarantors irrevocably
agree that, in any Proceedings anywhere (whether for an injunction, specific
performance or otherwise), no immunity (to the extent that it may at any time
exist, whether on the grounds of sovereignty or otherwise) from such
Proceedings, from attachment (whether in aid of execution, before judgment or
otherwise) of their assets or from execution of judgment shall be claimed by
them or on their behalf or with respect to their assets, except to the extent
required by applicable law, any such immunity being irrevocably waived, to the
fullest extent permitted by applicable law. The Company and the Subsidiary
Guarantors irrevocably agree that, where permitted by applicable law, they and
their assets are, and shall be, subject to such Proceedings, attachment or
execution in respect of their obligations under this Indenture or the
Securities.
SECTION 13.13. Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 13.14. Multiple 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. One signed copy is enough
to prove this Indenture. This Indenture may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 13.15. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first above written.
THE COMPANY:
HS RESOURCES, INC.
By: /s/ P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
SUBSIDIARY GUARANTORS:
ORION ACQUISITION, INC.
By: /s/ P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
HSRTW, INC.
By: /s/ P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Name: P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
TRUSTEE:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A,
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7)) AND TO CERTAIN PERSONS IN
OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security
bearing the restricted securities legend set forth in Section 2.3(d) and which
is held by an IAI in accordance with Section 2.1(c).
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Securities" means the 9-1/4% Senior Subordinated Notes
Due 2006 to be issued pursuant to this Indenture in connection with a
Registered Exchange Offer pursuant to the Registration Agreement.
"IAI" means an institutional "accredited investor" as described
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Salomon Brothers Inc, Chase Securities
Inc., ▇▇▇▇▇▇ Brothers Inc. and Prudential Securities Incorporated.
"Initial Securities" means the 9-1/4% Senior Subordinated Notes
Due 2006, issued under this Indenture on or about the date hereof.
"Purchase Agreement" means the Purchase Agreement dated as of
November 22, 1996, among the Company, the Subsidiary Guarantors and the Initial
Purchasers, as such may be amended from time to time.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
"Registration Agreement" means the Registration Agreement dated
as of November 27, 1996, among the Company and the Initial Purchasers, as such
may be amended from time to time.
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"Securities" means the Initial Securities and the Exchange
Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company in connection with the offer and sale of Initial
Securities pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities and
Securities that bear or are required to bear the legend set forth in Section
2.3(d) hereto.
1.2 Other Definitions
Defined in
----------
Term Section:
---- -------
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
"Global Security" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Regulation S" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
2. The Securities
2.1 Form and Dating
The Initial Securities are being offered and sold by the Company
pursuant to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a
QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or outside
of the United States to a non-U.S. Person in reliance on Regulation S under the
Securities Act ("Regulation S"), in each case as provided in the Purchase
Agreement, shall be issued initially in the form of one or more permanent
global Securities in definitive, fully registered form without interest coupons
with the global securities legend and restricted securities legend set forth in
Exhibit 1 hereto (each, a "Global Security"), which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with the
Trustee, as custodian for the Depository (or with such other custodian as the
Depository may direct), and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by
the Trustee as provided in the Indenture. The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only
to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of the Company, authenticate
and deliver initially one or more Global Securities that (i) shall be
registered in the name of the Depository for such Global Security or Global
Securities or the nominee of such Depository and (ii) shall
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be delivered by the Trustee to such Depository or pursuant to such Depository's
instructions or held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or by the Trustee as the custodian of
the Depository, or under any Global Security, and the Depository or its
nominee, as the case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or shall impair, as between the
Depository and its Agent Members, the operation of customary practices of such
Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
Ownership of beneficial interests in any Global Security will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of Agent
Members) and the records of Agent Members (with respect to interests of Persons
other than Agent Members).
(c) Definitive Securities. Except as provided in this Section
2.1 or Sections 2.3 or 2.4, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of certificated Securities.
Purchasers of Initial Securities who are IAI's and are not QIBs and did not
purchase Initial Securities sold in reliance on Regulation S will receive
Definitive Securities; provided, however, that upon transfer of such Definitive
Securities to a QIB, such Definitive Securities will, unless the Global
Security has previously been exchanged, be exchanged for an interest in a
Global Security pursuant to the provisions of Section 2.3.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$150,000,000 and (2) Exchange Securities for issue only in a Registered
Exchange Offer pursuant to the Registration Agreement, for a like principal
amount of Initial Securities, upon a written order of the Company signed by two
Officers of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is
to be authenticated and whether the Securities are to be Initial Securities or
Exchange Securities. The aggregate principal amount of Securities outstanding
at any time may not exceed $150,000,000, except as provided in Section 2.07 of
this Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
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(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied
by the following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to
the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect; or
(B) if such Definitive Securities are being transferred
to the Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred
pursuant to an exemption from registration in accordance with
Rule 144, (i) a certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if the Company or
Registrar so requests, an opinion of counsel or other evidence
reasonably satisfactory to them as to the compliance with the
restrictions set forth in the legend set forth in Section
2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (A) to a
QIB in accordance with Rule 144A, or (B) outside the United States in an
offshore transaction within the meaning of Regulation S and in
compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by the
Global Security, such instructions to contain information regarding the
Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so cancelled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged pursuant to Section 2.4, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate principal
amount.
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(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depository, in accordance with
this Indenture (including applicable restrictions on transfer set forth herein,
if any) and the procedures of the Depository therefor. A transferor of a
beneficial interest in a Global Security shall deliver to the Registrar a
written order given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary to be credited
with a beneficial interest in the Global Security. The Registrar shall, in
accordance with such instructions instruct the Depository to credit to the
account of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the transfer
the beneficial interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix A
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 prior
to the consummation of a Registered Exchange Offer or the effectiveness
of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Securities intended to ensure that such transfers comply
with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Security certificate evidencing the Global Securities and
the Definitive Securities (and all Securities issued in exchange
therefor or in substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE THIRD ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR
SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE
COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY
THE BOX
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CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE ON THE REVERSE OF THIS SECURITY),
AND, IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED
IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO THE EXPIRATION OF THE "40
DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF
REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE, (4) TO AN INSTITUTION THAT IS
AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A
CERTIFICATE, WHICH MAY BE OBTAINED FROM THE TRUSTEE, IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE (PROVIDED THAT CERTAIN HOLDERS
SPECIFIED IN THE INDENTURE MAY NOT TRANSFER THIS SECURITY PURSUANT TO
THIS CLAUSE (4) PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED
PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE
SECURITIES ACT), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL
ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE
COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY
MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS
SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF
THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE
REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER
THE SECURITIES ACT."
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
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(A) in the case of any Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(B) in the case of any Transfer Restricted Security that
is represented by a Global Security, the Registrar shall permit
the Holder thereof to exchange such Transfer Restricted Security
for a Definitive Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such
Transfer Restricted Security,
in either case, if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities during the
period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Securities, all requirements pertaining to
legends on such Initial Security will cease to apply, the requirements
requiring any such Initial Security issued to certain Holders be issued
in global form will cease to apply, and an Initial Security in
certificated or global form without legends will be available to the
transferee of the Holder of such Initial Securities upon exchange of
such transferring Holder's certificated Initial Security. Upon the
occurrence of any of the circumstances described in this paragraph, the
Company will deliver an Officers' Certificate to the Trustee instructing
the Trustee to issue Securities without legends.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of
such Initial Securities are offered Exchange Securities in exchange for
their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will cease to apply and certificated Initial Securities
with the restricted securities legend set forth in Exhibit 1 hereto will
be available to Holders of such Initial Securities that do not exchange
their Initial Securities, and Exchange Securities in certificated or
global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer. Upon the occurrence of
any of the circumstances described in this paragraph, the Company will
deliver an Officers' Certificate to the Trustee instructing the Trustee
to issue Securities without legends.
(e) Cancellation or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depository for cancellation or
retained and canceled by the Trustee. At any time prior to such cancellation,
if any beneficial interest in a Global Security is exchanged for certificated
or Definitive Securities, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such
reduction.
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(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities, Definitive Securities and Global Securities at the
Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning 15 days before the mailing of a notice of an offer to
repurchase Securities or 15 days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose
name a Security is registered as the absolute owner of such Security for
the purpose of receiving payment of principal of and interest on such
Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
(v) All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a participant
in the Depository or other Person with respect to the accuracy of the
records of the Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or
with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under
or with respect to such Securities. All notices and communications to
be given to the Holders and all payments to be made to Holders under the
Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depository or its nominee in the
case of a Global Security). The rights of beneficial owners in any
Global Security shall be exercised only through the Depository subject
to the applicable rules and procedures of the Depository. The Trustee
may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants
and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers
between or among Depository participants, members or beneficial owners
in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine
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the same to determine substantial compliance as to form with the express
requirements hereof.
2.4 Certificated Securities
(a) A Global Security deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as a depository for such Global
Security or if at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, and a successor depository is not appointed
by the Company within 90 days, (ii) the Company executes and delivers to the
Trustee a notice that such Global Security shall be so transferable,
registrable and exchangeable, and such transfer shall be registrable or (iii)
there shall have occurred and be continuing an Event of Default or an event
which, with the giving of notice or lapse of time or both, would constitute an
Event of Default with respect to the Securities represented by such Global
Security.
(b) Any Global Security that is exchangeable for certificated
Securities pursuant to Section 2.4 will be transferred to, and registered and
exchanged for, certificated Securities in authorized denominations and
registered in such names as the Depository or its nominee holding such Global
Security may direct. Subject to the foregoing, a Global Security is not
exchangeable, except for a Global Security of like denomination to be
registered in the name of the Depository or its nominee. In the event that a
Global Security becomes exchangeable for certificated Securities, (i)
certificated Securities will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof, (ii) payment of
principal, premium, any repurchase price, and interest on the certificated
Securities will be payable, and the transfer of the certificated Securities
will be registrable, at the office or agency of the Company maintained for such
purposes and (iii) no service charge will be made for any issuance of the
certificated Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessment or similar governmental charge
payable in connection therewith. In addition, such certificates will bear the
legend set forth in Section 2.3(d) (unless the Company determines otherwise in
accordance with applicable law) subject, with respect to such Securities, to
the provisions of such legend. Holders of certificated Securities may only
transfer their Securities (i) to the Company or (ii) to a QIB; provided,
however, that the agreement of such holder is subject to any requirement of law
that the disposition of such holder's property shall at all times be and remain
within its control.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
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EXHIBIT 1
to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
HS RESOURCES, INC.
No._____ CUSIP No.__________
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES IN
DEFINITIVE, FULLY REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC
NOTIFIES THE COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY
FOR THIS GLOBAL SECURITY OR IF AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY"
REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND A
SUCCESSOR DEPOSITORY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OF SUCH
NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS TO THE TRUSTEE A NOTICE THAT THIS
GLOBAL SECURITY SHALL BE TRANSFERABLE, REGISTRABLE AND EXCHANGEABLE, AND SUCH
TRANSFER SHALL BE REGISTRABLE, OR (C) AN EVENT OF DEFAULT (AS HEREINAFTER
DEFINED) HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE SECURITIES.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE THIRD ANNIVERSARY OF
THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING
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91
THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN
(1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE ON THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER IS
BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS DEFINED
BELOW) PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE
MEANING OF RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), A
CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE, (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501 (A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY
FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE, WHICH MAY
BE OBTAINED FROM THE TRUSTEE, IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND
THE TRUSTEE (PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE INDENTURE MAY NOT
TRANSFER THIS SECURITY PURSUANT TO THIS CLAUSE (4) PRIOR TO THE EXPIRATION OF
THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF
REGULATION S UNDER THE SECURITIES ACT), (5) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL
ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT WILL FURNISH TO THE COMPANY
AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO
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CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]1
GLOBAL SECURITY
Representing 9-1/4% Senior Subordinated Notes Due 2006
HS RESOURCES, INC., a Delaware corporation, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum indicated on Schedule A
hereof, on November 15, 2006.
Interest Payment Dates: May 15 and November 15, commencing May 15, 1997.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, HS RESOURCES, INC. has caused this instrument to be
duly executed under its corporate seal.
Dated:
HS RESOURCES, INC.
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By:
----------------------------------------
Authorized Signatory
--------------------
(1) Include if a Definitive Security to be held by an
institutional "accredited investor" (as defined in Rule
501(a),(1),(2),(3) or (7) under the Securities Act) who is not a Qualified
Institutional Buyer.
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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9-1/4% Senior Subordinated Note Due 2006
1. Interest
(a) General. HS Resources, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Security at the rate per annum shown above. The
Company will pay interest semiannually on May 15 and November 15 of each year.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the Issue Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
(b) Special Interest. The holder of this Security is entitled to the
benefits of a Registration Agreement, dated as of November 27, 1996, among the
Company and the Initial Purchasers named therein (as such may be amended from
time to time, the "Registration Agreement"). Capitalized terms used in this
subsection (b) but not defined herein have the meanings assigned to them in the
Registration Agreement.
In the event that (i) neither the Exchange Offer Registration Statement
nor the Shelf Registration Statement has been filed with the Commission on or
prior to January 24, 1997, (ii) the Exchange Offer Registration Statement has
not been declared effective on or prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) neither the
Registered Exchange Offer has been consummated nor the Shelf Registration
Statement has been declared effective on or prior to April 25, 1997, or (iv)
after either the Exchange Offer Registration Statement or the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable in connection with resales of the
Securities at any time that the Company is obligated to maintain the
effectiveness thereof pursuant to the Registration Agreement (each such event
referred to in clauses (i) through (iv) above being referred to herein as a
"Registration Default"), additional interest ("Special Interest") will accrue
on this Security (in addition to the interest described in subsection (a)
above) from and including the date on which any such Registration Default shall
occur to but excluding the date on which all Registration Defaults have been
cured. Special Interest shall accrue at a rate of 0.50% per annum during the
90-day period immediately following the occurrence of any Registration Default
and shall increase by 0.25% per annum at the end of each subsequent 90-day
period, but in no event shall Special Interest accrue at a rate in excess of
1.50% per annum. Special Interest will be payable to the holder hereof in the
same manner as interest under subsection (a) above.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the May 1 or November 1 immediately preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company, but, at the option of the
Company,
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94
interest may be paid by check mailed to the registered Holders at their
registered addresses. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of at
least $1,000,000 aggregate principal amount of Securities, by wire transfer to
a U.S. dollar account maintained by the payee with a bank in the United States
if such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, ▇▇▇▇▇▇ Trust and Savings Bank ("Trustee"), an Illinois
banking corporation, will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Restricted
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 27, 1996 (as such may be amended from time to time, the "Indenture"),
among the Company, the Initial Subsidiary Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Holders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are unsecured senior subordinated obligations of the
Company limited to $150,000,000 aggregate principal amount at any one time
outstanding (subject to Section 2.07 of the Indenture). This Security is one
of the Initial Securities referred to in the Indenture. The Securities include
the Initial Securities and any Exchange Securities issued in exchange for the
Initial Securities pursuant to the Indenture. The Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its
Restricted Subsidiaries and the redemption of certain Pari Passu Indebtedness
and Subordinated Indebtedness of the Company and its Restricted Subsidiaries;
Investments; sales of assets and Restricted Subsidiary Capital Stock; certain
transactions with Affiliates of the Company; the sale or issuance of Capital
Stock of the Restricted Subsidiaries; the creation of Liens; and
consolidations, mergers and transfers of all or substantially all of the
Company's assets. In addition, the Indenture prohibits certain restrictions on
distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium and
interest, if any, on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Subsidiary Guarantors
have unconditionally guaranteed the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
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5. Optional Redemption
The Securities are not redeemable prior to November 15, 2001. At any
time on or after November 15, 2001, the Securities are redeemable at the option
of the Company, in whole or in part, on not less than 30 nor more than 60 days'
notice, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest (if any) to the date of
redemption.
If redeemed during the 12-month period commencing November 15 of the
years indicated:
Redemption
Year Price
------- -----------
2001.............................................. 104.625%
2002.............................................. 103.083%
2003.............................................. 101.542%
2004 and thereafter............................... 100.000%
Notwithstanding the foregoing, on and prior to November 15, 1999, the
Company may redeem up to 33 1/3% of the aggregate principal amount of the
Securities originally outstanding at a redemption price of 109.25% of the
principal amount thereof, plus accrued and unpaid interest (if any) thereon to
the redemption date, with the net proceeds of one or more Equity Offerings of
the Company; provided that at least 66 2/3% of the aggregate principal amount
of the Securities originally issued remains outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption
shall occur not later than 75 days after the date of the closing of any such
Equity Offering. The redemption shall be made in accordance with procedures set
forth in the Indenture.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
7. Put Provisions
Upon a Change of Control, unless the Company has elected to redeem the
Securities pursuant to paragraph 5, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
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In the event that the aggregate amount of Excess Proceeds from Asset
Sales exceeds $10,000,000, the Company will, subject to certain conditions
specified in the Indenture, make an offer to repurchase Securities having an
aggregate principal amount equal to the aggregate amount of Excess Proceeds at
a purchase price equal to 100% of the principal amount of such Securities plus
accrued and unpaid interest, if any, to the purchase date.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the Company,
as defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid. In
addition, each Subsidiary Guaranty is subordinated to Senior Indebtedness of
the relevant Subsidiary Guarantor, as defined in the Indenture. The Company
and each Subsidiary Guarantor agrees, and each Holder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as attorney-
in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 (or in the case of Definitive Securities sold to institutional
accredited investors as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, minimum denominations of $250,000, unless the Company otherwise
consents) and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange,
the Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or to transfer or exchange any Securities for a period of 15
days prior to a selection of Securities to be redeemed or 15 days before an
interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal, premium and interest on the Securities to redemption or
maturity, as the case may be.
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13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Holder, the Company, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
(i) to cure any ambiguity, omission, defect or inconsistency, (ii) to provide
for the assumption of the obligations of the Company under the Indenture upon
the merger, consolidation or sale or other disposition of all or substantially
all of the assets of the Company and its Restricted Subsidiaries taken as a
whole and certain other events specified in Article 5 of the Indenture, (iii)
to provide for uncertificated Securities in addition to or in place of
certificated Securities, (iv) to comply with any requirement of the Commission
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act, (v) to make any change that does not adversely affect the
rights of any Holder of Securities in any material respect, (vi) to add or
remove Subsidiary Guarantors pursuant to the procedures set forth in the
Indenture, and (vii) to provide for certain other modifications and amendments
as set forth in the Indenture. Certain provision of the Securities and the
Indenture may not be amended or waived without the consent of each Holder
affected thereby.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) failure to pay any
interest on the Securities when due, continued for 30 days; (ii) failure to pay
principal of (or premium, if any, on) the Securities when due; (iii) failure to
perform any other covenant of the Company or any Subsidiary Guarantor in the
Indenture, continued for 60 days after written notice as provided in the
Indenture; (iv) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if any,
on) or interest on any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company (other than the Securities) or any Restricted
Subsidiary for money borrowed when due (whether resulting from maturity,
acceleration, mandatory redemption or otherwise), or any other default causing
acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary for money borrowed,
provided that the aggregate principal amount of such Indebtedness shall exceed
$5,000,000; and specifically including, without limitation, any such default
under or acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) directly or indirectly resulting or derived from, or caused by, a
default under or acceleration of any Permitted Non-Recourse Indebtedness; or
(v) one or more final judgments or orders by a court of competent jurisdiction
are entered against the Company or any Restricted Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 and such judgments or
orders are not discharged, waived, stayed, satisfied or bonded for a period of
60 consecutive days; (vi) certain events of bankruptcy, insolvency or
reorganization; or (vii) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of the Indenture and such
Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guaranty.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in the interest of the Holders.
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15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of
the Company or a Subsidiary Guarantor under the Securities or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
17. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. 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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. Holders' Compliance with Registration Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
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99
21. 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 Securities and has directed the Trustee to 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 Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of this
Security.
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100
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint agent to transfer this
--------------------------
Security on the books of the Company. The agent may substitute another to act
for him.
Dated: Your Signature:
---------------- ----------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act
of 1933) that purchases for its own account or for the
account of a qualified institutional buyer to whom notice
is given that such transfer is being made in reliance on
Rule 144A, in each case pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(4) [ ] outside the United States in an offshore transaction
within the meaning of Regulation S under the Securities
Act in compliance with Rule 904 under the Securities Act
of 1933; or
(5) [ ] to an institutional "accredited investor" (as defined in
Schedule 501(a)(1), (2), (3) or (7) under the Securities
Act of 1933) that has furnished to the Trustee a signed
letter containing certain representations and agreements
(the form of which letter can be obtained from the
Trustee); or
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(6) [ ] pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that
if box (4), (5) or (6) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
-------------------------------------
Signature
Signature Guarantee:
---------------------------- -------------------------------------
Signature must be guaranteed Signature
--------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
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TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
----------------- ------------------------------------------------
NOTICE: To be executed by an executive officer
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or Section 4.09 of the Indenture, check the
appropriate box:
Section 4.06 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or Section 4.09 of the Indenture, state
the amount in principal amount (must be an integral multiple of $1,000):
$_______________
Dated: Your Signature:
--------------- ------------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
-----------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount at maturity of this Global Security shall
be $__________. The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal in Principal Amount this Global authorized
Amount of this of this Global Security following signatory of
Global Security Security such decrease or Trustee or
increase Securities
Custodian
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EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY]
HS RESOURCES, INC.
No._____ CUSIP No.__________
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES IN
DEFINITIVE, FULLY REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC
NOTIFIES THE COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY
FOR THIS GLOBAL SECURITY OR IF AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY"
REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND A
SUCCESSOR DEPOSITORY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OF SUCH
NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS TO THE TRUSTEE A NOTICE THAT THIS
GLOBAL SECURITY SHALL BE TRANSFERABLE, REGISTRABLE AND EXCHANGEABLE, AND SUCH
TRANSFER SHALL BE REGISTRABLE, OR (C) AN EVENT OF DEFAULT (AS HEREINAFTER
DEFINED) HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE SECURITIES.
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GLOBAL SECURITY
Representing 9-1/4% Senior Subordinated Notes Due 2006
HS RESOURCES, INC., a Delaware corporation, hereby promises to pay to
CEDE & CO., or registered assigns, the principal sum indicated on Schedule A
hereof, on November 15, 2006.
Interest Payment Dates: May 15 and November 15, commencing May 15,
1997.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, HS RESOURCES, INC. has caused this instrument to be
duly executed under its corporate seal.
Dated:
HS RESOURCES, INC.
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By:
----------------------------------------
Authorized Signatory
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[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
9-1/4% Senior Subordinated Note Due 2006
1. Interest
HS Resources, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on May 15 and November 15 of each year. Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the Issue Date. 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 Securities (except defaulted
interest) to the Persons who are registered Holders of Securities at the close
of business on the May 1 or November 1 immediately preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company, but, at the option of the
Company, interest may be paid by check mailed to the registered Holders at
their registered addresses. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on the Securities may also be made, in the case of a Holder of at
least $1,000,000 aggregate principal amount of Securities, by wire transfer to
a U.S. dollar account maintained by the payee with a bank in the United States
if such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Restricted Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 27, 1996 (as such may be amended from time to time, the "Indenture"),
among the Company, the Initial Subsidiary Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms
3
108
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Holders are referred to the Indenture and the Act for a statement of those
terms.
The Securities are unsecured senior subordinated obligations of the
Company limited to $150,000,000 aggregate principal amount at any one time
outstanding (subject to Section 2.07 of the Indenture). This Security is one
of the Exchange Securities referred to in the Indenture. The Securities
include the Initial Securities and any Exchange Securities issued in exchange
for the Initial Securities pursuant to the Indenture. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its
Restricted Subsidiaries and the redemption of certain Pari Passu Indebtedness
and Subordinated Indenture of the Company and its Restricted Subsidiaries;
Investments; sales of assets and Restricted Subsidiary Capital Stock; certain
transactions with Affiliates of the Company; the sale or issuance of Capital
Stock of the Restricted Subsidiaries; the creation of Liens; and
consolidations, mergers and transfers of all or substantially all of the
Company's assets. In addition, the Indenture prohibits certain restrictions on
distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium and
interest, if any, on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be
due and payable, whether at maturity, by acceleration or otherwise, according
to the terms of the Securities and the Indenture, the Subsidiary Guarantors
have unconditionally guaranteed the Obligations on a senior subordinated basis
pursuant to the terms of the Indenture.
5. Optional Redemption
The Securities are not redeemable prior to November 15, 2001. At any
time on or after November 15, 2001, the Securities are redeemable at the option
of the Company, in whole or in part, on not less than 30 nor more than 60 days'
notice, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest (if any) to the date of
redemption.
If redeemed during the 12-month period commencing November 15 of the
years indicated:
Redemption
Year Price
------ -----------
2001............................................... 104.625%
2002............................................... 103.083%
2003............................................... 101.542%
2004 and thereafter................................ 100.000%
Notwithstanding the foregoing, on and prior to November 15, 1999, the
Company may redeem up to 33 1/3% of the aggregate principal amount of the
Securities originally outstanding at a redemption price of 109.25% of the
principal amount thereof, plus accrued and unpaid interest (if any) thereon to
the redemption date, with the net proceeds of one or more Equity Offerings of
the Company; provided that at least 66 2/3% of the aggregate principal amount
of the Securities originally issued remains outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption
shall occur not later than 75 days after
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109
the date of the closing of any such Equity Offering. The redemption shall be
made in accordance with procedures set forth in the Indenture.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30 days
but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
7. Put Provisions
Upon a Change of Control, unless the Company has elected to redeem the
Securities pursuant to paragraph 5, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
In the event that the aggregate amount of Excess Proceeds from Asset
Sales exceeds $10,000,000, the Company will, subject to certain conditions
specified in the Indenture, make an offer to repurchase Securities having an
aggregate principal amount equal to the aggregate amount of Excess Proceeds at
a purchase price equal to 100% of the principal amount of such Securities plus
accrued and unpaid interest, if any, to the purchase date.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the Company,
as defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid. In
addition, each Subsidiary Guaranty is subordinated to Senior Indebtedness of
the relevant Subsidiary Guarantor, as defined in the Indenture. The Company
and each Subsidiary Guarantor agrees, and each Holder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as attorney-
in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 (or in the case of Definitive Securities sold to institutional
accredited investors as described in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, minimum denominations of $250,000, unless the Company otherwise
consents) and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange,
the Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate
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endorsements or transfer documents and to pay any taxes required by law or
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be
redeemed) or to transfer or exchange any Securities for a period of 15 days
prior to a selection of Securities to be redeemed or 15 days before an interest
payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal, premium and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Holder, the Company, the
Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities
(i) to cure any ambiguity, omission, defect or inconsistency, (ii) to provide
for the assumption of the obligations of the Company under the Indenture upon
the merger, consolidation or sale or other disposition of all or substantially
all of the assets of the Company and its Restricted Subsidiaries taken as a
whole and certain other events specified in Article 5 of the Indenture, (iii)
to provide for uncertificated Securities in addition to or in place of
certificated Securities, (iv) to comply with any requirement of the Commission
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act, (v) to make any change that does not adversely affect the
rights of any Holder of Securities in any material respect, (vi) to add or
remove Subsidiary Guarantors pursuant to the procedures set forth in the
Indenture, and (vii) to provide for certain other modifications and amendments
as set forth in the Indenture. Certain provisions of the Securities and the
Indenture may not be amended or waived without the consent of each Holder
affected thereby.
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14. Defaults and Remedies
Under the Indenture, Events of Default include (i) failure to pay any
interest on the Securities when due, continued for 30 days; (ii) failure to pay
principal of (or premium, if any, on) the Securities when due; (iii) failure to
perform any other covenant of the Company or any Subsidiary Guarantor in the
Indenture, continued for 60 days after written notice as provided in the
Indenture; (iv) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of (or premium, if any,
on) or interest on any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company (other than the Securities) or any Restricted
Subsidiary for money borrowed when due (whether resulting from maturity,
acceleration, mandatory redemption or otherwise), or any other default causing
acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) of the Company or any Restricted Subsidiary for money borrowed,
provided that the aggregate principal amount of such Indebtedness shall exceed
$5,000,000; and specifically including, without limitation, any such default
under or acceleration of any Indebtedness (other than Permitted Non-Recourse
Indebtedness) directly or indirectly resulting or derived from, or caused by, a
default under or acceleration of any Permitted Non-Recourse Indebtedness; or
(v) one or more final judgments or orders by a court of competent jurisdiction
are entered against the Company or any Restricted Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 and such judgments or
orders are not discharged, waived, stayed, satisfied or bonded for a period of
60 consecutive days; (vi) certain events of bankruptcy, insolvency or
reorganization; or (vii) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of the Indenture and such
Subsidiary Guaranty) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guaranty.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of
the Company or a Subsidiary Guarantor under the Securities or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of the Securities.
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17. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. 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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. Holders' Compliance with Registration Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
21. 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 Securities and has directed the Trustee to 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 Securities or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of this
Security.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint agent to transfer this
--------------------------
Security on the books of the Company. The agent may substitute another to act
for him.
Dated: Your Signature:
---------------- ----------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
----------------------------
Signature must be guaranteed
--------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or Section 4.09 of the Indenture, check the
appropriate box:
Section 4.06 [ ]
Section 4.09 [ ]
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or Section 4.09 of the Indenture, state
the amount in principal amount (must be an integral of $1,000):
$_______________
Dated: Your Signature:
--------------- ------------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
-----------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Notice: Signature(s) must be guaranteed by an institution which is a
participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount at maturity of this Global Security shall
be $__________. The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal in Principal Amount this Global authorized
Amount of this of this Global Security following signatory of
Global Security Security such decrease or Trustee or
increase Securities
Custodian
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EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, among [SUBSIDIARY GUARANTOR] (the "New Subsidiary Guarantor"),
a subsidiary of HS Resources, Inc. (or its successor), a Delaware corporation
(the "Company"), HS RESOURCES, INC., the Subsidiary Guarantors (the "Existing
Subsidiary Guarantors") under the Indenture referred to below, and ▇▇▇▇▇▇ TRUST
AND SAVINGS BANK, an Illinois banking corporation, 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 (as such may be amended from time to time, the
"Indenture"), dated as of November 27, 1996, providing for the issuance of an
aggregate principal amount of $150,000,000 of 9-1/4% Senior Subordinated Notes
due 2006 (the "Securities");
WHEREAS Section 4.12 of the Indenture provides that under certain
circumstances the Company is required to cause the New Subsidiary Guarantor to
execute and deliver to the Trustee a supplemental indenture pursuant to which
the New Subsidiary Guarantor shall unconditionally guarantee all of the
Company's obligations under the Securities pursuant to a Subsidiary Guaranty on
the terms and conditions set forth herein; and
WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee,
the Company and Existing Subsidiary Guarantors are 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 New Subsidiary Guarantor, the Company, the Existing Subsidiary Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit
of the holders of the Securities as follows:
1. Definitions. (a) Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture; and (ii) the words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
2. Agreement to Guarantee. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
guarantee the Company's obligations under the Securities on the terms and
subject to the conditions set forth in Article 11 of the Indenture and to be
bound by all other applicable provisions of the Indenture. From and after the
date hereof, the New Subsidiary Guarantor shall be a Subsidiary Guarantor for
all purposes under the Indenture and the Securities.
3. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the
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terms, conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every holder of Securities heretofore or hereafter authenticated
and delivered shall be bound hereby.
4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
5. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of 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.
7. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR]
By:
----------------------------------
Name:
Title:
HS RESOURCES, INC.
By:
----------------------------------
Name:
Title:
[SUBSIDIARY GUARANTORS]
By:
----------------------------------
Name:
Title:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
By:
----------------------------------
Name:
Title:
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