1
EXHIBIT 4.4
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NATIONAL ENERGY GROUP, INC.
as Issuer,
AND
BANK ONE, N.A.
as Trustee
____________________________
INDENTURE
DATED AS OF AUGUST 21, 1997
____________________________
$165,000,000.00
10 3/4% SERIES C SENIOR NOTES DUE 2006
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2
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02; 4.03; 11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02; 6.04; 9.02
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.04
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
-------------------------
N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of
this Indenture.
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TABLE OF CONTENTS
PAGE
ARTICLE I
Definitions And Incorporation By Reference
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 1.03 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . 24
SECTION 1.04 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE II
The Securities
SECTION 2.01 Principal Amount; Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.02 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.03 Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.04 Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.05 Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.07 Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.08 Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.09 Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.10 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.13 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE III
Redemption
SECTION 3.01 Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.02 Selection of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.06 Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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SECTION 3.07 Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.08 Equity Offering Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IV
Covenants
SECTION 4.01 Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.02 SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.03 Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.04 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.05 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.06 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.07 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.08 Maintenance of Properties and Insurance . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 4.09 Limitation on Incurrence of Additional Indebtedness . . . . . . . . . . . . . . . . . . 44
SECTION 4.10 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4.11 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.12 Limitation on Liens Securing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.13 Limitation on Sale/Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.14 Limitation on Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . . 49
SECTION 4.15 Limitation on Issuances and Sales of Restricted Subsidiary Stock . . . . . . . . . . . 50
SECTION 4.16 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 4.17 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.18 Limitation on Line of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.19 Limitation on Restrictive Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE V
Successor Corporation
SECTION 5.01 When Company May Merge, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 5.02 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VI
Defaults And Remedies
SECTION 6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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SECTION 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.06 Limitation on Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.07 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VII
Trustee
SECTION 7.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 7.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.03 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.05 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.06 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.08 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.11 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . 66
ARTICLE VIII
Discharge Of Indenture
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . 66
SECTION 8.02 Legal Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.03 Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.04 Conditions to Legal or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.05 Deposited Money and U.S. Government Securities to be Held in Trust; Other
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 8.06 Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 8.07 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
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ARTICLE IX
Amendments, Supplements And Waivers
SECTION 9.01 Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 9.02 With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 9.03 Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.04 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.05 Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.06 Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE X
Guarantees
SECTION 10.01 Unconditional Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 10.02 Guarantors May Consolidate, etc., on Certain Terms . . . . . . . . . . . . . . . . . . 75
SECTION 10.03 Addition of Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 10.04 Release of a Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.05 Limitation of Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.06 Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.07 Execution and Delivery of Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 10.08 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE XI
Miscellaneous
SECTION 11.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.03 Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.04 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . 80
SECTION 11.05 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.06 Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.07 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.08 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.09 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . 81
SECTION 11.10 No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.11 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.12 Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
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SIGNATURES
EXHIBIT A FORM OF SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▇-▇
▇▇▇▇▇▇▇ ▇-▇ FORM OF NOTATION ON SECURITY RELATING
TO GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1
EXHIBIT B CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR TRANSFER OF SERIES C SENIOR NOTES . . . . . B-1
EXHIBIT C FORM OF LEGAL OPINION ON TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D FORM OF COMPLIANCE CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E FORM OF TRANSFEREE LETTER OF REPRESENTATION . . . . . . . . . . . . . . . . . . . . . . . E-1
-----------------
NOTE: This Table of Contents shall not, for any purpose, be deemed to be
a part of this Indenture.
v
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INDENTURE, dated as of August 21, 1997, between NATIONAL ENERGY GROUP,
INC., a Delaware corporation (the "Company"), and Bank One, N.A., a national
banking association, as Trustee. Each party agrees as follows for the benefit
of the other parties and for the equal and ratable benefit of the holders of
the Company's 10 3/4% Series C Senior Notes due 2006 (the "Series C Notes") and
the 10 3/4% Series D Senior Notes due 2006 (the "Series D Notes" and, together
with the Series C Notes, the "Securities") issued pursuant to this Indenture:
ARTICLE I
Definitions And Incorporation By Reference
SECTION 1.01 Definitions.
"Adjusted Consolidated Net Tangible Assets" or "ACNTA" means (without
duplication), as of the date of determination, (a) the sum of (i) discounted
future net revenue from proved oil and gas reserves of the Company and its
Restricted Subsidiaries calculated in accordance with SEC guidelines before any
state or federal income taxes, as estimated by independent petroleum engineers
in a reserve report prepared as of the end of the Company's most recently
completed fiscal year as increased by, as of the date of determination, the
discounted future net revenue of (A) estimated proved oil and gas reserves of
the Company and its Restricted Subsidiaries attributable to any acquisition
consummated since the effective date of such year-end reserve reports and (B)
estimated oil and gas reserves of the Company and its Restricted Subsidiaries
attributable to extensions, discoveries and other additions and upward
revisions of estimates of proved oil and gas reserves due to exploration,
development or exploitation, production or other activities conducted or
otherwise occurring since the effective date of such year-end reserve reports
which, in the case of sub-clauses (A) and (B), would, in accordance with
standard industry practice, result in such increases, in each case calculated
in accordance with SEC guidelines (utilizing the prices utilized in such
year-end reserve reports), and decreased by, as of the date of determination,
the discounted future net revenue of (C) estimated proved oil and gas reserves
of the Company and its Restricted Subsidiaries produced or disposed of since
the effective date of such year- end reserve reports and (D) reductions in the
estimated oil and gas reserves of the Company and its Restricted Subsidiaries
since the effective date of such year-end reserve reports attributable to
downward revisions of estimates of proved oil and gas reserves due to
exploration, development or exploitation, production or other activities
conducted or otherwise occurring since the effective date of such year-end
reserve reports which would, in accordance with standard industry practice,
result in such revisions, in each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in such year-end reserve reports);
provided that, in the case of each of the determinations made pursuant to
sub-clauses (A) through (D) above, such increases and decreases shall be as
estimated by the Company's engineers, except that if as a result of such
acquisitions, dispositions, discoveries, extensions or revisions, there is a
Material Change and in connection with the incurrence of Indebtedness under
Section 4.09, all or any part of an increase in discounted future net revenue
resulting from the matters described in sub-clauses (A) and (B) above are
needed to permit the incurrence of such Indebtedness, then the discounted
future net revenue utilized for purposes of this clause (a) (i) shall be
confirmed in writing
9
by independent petroleum engineers provided that, in the event that the
determinations made pursuant to sub-clauses (C) and (D) above, when taken
alone, would not cause a Material Change, then such written confirmation need
only cover the incremental additions to discounted future net revenues
resulting from the determinations made pursuant to sub-clauses (A) and (B)
above to the extent needed to permit the incurrence of such Indebtedness, (ii)
the capitalized costs that are attributable to oil and gas properties of the
Company and its Restricted Subsidiaries to which no proved oil and gas reserves
are attributed, based on the Company's books and records as of a date no
earlier than the date of the Company's latest annual or quarterly financial
statements, (iii) the Net Working Capital on a date no earlier than the date of
the Company's latest annual or quarterly financial statements and (iv) the
greater of (A) the net book value on a date no earlier than the date of the
Company's latest annual or quarterly financial statements and (B) the appraised
value, as estimated by independent appraisers, of other tangible assets
(including Investments in unconsolidated Subsidiaries) of the Company and its
Restricted Subsidiaries, as of a date no earlier than the date of the Company's
latest audited financial statements, minus (b) the sum of (i) minority
interests, (ii) any non-current portion of gas balancing liabilities of the
Company and its Restricted Subsidiaries reflected in the Company's latest
annual or quarterly financial statements, (iii) the discounted future net
revenue, calculated in accordance with SEC guidelines (utilizing the prices
utilized in the Company's year-end reserve reports), attributable to reserves
which are required to be delivered to third parties to fully satisfy the
obligations of the Company and its Restricted Subsidiaries with respect to
Volumetric Production Payments on the schedules specified with respect thereto,
(iv) the discounted future net revenue, calculated in accordance with SEC
guidelines, attributable to reserves subject to Dollar-Denominated Production
Payments which, based on the estimates of production included in determining
the discounted future net revenue specified in (a) (i) above (utilizing the
same prices utilized in the Company's year-end reserve reports), would be
necessary to fully satisfy the payment obligations of the Company and its
Restricted Subsidiaries with respect to Dollar-Denominated Production Payments
on the schedules specified with respect thereto and (v) the discounted future
net revenue, calculated in accordance with SEC guidelines (utilizing the same
prices utilized in the Company's initial or year-end reserve reports),
attributable to reserves subject to participation interests, overriding royalty
interests or other interests of third parties, pursuant to participation,
partnership, vendor financing or other agreements then in effect, or which
otherwise are required to be delivered to third parties. If the Company
changes its method of accounting from the full cost method to the successful
efforts method or a similar method of accounting, Adjusted Consolidated Net
Tangible Assets will continue to be calculated as if the Company was still
using the full cost method of accounting.
"Adjusted Net Assets" of a Guarantor at any date shall mean the lesser
of (i) the amount by which the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Guarantee of such Guarantor at such date and (ii) the amount by which the
present fair salable value of the assets of such Guarantor at such date exceeds
the amount that will be required to pay the probable
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liability of such Guarantor on its debts (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date and after
giving effect to any collection from any Subsidiary of such Guarantor in
respect of the obligations of such Subsidiary under the Guarantee), excluding
debt in respect of the Guarantee, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
control when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and
the terms controlling and controlled have meanings correlative to the
foregoing; provided that a corporation shall not be deemed an Affiliate of the
Company solely by reason of having a single common director with the Company
who constitutes less than a majority of the directors of either the Company and
the other corporation.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means any sale, lease, transfer, exchange or other
disposition having a fair market value of $1,000,000 or more (or series of
sales, leases, transfers, exchanges or dispositions during any fiscal year
having an aggregate fair market value of such amount) of shares of Capital
Stock of a Restricted Subsidiary (other than directors' Qualifying Shares), or
of property or assets (including the creation of Dollar-Denominated Production
Payments and Volumetric Production Payments, other than Dollar-Denominated
Production Payments and Volumetric Production Payments created or sold in
connection with the financing of, and within 30 days after, the acquisition of
the properties subject thereto) or any interests therein (each referred to for
purposes of this definition as a disposition) by the Company or any of its
Restricted Subsidiaries, including any disposition by means of a merger,
consolidation or similar transaction (other than (a) by the Company to a Wholly
Owned Restricted Subsidiary or by a Subsidiary to the Company or a Wholly Owned
Restricted Subsidiary, (b) a sale of oil, gas or other hydrocarbons or other
mineral products in the ordinary course of business of the Company's oil and
gas production operations, (c) any abandonment, farm-in, farm-out, lease and
sub-lease of developed and/or undeveloped properties made or entered into in
the ordinary course of business (but excluding (x) any sale of a net profits or
overriding royalty interest, in each case conveyed from or burdening proved
developed or proved undeveloped reserves and (y) any sale of hydrocarbons or
other mineral products as a result of the creation of Dollar-Denominated
Production Payments or Volumetric Production Payments, other than
Dollar-Denominated Production Payments and Volumetric Production Payments
created or sold in connection with the financing of, and within 30 days after,
the acquisition of the properties subject thereto), (d) the disposition of all
or substantially all of the assets of the Company in compliance with Article V
and Sale/Leaseback Transactions in compliance with Section 4.13, (e) the
provision of services and equipment for the operation and development of the
Company's oil and gas ▇▇▇▇▇, in the ordinary course of the Company's oil and
gas service businesses, notwithstanding that such transactions may be recorded
as asset sales in accordance with full cost accounting guidelines, (f)
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the issuance by the Company of shares of its Capital Stock, (g) any trade or
exchange by the Company or any Restricted Subsidiary of oil and gas properties
for other oil and gas properties owned or held by another Person provided that
(i) the fair market value of the properties traded or exchanged by the Company
or such Restricted Subsidiary (including any cash or Cash Equivalents, not to
exceed 15% of such fair market value, to be delivered by the Company or such
Restricted Subsidiary) is reasonably equivalent to the fair market value of the
properties (together with any cash or Cash Equivalents, not to exceed 15% of
such fair market value) to be received by the Company or such Restricted
Subsidiary as determined in good faith by the Board of Directors of the
Company, which determination shall be certified by a resolution of the Board of
Directors delivered to the Trustee if such fair market value is in excess of
$5,000,000, provided that if such resolution indicates that such fair market
value is in excess of $10,000,000 such resolution shall be accompanied by a
written appraisal by a nationally recognized investment banking firm or
appraisal firm, in each case specializing or having a speciality in oil and gas
properties, and (ii) such exchange is approved by a majority of Disinterested
Directors of the Company, and (h) the sale, transfer or other disposition in
the ordinary course of business of oil and natural gas properties, or interests
therein, provided that such properties either (i) do not have proved reserves
attributed to them or (ii) were purchased for the purpose of offering such
properties for resale or participations by other Persons).
"Attributable Indebtedness" means, with respect to any particular
lease under which any Person is at the time liable and at any date as of which
the amount thereof is to be determined, the present value of the total net
amount of rent required to be paid by such Person under the lease during the
primary term thereof, without giving effect to any renewals at the option of
the lessee, discounted from the respective due dates thereof to such date at
the rate of interest per annum implicit in the terms of the lease. As used in
the preceding sentence, the net amount of rent under any lease for any such
period shall mean the sum of rental and other payments required to be paid with
respect to such period by the lessee thereunder excluding any amounts required
to be paid by such lessee on account of maintenance and repairs, insurance,
taxes, assessments, water rates or similar charges. In the case of any lease
which is terminable by the lessee upon payment of a penalty, such net amount of
rent shall also include the amount of such penalty, but no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing (i) the product of (x) the
number of years from such date to the date of each successive scheduled
principal payment of such Indebtedness multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
"Bank Credit Facility" means a revolving credit, term credit and/or
letter of credit facility, the proceeds of which are used for working capital
and other general corporate purposes to be entered into by one or more of the
Company and/or its Restricted Subsidiaries and certain financial
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12
institutions, as amended, extended or refinanced from time to time. The
Revised Credit Facility will constitute a Bank Credit Facility.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized to act on behalf of the Board of Directors of such
Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors or the managing partner(s)
of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading and which is not a Legal Holiday.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock or partnership interests and any and all warrants, options and
rights with respect thereto (whether or not currently exercisable), including
each class of common stock and Preferred Stock of such Person.
"Capitalized Lease Obligations" of any Person means the obligations 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 obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash Equivalents" means (i) any evidence of Indebtedness with a
maturity of 90 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) demand and time deposits and certificates of
deposit or acceptances with a maturity of 90 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500,000,000; (iii)
commercial paper with a maturity of 90 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-1
by Standard & Poor's Ratings Services at least P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc.; (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any commercial bank meeting the specifications of clause (ii)
above; and (v) overnight bank deposits and bankers' acceptances at any
commercial bank meeting the qualifications specified in clause (ii) above.
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13
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of related transactions, of all
or substantially all of the Company's assets to any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act); (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company; (iii) the
acquisition, directly or indirectly, by any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of more than 50% of the aggregate
voting power of the Voting Stock of the Company (for the purposes of this
definition, such other Person shall be deemed to beneficially own any Voting
Stock of a specified corporation held by a parent corporation, if such other
Person is the beneficial owner (as defined above), directly or indirectly, of
more than 35% of the voting power of the Voting Stock of such parent
corporation); or (iv) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company
was approved by a vote of 66-2/3% of the directors of the Company 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 Board of Directors of the Company then
in office.
"Company" means the party named as such above, until a successor
replaces such Person in accordance with the terms of this Indenture, and
thereafter means such successor.
"Consolidated Interest Coverage Ratio" means, for any Reference
Period, the ratio on a pro forma basis of (a) the sum of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) Consolidated Tax Expense,
(iv) depreciation and depletion of the Company and its Restricted Subsidiaries,
as determined in accordance with GAAP on a consolidated basis plus (v)
amortization of the Company and its Restricted Subsidiaries including, without
limitation, amortization of capitalized debt issuance costs, as determined in
accordance with GAAP on a consolidated basis, in each case as determined for
the Reference Period to (b) Consolidated Interest Expense for such Reference
Period; provided, that, in calculating each of the items set forth in the
foregoing (i) acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date") shall be assumed to have occurred on
the first day of the Reference Period, (provided further that nonrecurring
expenses incurred by NEG-OK prior to the date NEG-OK became a Subsidiary shall
be excluded from any calculation of Consolidated Interest Coverage Ratio), (ii)
the incurrence of any Indebtedness (including the issuance of the Securities)
or issuance of any Disqualified Stock during the Reference Period or subsequent
to the Reference Period and on or prior to the Transaction Date shall be
assumed to have occurred on the first day of such Reference Period, (iii) any
Indebtedness that had been outstanding during the Reference Period that has
been repaid on or prior to the Transaction Date shall be assumed to have been
repaid as of the first day of such Reference Period, (iv) the Consolidated
Interest Expense attributable to interest on any Indebtedness or dividends on
any Disqualified Stock bearing a floating interest (or dividend)
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14
rate shall be computed on a pro forma basis as if the rate in effect on the
Transaction Date was the average rate in effect during the entire Reference
Period and (v) in determining the amount of Indebtedness pursuant to Section
4.09, the incurrence of Indebtedness or issuance of Disqualified Stock giving
rise to the need to calculate the Consolidated Interest Coverage Ratio and, to
the extent the net proceeds from the incurrence or issuance thereof are used to
retire Indebtedness, the application of the proceeds therefrom shall be assumed
to have occurred on the first day of the Reference Period.
"Consolidated Interest Expense" means, with respect to the Company and
its Restricted Subsidiaries, for the Reference Period, the aggregate amount
(without duplication) of (a) interest expensed in accordance with GAAP
(including, in accordance with the following sentence, interest attributable to
Capitalized Lease Obligations, but excluding interest attributable to
Dollar-Denominated Production Payments and amortization of deferred debt
expense) during such period in respect of all Indebtedness of the Company and
its Restricted Subsidiaries (including (i) amortization of original issue
discount on any Indebtedness (other than with respect to the Securities), (ii)
the interest portion of all deferred payment obligations, calculated in
accordance with GAAP and (iii) all commissions, discounts and other fees and
charges owed with respect to bankers' acceptance financings and currency and
interest rate swap arrangements, in each case to the extent attributable to
such period), and (b) dividend requirements of the Company and its Restricted
Subsidiaries with respect to any Preferred Stock or Disqualified Stock
dividends (whether in cash or otherwise (except dividends paid solely in shares
of Capital Stock other than Disqualified Stock)) paid (other than to the
Company or any of its Restricted Subsidiaries), declared, accrued or
accumulated during such period, divided by one minus the applicable actual
combined federal, state, local and foreign income tax rate of the Company and
its Subsidiaries (expressed as a decimal), on a consolidated basis, for the
Reference Period preceding the date of the transaction giving rise to the need
to calculate Consolidated Interest Expense, in each case to the extent
attributable to such period and excluding items eliminated in consolidation.
For purposes of this definition, (a) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by the
Company to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP and (b) interest expense attributable to any
Indebtedness represented by the guarantee by the Company or a Restricted
Subsidiary of the Company of an obligation of another Person (other than the
Company or any other Restricted Subsidiary) shall be deemed to be the interest
expense attributable to the Indebtedness guaranteed.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall not be included in such Consolidated Net
Income: (a) any net income of any Person if such Person is not the Company or a
consolidated Restricted Subsidiary, except that (i) subject to the limitations
contained in clause (d) below, the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash or Cash Equivalents actually
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15
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below) and (ii) the Company's equity in a net loss of
any such Person (other than an Unrestricted Subsidiary) for such period shall
be included in determining such Consolidated Net Income; (b) any net income (or
loss) of any Person acquired by the Company or a Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition; (c)
the net income of any Restricted Subsidiary to the extent that the payment of
dividends or the making of distributions by such Restricted Subsidiary,
directly or indirectly, to the Company, is prohibited; (d) any gain (but not
loss) realized upon the sale or other disposition of any property, plant or
equipment of the Company or any Restricted Subsidiary (including pursuant to
any Sale/Leaseback Transaction) which is not sold or otherwise disposed of in
the ordinary course of business and any gain (but not loss) realized upon the
sale or other disposition of any Capital Stock of any Person; (e) any gain (but
not loss) from currency exchange transactions not in the ordinary course of
business consistent with past practice; (f) the cumulative effect of a change
in accounting principles; (g) to the extent deducted in the calculation of net
income, the non-cash charges associated with the repayment of Indebtedness with
the proceeds from the sale of the Securities and the Series A/B Notes and the
prepayment of any of the Securities and the Series A/B Notes; (h) any
writedowns of noncurrent assets; provided, however, that any ceiling limitation
writedowns under SEC guidelines shall be treated as capitalized costs, as if
such writedowns had not occurred; and (i) any gain (but not loss) attributable
to extraordinary items.
"Consolidated Net Worth" means, with respect to the Company and its
Restricted Subsidiaries, as at any date of determination, the sum of Capital
Stock (other than Disqualified Stock) and additional paid-in capital plus
retained earnings (or minus accumulated deficit) minus all intangible assets,
including, without limitation, organization costs, patents, trademarks,
copyrights, franchises, research and development costs, and any amount
reflected in treasury stock, of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Tax Expense" means, for any period, the provisions for
federal, state, local and foreign income taxes (including state franchise taxes
accounted for as income taxes in accordance with GAAP) of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis
in accordance with GAAP.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Definitive Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A, that do not include the information
called for by footnotes 1 and 2 thereof, and do not have attached the
additional schedule referred to in footnote 3 thereof.
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"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disinterested Director" means, with respect to an Affiliate
Transaction or series of related Affiliate Transactions, a member of the Board
of Directors of the Company who has no financial interest, and whose employer
has no financial interest, in such Affiliate Transaction or series of related
Affiliate Transactions.
"Disqualified Stock" means any Capital Stock of the Company or any
Restricted Subsidiary of the Company which, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable), or
upon the happening of any event or with the passage of time, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Maturity Date or which is exchangeable or convertible into debt
securities of the Company or any Restricted Subsidiary of the Company, except
to the extent that such exchange or conversion rights cannot be exercised prior
to the Maturity Date.
"Dollar-Denominated Production Payments" mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Effective Registration" means the Company shall have (i) commenced a
Registered Exchange Offer for the Securities pursuant to an effective
registration statement under the Securities Act or (ii) filed and caused to
become effective the Notes Shelf Registration under the Securities Act for the
sale of Securities by Holders.
"Equity Offering" means any underwritten public offering of common
stock of the Company pursuant to a registration statement filed pursuant to the
Securities Act or any private placement of Capital Stock (other than
Disqualified Stock) of the Company (other than to any Person who, prior to such
private placement, was a Subsidiary of the Company or any other Person
controlled by the Company) which offering or placement is consummated after the
Series A/B Issue Date.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America as of the Series A/B Issue Date.
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17
"Global Security" means a Security that contains the language referred
to in footnotes 1 and 2 and the additional schedule referred to in footnote 3
to the form of the Securities attached hereto as Exhibit A.
"Guarantee" or "Guarantees" means any Guarantee issued by existing or
future Restricted Subsidiaries pursuant to Article X hereof.
"Guarantor" means (i) each of the Subsidiaries that becomes a
guarantor of the Securities in compliance with the provisions of Article X
hereof and (ii) each of the Subsidiaries executing a supplemental indenture in
which such Subsidiary agrees to be bound by the terms of this Indenture; in
each case until such time, if any, such Subsidiary is released from the
Guarantee pursuant to Section 10.04 hereof.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Indebtedness" means, without duplication, with respect to any Person,
(a) all obligations of such Person (i) in respect of borrowed money (whether or
not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), (ii) evidenced by bonds, notes, debentures or
similar instruments, (iii) representing the balance deferred and unpaid of the
purchase price of any property or services (other than accounts payable or
other obligations arising in the ordinary course of business), (iv) evidenced
by bankers' acceptances or similar instruments issued or accepted by banks, (v)
for the payment of money relating to a Capitalized Lease Obligation, or (vi)
evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit; (b) all net obligations of such Person
under interest rate swap obligations, commodity swap obligations and foreign
currency ▇▇▇▇▇▇, except to the extent such net obligations are taken into
account in the determination of future net revenues from proved oil and gas
reserves for purposes of the calculation of Adjusted Consolidated Net Tangible
Assets; (c) all liabilities of others of the kind described in the preceding
clauses (a) or (b) that such Person has guaranteed or that are otherwise its
legal liability (including, with respect to any Production Payment, any
warranties or guaranties of production or payment by such Person with respect
to such Production Payment but excluding other contractual obligations of such
Person with respect to such Production Payment); (d) Indebtedness (as otherwise
defined in this definition) of another Person secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person, the
amount of such obligations being deemed to be the lesser of (1) the full amount
of such obligations so secured and (2) the fair market value of such asset, as
determined in good faith by the Board of Directors of such Person, which
determination shall be evidenced by a resolution of such Board; (e) with
respect to such Person, the liquidation preference or any mandatory redemption
payment obligations in respect of Disqualified Stock; (f) the aggregate
preference in respect of amounts payable on the issued and outstanding shares
of Preferred Stock of any of the Company's Restricted Subsidiaries in the event
of any voluntary or involuntary liquidation, dissolution or winding up
(excluding any such preference attributable to such shares of Preferred Stock
that are owned by such Person or any
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of its Restricted Subsidiaries; provided, that if such Person is the Company,
such exclusion shall be for such preference attributable to such shares of
Preferred Stock that are owned by the Company or any of its Restricted
Subsidiaries); and (g) any and all deferrals, renewals, extensions,
refinancings and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in any of
the preceding clauses (a), (b), (c), (d), (e), (f) or this clause (g), whether
or not between or among the same parties. Subject to clause (c) of the
preceding sentence, neither Dollar-Denominated Production Payments nor
Volumetric Production Payments shall be deemed to be Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Initial Securities" means the Series C Notes issued pursuant to this
Indenture.
"Investment" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions, (ii)
all guarantees of Indebtedness or other obligations of any other Person by such
Person, (iii) all purchases (or other acquisitions for consideration) by such
Person of assets, Indebtedness, Capital Stock or other securities of any other
Person and (iv) all other items that would be classified as investments
(including, without limitation, purchases of assets outside the ordinary course
of business) or advances on a balance sheet of such Person prepared in
accordance with GAAP.
"Issue Date" means the date on which the Initial Securities are
originally issued under this Indenture.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or
equivalent statute or statutes) of any jurisdiction).
"Make-Whole Amount" with respect to a Security means an amount equal
to the excess, if any, of (i) the present value of the remaining interest,
premium and principal payments due on such Security as if such Security were
redeemed on November 1, 2001, computed using a discount rate equal to the
Treasury Rate plus 75 basis points, over (ii) the outstanding principal amount
of such Security. "Treasury Rate" is defined as the yield to maturity at the
time of the computation of United States Treasury securities with a constant
maturity (as compiled by and published in the most recent Federal Reserve
Statistical Release H.15(519), which has become publicly available at least two
Business Days prior to the date of the redemption notice or, if such
Statistical Release is no
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longer published, any publicly available source of similar market data) most
nearly equal to the then remaining maturity of the Securities assuming
redemption of the Securities on November 1, 2001; provided, however, that if
the Make-Whole Average Life of such Security is not equal to the constant
maturity of the United States Treasury securities for which a weekly average
yield is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given,
except that if the Make-Whole Average Life of such Securities is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Make-Whole Average Life" means the number of years (calculated to the
nearest one-twelfth) between the date of redemption and November 1, 2001.
"Make-Whole Price" with respect to a Security means the greater of (i)
the sum of the outstanding principal amount and the Make-Whole Amount of such
Security, and (ii) the redemption price of such Security on November 1, 2001,
determined pursuant to this Indenture (105.375 % of the principal amount).
"Material Change" means an increase or decrease (excluding changes
that result solely from changes in prices) of more than either (i) 10% from the
end of the immediately preceding fiscal quarter in the estimated discounted
future net revenue from proved oil and gas reserves of the Company and its
Restricted Subsidiaries, or (ii) 20% from the end of the immediately preceding
year in the estimated discounted future net revenue from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, in each case
calculated in accordance with clause (a) (i) of the definition of Adjusted
Consolidated Net Tangible Assets; provided, however, that the following will be
excluded from the calculation of Material Change: (a) any acquisitions of oil
and gas reserves made after the end of the immediately preceding year for which
the discounted future net revenues have been estimated by independent petroleum
engineers since the end of the preceding year and on which a report or reports
exist and (b) any disposition of properties existing at the beginning of the
current quarter or current year, as the case may be, for purposes of clause (i)
or clause (ii) above, that have been disposed of as provided in Section 4.11.
"Maturity Date" means November 1, 2006.
"NEG-OK" means National Energy Group of Oklahoma, Inc., a Delaware
corporation and former wholly-owned Subsidiary of the Company that was merged
with and into the Company effective December 31, 1996.
"Net Cash Proceeds" means (a) with respect to any Asset Sale or
Sale/Leaseback Transaction of any Person, an amount equal to aggregate cash
proceeds received (including any cash proceeds received by way of deferred
payment of principal pursuant to a note or installment
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receivable or otherwise, but only as and when received, and excluding any other
consideration until such time as such consideration is converted into cash)
therefrom, in each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all federal, state or
local taxes required to be accrued as a liability as a consequence of such
Asset Sale or Sale/Leaseback Transaction, and in each case net of all
Indebtedness which is secured by such assets, in accordance with the terms of
any Lien upon or with respect to such assets, or which must, by its terms or in
order to obtain a necessary consent to such Asset Sale or Sale/Leaseback
Transaction or by applicable law, be repaid out of the proceeds from such Asset
Sale or Sale/Leaseback Transaction and which is actually so repaid and (b) in
the case of any sale by the Company of securities pursuant to clauses (B) or
(C) of Section 4.10(a)(iii), the amount of aggregate net cash proceeds received
by the Company, after payment of expenses, commissions, discounts and any other
transaction costs incurred in connection therewith.
"Net Working Capital" means (i) all current assets of the Company and
its Restricted Subsidiaries, minus (ii) all current liabilities of the Company
and its Restricted Subsidiaries (including the current portion of gas balancing
liabilities), except current liabilities included in Indebtedness.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Person as to which (a) neither the Company nor any Restricted
Subsidiary (i) provides credit support including any undertaking, agreement or
instrument which would constitute Indebtedness or (ii) is directly or
indirectly liable for such Indebtedness and (b) no default with respect to such
Indebtedness (including any rights which the holders thereof may have to take
enforcement action against such Person) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness (other than Non-Recourse
Indebtedness) of the Company or its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Notes Liquidated Damages" shall have the meaning given such term in
the Registration Rights Agreement.
"Notes Shelf Registration" shall have the meaning given such term in
the Registration Rights Agreement.
"Officer" means, with respect to any Person, the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer or the
Treasurer of such Person.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either a Secretary,
Assistant Secretary or Assistant Treasurer of such Person. One of the Officers
signing an Officers' Certificate given pursuant to Section 4.03(a) shall be the
principal executive, financial or accounting Officer of the Person delivering
such certificate.
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"Oil and Gas Business" means the business of the exploration for, and
exploitation, development, production, processing (but not refining),
marketing, storage and transportation of, hydrocarbons, and other related
energy and natural resources businesses (including oil and gas services
businesses related to the foregoing).
"Oil and Gas Securities" means the Voting Stock of a Person primarily
engaged in the Oil and Gas Business, provided that such Voting Stock shall
constitute a majority of the Voting Stock of such Person in the event that such
Voting Stock is not registered under Section 12 of the Exchange Act.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company (or any Guarantor, if applicable) or the Trustee.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PBGC Plan" shall mean any employee pension benefit plan as defined in
Section 3(2) of ERISA sponsored by the Company or an ERISA Affiliate (excluding
any Multiemployer Plan and any Multiple Employer Plan) and which is subject to
Title IV of ERISA or Section 412 of the Code.
"Permitted Business Investments" means (i) Investments in assets used
in the Oil and Gas Business; (ii) the acquisition of Oil and Gas Securities;
(iii) the entry into operating agreements, joint ventures, processing
agreements, farmout agreements, development agreements, area of mutual interest
agreements, contracts for the sale, transportation or exchange of oil and
natural gas, unitization agreements, pooling arrangements, joint bidding
agreements, service contracts, partnership agreements (whether general or
limited) or other similar or customary agreements, transactions, properties,
interests or arrangements, and Investments and expenditures in connection
therewith or pursuant thereto, in each case made or entered into in the
ordinary course of the Oil and Gas Business, excluding solely for purposes of
this clause (iii), however, Investments in corporations; (iv) the acquisition
of working interests, royalty interests or mineral leases relating to oil and
gas properties; (v) Investments by the Company or any Wholly Owned Restricted
Subsidiary in any Person which, immediately prior to the making of such
Investment, is a Wholly Owned Restricted Subsidiary; (vi) Investments in the
Company by any Wholly Owned Restricted Subsidiary; (vii) Investments permitted
under Section 4.11 and Section 4.13; (viii) Investments in any Person the
consideration for which consists of Capital Stock (other than Disqualified
Stock); (ix) Investments constituting obligations under hedging arrangements
described in clause (viii) of the definition of "Permitted Indebtedness;" and
(x) Investments in Unrestricted Subsidiaries the assets of which consist of
assets used in the Oil and Gas Business (other than cash and Cash Equivalents)
received by the Company from any Person other than a Subsidiary of the Company
solely as a result of the issuance or sale of Capital Stock of the Company
(other than Disqualified Stock) provided that such Investment is made within 30
days of the issuance or sale of such Capital Stock.
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"Permitted Company Refinancing Indebtedness" means Indebtedness of the
Company, the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Indebtedness of the Company (other than any
Indebtedness incurred in reliance upon clause (ii) or clause (v) of the
definition of Permitted Indebtedness), provided that (i) if the Indebtedness
(including the Securities) being renewed, extended, refinanced, refunded or
repurchased is pari passu with or subordinated in right of payment to the
Securities, then such Indebtedness is pari passu with or subordinated in right
of payment to, as the case may be, the Securities at least to the same extent
as the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (ii) such Indebtedness is scheduled to mature no earlier than the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, and
(iii) such Indebtedness has an Average Life at the time such Indebtedness is
incurred that is equal to or greater than the Average Life of the Indebtedness
being renewed, extended, refinanced, refunded or repurchased; provided,
further, that such Indebtedness (to the extent that such Indebtedness
constitutes Permitted Company Refinancing Indebtedness) is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or
if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP).
"Permitted Financial Investments" means the following kinds of
instruments if, in the case of instruments referred to in clauses (i) through
(iv) below, on the date of purchase or other acquisition of any such instrument
by the Company or any Subsidiary, the remaining term to maturity is not more
than one year: (i) readily marketable obligations issued or unconditionally
guaranteed as to principal of and interest on by the United States of America
or by any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America; (ii) repurchase obligations
for instruments of the type described in clause (i) for which delivery of the
instrument is made against payment; (iii) obligations (including, but not
limited to, demand or time deposits, bankers' acceptances and certificates of
deposit) issued by a depository institution or trust company incorporated or
doing business under the laws of the United States of America, any state
thereof or the District of Columbia or a branch or subsidiary of any such
depository institution or trust company operating outside the United States,
provided, that such depository institution or trust company has, at the time of
the Company's or such Subsidiary's investment therein or contractual commitment
providing for such investment, capital surplus or undivided profits (as of the
date of such institution's most recently published financial statements) in
excess of $500,000,000; (iv) commercial paper issued by any corporation, if
such commercial paper has, at the time of the Company's or any Subsidiary's
investment therein or contractual commitment providing for such investment,
credit ratings of A-1 (or higher) by Standard & Poor's Ratings Services and P-1
(or higher) by ▇▇▇▇▇'▇ Investors Services, Inc.; and (v) money market mutual or
similar funds having assets in excess of $500,000,000.
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"Permitted Indebtedness" means (i) Indebtedness of the Company and its
Restricted Subsidiaries outstanding as of the Series A/B Issue Date; (ii)
Indebtedness of the Company and its Restricted Subsidiaries under a Bank Credit
Facility in a principal amount outstanding at any time not to exceed a
principal amount equal to the greater of (a) $40,000,000 and (b) $10,000,000
plus 15% of Adjusted Consolidated Net Tangible Assets plus related accrued
interests and costs, less any Net Cash Proceeds applied in accordance with
Section 4.11(b) to repay or prepay such Indebtedness that results in a
permanent reduction in any revolving credit or other commitment relating
thereto or the maximum amount that may be borrowed thereunder provided that the
aggregate amount of applied Net Cash Proceeds shall not permanently, reduce the
amount of Permitted Indebtedness under this clause (ii) below $10,000,000
principal amount plus related accrued interest and costs; (iii) other
Indebtedness of the Company and its Restricted Subsidiaries in a principal
amount not to exceed $10,000,000 at any one time outstanding; (iv) Non-Recourse
Indebtedness; (v) Indebtedness of the Company to any Wholly Owned Restricted
Subsidiary of the Company and Indebtedness of any Restricted Subsidiary of the
Company to the Company or another Wholly Owned Restricted Subsidiary of the
Company; (vi) Permitted Company Refinancing Indebtedness; (vii) Permitted
Subsidiary Refinancing Indebtedness; (viii) obligations under hedging
arrangements that the Company and its Subsidiaries enter into in the ordinary
course of business for the purpose of protecting their production against
fluctuations in oil and natural gas prices; (ix) Indebtedness under the
Securities and the Series A/B Notes; and (x) Indebtedness of a Subsidiary
pursuant to a Guarantee of the Securities pursuant to Article X of this
Indenture or of the Series A/B Notes pursuant to the Series A/B Indenture.
"Permitted Investments" means Permitted Business Investments and
Permitted Financial Investments.
"Permitted Liens" means (i) Liens outstanding as of the Series A/B
Issue Date; (ii) Liens now or hereafter securing a Bank Credit Facility;
provided, however, such Liens are limited to securing Indebtedness in an amount
not in excess of that permitted to be incurred in accordance with clause (ii)
of the definition of Permitted Indebtedness; (iii) Liens now or hereafter
securing any interest rate hedging obligations so long as the related
Indebtedness (a) constitutes Senior Indebtedness or (b) is, or is permitted to
be under this Indenture, secured by a Lien on the same property securing such
interest rate obligations; (iv) Liens now or hereafter securing any interest
rate hedging obligations so long as the related Indebtedness (a) constitutes
the Securities or the Series A/B Notes (or any Permitted Company Refinancing
Indebtedness in respect thereof) or (b) is, or is permitted to be under this
Indenture, secured by a Lien on the same property securing such interest rate
hedging obligations; (v) Liens securing Indebtedness, the proceeds of which are
used to refinance secured Indebtedness of the Company or its Restricted
Subsidiaries; provided, that such Liens extend to or cover only the property or
assets currently securing the Indebtedness being refinanced; (vi) Liens for
taxes, assessments and governmental charges not yet delinquent or being
contested in good faith and for which adequate reserves have been established
to the extent required by GAAP; (vii) mechanics', workmen's, materialmen's,
operators' or similar Liens arising in the
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ordinary course of business; (viii) Liens in connection with workers'
compensation, unemployment insurance or other social security, old age pension
or public liability obligations; (ix) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment
of money), leases, public or statutory obligations, surety, stay, appeal
indemnity, performance or other similar bonds, or other similar obligations
arising in the ordinary course of business; (x) survey exceptions,
encumbrances, easements or reservations of, or rights of others for, rights of
way, zoning or other restrictions as to the use of real properties, and minor
defects in title which, in the case of any of the foregoing, were not incurred
or created to secure the payment of borrowed money or the deferred purchase
price of property or services, and in the aggregate do not materially adversely
affect the value of such properties or materially impair use for the purposes
of which such properties are held by the Company or any Restricted
Subsidiaries; (xi) Liens on, or related to, properties to secure all or part of
the costs incurred in the ordinary course of business of exploration, drilling,
development or operation thereof; (xii) Liens on pipeline or pipeline
facilities which arise out of operation of law; (xiii) judgment and attachment
Liens not giving rise to an Event of Default or Liens created by or existing
from any litigation or legal proceeding that are currently being contested in
good faith by appropriate proceedings and for which adequate reserves have been
made; (xiv) (a) Liens upon any property of any Person existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary, (b) Liens upon
any property of a Person existing at the time such Person is merged or
consolidated with the Company or any Restricted Subsidiary or existing at the
time of the sale or transfer of any such property of such Person to the Company
or any Restricted Subsidiary, or (c) Liens upon any property of a Person
existing at the time such Person becomes a Restricted Subsidiary; provided,
that in each case such Lien has not been created in contemplation of such sale,
merger, consolidation, transfer or acquisition, and provided that in each such
case no such Lien shall extend to or cover any property of the Company or any
Restricted Subsidiary other than the property being acquired and improvements
thereon; (xv) Liens on deposits to secure public or statutory obligations or in
lieu of surety or appeal bonds entered into in the ordinary course of business;
(xvi) Liens in favor of collecting or payor banks having a right of setoff,
revocation, refund or chargeback with respect to money or instruments of the
Company or any Subsidiary on deposit with or in possession of such bank; (xvii)
purchase money security interests granted in connection with the acquisition of
assets in the ordinary course of business and consistent with past practices,
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 100% of the purchase price of such
assets; (xviii) Liens reserved in oil and gas mineral leases for bonus or
rental payments and for compliance with the terms of such leases; (xix) Liens
arising under partnership agreements, oil and gas leases, farm-out agreements,
division orders, contracts for the sale, purchase, exchange, transportation or
processing (but not refining) of oil, gas or other hydrocarbons, unitization
and pooling declarations and agreements, development agreements, operating
agreements, area of mutual interest agreements, and other similar agreements
which are customary in the Oil and Gas Business; (xx) Liens securing
obligations under hedging arrangements that the Company enters into in the
ordinary course of business for the purpose of protecting its
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production against fluctuations in oil and natural gas prices; and (xxi) Liens
to secure Dollar-Denominated Production Payments and Volumetric Production
Payments.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of
any Restricted Subsidiary, the net proceeds of which are used to renew, extend,
refinance, refund or repurchase outstanding Indebtedness of such Restricted
Subsidiary (other than any Indebtedness incurred in reliance upon clause (ii)
or clause (v) of the definition of Permitted Indebtedness), provided that (i)
if the Indebtedness (including any Guarantee) being renewed, extended,
refinanced, refunded or repurchased is pari passu with or subordinated in right
of payment to the Guarantee, then such Indebtedness is pari passu with or
subordinated in right of payment to, as the case may be, the Guarantee at least
to the same extent as the Indebtedness being renewed, extended, refinanced,
refunded or repurchased, (ii) such Indebtedness is scheduled to mature no
earlier than the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, and (iii) such Indebtedness has an Average Life at the time such
Indebtedness is incurred that is equal to or greater than the Average Life of
the Indebtedness being renewed, extended, refinanced, refunded or repurchased,
provided, further, that such Indebtedness (to the extent that such Indebtedness
constitutes Permitted Subsidiary Refinancing Indebtedness) is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or
if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP); provided, however, that a Restricted Subsidiary shall
not incur refinancing Indebtedness to renew, extend, refinance, refund or
repurchase outstanding Indebtedness of another Subsidiary unless such
Subsidiary is a Guarantor.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated), which is
preferred as to the payment of dividends, or upon any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of Capital Stock of
any other class of such corporation.
"Production Payments" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article XI of Regulation S-X under the Securities Act.
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"Reference Period" means, with respect to any Person, the four full
consecutive fiscal quarters ended with the last full fiscal quarter for which
financial information is available immediately preceding any date upon which
any determination is to be made pursuant to the terms of the Securities or this
Indenture.
"Registered Exchange Offer" shall have the meaning given such term in
the Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of August 21, 1997, by and between the Company and the
purchasers named therein, as such agreement may be amended, modified or
supplemented from time to time.
"Restricted Payment" means, with respect to any Person, any of the
following: (i) any dividend or other distribution in respect of such Person's
Capital Stock (other than (a) dividends or distributions payable solely in
Capital Stock (other than Disqualified Stock) and (b) in the case of Restricted
Subsidiaries of the Company, dividends or distributions payable to the Company
or to a Restricted Subsidiary of the Company); (ii) the purchase, redemption or
other acquisition or retirement for value of any Capital Stock, or any option,
warrant, or other right to acquire shares of Capital Stock, of the Company or
any of its Restricted Subsidiaries (but excluding (a) any cashless exercise of
warrants or options or (b) payments in respect of cash elections or phantom
stock or similar awards under any director or employee benefit plan or
arrangement provided such payment is recorded as a compensation expense under
GAAP); (iii) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for
value, prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, of any Indebtedness which is subordinated in right of
payment to the Securities; and (iv) the making by such Person of any Investment
other than a Permitted Investment.
"Restricted Securities" mean Securities that bear or are required to
bear the Restricted Securities Legend.
"Restricted Securities Legend" means the legend set forth on the face
of the form of Security attached hereto as Exhibit A, pursuant to Section 2.06.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that,
immediately after giving effect to such designation, the Company could incur at
least $1.00 in additional Indebtedness pursuant Section 4.09(a).
"Revised Credit Facility" means the Restated Loan Agreement between
the Company and Bank One, Texas, N.A. and Credit Lyonnais, New York, as amended
from time to time, including but not limited to the First Amendment dated as of
October 31, 1996, the Second Amendment dated
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as of March 7, 1997, and the Third Amendment dated as of May 12, 1997, and the
Fourth Amendment dated as of August 21, 1997.
"Sale/Leaseback Transaction" means with respect to the Company or any
of its Restricted Subsidiaries, any arrangement with any Person providing for
the leasing by the Company or any of its Restricted Subsidiaries of any
principal property, acquired or placed into service more than 180 days prior to
such arrangement, whereby such property has been or is to be sold or
transferred by the Company or any of its Restricted Subsidiaries to such
Person.
"SEC" means the Securities and Exchange Commission.
"Securities" or "Security" means the Initial Securities and the Senior
Exchange Securities, as either may be amended or supplemented from time to time
in accordance with the terms hereof, that are issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Senior Exchange Securities" means the Series D Notes issued in
exchange for the Initial Securities pursuant to a Registered Exchange Offer and
shall also include any Series D Notes issued in exchange for the Series B
Notes.
"Senior Indebtedness" means any Indebtedness of the Company (whether
outstanding on the Series A/B Issue Date or thereafter incurred), unless such
Indebtedness is contractually subordinate or junior in right of payment of
principal, premium and interest to the Securities.
"Senior Indebtedness of a Guarantor" means any Indebtedness of such
Guarantor (whether outstanding on the Series A/B Issue Date or thereafter
incurred), unless such Indebtedness is contractually subordinate or junior in
right of payment of principal, premium and interest to the Guarantees.
"Series A/B Indenture" means the Indenture dated as of November 1,
1996 among the Company, NEG-OK, and Bank One, Columbus, N.A., as trustee, and
providing for the issuance of the Series A/B Notes in the aggregate principal
amount of $100 million, as such may be amended or supplemented from time to
time.
"Series A/B Issue Date" means the date on which the Series A/B Notes
were originally issued under the Series A/B Indenture.
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"Series A/B Notes" means the Company's 10 3/4% Senior Notes due 2006
issued pursuant to the Series A/B Indenture, as such may be amended or
supplemented from time to time.
"Series A/B Registration Rights Agreement" means the Registration
Rights Agreement dated as of October 29, 1996, by and among the Company, NEG-OK
and each of the purchasers named therein, as such agreement may be amended,
modified or supplemented from time to time.
"Series B Notes" means the Company's Series A/B Notes registered
pursuant to the Series A/B Registration Rights Agreement.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and, when used with respect to any other
Indebtedness or any installment of interest thereon, means the date specified
in the instrument evidencing or governing such Indebtedness as the fixed date
on which the principal of such Indebtedness or such installment of interest is
due and payable.
"Subordinated Indebtedness of a Guarantor" means any Indebtedness of
such Guarantor (whether outstanding on the Series A/B Issue Date or thereafter
incurred) which is contractually subordinate or junior in right of payment of
principal, premium and interest to the Guarantees.
"Subordinated Indebtedness of the Company" means any Indebtedness of
the Company (whether outstanding on the Series A/B Issue Date or thereafter
incurred) which is contractually subordinate or junior in right of payment of
principal, premium and interest to the Securities.
"Subsidiary" means any subsidiary of the Company. A subsidiary of any
Person means (i) a corporation a majority of whose Voting Stock is at the time,
directly or indirectly, owned by such Person, by one or more subsidiaries of
such Person or by such Person and one or more subsidiaries of such Person, (ii)
a partnership in which such Person or a subsidiary of such Person is, at the
date of determination, a general or limited partner of such partnership, but
only if such Person or its subsidiary is entitled to receive more than 50
percent of the assets of such partnership upon its dissolution, or (iii) any
other Person (other than a corporation or partnership) in which such Person,
directly or indirectly, at the date of determination thereof, has (x) at least
a majority ownership interest or (y) the power to elect or direct the election
of a majority of the directors or other governing body of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of this Indenture, except as provided in
Section 9.03.
"Trust Officer" means any officer or assistant officer within the
corporate trust department of the Trustee assigned by the Trustee to administer
its corporate trust matters.
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"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor.
"Unrestricted Subsidiary" means (i) any Subsidiary of an Unrestricted
Subsidiary or (ii) any Subsidiary of the Company or of a Restricted Subsidiary
that is designated as an Unrestricted Subsidiary by a resolution adopted by the
Board of Directors in accordance with the requirements of the following
sentence. The Company may designate any Subsidiary of the Company or of a
Restricted Subsidiary (including a newly acquired or newly formed Subsidiary or
any Restricted Subsidiary of the Company), to be an Unrestricted Subsidiary by
a resolution of the Board of Directors of the Company, as evidenced by written
notice thereof delivered to the Trustee, if after giving effect to such
designation, (i) the Company could incur at least $1.00 of additional
Indebtedness pursuant to Section 4.09(a), (ii) the Company could make an
additional Restricted Payment of at least $1.00 pursuant to Section 4.10(a),
(iii) such Subsidiary does not own or hold any Capital Stock of, or any lien on
any property of, the Company or any Restricted Subsidiary and (iv) such
Subsidiary is not liable, directly or indirectly, with respect to any
Indebtedness other than Unrestricted Subsidiary Indebtedness. Notwithstanding
the foregoing, as of the date of this Indenture, Boomer Marketing Corporation,
an Oklahoma corporation, and Energy and Environmental Services Limited
Partnership, an Oklahoma limited partnership, are designated by the Company as
Unrestricted Subsidiaries.
"Unrestricted Subsidiary Indebtedness" of any Person means
Indebtedness of such Person (i) as to which neither the Company nor any
Restricted Subsidiary is directly or indirectly liable (by virtue of the
Company's or such Restricted Subsidiary's being the primary obligor, or
guarantor of, or otherwise liable in any respect on, such Indebtedness), (ii)
which, with respect to Indebtedness incurred after the Issue Date by the
Company or any Restricted Subsidiary, upon the occurrence of a default with
respect thereto, does not result in, or permit any holder of any Indebtedness
of the Company or any Restricted Subsidiary to declare a default on such
Indebtedness of the Company or any Restricted Subsidiary and (iii) which is not
secured by any assets of the Company or of any Restricted Subsidiary.
"U.S. Government Securities" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (i) or (ii) are not callable or redeemable at the option of the
issuer thereof.
"U.S. Legal Tender" means such coin or currency of the United States
as at the time of payment shall be legal tender for the payment of public and
private debts.
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"Volumetric Production Payments" mean production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of contingency) to vote in the election of members of the Board
of Directors or other governing body of such person, provided that, for
purposes of the definition of Change in Control, the Series D Preferred Stock
of the Company outstanding at the Series A/B Issue Date shall not be deemed
Voting Stock unless and until the holders of such class take any action, by
vote, consent or otherwise, to exercise any right of such class to elect or
appoint more than one member to the Board of Directors of the Company.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary 95%
or more of the Capital Stock (other than directors' qualifying shares if
applicable) of which is owned by the Company or another Wholly Owned Restricted
Subsidiary.
Section 1.02 Other Definitions.
Term Defined in Section
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.16
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17
"Change of Control Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17
"Change of Control Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . 4.17
"Covenant Defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.03
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Defaulted Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.06
"incur" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09
"Legal Defeasance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.02
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07
"Net Proceeds Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
"Net Proceeds Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
"Net Proceeds Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Payment Restriction" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.14
"QIB" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.06
"Registrar". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
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SECTION 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms, if used in this Indenture, have the following
meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Guarantors and any other obligor on the Securities or the Guarantees.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them therein.
SECTION 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) any gender used in this Indenture shall be
deemed to include the neuter, masculine or feminine genders;
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(6) provisions apply to successive events and
transactions; and
(7) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other Subdivision.
ARTICLE II
The Securities
SECTION 2.01 Principal Amount; Form and Dating.
(a) Principal Amount
The aggregate principal amount of Securities which may be issued,
executed, authenticated and outstanding under this Indenture is $165,000,000;
provided that $100,000,000 shall be reserved for issuance and shall be
available for issuance only in connection with a possible exchange of Series B
Notes for Senior Exchange Securities if such an exchange offer is made by the
Company.
(b) Form and Dating
The Securities and the certificate of authentication, and the notation
on the Securities relating to the Guarantee and the certificate of
authentication relating to the Guarantee, shall be substantially in the forms
of Exhibits A and A-1, respectively. The Securities may also have such
insertions, omissions, substitutions and variations as are required or as may
be permitted by or consistent with this Indenture and, in this regard, Senior
Exchange Securities issued pursuant to a Registered Exchange Offer in
accordance with Section 2.06(c) and Section 2.06(i)(iii) may be referred to as
Series D Notes on the face and reverse of the certificate and bear a CUSIP
number different from that applicable to Securities bearing a Restricted
Securities Legend. The provisions of Exhibits A and A-1 are part of this
Indenture. The Securities may have notations, legends and endorsements
required by law or stock exchange rule or usage. Restricted Securities shall
bear the Restricted Securities Legend, unless removed in accordance with
Section 2.06. The Company shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the Securities and the Guarantee
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Guarantors, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions
and to be bound thereby.
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Securities offered and sold in reliance on Rule 144A under the
Securities Act will initially be issued only in the form of one or more Global
Securities. Securities offered and sold in reliance on any other exemption
from registration under the Securities Act will be issued only in the form of
Definitive Securities.
Securities issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto and the additional schedule referred to in footnote 3 thereto).
Securities issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto and the additional schedule referred to in footnote 3
thereto). Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the amount of
outstanding Securities represented thereby shall be made by the Trustee or the
Securities Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
Subject to the provisions of Section 2.06, any Person having a beneficial
interest in a Global Security may exchange such beneficial interest, upon
request to the Trustee, for fully certificated Definitive Securities in
registered form.
SECTION 2.02 Execution and Authentication.
Two Officers of the Company shall sign the Securities on behalf of the
Company, and one Officer of each Guarantor shall sign the notation on the
Securities relating to the Guarantee of such Guarantor on behalf of such
Guarantor, in each case by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities.
If an Officer of the Company or any Guarantor whose signature is on a
Security no longer holds that office at the time the Security is authenticated,
the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee or an authenticating agent manually signs the certificate of
authentication on the Security and the Guarantee. These signatures shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall authenticate Securities
for original issue in the aggregate principal amount of $165,000,000 upon a
written order of the Company signed by two Officers of the Company. Subject to
Section 2.01 and Section 2.07, the aggregate principal amount of Securities
outstanding at any time may not exceed $165,000,000. Each Security
authenticated for original issuance shall bear the Restricted Securities
Legend.
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The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so except on original issuance. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent and each reference to authentication of the Securities includes
authentication of the Guarantee. An authenticating agent has the same rights
as an Agent to deal with the Company or its Affiliates.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency 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. Where the Trustee is acting as or has been appointed
Registrar and/or Paying Agent, the Company may appoint one or more
co-registrars and one or more additional paying agents with the prior consent
of the Trustee, whose consent shall not be unreasonably withheld. The term
"Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. Such agency agreement shall provide for
reasonable compensation for such services. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent and shall furnish
the Trustee with an executed counterpart of any such agency agreement. If the
Company fails to maintain or act as Registrar or Paying Agent, the Trustee
shall act as such and shall be duly compensated therefor.
The Registrar or a co-registrar and a Paying Agent shall be maintained
by the Company in the Borough of Manhattan, the City of New York. The Company
initially designates the Trustee as the Registrar and Paying Agent.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Securities Custodian with respect to the Global
Securities.
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SECTION 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
hold in trust for the benefit of Holders or the Trustee all money held by such
Paying Agent for the payment of principal of, premium, if any, or interest on
the Securities (whether such money shall have been paid to it by the Company or
any Guarantor), and to notify the Trustee of any Default by the Company or any
Guarantor in making any such payment. While any such Default continues, the
Trustee may require the Paying Agent to pay all money held by it to the
Trustee. Except as provided in the immediately preceding sentence, the Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed and, if the Company requires
such payment, the Company shall give prior notice to the Trustee and provide
appropriate money transfer instructions to the Paying Agent. Upon such payment
over to the Trustee and accounting for any funds disbursed, such Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold as separate trust funds for the benefit of the Holders all
money held by it as Paying Agent.
SECTION 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause to be furnished to the
Trustee at least ten Business Days prior to each semiannual interest payment
date, and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders, and the Company shall otherwise comply with TIA
Section 312(a).
SECTION 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When
a Definitive Security is presented to the Registrar or a co-registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of the Registrar are met; provided, however, that
the Definitive Security presented or surrendered for register of transfer (i)
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by the Holder thereof or by
his attorney, duly authorized in writing; and (ii) in the case of a Definitive
Security that is a Restricted Security, such request shall be accompanied by
(A) a certificate substantially in the form set forth as Exhibit B hereto,
given by the Holder and the transferee of such Restricted Security, to the
effect set forth therein and (B) an opinion of counsel substantially in the
form of Exhibit C hereto from such Holder or the transferee satisfactory to the
Trustee and the Registrar, to the effect set forth therein.
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(b) Securities Selected for Redemption; Registrar
Requirements; Authentication; Fees. The Registrar need not transfer or
exchange any Securities selected for redemption, except the unredeemed portion
of any Security being redeemed in part. Also, it need not transfer or exchange
any Securities for a period of 15 days before a selection of Securities to be
redeemed. When Securities are presented to the Registrar or a co-registrar
with a request to exchange them for an equal principal amount of Securities of
other authorized denominations, the Registrar shall make the exchange as
requested if the requirements of the Registrar are met. The Company shall
cooperate with the Registrar in meeting its requirements. To permit transfers,
registration and exchanges, the Trustee shall authenticate Securities at the
Registrar's request. The Company may charge a reasonable fee for any transfer,
registration or exchange and may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto,
but not for any exchange pursuant to Sections 2.10, 3.06 or 9.05.
(c) Restricted Securities Legend. If Securities are
issued upon the transfer, exchange or replacement of Securities bearing the
Restricted Securities Legend, or if a request is made to remove such Restricted
Securities Legend on Securities, the Securities so issued shall bear the
Restricted Securities Legend, or the Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Company (with
copies to the Registrar) such satisfactory evidence, which may include an
opinion of counsel, as may be reasonably required by the Company that (i)
neither the legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of the
Securities Act or, with respect to Restricted Securities, that such Securities
upon transfer to the transferee will not be "restricted" within the meaning of
Rule 144 under the Securities Act or (ii) there is an Effective Registration
involving the Notes Shelf Registration with respect to the Securities then in
effect or the Security as to which the Restricted Securities Legend is sought
to be removed has been disposed of in accordance with the Notes Shelf
Registration. Upon (i) provision of such satisfactory evidence, or (ii)
notification by the Company to the Trustee of an Effective Registration with
respect to the Notes Shelf Registration, the Trustee, at the written order of
the Company signed by two Officers, shall authenticate and deliver Securities
that do not bear the Restricted Securities Legend in exchange for Securities
bearing the Restricted Securities Legend. If the Effective Registration is
with respect to a Registered Exchange Offer for the Securities, the Company
shall notify the Trustee, and the Trustee, at the Company's request, thereafter
shall notify the Holders of receipt of such notice and, after receipt of a
written order of the Company signed by two Officers for the authentication and
delivery of Securities that do not bear the Restricted Securities Legend and a
properly completed letter of transmittal or other requested documents from a
Holder as specified in the exchange offer documents, shall exchange such
Holder's Securities for Securities that do not bear the Restricted Securities
Legend upon the terms set forth in the exchange offer documents.
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(d) 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) if such Definitive Security is a Restricted
Security, a certification from the Holder thereof (in substantially
the form of Exhibit B hereto) to the effect that such Holder is a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) (a "QIB") or, if such Holder is transferring same,
that such transferee is a Person that such Holder reasonably believes
to be to a QIB in accordance with Rule 144A under the Securities Act;
and
(ii) whether or not such Definitive Security is a
Restricted Security, written instructions from the Holder thereof
directing the Trustee to make, or to direct the Security Custodian to
make, an endorsement on the Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by the
Global Security,
the Trustee shall cancel such Definitive Security in accordance with Section
2.11 hereof and cause, or direct the Security Custodian to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Security Custodian, the aggregate principal amount of Securities
represented by the Global Security to be increased accordingly. If no Global
Securities are then outstanding, the Company shall issue and, upon receipt of
an authentication order in accordance with Section 2.02 hereof, the Trustee
shall authenticate a new Global Security in the appropriate principal amount.
(e) Transfer and Exchange of Global Securities. The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Indenture and
the procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(f) Transfer of a Beneficial Interest in a Global
Security for a Definitive Security.
(i) Any Person having a beneficial interest in a
Global Security may upon request exchange such beneficial interest for
a Definitive Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for
the Depositary, from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Security, and, in the
case of a Restricted Security, the following additional information
and documents (all of which may be submitted by facsimile):
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(A) if such beneficial interest is being
transferred to the Person designated by the Depositary as
being the beneficial owner, a certification to that effect
from such Person (in substantially the form of Exhibit B
hereto); or
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being
transferred in reliance on Rule 144 or Rule 904 or another
exemption from the registration requirements of the Securities
Act, a certification to that effect from the transferor (in
substantially the form of Exhibit B hereto) and an opinion of
counsel substantially in the form of Exhibit C hereto from the
transferee or transferor reasonably acceptable to the Company
and to the Registrar to the effect that such transfer is in
compliance with the Securities Act,
the Trustee or the Security Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Security Custodian,
cause the aggregate principal amount of Global Securities to be
reduced accordingly and, following such reduction, the Company shall
execute and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate and deliver
to the transferee a Definitive Security in the appropriate principal
amount.
(ii) Definitive Securities issued in exchange for
a beneficial interest in a Global Security pursuant to this Section
2.06(f) shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Definitive Securities to the
Persons in whose names such Securities are so registered.
(g) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provision of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.06), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(h) Authentication of Definitive Securities in Absence of
Depositary. If at any time:
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(i) the Depositary for the Securities notifies
the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Securities and a successor Depositary for
the Global Securities is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of
Definitive Securities under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Securities in an aggregate principal amount equal to the
principal amount of the Global Securities in exchange for such Global
Securities.
(i) Legends.
(i) Except as permitted by the following
paragraphs (ii) and (iii), each Security certificate evidencing Global
Securities and Definitive Securities (and all Securities issued in
exchange therefor or substitution thereof) shall bear legends in
substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY PERSON
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) WHICH IS AN
INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT
IT WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD AS COMPLIES WITH RULE 144 UNDER THE SECURITIES ACT) AFTER THE
LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST
DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THIS SECURITY (THE "RESALE RESTRICTION TERMINATION DATE") RESELL,
PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER,
(B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE
PROVISIONS
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OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY,
(D) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF THE SECURITIES ACT, (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY
REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE
PROPERTY OF SUCH ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHICH THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED
TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING
RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE
RESTRICTION TERMINATION DATE.
(ii) Subject to Section 2.06(c), upon any sale or
transfer of a Restricted Security (including any Restricted Security
represented by a Global Security) pursuant to Rule 144 under the
Securities Act or pursuant to an Effective Registration:
(A) in the case of any Restricted
Security that is a Definitive Security, the Registrar shall
permit the Holder thereof to exchange such Restricted Security
for a Definitive Security that does not bear the legend set
forth in (i) above and rescind any restriction on the transfer
of such Restricted Security; and
(B) in the case of any Restricted
Security represented by a Global Security, such Restricted
Security shall not be required to bear the legend set forth in
(i) above, but shall continue to be subject to the other
provisions hereof; provided, however, that with respect to
any request for an exchange of a Restricted Security
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that is represented by a Global Security for a Definitive
Security that does not bear the legend set forth in (i) above,
which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such
request is being made pursuant to Rule 144 (such certification
to be substantially in the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon
consummation of the Registered Exchange Offer, the Company shall issue
and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate Senior Exchange
Securities issued in exchange for Restricted Securities in the
Registered Exchange Offer and/or in exchange for the Series B Notes,
which Senior Exchange Securities shall not bear the legend set forth
in (i) above, and the Registrar shall rescind any restriction on the
transfer of such Securities, in each case unless the Holder of such
Securities is either (A) a broker-dealer, (B) a Person participating
in the distribution of the Securities, (C) a Person who is an
affiliate (as defined in Rule 144A) of the Company or (D) a Person who
is not acquiring Senior Exchange Securities in the ordinary course of
business.
(j) Cancellation and/or Adjustment of Global Securities.
At such time as all beneficial interests in Global Securities have been
exchanged for Definitive Securities, redeemed, repurchased or canceled, all
Global Securities shall be returned to or retained and canceled by the Trustee
in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall be reduced accordingly
and an endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(k) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate in accordance with Section 2.02 Definitive Securities and
Global Securities at the Registrar's request.
(ii) The Registrar may require a Holder to furnish
appropriate endorsements and transfer documents.
(iii) All Definitive Securities and Global
Securities issued upon any registration of transfer or exchange of
Definitive Securities or Global Securities shall be the valid
obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Definitive Securities
or Global Securities surrendered upon such registration of transfer or
exchange.
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SECTION 2.07 Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of the Trustee are met. An indemnity bond may be
required by the Trustee, the Company or any Guarantor that is sufficient in the
judgment of the Company, the Guarantors and the Trustee to protect the Company,
the Guarantors, the Trustee or any Agent from any loss which any of them may
suffer if a Security is replaced. The Company may charge for its expenses
(including fees and expenses of the Trustee) in replacing a Security.
SECTION 2.08 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, those reductions in the interest in a Global Security effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section 2.08 as not outstanding. Except as set forth in Section 2.09, a
Security does not cease to be outstanding because the Company, the Guarantors
or any of their respective Subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01, it ceases to be outstanding and interest on it ceases to accrue.
SECTION 2.09 Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any Guarantor or an Affiliate of the Company shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded.
SECTION 2.10 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and, upon written order of the Company, the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate and deliver definitive
Securities in exchange for a like
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principal amount of temporary Securities surrendered to it. Until so
exchanged, temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 2.11 Cancellation.
The Company or any Guarantor at any time may deliver Securities to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee shall cancel all Securities surrendered for registration, transfer,
exchange, payment or cancellation and shall destroy canceled Securities unless
the Company directs their return to the Company. Except as provided in Section
2.07, the Company may not issue new Securities to replace Securities that it
has paid or delivered to the Trustee for cancellation.
Securities that are redeemed by the Company, that are repurchased by
the Company pursuant to Section 4.11 or Section 4.17, or that are otherwise
acquired by the Company, will be surrendered to the Trustee for cancellation.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Securities, it
shall pay, or cause the Paying Agent to pay, the defaulted interest in any
lawful manner (plus interest on such defaulted interest to the extent lawful)
(taken together, the "Defaulted Interest") to the persons who are Holders on a
subsequent special record date, in each case at the rate provided in the
Securities and in Section 4.01 hereof. At least 15 days before the special
record date, the Company shall mail to each Holder to be paid thereon a notice
stating the special record date, the payment date and the amount of Defaulted
Interest to be paid. In the event that the Company has elected to cause a
Paying Agent to pay the Defaulted Interest, the Company shall so notify the
Paying Agent at least 15 days before the special record date, which notice
shall also set forth the special record date, the payment date and the
aggregate amount of Defaulted Interest to be paid. At least five days before
such payment date, the Company shall deposit with the Paying Agent money
sufficient to pay all of the Defaulted Interest on the payment date therefor
and instruct the Paying Agent in writing to pay to specified Holders on the
payment date. On the payment date, the Paying Agent shall make the payments in
accordance with the Company's written instructions from funds deposited with
the Paying Agent for the purpose of making such Defaulted Interest payments.
SECTION 2.13 Persons Deemed Owners.
The Company, the Trustee, any Paying Agent and any authenticating
agent may treat the Person in whose name any Security is registered as the
owner of such Security for the purpose of receiving payments of principal of,
premium, if any, or interest on such Security and for all other
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purposes. None of the Company, the Trustee, any Paying Agent or any
authenticating agent shall be affected by any notice to the contrary.
ARTICLE III
Redemption
SECTION 3.01 Notice to Trustee.
If the Company elects to redeem Securities pursuant to the optional
redemption provisions of paragraph 6 or 7 of the Securities, it shall furnish
to the Trustee and the Registrar, at least 45 days but not more than 60 days
before the redemption date (unless the Trustee consents to a shorter period in
writing), an Officers' Certificate setting forth the redemption date, the
principal amount of Securities to be redeemed and the redemption price.
SECTION 3.02 Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in multiples of $1,000 pro rata, by
lot or, if the Securities are listed on any securities exchange, by any other
method that the Trustee considers fair and appropriate and that complies with
the requirements of such exchange. The Trustee shall make the selection from
outstanding Securities not previously called for redemption not less than 30
nor more than 60 days prior to the redemption date. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them it selects shall be in
amounts of $1,000 or whole multiples of $1,000. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company promptly
of the Securities or portions of Securities selected for redemption.
SECTION 3.03 Notice of Redemption.
(a) At least 30 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption by first-class
mail to each Holder of Securities to be redeemed at such Holder's registered
address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the aggregate principal amount of Securities being
redeemed;
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(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such
notice to collect the redemption price;
(6) that, unless the Company defaults in the payment of
the redemption price or accrued interest, interest on Securities
called for redemption ceases to accrue on and after the redemption
date and the only remaining right of the Holders is to receive payment
of the redemption prices in respect of the Securities upon surrender
to the Paying Agent of the Securities;
(7) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be redeemed and
that, after the redemption date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the unredeemed
portion will be issued;
(8) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(9) the CUSIP number of the Securities.
(b) At the Company's request, the Trustee shall give the
notice of redemption required in Section 3.03(a) in the Company's name and at
the Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the redemption date (unless the Trustee
consents to a shorter notice period in writing), an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in Section 3.03(a).
SECTION 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the redemption date
at the redemption price. Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price, plus accrued interest to the redemption
date.
SECTION 3.05 Deposit of Redemption Price.
Prior to the redemption date, the Company shall deposit with the
Paying Agent funds available on the redemption date sufficient to pay the
redemption price of, and accrued interest on, the Securities to be redeemed on
that date. The Paying Agent shall promptly return to the Company
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any money so deposited which is not required for that purpose upon the written
request of the Company, except with respect to monies owed as obligations to
the Trustee pursuant to Article VII.
If any Security called for redemption shall not be so paid upon
redemption because of the failure of the Company to comply with the preceding
paragraph, interest will continue to be payable on the unpaid principal and
premium, if any, including from the redemption date until such principal and
premium, if any, is paid, and, to the extent lawful, on any interest not paid
on such unpaid principal, in each case at the rate provided in the Securities
and in Section 4.01 hereof.
SECTION 3.06 Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Company shall issue and the Trustee shall authenticate for the Holder, at the
expense of the Company, a new Security equal in aggregate amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07 Optional Redemption.
The Securities may be redeemed at the option of the Company, in whole
or from time to time in part:
(i) at any time on or after November 1, 2001, at
the redemption prices set forth below (expressed as a percentage of
the principal amount of the Securities to be redeemed), together with
accrued and unpaid interest on the Securities so redeemed to the
redemption date, if redeemed during the 12-month period commencing on
November 1, of the years indicated below:
Redemption
Year Price
---- -----------
2001 . . . . . . . . . . . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . . . . . . . . . . . 102.688%
2003 and thereafter . . . . . . . . . . . . . . . 100.000%
or
(ii) at any time prior to November 1, 2001, at the
Make-Whole Price plus accrued and unpaid interest to the date of
redemption.
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Any redemption pursuant to this Section 3.07 shall be made, to the
extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.08 Equity Offering Redemption.
In the event the Company consummates one or more Equity Offerings on
or prior to November 1, 1999, the Company may redeem, in its sole discretion,
up to 35% of the aggregate principal amount of the Securities with all or a
portion of the aggregate net proceeds received by the Company from any such
Equity Offering or Equity Offerings at a redemption price of 110.75% of the
aggregate principal amount of Securities so redeemed, plus accrued and unpaid
interest on the Securities so redeemed to the redemption date; provided,
however, that following such redemption, at least 65% of the aggregate
principal amount of the Securities remains outstanding. Any redemption
pursuant to this Section 3.08 shall be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.
ARTICLE IV
Covenants
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of, premium, if any, and interest
on, the Securities in New York, New York on the dates and in the manner
provided in the Securities and this Indenture. Principal, premium and interest
shall be considered paid on the date due if the Trustee or Paying Agent holds
on that date money deposited by the Company designated for and sufficient to
pay all principal, premium and interest then due. All references to interest
in this Indenture shall for all purposes be deemed to include any additional
interest payable as Notes Liquidated Damages pursuant to the Registration
Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal, and premium, if
any, at the rate borne by the Securities to the extent lawful; and it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
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SECTION 4.02 SEC Reports.
(a) The Company, within 15 days after it files the same
with the SEC, shall deliver to Holders, copies of the annual reports and the
information, documents and other reports (or copies of any such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. 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 SEC (if the SEC will so accept) and
provide the Trustee and the Holders with such annual reports and such
information, documents and other reports specified in Sections 13 and 15(d) of
the Exchange Act. The Company and each Guarantor shall also comply with the
provisions of TIA Section 314(a).
(b) The Company may request the Trustee on behalf of the
Company at the Company's expense to mail the foregoing to Holders. In such
case, the Company shall provide the Trustee with a sufficient number of copies
of all reports and other documents and information that the Trustee may be
required to deliver to Holders under this Section.
SECTION 4.03 Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company, an Officers' Certificate
substantially in the form of Exhibit D hereto, stating that a review of the
activities of the Company and the Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that, to the best of such Officer's knowledge, the
Company and each Guarantor has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which such Officer may have knowledge and what
action the Company is taking or proposes to take with respect thereto). Such
Officers' Certificate shall comply with TIA Section 314(a)(4). The Company
hereby represents that, as of the Issue Date, its fiscal year ends December 31,
and hereby covenants that it shall notify the Trustee at least 30 days in
advance of any change in its fiscal year.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.02 shall be
accompanied by a written statement of the Company's independent public
accountants (which shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Section 4.07 through Section
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4.18 of this Indenture (to the extent such provisions relate to accounting
matters) or, if any such violation has occurred, specifying the nature and
period of existence thereof. Where such financial statements are not
accompanied by such a written statement, the Company shall furnish the Trustee
with an Officers' Certificate stating that any such written statement would be
contrary to the then current recommendations of the American Institute of
Certified Public Accountants.
(c) The Company and the Guarantors will, so long as any
of the Securities are outstanding, deliver to the Trustee within 10 Business
Days of any Officer becoming aware of any Default or Event of Default or
default in the performance of any covenant, agreement or condition contained in
this Indenture, an Officers' Certificate specifying such Default or Event of
Default and what action the Company or any Guarantor proposes to take with
respect thereto.
SECTION 4.04 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be surrendered for registration
of transfer or exchange or for presentation for payment and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 11.02. If at any time the Company
shall fail to maintain any required office or agency or shall fail to furnish
the Trustee with the address thereof, such surrenders, presentations, notices
and demands may be made or served at the corporate trust office of the Trustee.
Subject to Section 2.03, the Company may also from time to time
designate one or more other offices or agencies where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in the Borough of Manhattan, The City of New York, for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 4.05 Corporate Existence.
Subject to Section 5.01 and Section 10.02, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other
existence of each Subsidiary and all rights (charter and statutory) and
franchises of the Company and the Subsidiaries; provided, that the Company
shall not be required to preserve the corporate existence of any Subsidiary, or
any such right or franchise, if the Board of
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Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 4.06 Waiver of Stay, Extension or Usury Laws.
The Company and each Guarantor covenants (to the extent that each may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension, or usury law or other law, which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium, if any, or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company and each Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.07 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a Lien upon the property of the Company or any Subsidiary; provided,
however, 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.
SECTION 4.08 Maintenance of Properties and Insurance.
(a) The Company shall cause all properties used or held
for use in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that there is no material adverse effect to the Company and its Subsidiaries,
taken as a whole; provided, however, that nothing in this Section shall prevent
the Company from discontinuing the operation or maintenance of any such
property, or disposing of it, if such discontinuance or disposal is, in the
judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Holders.
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(b) The Company shall provide or cause to be provided,
for itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of the
Company, for corporations similarly situated in the industry.
SECTION 4.09 Limitation on Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries, directly or indirectly, to issue, incur, assume,
guarantee, become liable, contingently or otherwise, with respect to or
otherwise become responsible for the payment of (collectively, "incur") any
Indebtedness (other than Permitted Indebtedness); provided, however, that if no
Default or Event of Default shall have occurred and be continuing at the time
or as a consequence of the incurrence of such Indebtedness, the Company or its
Restricted Subsidiaries may incur Indebtedness if, on a pro forma basis, after
giving effect to such incurrence and the application of the proceeds therefrom,
both of the following tests shall have been satisfied: (i) the Consolidated
Interest Coverage Ratio for the Reference Period immediately preceding the
incurrence of such Indebtedness is at least (a) 2.25-to-1.0 with respect to any
date of incurrence of additional Indebtedness occurring on or before the first
anniversary date of the Series A/B Issue Date or (b) 2.50-to-1.0 with respect
to any date of incurrence of additional Indebtedness occurring after the first
anniversary date of the Series A/B Issue Date and (ii) Adjusted Consolidated
Net Tangible Assets would have been equal to or greater than 125% of
Indebtedness of the Company and its Restricted Subsidiaries.
(b) Notwithstanding the foregoing, if no Default or Event
of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness, the Company and its
Restricted Subsidiaries may incur Permitted Indebtedness.
(c) Any Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be incurred by such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary.
SECTION 4.10 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, unless:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of or immediately after giving
effect to such Restricted Payment;
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(ii) at the time of and immediately after giving
effect to such Restricted Payment, the Company would be able to incur
at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.09(a); and
(iii) immediately after giving effect to such
Restricted Payment, the aggregate of all Restricted Payments declared
or made after the Series A/B Issue Date does not exceed the sum of (A)
50% of the Consolidated Net Income of the Company and its Restricted
Subsidiaries (or in the event such Consolidated Net Income shall be a
deficit, minus 100% of such deficit) during the period (treated as one
accounting period) subsequent to September 30, 1996 and ending on the
last day of the fiscal quarter for which financial information is
available immediately preceding the date of such Restricted Payment
(less the aggregate amount of dividends described in clauses (i) and
(ii) of the following paragraph that are either (x) paid after the
last day of the fiscal quarter for which financial information is
available immediately preceding the date of such Restricted Payment or
(y) declared but not yet paid as of such date); (B) the aggregate Net
Cash Proceeds received by the Company during such period from any
Person other than a Subsidiary of the Company as a result of the
issuance or sale of Capital Stock of the Company (other than any
Disqualified Stock), other than in connection with the conversion of
Indebtedness or Disqualified Stock; (C) the aggregate Net Cash
Proceeds received by the Company during such period from any Person
other than a Subsidiary of the Company as a result of the issuance or
sale of any Indebtedness or Disqualified Stock to the extent that at
the time the determination is made such Indebtedness or Disqualified
Stock, as the case may be, has been converted into or exchanged for
Capital Stock of the Company (other than Disqualified Stock); (D) (i)
in case any Unrestricted Subsidiary has been redesignated a Restricted
Subsidiary, an amount equal to the lesser of (x) the book value
(determined in accordance with GAAP) at the date of such redesignation
of the aggregate Investments made by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary and (y) the fair market
value of such Investments in such Unrestricted Subsidiary at the time
of such redesignation, as determined in good faith by the Company's
Board of Directors, including a majority of the Company's
Disinterested Directors, whose determination shall be conclusive and
evidenced by a resolution of such Board (less, in the case of each of
clauses (x) and (y), the amount of original Investment (based upon
book value determined in accordance with GAAP at the time of such
Investment) made by the Company or any Restricted Subsidiary pursuant
to clause (x) of the definition of "Permitted Business Investment" set
forth in Section 1.01 minus the aggregate cash dividends paid by such
Unrestricted Subsidiary to the Company or any other Restricted
Subsidiary since the date of such original Investment, provided that
the result of the foregoing shall not be less than zero); or (ii) in
case any Restricted Subsidiary has been redesignated an Unrestricted
Subsidiary, minus the greater of (x) the book value (determined in
accordance with GAAP) at the date of redesignation of the aggregate
Investments made by the Company and its Restricted Subsidiaries and
(y) the fair market value of such Investments in such Restricted
Subsidiary at the time of such
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redesignation, as determined in good faith by the Company's Board of
Directors, including a majority of the Company's Disinterested
Directors, whose determination shall be conclusive and evidenced by a
resolution of such Board; and (E) $5.0 million.
(b) Notwithstanding the foregoing, the above limitations
will not prevent (i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment complied
with the provisions hereof; (ii) the payment of any dividend on any shares of
Preferred Stock of the Company issued and outstanding as of the Series A/B
Issue Date in accordance with the terms of such Preferred Stock in effect at
the Series A/B Issue Date; (iii) any dividend on shares of Capital Stock of the
Company or any Restricted Subsidiary payable solely in shares of Capital Stock
(other than Disqualified Stock); (iv) any dividend or other distribution
payable from a Subsidiary to the Company or any Restricted Subsidiary that is
wholly-owned directly or indirectly by the Company; and (v) the repurchase,
redemption or other acquisition or retirement of any shares of any class of
Capital Stock of the Company or any Restricted Subsidiary, in exchange for, or
out of the aggregate net proceeds of a substantially concurrent issue and sale
(other than to a Restricted Subsidiary) of shares of Capital Stock of the
Company (other than Disqualified Stock).
SECTION 4.11 Limitation on Sale of Assets.
(a) The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Sale unless:
(i) the Company (or its Restricted Subsidiary, as
the case may be) receives consideration at the time of such sale or
other disposition at least equal to the fair market value thereof (as
determined in good faith by the Company, which determination, with
respect to Asset Sales or series of related Asset Sales with proceeds
valued at greater than $5 million, shall be evidenced by a resolution
duly adopted by the Company's Board of Directors, including a majority
of the Company's Disinterested Directors);
(ii) at least 75% of the proceeds from such Asset
Sale consist of cash or U.S. dollar denominated Cash Equivalents; and
(iii) the Net Cash Proceeds received by the Company
(or its Restricted Subsidiary, as the case may be) from such Asset
Sale are applied in accordance with paragraphs (b) or (c) hereof.
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(b) The Company may apply such Net Cash Proceeds, within
365 days after receipt of Net Cash Proceeds from any Asset Sale, to: (i) the
repayment of Indebtedness of the Company under a Bank Credit Facility or other
Senior Indebtedness of the Company or Senior Indebtedness of a Guarantor, that
results in a permanent reduction in any revolving credit or other commitment
relating thereto or the maximum principal amount that may be borrowed
thereunder in an amount equal to the principal amount so repaid; (ii) make an
Investment in assets used in the Oil and Gas Business in replacement of the
assets that were the subject of the Asset Sale giving rise to such Net Cash
Proceeds, or (iii) develop by drilling, completing and producing reserves from
the oil and gas properties of the Company and the Restricted Subsidiaries.
(c) If, upon completion of the 365-day period, the Net
Cash Proceeds of any Asset Sale less the aggregate amount applied by the
Company during such period as described in clauses (b) (i), (ii) or (iii)
above, together with any Net Cash Proceeds in excess of amounts similarly
applied by the Company from any prior Asset Sale after the date of receipt of
such Net Cash Proceeds (such aggregate constituting "Excess Proceeds"), exceeds
$5,000,000, then the Company will be obligated to make an offer (the "Net
Proceeds Offer") to repurchase the Securities (and any other Senior
Indebtedness including, without limitation, the Series A/B Notes in respect of
which such an offer to repurchase also is required to be made concurrently with
the Net Proceeds Offer) having an aggregate principal amount equal to the
Excess Proceeds (such repurchase to be made on a pro rata basis if the amount
available for such repurchase is less than the principal amount of the
Securities and other Senior Indebtedness, including, without limitation, the
Series A/B Notes tendered in such Net Proceeds Offer) at a repurchase price of
100% of the principal amount thereof plus accrued interest, if any, to the date
of repurchase. Upon the completion of the Net Proceeds Offer, the amount of
Excess Proceeds will be reset to zero, subject to further increase resulting
from subsequent Asset Sales.
(d) The Company shall commence a Net Proceeds Offer by
preparing and mailing a notice to the Trustee, the Paying Agent and each Holder
as of such record date as the Company shall establish (upon written notice to
the Trustee). Notice of a Net Proceeds Offer to purchase the Securities will
be made on behalf of the Company not less than 25 Business Days nor more than
60 Business Days before the payment date of the Net Proceeds Offer (the "Net
Proceeds Payment Date"), and shall set forth the Net Proceeds Offer Amount and
the Net Proceeds Payment Date and refer to and summarize the material points
contained in Sections 4.11(d) and (e) hereof. Securities tendered to the
Company pursuant to a Net Proceeds Offer will cease to accrue interest after
the Net Proceeds Payment Date. For purposes of this covenant, the term "Net
Proceeds Offer Amount" means the principal of outstanding Securities in an
aggregate principal amount equal to any remaining Net Cash Proceeds (rounded to
the next lowest $1,000). If the Net Proceeds Payment Date is on or after an
interest payment record date and on or before the related interest payment
date, any accrued interest will be paid to the Person in whose name a Security
is registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Securities pursuant to the Net
Proceeds Offer.
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(e) On the Net Proceeds Payment Date, the Company will
(i) accept for payment Securities and any other Senior Indebtedness in respect
of which such an offer to repurchase is required to be made concurrently with
the Net Proceeds Offer or portions thereof pursuant to the Net Proceeds Offer
in an aggregate principal amount equal to the Net Proceeds Offer Amount or such
lesser amount as has been tendered, (ii) deposit with the Paying Agent money
sufficient to pay the repurchase price of all Securities and such other Senior
Indebtedness or portions thereof so tendered in an aggregate principal amount
equal to the Net Proceeds Offer Amount or such lesser amount, and (iii) deliver
or cause to be delivered to the Trustee, Securities so accepted together with
an Officers' Certificate stating the amount of the Securities or portions
thereof tendered to the Company. If the aggregate principal amount of
Securities and such other Senior Indebtedness tendered exceeds the Net Proceeds
Offer Amount, the Trustee will select the Securities and other Senior
Indebtedness to be repurchased (in integral multiples of $1,000) on a pro rata
basis based on the principal amount of Securities and other Senior Indebtedness
so tendered and notify the Company, the Registrar and the Paying Agent. The
Paying Agent, upon instruction of the Company, will promptly mail or deliver to
Holders of Securities so accepted payment in an amount equal to the repurchase
price (representing those funds received pursuant to clause (ii) of this
Section 4.11(e)), and the Company will execute and the Trustee will promptly
authenticate and mail or make available for delivery to Holders a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted will be promptly mailed or
delivered to the Holder thereof by the Company, or, if the Company so directs
the Trustee, by the Trustee on behalf of the Company at the Company's expense.
The Company will publicly announce the results of the Net Proceeds Offer on or
as soon as practicable after the Net Proceeds Payment Date. For purposes of
this Section 4.11, the Trustee will act as the Paying Agent.
(f) The Company will comply with Section 14 of the
Exchange Act and the provisions of Regulation 14E and any other tender offer
rules under the Exchange Act and any other federal and state securities laws,
rules and regulations which may then be applicable to any Net Proceeds Offer.
(g) During the period between any Asset Sale and the
application of the Net Cash Proceeds therefrom in accordance with this
covenant, all Net Cash Proceeds shall be either (i) maintained in a segregated
account and shall be invested in Permitted Financial Investments or (ii)
applied to temporarily reduce borrowings under any revolving credit facility
constituting Senior Indebtedness of the Company or Senior Indebtedness of a
Guarantor.
(h) Notwithstanding the foregoing, the Company will not
and will not permit any Restricted Subsidiary to, directly or indirectly, make
any Asset Sale of any of the Capital Stock of a Restricted Subsidiary except
pursuant to an Asset Sale of all of the Capital Stock of such Restricted
Subsidiary.
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SECTION 4.12 Limitation on Liens Securing Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than
Permitted Liens) upon any of their respective properties securing (i) any
Indebtedness of the Company, unless the Securities are equally and ratably
secured or (ii) any Indebtedness of any Guarantor, unless the Guarantees are
equally and ratably secured; provided, that if such Indebtedness is expressly
subordinated to the Securities or the Guarantees, the Lien securing such
Indebtedness will be subordinated and junior to any Lien securing the
Securities or the Guarantees, with the same relative priority as such
Subordinated Indebtedness of the Company or Subordinated Indebtedness of a
Restricted Subsidiary that is a Guarantor will have with respect to the
Securities or the Guarantees, as the case may be.
SECTION 4.13 Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction unless (i) the
Company or such Restricted Subsidiary, as the case may be, would be able to
incur Indebtedness in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction or (ii) the Company or such
Restricted Subsidiary receives proceeds from such Sale/Leaseback Transaction at
least equal to the fair market value thereof (as determined in good faith by
the Company's Board of Directors, whose determination in good faith, evidenced
by a resolution of such Board shall be conclusive) and such proceeds are
applied in the same manner and to the same extent as Net Cash Proceeds and
Excess Proceeds from an Asset Sale.
SECTION 4.14 Limitation on Payment Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary of the Company to (i) pay dividends
or make any other distributions on its Capital Stock or on any other interest
or participation in the Company or a Restricted Subsidiary; (ii) pay any
Indebtedness owed to the Company or a Restricted Subsidiary of the Company;
(iii) make loans or advances to the Company or a Restricted Subsidiary of the
Company; or (iv) transfer any of its properties or assets to the Company or a
Restricted Subsidiary of the Company (each, a "Payment Restriction"), except
for (a) encumbrances or restrictions under a Bank Credit Facility; provided,
that no encumbrance or restriction shall limit the ability of any Restricted
Subsidiary to transfer cash to the Company except upon the occurrence of an
event of default under the Bank Credit Facility; (b) consensual encumbrances or
consensual restrictions binding upon any Person at the time such Person becomes
a Restricted Subsidiary of the Company (unless the agreement creating such
consensual encumbrances or consensual restrictions was entered into in
connection with, or in contemplation of, such entity becoming a Restricted
Subsidiary); (c) consensual encumbrances or consensual
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restrictions under any agreement that refinances or replaces any agreement
described in clauses (a) and (b) above, provided that the terms and conditions
of any such restrictions are in the aggregate no less favorable to the holders
of the Securities than those under the agreement so refinanced or replaced; (d)
customary non-assignment provisions in leases, purchase money financings and
any encumbrance or restriction due to applicable law; and (e) consensual
encumbrances or consensual restrictions existing under the Series A/B
Indenture.
SECTION 4.15 Limitation on Issuances and Sales of Restricted Subsidiary
Stock.
The Company (i) will not permit any Restricted Subsidiary to issue any
Preferred Stock (other than to the Company or a Restricted Subsidiary) and (ii)
will not permit any Person (other than the Company and/or one or more
Restricted Subsidiaries) to own any Capital Stock of any Restricted Subsidiary;
provided, however, that this covenant shall not prohibit (a) the issuance or
sale of all, but not less than all, of the issued and outstanding Capital Stock
of any Restricted Subsidiary owned by the Company or any of its Restricted
Subsidiaries in compliance with the other provisions of this Indenture, (b) the
issuance or sale of (A) not more than 5 percent in the aggregate of the issued
and outstanding Capital Stock of any Restricted Subsidiary (calculated on a
fully diluted basis) by the Company or any Restricted Subsidiary or (B) more
than 5 percent of the issued and outstanding Capital Stock of any Restricted
Subsidiary if immediately following such issuance and sale (calculated on a
fully diluted basis) the Company and all Subsidiaries will collectively own 95
percent or more of the Consolidated Total Assets of the Company, and in the
case of either (A) or (B), immediately following such issuance and sale, the
Company or one or more Restricted Subsidiaries will collectively hold the
voting power to elect a majority of the directors of the Restricted Subsidiary
and such power is not subject to dilution or limitation, by the terms of such
Capital Stock, by agreement, by passage of time or the occurrence of any future
event, (c) the ownership by directors of directors' qualifying shares or the
ownership by foreign nationals of Capital Stock of any Restricted Subsidiary,
to the extent mandated by applicable law or (d) customary non-assignment
provisions in leases or purchase money financings and any customary encumbrance
or restriction relating to same.
SECTION 4.16 Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series
of transactions (including, without limitation, the sale, purchase or lease of
any assets or properties or the rendering of any services) with any Affiliate
or beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of 10% or more of the Company's common stock (other than with a Wholly
Owned Restricted Subsidiary of the Company) (an "Affiliate Transaction"), on
terms that are less favorable to the Company or such Restricted Subsidiary, as
the case may be, than would be available in a comparable transaction with an
unrelated Person. In addition, the Company will not, and will not permit any
Restricted Subsidiary of the Company to, enter into an Affiliate Transaction,
or any series of related Affiliate
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Transactions having a value of (a) more than $1,000,000, unless a majority of
the Board of Directors of the Company (including a majority of the Company's
Disinterested Directors) determines in good faith, as evidenced by a resolution
of such Board, that such Affiliate Transaction or series of related Affiliate
Transactions is fair to the Company and in compliance with the first sentence
of this Section 4.16; or (b) more than $10,000,000, unless the Company receives
a written opinion from a nationally recognized investment banking firm that
such transaction or series of transactions is fair to the Company from a
financial point of view.
SECTION 4.17 Change of Control.
(a) Following the occurrence of any Change of Control,
the Company shall offer (a "Change of Control Offer") to repurchase all
outstanding Securities at a repurchase price equal to 101% of the aggregate
principal amount of the Securities, plus accrued and unpaid interest to the
date of repurchase. The Change of Control Offer shall be deemed to have
commenced upon mailing of the notice described in the next succeeding paragraph
and shall terminate 20 Business Days after its commencement, unless a longer
offering period is required by law. Promptly after the termination of the
Change of Control Offer (the "Change of Control Payment Date"), the Company
shall repurchase and mail or deliver payment for all Securities tendered in
response to the Change of Control Offer. If the Change of Control Payment Date
is on or after an interest payment record date and on or before the related
interest payment date, any accrued interest payable on such interest payment
date will be paid to the Person in whose name a Security is registered at the
close of business on such record date, and no additional interest will be
payable to Holders who tender Securities pursuant to the Change of Control
Offer.
(b) Within 10 Business Days after any Change of Control,
the Company (with notice to the Trustee and the Paying Agent), or the Trustee
at the Company's request and expense, will mail or cause to be mailed to all
Holders on the date of the Change of Control a notice prepared by the Company
(the "Change of Control Notice") of the occurrence of such Change of Control
and of the Holders' rights arising as a result thereof. The Change of Control
Notice will contain all instructions and materials necessary to enable Holders
to tender their Securities to the Company. The Change of Control Notice, which
shall govern the terms of the Change of Control Offer, shall state: (1) that
the Change of Control Offer is being made pursuant to this Section 4.17; (2)
the repurchase price and the Change of Control Payment Date; (3) that any
Security not tendered will continue to accrue interest at the stated rate; (4)
that any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest on the Change of Control Payment Date; (5) that
Holders electing to have a Security repurchased pursuant to any Change of
Control Offer will be required to surrender the Security, with the form
entitled "Option of Holder to Elect Repurchase" on the reverse of the Security
completed, to the Company, a depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice prior to termination of the
Change of Control Offer; (6) that Holders will be entitled to withdraw their
election if the Company, depositary or Paying Agent, as the case may be,
receives, not later than the expiration of the Change
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of Control Offer, or such longer period as may be required by law, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security delivered for repurchase and a statement
that such Holder is withdrawing his election to have the Security repurchased;
and (7) that Holders whose Securities are repurchased only in part will be
issued Securities equal in principal amount to the unrepurchased portion of the
Securities surrendered.
(c) On the Change of Control Payment Date, the Company
shall (i) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Notice, (ii) if the Company appoints a depositary or
Paying Agent, deposit with such depositary or Paying Agent money sufficient to
pay the repurchase price of all Securities or portions thereof so tendered and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the amount of the Securities or portions thereof tendered
to the Company. The depositary, the Company or the Paying Agent, as the case
may be, shall promptly mail to the Holders of Securities so accepted payment in
an amount equal to the repurchase price (representing those funds received
pursuant to clause (ii) of this Section 4.17(c)), and the Trustee shall
promptly authenticate and mail to each such Holder a new Security equal in
principal amount to any unrepurchased portion of the Security surrendered, if
any. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
For purposes of this Section 4.17, the Trustee shall act as the Paying Agent.
(d) The Company will comply with Section 14 of the
Exchange Act and the provisions of Regulation 14E and any other tender offer
rules under the Exchange Act and any other federal and state securities laws,
rules and regulations which may then be applicable to any Change of Control
Offer.
SECTION 4.18 Limitation on Line of Business.
The Company and the Subsidiaries will be operated in a manner such
that their business activities will be the Oil and Gas Business and Investment
in any business or Person engaged in the Oil and Gas Business.
SECTION 4.19 Limitation on Restrictive Covenants.
Notwithstanding any other provision of this Indenture, the restrictive
covenants set forth herein, including, without limitation, Sections 4.10, 4.11,
4.12, 4.13, 4.16 and 5.01, shall be and shall be deemed limited to the extent
necessary so that the creation, existence and effectiveness of such restrictive
covenants shall not result in a breach of the covenant set forth in Section
4.14 of the Series A/B Indenture.
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ARTICLE V
Successor Corporation
SECTION 5.01 When Company May Merge, etc.
The Company will not consolidate with or merge with any Person or
convey, transfer or lease all or substantially all of its assets to any Person,
unless:
(1) the Company survives such merger or the Person formed
by such consolidation or into which the Company is merged or that
acquires by conveyance or transfer, or which leases, all or
substantially all of the assets of the Company is a corporation
organized and existing under the laws of the United States of America,
any state thereof or the District of Columbia and expressly assumes,
by supplemental indenture, the due and punctual payment of the
principal of, premium, if any, and interest on, all the Securities and
the performance of every other covenant and obligation of the Company
under this Indenture;
(2) immediately before and after giving effect to such
transaction no Default or Event of Default exists;
(3) immediately after giving effect to such transaction
on a pro forma basis, the Consolidated Net Worth of the Company (or
the surviving or transferee entity) is equal to or greater than the
Consolidated Net Worth of the Company immediately before such
transaction; and
(4) immediately after giving effect to such transaction
on a pro forma basis, the Company (or the surviving or transferee
entity) would be able to incur $1.00 of additional Indebtedness under
the test described in Section 4.09(a).
In connection with any consolidation, merger, conveyance, transfer or
lease contemplated by this Section 5.01, the Company shall deliver to the
Trustee prior to the consummation of the proposed transaction an Officers'
Certificate to the foregoing effect and an Opinion of Counsel stating that all
conditions precedent to the proposed transaction and the execution and delivery
of such supplemental indenture have been complied with.
SECTION 5.02 Successor Corporation Substituted.
Upon any consolidation, merger, lease, conveyance or transfer in
accordance with Section 5.01, the Trustee shall be notified by the Company and
the successor Person, and the successor Person formed by such consolidation or
into which the Company is merged or to which such lease,
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conveyance or transfer is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor had been named as the Company herein and
thereafter (except in the case of a lease) the predecessor corporation will be
relieved of all further obligations and covenants under this Indenture and the
Securities.
ARTICLE VI
Defaults And Remedies
SECTION 6.01 Events of Default.
An "Event of Default" occurs upon:
(1) default by the Company or any Guarantor in the
payment of principal of, or premium, if any, on the Securities when
due and payable at maturity, upon repurchase pursuant to Section 4.11
or 4.17, upon acceleration or otherwise;
(2) default by the Company or any Guarantor in the
payment of any installment of interest on the Securities when due and
payable and continuance of such default for 30 days;
(3) default by the Company or any Guarantor in the
deposit of any optional redemption payment, when and as due and
payable pursuant to Article III;
(4) default on any other Indebtedness (other than
Non-Recourse Indebtedness) of the Company or any Subsidiary (other
than an Unrestricted Subsidiary) if either (A) such default results in
the acceleration of the maturity of any such Indebtedness having a
principal amount of $5,000,000 or more individually or, taken together
with the principal amount of any other such Indebtedness in default or
the maturity of which has been so accelerated, in the aggregate, or
(B) such default results from the failure to pay when due principal
of, premium, if any, or interest on, any such Indebtedness, after
giving effect to any applicable grace period (a "Payment Default"),
having a principal amount of $5,000,000 or more individually or, taken
together with the principal amount of any other Indebtedness under
which there has been a Payment Default, in the aggregate;
(5) default in the performance, or breach of, the
covenants set forth in Section 4.10 and Article V;
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(6) default in the performance, or breach of, any other
covenant or agreement of the Company or any Guarantor in this
Indenture and failure to remedy such default within a period of 30
days after written notice thereof from the Trustee or Holders of 25%
in principal amount of the outstanding Securities;
(7) the commencement of proceedings, or the taking of any
enforcement action (including by way of set-off), by any holder of at
least $5,000,000 in aggregate principal amount of Indebtedness
(including any amounts owed pursuant to a judgment or order) of the
Company or any Subsidiary (other than an Unrestricted Subsidiary
provided that neither the Company nor any Restricted Subsidiary is
liable, directly or indirectly, for such Indebtedness), after a
default under such Indebtedness, to retain in satisfaction of such
Indebtedness or to collect or seize, dispose of or apply in
satisfaction of such Indebtedness, property or assets of the Company
or its Restricted Subsidiaries having a fair market value in excess of
$5,000,000 individually or in the aggregate; provided that if any such
proceedings or actions are terminated or rescinded, or such
Indebtedness is repaid or settled, such Event of Default under this
Indenture and any consequential acceleration of the Securities shall
be automatically rescinded, so long as (a) such rescission does not
conflict with any judgment or decree and (b) the holder of such
Indebtedness shall not have applied any such property or assets in
satisfaction of such Indebtedness;
(8) the entry by a court of one or more judgments or
orders against the Company or any Subsidiary (other than an
Unrestricted Subsidiary provided that neither the Company nor any
Restricted Subsidiary is liable, directly or indirectly, for such
judgment or order) in an aggregate amount equal to or in excess of
$5,000,000 individually or in the aggregate (net of applicable
insurance coverage by a third party insurer which is acknowledged in
writing by the insurance carrier) that has not been vacated,
discharged, satisfied or stayed pending appeal within 60 days from the
entry thereof;
(9) the failure of a Guarantee by a Guarantor to be in
full force and effect (other than a release of a Guarantee in
accordance with Section 10.04) or any Guarantor shall deny or
disaffirm its obligations with respect thereto;
(10) if (i) any material "accumulated funding deficiency"
(as defined in Section 302 of ERISA or Section 412 of the Code), shall
exist with respect to any PBGC Plan or Multiple Employer Plan (unless
a waiver or extension is obtained under Section 412(d) or (e) of the
Code and Sections 303 and 304 of ERISA), if such accumulated funding
deficiency is a material liability of the Company, (ii) a Reportable
Event shall occur with respect to any PBGC Plan or Multiple Employer
Plan, which Reportable Event results in the non-appealable termination
of such PBGC Plan or Multiple Employer Plan for purposes of Title IV
of ERISA and gives rise to a material liability of the Company, (iii)
proceedings to have a trustee appointed have resulted in a trustee
being appointed to terminate or administer a
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PBGC Plan or Multiple Employer Plan which proceeding results in the
non-appealable termination of such PBGC Plan or Multiple Employer Plan
and gives rise to a material liability of the Company with respect to
such termination, (iv) a PBGC Plan or Multiple Employer Plan has been
terminated in a distress termination under Section 4041(c) of ERISA
and the Company no longer may appeal such termination, (v) any
Multiemployer Plan is in reorganization or is insolvent and the
circumstances are such that such reorganization or insolvency results
in a material liability to the Company, (vi) there is a complete or
partial withdrawal from a Multiemployer Plan under circumstances that
subjects the Company to material liability, or (vii) any event or
condition described in (i) through (vi) above (determined without
regard to whether the event or condition taken alone would or could
result in a material liability) shall occur or exist with respect to a
PBGC Plan, Multiple Employer Plan or Multiemployer Plan which in
combination with one or more of any events described in (i) through
(vi) above (determined without regard to whether the event or
condition taken alone would or could result in a material liability)
that subjects the Company, any Guarantor or any other Restricted
Subsidiary to any material tax, penalty or other liability (for
purposes of this paragraph (10) the term "material" and "material
liability" shall mean any tax, penalty or liability in excess of
$5,000,000); or
(11) the Company or any Subsidiary (other than an
Unrestricted Subsidiary) pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or
proceeding,
(B) consents to the entry of an order
for relief against it in an involuntary case or proceeding,
(C) consents to the appointment of a
Custodian of it or for all or substantially all of its
property,
(D) makes a general assignment for the
benefit of its creditors, or
(E) admits in writing that it generally
is unable to pay its debts as the same become due; or
(12) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief (with respect to the
petition commencing such case) against the Company or any
Subsidiary (other than an Unrestricted Subsidiary) in an
involuntary case or proceeding,
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(B) appoints a Custodian of the Company
or any Subsidiary (other than an Unrestricted Subsidiary) or
for all or substantially all of its respective property, or
(C) orders the liquidation of the
Company or any Subsidiary (other than an Unrestricted
Subsidiary),
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 6.02 Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (11) and (12)) under Section 6.01 occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% in principal
amount of the outstanding Securities may declare the unpaid principal of (or
the Change of Control purchase price if the Event of Default includes failure
to pay the Change of Control purchase price), and accrued and unpaid interest
on, all the Securities then outstanding to be due and payable, by a notice in
writing to the Company (and to the Trustee, if given by Holders), and upon any
such declaration such principal, premium, if any, and accrued and unpaid
interest shall become immediately due and payable, notwithstanding anything
contained in this Indenture or the Securities to the contrary. If an Event of
Default specified in clauses (11) or (12) above occurs, all unpaid principal
of, and accrued interest on, the Securities then outstanding will become due
and payable, without any declaration or other act on the part of the Trustee or
any Holder.
The Holders of a majority in principal amount of the then outstanding
Securities, by written notice to the Company, the Guarantors and the Trustee,
may rescind and annul a declaration of acceleration and its consequences if (1)
the Company or any Guarantor has paid or deposited with such Trustee a sum
sufficient to pay (A) all overdue installments of interest on all the
Securities, (B) the principal of, 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, (C) to the
extent that payment of such interest is lawful, interest on the defaulted
interest at the rate or rates prescribed therefor in the Securities, and (D)
all money paid or advanced by the Trustee thereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel; (2) all Events of Default, other than the non-payment of the
principal of any Securities that have become due solely by such declaration of
acceleration, have been cured or waived as provided in this Indenture; and (3)
the rescission would not conflict with any judgment
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or decree of a court of competent jurisdiction. No such rescission will affect
any subsequent Event of Default or impair any right consequent thereon.
SECTION 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, but
is not obligated to, pursue, in its own name and as trustee of an express
trust, any available remedy by proceeding at law or in equity to collect the
payment of principal or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture. If an Event
of Default specified under clauses (11) or (12) of Section 6.01 occurs with
respect to the Company at a time when the Company is the Paying Agent, the
Trustee shall automatically assume the duties of Paying Agent.
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.
Subject to Sections 6.07 and 9.02, the Holders of at least a majority
in principal amount of Securities then outstanding by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
Default or Event of Default in payment of principal or interest on the
Securities, including any optional redemption payments or Change of Control or
Net Proceeds Offer payments.
SECTION 6.05 Control by Majority.
The Holders of a majority in principal amount of the Securities will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on such Trustee, provided that (1) such direction is not in
conflict with any rule of law or with this Indenture and (2) the Trustee may
take any other action deemed proper by such Trustee that is not inconsistent
with such direction.
SECTION 6.06 Limitation on Remedies.
No Holder of any of the Securities will have any right to institute
any proceeding, judicial or otherwise, or for the appointment of a receiver or
trustee or pursue any remedy under this Indenture, unless:
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(1) such Holder has previously given notice to the
Trustee of a continuing Event of Default,
(2) the Holders of not less than 25% in principal amount
of the outstanding Securities have made written request to such
Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee under this Indenture,
(3) such Holder or Holders have offered to such Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request,
(4) such Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
proceeding, and
(5) no direction inconsistent with such written request
has been given to such Trustee during such 60-day period by the
Holders of a majority in principal amount of the outstanding
Securities.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over other Holders.
SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the Holder of
any Securities will have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Securities on the
stated maturity therefor and to institute suit for the enforcement of any such
payment, and such right may not be impaired without the consent of such Holder.
SECTION 6.08 Collection Suit by Trustee.
If an Event of Default in payment of principal, premium, if any, or
interest specified in Section 6.01(1), (2) or (3) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any Guarantor for the whole amount of principal,
premium, if any, and interest remaining unpaid with respect to the Securities,
and interest on overdue principal and premium, if any, and, to the extent
lawful, interest on overdue interest, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation and expenses of the Trustee, its agents and counsel.
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SECTION 6.09 Trustee May File Proofs of Claim.
(a) The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the Holders allowed in any judicial proceedings
relative to the Company, the Guarantors, their creditors or their property and
may collect and receive any money or securities or other property payable or
deliverable on any such claims and to distribute the same.
(b) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities 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
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
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ARTICLE VII
Trustee
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such rights and powers vested in it by
this Indenture and use the same degree of care and skill in such exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth (or incorporated by reference) in this
Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine such
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph (c) does not limit the effect of
paragraph (b) of this Section.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by an officer of the Trustee, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts.
(3) The Trustee shall not be liable with respect to
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05, and the Trustee
shall be entitled from time to time to request such a direction.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
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(e) The Trustee shall be under no obligation and may
refuse to perform any duty or exercise any right or power unless it receives
indemnity satisfactory to it against any loss, liability or expense. 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.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) Subject to Sections 7.01 and 7.02, the Trustee shall
not be required to take notice, and shall not be deemed to have notice, of any
Default or Event of Default hereunder, except Events of Default described in
paragraphs (1), (2) and (3) of Section 6.01 hereof, unless the Trustee shall be
notified specifically of the Default or Event of Default in a written
instrument or document delivered to it by the Company or any Guarantor, or by
the Holders of at least 10% of the aggregate principal amount of the Notes then
outstanding. In the absence of delivery of a notice satisfying those
requirements, the Trustee may assume that there is no Default or Event of
Default, except as noted above.
SECTION 7.02 Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on and shall be protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney, to the extent reasonably required by such inquiry or
investigation.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
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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.
SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Subsidiaries or Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities or any offering memorandum or
solicitation documents, and it shall not be responsible for any statement in
the Securities other than its certificate of authentication.
SECTION 7.05 Notice of Defaults.
If a Default occurs and is continuing and if it is known to the
Trustee pursuant to Section 7.01(g), the Trustee shall mail to each Holder
pursuant to Section 11.02 a notice of the Default within 90 days after it
occurs. Except in the case of a Default in any payment on any Security, the
Trustee may withhold the notice if and so long as the board of directors,
executive committee or a trust committee of officers in good faith determines
that withholding the notice is in the interests of Holders.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each November 1, beginning with the November 1
following the date of this Indenture, the Trustee shall mail to each Holder a
brief report dated as of such November 1, that complies with TIA Section
313(a), but only if such report is required in any year under 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 SEC and each stock exchange on which the Securities are listed.
The Company shall notify the Trustee in writing when the Securities become
listed on any national securities exchange or of any delisting thereof.
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SECTION 7.07 Compensation and Indemnity.
The Company and the Guarantors jointly and severally agree to pay the
Trustee from time to time reasonable compensation for its services (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). The Company and the Guarantors
jointly and severally agree to reimburse the Trustee upon request for all
reasonable out-of-pocket expenses, disbursements and advances incurred by it.
Such expenses shall include when applicable the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee against any loss, liability or expenses incurred by it
arising out of or in connection with the acceptance and administration of the
trust and its duties hereunder as Trustee, Registrar and/or Paying Agent,
including the costs and expenses of enforcing this Indenture against the
Company (including with respect to this Section 7.07) and of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee shall notify the Company
and the Guarantors of any claim for which it may seek indemnity; however,
unless the position of the Company is prejudiced by such failure, the failure
of the Trustee to promptly notify the Company shall not limit its right to
indemnification. The Company shall defend each such claim and the Trustee
shall cooperate in the defense. The Trustee may retain separate counsel and
the Company shall reimburse the Trustee for the reasonable fees and expenses of
such counsel if the Company is advised by an Opinion of Counsel that the
Trustee has separate defenses and that separate representation is appropriate.
The Company need not pay for any settlement made without its consent.
Neither the Company nor the Guarantors shall be obligated to reimburse
any expense or indemnify against any loss or liability incurred by the Trustee
through the Trustee's breach of the applicable standard of care for its conduct
under Section 7.01.
To secure the payment obligations of the Company and the Guarantors in
this Section, the Trustee shall have a claim prior to that of the Holders of
the Securities on all money or property held or collected by the Trustee,
except that held in trust to pay principal of and interest on particular
Securities.
When the Trustee incurs expenses or renders services after the
occurrence of any Event of Default specified in Sections 6.01(11) or (12), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
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SECTION 7.08 Replacement of Trustee.
The Trustee may resign by so notifying the Company and the Guarantors.
The Holders of a majority in principal amount of the Securities may remove the
Trustee by so notifying the Trustee, in writing. The Company may remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting as Trustee
hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company and the Guarantors.
Immediately after that, the retiring Trustee shall transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07, 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. A successor Trustee shall mail
notice of its succession to each Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee. Any successor Trustee shall comply
with TIA Section 310(a)(5).
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SECTION 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation, the
successor corporation without any further act shall be the successor Trustee;
provided such corporation or association shall be otherwise eligible and
qualified under this Article.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee which satisfies the
requirements of TIA Section 310(a)(1) and (5). The Trustee shall always 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 also comply
with TIA Section 310(b).
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 VIII
Discharge Of Indenture
SECTION 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, with respect
to the Securities, elect to exercise its rights pursuant to either Section 8.02
or 8.03 with respect to all outstanding Securities upon compliance with the
conditions set forth below in this Article VIII.
SECTION 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.02, the Company shall be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date all conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 and the other Sections of
this Indenture referred to in (a) and (b) below, and to have satisfied all its
other obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the
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expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (a) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 8.04, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Securities when such payments are due, (b) the
Company's obligations with respect to such Securities under Sections 2.03,
2.04, 2.06, 2.07, 2.10 and 4.04, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith (including, but not limited to, Section 7.07) and (d) this Article
VIII. Subject to compliance with this Article VIII, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 with respect to the Securities.
SECTION 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, the Company shall be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.18 and Article V with respect to
the outstanding Securities on and after the date the conditions set forth below
are satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Securities shall not be deemed outstanding for accounting purposes). For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01(5) or
Section 6.01(6), but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. In addition, upon
the Company's exercise under Section 8.01 of the option applicable to this
Section 8.03, Sections 6.01(4) through 6.01(12) shall not constitute Events of
Default.
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SECTION 8.04 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to application of either Section
8.02 or Section 8.03 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or cause
to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 who shall agree to comply with the provisions of
this Article VIII applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a) cash in
U.S. Legal Tender in an amount, or (b) U.S. Government Securities which through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment, cash in U.S. Legal Tender in an amount, or (c) a
combination thereof, in such amounts, as will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge the principal of, premium, if any, and interest on the
outstanding Securities on the Maturity Date or on the applicable redemption
date, as the case may be, in accordance with the terms of this Indenture and of
such Securities; provided that the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Securities to said payments with respect to the Securities;
(b) In the case of an election under Section 8.02, the
Company shall have delivered to the Trustee an Opinion of Counsel confirming
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (ii) since the date hereof, there has been
a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of the
outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred;
(c) In the case of an election under Section 8.03, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the outstanding Securities 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, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
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(d) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such deposit
or, insofar as Subsection 6.01(11) or 6.01(12) is concerned, at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(e) Such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under, any
other material agreement or instrument to which the Company is a party or by
which the Company is bound;
(f) In the case of any election under Section 8.02 or
8.03, the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.02 or 8.03 was not made by the Company with the intent of preferring
the Holders over other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or
others; and
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the Legal Defeasance under
Section 8.02 or the Covenant Defeasance under Section 8.03 (as the case may be)
have been complied with as contemplated by this Section 8.04.
SECTION 8.05 Deposited Money and U.S. Government Securities to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06, all money and U.S. Government Securities
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 in respect of the outstanding Securities
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company or a Guarantor, if
any, acting as Paying Agent) as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or U.S. Government
Securities deposited pursuant to Section 8.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the outstanding Securities.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
Company's request any money or U.S. Government Securities held by it as
provided in Section 8.04 which, in the opinion of a nationally recognized firm
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of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a)), are in excess of the amount thereof which would then be required to
be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security which is not subject to the last paragraph of
Section 8.05 and has remained unclaimed for one year after such principal, and
premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.
SECTION 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Securities in accordance with Section 8.02 or 8.03,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining, or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03, as the case may be; provided, however, that, if the
Company or any Guarantor makes any payment of principal of, premium, if any, or
interest on any Security following the reinstatement of its obligations, the
Company or such Guarantor shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Securities held by the Trustee or Paying Agent.
ARTICLE IX
Amendments, Supplements And Waivers
SECTION 9.01 Without Consent of Holders.
The Company, the Guarantors and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:
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(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Section 5.01;
(3) to reflect the addition or release of any Guarantor,
as provided for by this Indenture;
(4) to comply with any requirements of the SEC in order
to effect or maintain the qualification of this Indenture under the
TIA; or
(5) to make any change that would provide any additional
benefit or rights to the Holders or that does not adversely affect the
rights of any Holder in any material respect.
Upon the request of the Company and the Guarantors, accompanied by a
Board Resolution of the Company and of each Guarantor authorizing the execution
of any such supplemental indenture, and upon receipt by the Trustee of the
documents described in Section 9.06, the Trustee shall join with the Company
and the Guarantors in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and make any further appropriate
agreements and stipulations that may be therein contained. After an amendment
or waiver under this Section becomes effective, the Company shall mail to the
Holders of each Security affected thereby a notice briefly describing the
amendment or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend this Indenture or the Securities with the
written consent (including consents obtained in connection with a tender offer
or exchange offer for Securities or a solicitation of consents in respect of
Securities, provided that in each case such offer or solicitation is made to
all Holders of then outstanding Securities on equal terms) of the Holders of at
least a majority in principal amount of the then outstanding Securities.
Upon the request of the Company and the Guarantors, accompanied by a
Board Resolution of the Company and each Guarantor authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of the Holders as aforesaid, and upon receipt by the
Trustee of the Opinion of Counsel described in Section 9.06, the Trustee shall
join with the Company and the Guarantors in the execution of such supplemental
indenture.
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It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
The Holders of a majority in principal amount of the then outstanding
Securities may waive compliance in a particular instance by the Company or the
Guarantors with any provision of this Indenture or the Securities (including
waivers obtained in connection with a tender offer or exchange offer for
Securities or a solicitation of consents in respect of Securities, provided
that in each case such offer or solicitation is made to all Holders of the then
outstanding Securities on equal terms). However, without the consent of each
Holder affected, an amendment or waiver under this Section may not:
(1) reduce the percentage of principal amount of
Securities whose Holders must consent to an amendment, supplement or
waiver of any provision of this Indenture or the Securities;
(2) reduce the rate or change the time for payment of
interest, including defaulted interest, on the Securities;
(3) reduce the principal amount of any Security or change
the Maturity Date of the Securities;
(4) reduce the redemption price, including premium, if
any, payable upon the redemption of any Security or change the time at
which any Security may be redeemed;
(5) reduce the repurchase price, including premium, if
any, payable upon the repurchase of any Security pursuant to Sections
4.11 or 4.17, or change the time at which any Security may or shall be
repurchased thereunder;
(6) waive a Default or Event of Default in the payment of
the principal of, premium, if any, or interest on the Securities;
(7) make any Security payable in money other than that
stated in the Security;
(8) impair the right to institute suit for the
enforcement of principal of, premium, if any, or interest on any
Security pursuant to Sections 6.07 or 6.08, except as limited by
Section 6.06; or
(9) make any change in Section 6.04 or Section 6.07 or in
this sentence of this Section 9.02.
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The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of
record of any Securities with respect to which such consent is required or
sought as of a date identified by the Trustee in a notice furnished to Holders
in accordance with the terms of this Indenture.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04 Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security.
However, until an amendment, supplement or waiver becomes effective, any such
Holder or subsequent Holder may revoke the consent as to its Security or
portion of a Security. For such revocation to be effective, the Trustee must
receive the notice of revocation before the date the amendment, supplement or
waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If the Company elects to fix a record date for such purpose, the
record date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 2.05,
or (ii) such other date as the Company shall designate. If a record date is
fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment or waiver or to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No consent
shall be valid or effective for more than 90 days after such record date unless
consent from the Holders of the principal amount of Securities required
hereunder for such amendment or waiver to be effective also shall have been
given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it makes a change described in any of clauses (1)
through (9) of Section 9.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security.
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SECTION 9.05 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company
or the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.
SECTION 9.06 Trustee Protected.
The Trustee shall sign any amendment or supplement or waiver
authorized pursuant to this Article if the amendment or supplement or waiver
does not adversely affect the rights of the Trustee. If it does adversely
affect the rights of the Trustee, the Trustee may but need not sign it. In
signing such amendment or supplement or waiver the Trustee shall be entitled to
receive, and (subject to Article VII) shall be fully protected in relying upon,
an Opinion of Counsel stating that such amendment or supplement or waiver is
authorized or permitted by and complies with this Indenture. The Company may
not sign an amendment or supplement until the Boards of Directors of the
Company and the Guarantors approve it.
SECTION 9.07 Restrictions on Payments for Amendments, Waivers and
Modifications.
Notwithstanding any provision to the contrary in this Indenture
neither the Company nor any of its Subsidiaries shall, directly or indirectly,
pay or cause to be paid any consideration, whether by way of interest, fees or
otherwise, to any Holder of any Security for or as an inducement to any
consent, waiver or amendment of any terms or provisions of the Security or the
Indenture unless such consideration is offered to be paid or agreed to be paid
to all Holders of the Securities which so consent, waive or agree to amend in
the time period set forth in any solicitation documents relating to such
consent.
ARTICLE X
Guarantees
SECTION 10.01 Unconditional Guarantee.
Each person who becomes a Guarantor under this Indenture pursuant to
Section 10.03, jointly and severally, unconditionally guarantees (such
guarantee to be referred to herein as the "Guarantee") to each Holder and to
the Trustee the due and punctual payment of the principal of, premium, if any,
and interest on the Securities and all other amounts due and payable under this
Indenture and the Securities by the Company whether at maturity, by
acceleration, redemption, repurchase or otherwise, including, without
limitation, interest on the overdue principal of, premium,
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if any, and interest on the Securities, to the extent lawful, all in accordance
with the terms hereof and thereof; subject, however, to the limitations set
forth in Section 10.05.
Failing payment when due of any amount so guaranteed for whatever
reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor hereby agrees that its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the
same, any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. To the
fullest extent permitted by law, each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
in this Guarantee. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Guarantor, any amount paid by the Company or any Guarantor to the Trustee or
such Holder with respect to the Securities, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees it shall not be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor further
agrees that, as between each Guarantor, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article VI,
such obligations (whether or not due and payable) shall forthwith become due
and payable by each Guarantor for the purpose of this Guarantee.
SECTION 10.02 Guarantors May Consolidate, etc., on Certain Terms.
(a) Subject to paragraph (b) of this Section 10.02, no
Guarantor may consolidate or merge with or into (whether or not such Guarantor
is the surviving Person) another corporation or Person unless (i) the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) is a corporation organized and existing under the laws of the United
States of America, any state thereof, or the District of Columbia and expressly
assumes all the obligations of such Guarantor pursuant to a supplemental
indenture, in a form reasonably satisfactory to the Trustee, under the
Securities and the Indenture, (ii) immediately before and after giving effect
to such transaction, no Default or Event of Default exists, (iii) such
Guarantor or the entity or Person formed by or surviving any such consolidation
or merger on a pro forma basis will have
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Consolidated Net Worth (immediately after the transaction) equal to or greater
than the Consolidated Net Worth of such Guarantor immediately preceding the
transaction and (iv) the Company will, at the time of such transaction after
giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable Reference Period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to Section 4.09(a). In connection
with any consolidation or merger contemplated by this Section 10.02, the
Company shall deliver to the Trustee prior to the consummation of the proposed
transaction an Officers' Certificate to the foregoing effect and an Opinion of
Counsel stating that all conditions precedent to the proposed transaction and
to execution and delivery of such supplemental indenture have been complied
with. This Section 10.02(a) will not prohibit a merger between Guarantors or a
merger between the Company and a Guarantor.
(b) In the event of a sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
Capital Stock of such Guarantor, then such Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the Capital Stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) will be released and relieved of any
obligations under its Guarantees; provided that the Net Cash Proceeds of such
sale or other disposition are applied in accordance with the provisions of the
Indenture described under Section 4.11.
SECTION 10.03 Addition of Guarantors.
(a) The Company agrees to cause each Subsidiary that
shall become a Restricted Subsidiary after the date of this Indenture to
execute and deliver a supplemental indenture pursuant to which such Restricted
Subsidiary shall guarantee the payment of the Securities pursuant to the terms
hereof.
(b) Any Person that was not a Guarantor on the date of
this Indenture may become a Guarantor by executing and delivering to the
Trustee (i) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such Person to the provisions (including the
representations and warranties) of this Indenture as a Guarantor and (ii) an
Opinion of Counsel and Officers' Certificate to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning creditors' rights and
equitable principles as may be acceptable to the Trustee in its discretion and
provided that no opinion need be rendered concerning the enforceability of the
Guarantee).
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SECTION 10.04 Release of a Guarantor.
Upon the sale or disposition of a Guarantor (or substantially all of
its assets) or the designation of a Guarantor as an Unrestricted Subsidiary,
which in each case otherwise is effected in compliance with the terms of this
Indenture, including but not limited to the provisions of Section 10.02, such
Guarantor shall be deemed released from all of its Guarantee and related
obligations in this Indenture. The Trustee shall deliver an appropriate
instrument evidencing such release upon receipt of a request by the Company
accompanied by an Officers' Certificate and an Opinion of Counsel certifying
that such sale or other disposition was made by the Company in accordance with
the provisions of this Indenture. Any Guarantor not so released remains liable
for the full amount of principal of and interest on the Securities as provided
in this Article X.
SECTION 10.05 Limitation of Guarantor's Liability.
Each Guarantor and by its acceptance of Securities under this
Indenture each Holder hereby confirms that it is the intention of all such
parties that the guarantee by such Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any federal or
state law. To effectuate the foregoing intention, the Holders and each
Guarantor hereby irrevocably agree that the obligations of each Guarantor under
the Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to Section 10.06, result in the obligations of such
Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law. This Section 10.05 is for the
benefit of the creditors of each Guarantor, and, for purposes of applicable
fraudulent transfer and fraudulent conveyance law, any Indebtedness of a
Guarantor pursuant to a Bank Credit Facility shall be deemed to have been
incurred prior to the incurrence by such Guarantor of its liability under the
Guarantee.
SECTION 10.06 Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from each
other Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by the Funding Guarantor in discharging the Company's
obligations with respect to the Securities or any other Guarantor's obligations
with respect to the Guarantee.
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SECTION 10.07 Execution and Delivery of Guarantee.
To further evidence the Guarantees set forth in Section 10.01, each
Guarantor hereby agrees that a notation relating to such Guarantee, in
substantially the form of Exhibit A-1, shall be endorsed on each Security
authenticated and delivered by the Trustee and executed by either manual or
facsimile signature of one Officer of each Guarantor.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation relating to such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Security no longer holds that office at the time the Trustee authenticates such
Security or at any time thereafter, such Guarantor's Guarantee of such Security
shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
SECTION 10.08 Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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ARTICLE XI
Miscellaneous
SECTION 11.01 Trust Indenture Act Controls.
Whether prior to or following the qualification of this Indenture
under the TIA, if any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by operation of TIA Section 318(c) upon an
Indenture qualified under the TIA, the imposed duties shall control under this
Indenture.
SECTION 11.02 Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by certified or registered mail (return
receipt requested), facsimile, telecopier or overnight air courier guaranteeing
next day delivery, addressed as follows:
If to the Company or any Guarantor:
National Energy Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
If to the Trustee:
Bank One, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
The Company, any Guarantor or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
receipt acknowledged, if faxed or telecopied; and the next Business
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Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next Business Day delivery.
Any notice or communication mailed to a Holder shall be mailed by
first-class mail to the address for such Holder appearing on the registration
books of the Registrar and shall be sufficiently given to such Holder if so
mailed within the time prescribed. Failure to mail a notice or communication
to a Holder or any defect in it shall not affect its sufficiency with respect
to other Holders.
If a notice or communication is mailed in the manner provided above,
it is duly given, whether or not the addressee receives it. If the Company or
any Guarantor mails notice or communications to Holders, it shall mail a copy
to the Trustee and each Agent at the same time.
SECTION 11.03 Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Guarantors, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 11.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company or such Guarantor,
as the case may be, shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 11.05) stating that, in the opinion of
the signers, the conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with;
(2) an Opinion of Counsel stating that, in the opinion of
such counsel, such conditions precedent have been complied with; and
(3) any Opinion of Counsel may assume the existence or
non-existence of facts necessary to support such Opinion unless such
counsel has actual knowledge that such assumption would be contrary to
the actual facts.
SECTION 11.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
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(1) a statement that each person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such person,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of
each such person, such covenant or condition has been complied with.
SECTION 11.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules for its
functions.
SECTION 11.07 Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banks and
trust companies in the City of New York and the City of Columbus, Ohio are not
required by law or executive order to be open. If a payment date is a Legal
Holiday at a place of payment, payment may be made at the place on the next
succeeding day that is not a Legal Holiday, without additional interest.
SECTION 11.08 Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, any Guarantor or any other Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
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SECTION 11.10 No Recourse Against Others.
All liability described in paragraph 18 of the Securities of any
director, officer, employee or stockholder, as such, of the Company, the
Guarantors or the Trustee is waived and released.
SECTION 11.11 Successors.
All agreements of the Company and the Guarantors in this Indenture,
the Securities and the Guarantees shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 11.12 Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
instrument.
SECTION 11.13 Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, as of the date first written above.
NATIONAL ENERGY GROUP, INC.
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
BANK ONE, N.A., as Trustee
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
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EXHIBIT A
FACE OF SECURITY
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York ("DTC")), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.(1)
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY PERSON EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) WHICH IS
AN INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT IT
WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD AS
COMPLIES WITH RULE 144 UNDER THE SECURITIES ACT) AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (THE "RESALE RESTRICTION
TERMINATION DATE") RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT
(A) TO THE ISSUER, (B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE
PROVISIONS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D) PURSUANT TO THE
RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT, (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (G) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
__________________________________
(1) This paragraph should be included only if the Security is issued in global
form.
A-1
91
SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF
LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT BE AT
ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHICH THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE
PROPOSED TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL
NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE.
NATIONAL ENERGY GROUP, INC.
10 3/4% [SERIES C] [SERIES D] SENIOR NOTE DUE 2006
NO. $_________
CUSIP NO.________
National Energy Group, Inc., a Delaware corporation, promises to pay
to __________________________ or registered assigns the principal sum of
$__________ on November 1, 2006.
Interest Payment Dates: May 1, and November 1, commencing November 1,
1997
Record Dates: April 15 and October 15
Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
A-2
92
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Dated:
NATIONAL ENERGY GROUP, INC.
By:
-----------------------------------------
Certificate of Authentication:
Bank One, N.A.
as Trustee, certifies that this is one of the Definitive Global(2)
Securities referred to in the within-mentioned Indenture.
By
------------------------------
Authorized Signatory
__________________________________
(2) If the Security is issued in global form, the term "Global" replaces the
term "Definitive."
A-3
93
REVERSE OF SECURITY
NATIONAL ENERGY GROUP, INC.
10 3/4% [SERIES C] [SERIES D] SENIOR NOTES DUE 2006
1. Interest. National Energy Group, Inc. a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at 10 3/4% per annum from the Issue Date until maturity and shall pay
additional interest, if any, payable pursuant to the Registration Rights
Agreement referred to in the Indenture. The Company will pay interest
semiannually on May 1 and November 1 of each year (each an "Interest Payment
Date"), or if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Securities will accrue from the most recent
Interest Payment Date on which interest has been paid or, if no interest has
been paid, from the Issue Date; provided, that if there is no existing Default
in the payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be November
1, 1997. The Company shall pay interest on overdue principal and premium, if
any, from time to time on demand at a rate equal to the interest rate on the
Securities then in effect; it shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. All references herein to
interest shall include additional interest, if any, payable as Notes Liquidated
Damages pursuant to the Registration Rights Agreement.
2. Method of Payment. The Company will pay interest on the
Securities to the persons who are registered holders of Securities at the close
of business on the record date immediately preceding the Interest Payment Date,
even if such Securities are canceled after the record date and on or before the
Interest Payment Date. Holders must surrender Securities to the Paying Agent to
collect principal payments. The Company will pay principal of, premium, if
any, and interest on the Securities in money of the United States of America
that at the time of payment is legal tender for payment of public and private
debts. However, the Company may pay such amounts by check payable in such
money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Securities under an
Indenture, dated as of August 21, 1997 (as such may be amended, the
"Indenture"), between the Company and the Trustee. Capitalized terms herein
are used as defined in the Indenture unless otherwise defined herein. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by
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reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbb) as in effect on the date of the Indenture. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders are referred to the Indenture and such Act for a complete statement
of such terms. The Securities are limited to $165,000,000 aggregate principal
amount.
5. Ranking and Guarantees. The Securities are general senior
unsecured obligations of the Company. The Company's obligation to pay
principal, premium, if any, and interest with respect to the Securities is
unconditionally guaranteed on a senior basis, jointly and severally, by the
Guarantors pursuant to Article X of the Indenture. Certain limitations to the
obligations of the Guarantors are set forth in further detail in the Indenture.
6. Optional Redemption. Securities are subject to redemption, at
the option of the Company, in whole in part, upon not less than 30 or more than
60 days' notice:
(i) or at any time on or after November 1, 2001 at the following
Redemption Prices (expressed as percentages of principal amount) if redeemed
during the 12-month period beginning November 1 of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2001 . . . . . . . . . . . . . . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . 102.688%
2003 and thereafter . . . . . . . . . . . . . . . . . . 100.000%
or (ii) at any time prior to November 1, 2001, at the Make-Whole Price
(as defined in the Indenture),
together in the case of any such redemption with accrued and unpaid interest,
if any, to the Redemption Date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on an Interest Payment Date
that is on or prior to the Redemption Date), all as provided in the Indenture.
In addition, in the event the Company consummates one or more Equity
Offerings on or prior to November 1, the Company may, in its sole discretion,
redeem up to 35% of the aggregate principal amount of the Securities with all
or a portion of the aggregate net proceeds received by the Company from any
such Equity Offering or Equity Offerings at a redemption price of 110.75% of
the aggregate principal amount of the Securities so redeemed, plus accrued and
unpaid interest on the Securities so redeemed to the Redemption Date; provided,
however, that following such redemption, at least 65% of the aggregate
principal amount of the Securities remains outstanding.
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Any redemption pursuant to this paragraph shall be made pursuant to the
provisions of Sections 3.01 through 3.06 of the Indenture.
In the case of any redemption of Securities, interest installments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities, of
record at the close of business on the relevant Record Date referred to on the
face hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date. In the event of redemption or purchase of
this Security in part only, a new Security or Securities for the unredeemed or
unpurchased portion hereof shall be issued in the name of the Holder hereof
upon the cancellation hereof.
The Securities do not have the benefit of any sinking fund
obligations.
7. Notice of Redemption. Notice of redemption will be mailed to
the Holder's registered address at least 30 days but not more than 60 days
before the redemption date to each Holder of Securities to be redeemed. If
less than all Securities are to be redeemed, the Trustee shall select pro rata,
by lot or in accordance with the rules of any securities exchange the
Securities to be redeemed in multiples of $1,000. Securities in denominations
larger than $1,000 may be redeemed in part. On and after the redemption date,
interest ceases to accrue on Securities or portions of them called for
redemption (unless the Company shall default in the payment of the redemption
price or accrued interest).
8. Change of Control Offer. In the event of a Change of Control
of the Company, and subject to certain conditions and limitations provided in
the Indenture, the Company will be obligated to make an offer to purchase, not
more than 10 Business Days or less than 30 Business Days following the
occurrence of a Change of Control of the Company, all of the then outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
together with accrued and unpaid interest to the Change of Control Purchase
Date, all as provided in the Indenture.
9. Net Proceeds Offer. In the event of Asset Sales, under certain
circumstances, the Company will be obligated to make a Net Proceeds Offer to
purchase all or a specified portion of each Holder's Securities at a purchase
price equal to 100% of the principal amount of the Securities, together with
accrued and unpaid interest to the Net Proceeds Payment Date.
10. Restrictive Covenants. The Indenture imposes certain
limitations on, among other things, the ability of the Company to merge or
consolidate with any other Person or sell, lease or otherwise transfer all or
substantially all of its properties or assets, the ability of the Company or
the Restricted Subsidiaries to dispose of certain assets, to pay dividends and
make certain other distributions and payments, to make certain investments or
redeem, retire, repurchase or acquire for value shares of Capital Stock, to
incur additional Indebtedness or incur encumbrances against certain
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property and to enter into certain transactions with Affiliates, all subject to
certain limitations described in the Indenture.
11. Defaults and Remedies. As set forth in the Indenture, an
Event of Default is generally (i) failure to pay principal upon maturity,
redemption or otherwise (including pursuant to a Change of Control Offer or a
Net Proceeds Offer), (ii) default for 30 days in payment of interest on any of
the Securities, (iii) default in the performance of agreements relating to
mergers, consolidations and sales of all or substantially all assets or the
failure to make or consummate a Change of Control Offer or a Net Proceeds
Offer, (iv) failure for 30 days after notice to comply with any other covenants
in the Indenture or the Securities; (v) certain payment defaults under, the
acceleration prior to the maturity of, and the exercise of certain enforcement
rights with respect to, certain Indebtedness of the Company or any Guarantor in
an aggregate principal amount in excess of $5,000,000; (vi) the failure of any
Guarantee to be in full force and effect or otherwise to be enforceable (except
as permitted by the Indenture); (vii) certain events giving rise to material
ERISA liability; (viii) certain final judgments against the Company, any
Guarantor or other Restricted Subsidiary in an aggregate amount of $5,000,000
or more which remain unsatisfied and either become subject to commencement or
enforcement proceedings or remain unstayed for a period of 60 days; and (ix)
certain events of bankruptcy, insolvency or reorganization of the Company or
any Subsidiary (other than an Unrestricted Subsidiary). If any Event of
Default occurs and is continuing, the Trustee or the holders of at least 25% in
aggregate principal amount of the Outstanding Securities may declare the
principal amount of all the Securities to be due and payable immediately,
except that (i) in the case of an Event of Default arising from certain events
of bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary, the principal amount of the Securities will become due and payable
immediately without further action or notice, and (ii) in the case of an Event
of Default which relates to certain payment defaults, acceleration or the
exercise of certain enforcement rights with respect to certain Indebtedness,
any acceleration of the Securities will be automatically rescinded if any such
Indebtedness is repaid or if the default relating to such Indebtedness is cured
or waived and if the holders thereof have accelerated such Indebtedness then
such holders have rescinded their declaration of acceleration or if in certain
circumstances the proceedings or enforcement action with respect to the
Indebtedness that is the subject of such Event of Default is terminated or
rescinded. No Holder may pursue any remedy under the Indenture unless the
Trustee shall have failed to act after notice of an Event of Default and
written request by Holders of at least 25% in principal amount of the
Outstanding Securities, and the offer to the Trustee of indemnity reasonably
satisfactory to it; however, such provision does not affect the right to ▇▇▇
for enforcement of any overdue payment on a Security by the Holder thereof.
Subject to certain limitations, Holders of a majority in principal amount of
the Outstanding 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 default in payment of principal, premium or interest) if it
determines in good faith that, withholding the notice is in the interest of the
Holders. The Company is required to file annual reports with the Trustee as to
the absence or existence of defaults.
▇-▇
▇▇
▇▇. Defeasance. The Indenture contains provisions for defeasance
at any time of (i) the entire indebtedness of the Company on this Security and
(ii) certain restrictive covenants and the related Defaults and Events of
Default, upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Security.
13. Amendment, Modification and Waiver. The Indenture permits,
with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the Guarantor and
the rights of the Holders under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by or on behalf of the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent or waiver is
made upon this Security. Without the consent of any Holder, the Company, the
Guarantors and the Trustee may amend or supplement the Indenture or the
Securities to cure any ambiguity, defect or inconsistency and to make certain
other specified changes and other changes that do not materially adversely
affect the rights of any Holder.
14. Obligation Absolute and Unconditional. No reference herein to
the Indenture and no provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of (and premium, if any, on) and interest on this Security
at the times, place, and rate, and in the coin or currency, herein prescribed.
15. Registration and Transfer. As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Security
is registerable on the Security register of the Company, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained for such purpose in the City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
16. Form. The Securities shall be issued either in global form or
in definitive registered form, without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, the Securities are exchangeable for a
like aggregate principal amount of Securities of a different authorized
denomination, as requested by the Holder surrendering the same.
▇-▇
▇▇
▇▇. Taxes. No service charge shall be made for any registration
of transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
18. No Recourse Against Others. A director, officer,
incorporator, or stockholder of the Company or any Guarantor, as such, shall
not have any personal liability under this Security or the Indenture by reason
of his or its status as such director, officer, incorporator or stockholder.
Each Holder, by accepting this Security with the notation of Guarantee endorsed
hereon, waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of this Security with the notation
of Guarantee endorsed hereon.
19. Registered Owners. Prior to the time of due presentment of
this Security for registration of transfer, the Company, the Guarantors, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security is overdue, and neither the Company, the
Guarantors, the Trustee nor any agent shall be affected by notice to the
contrary.
20. Definitions. All terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
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 as a convenience to the
Holders thereof. No representation is made as to the accuracy of such numbers
as printed on the Securities and reliance may be placed only on the other
identifying information printed hereon.
22. Governing Law. This Security shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to applicable principles of conflicts of laws to the extent that the
application of the law of another jurisdiction would be required thereby.
23. Successor Corporation. When a successor corporation assumes
all the obligations of its predecessor under the Securities and the Indenture,
the predecessor corporation will be released from those obligations.
24. Trustee Dealings with Company and Guarantors. The Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company, the
Guarantors or their respective Subsidiaries or Affiliates with the same rights
it would have if it were not Trustee.
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The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to: National Energy Group, Inc., ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Attention: Secretary.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to:
________________________________________________________________________________
(Insert assignee's social security or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________ as agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Your Signature: ________________________________________________________________
(Sign exactly as your name appears on the other side of this
Security)
Date: __________________________________
Signature Guarantee: ____________________________________________
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FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.11 or Section 4.17 of the Indenture, check the
appropriate box:
Section 4.11 [ ] Section 4.17 [ ]
If you want to have only part of this Security purchased by the
Company pursuant to Section 4.11 or Section 4.17 of the Indenture, state the
amount in integral multiples of $1,000:
$________________
Date:_____________________
Signature:____________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature
Guarantee:______________________________________________________________________
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SCHEDULE OF EXCHANGES OF GLOBAL SECURITY FOR
DEFINITIVE SECURITY(3)
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
AMOUNT OF DECREASE PRINCIPAL AMOUNT OF SIGNATURE OF
IN PRINCIPAL AMOUNT OF INCREASE THIS GLOBAL SECURITY AUTHORIZED OFFICER
AMOUNT IN PRINCIPAL FOLLOWING SUCH OF TRUSTEE OR
OF THIS GLOBAL AMOUNT OF THIS DECREASE (OR SECURITIES
DATE OF EXCHANGE SECURITY GLOBAL SECURITY INCREASE) CUSTODIAN
---------------- ------------------- ------------------- --------------------- -------------------
__________________________________
(3) This should be included only if the Security is issued in global form.
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EXHIBIT A-1
FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE
Subject to the limitations and provisions set forth in the Indenture,
the Guarantors (as defined in the Indenture referred to in the Security upon
which this notation is endorsed and each hereinafter referred to as a
"Guarantor," which term includes any successor or additional Guarantor under
the Indenture) have, jointly and severally, unconditionally guaranteed (a) the
due and punctual payment of the principal of, premium, if any, and interest on
the Securities, and all other amounts payable under the Indenture and the
Securities by the Company whether at maturity, acceleration, redemption,
repurchase or otherwise, (b) the due and punctual payment of interest on the
overdue principal of, premium, if any, and interest on the Securities, to the
extent lawful, (c) the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee, all in accordance with the terms set
forth in the Indenture, and (d) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture unless otherwise indicated.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under the Indenture,
result in the obligations of such Guarantor under the Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. Each Guarantor that makes a payment or distribution under a
Guarantee shall be entitled to a contribution from each other Guarantor in a
pro rata amount based on the Adjusted Net Assets of each Guarantor.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantors shall have any personal liability under
the Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
Any Guarantor may be released from its Guarantee upon the terms and
subject to the conditions provided in the Indenture.
All terms used in this notation of Guarantee which are defined in the
Indenture referred to in this Security upon which this notation of Guarantee is
endorsed shall have the meanings assigned to them in such Indenture.
The Guarantee shall be binding upon each Guarantor and its successors
and assigns and shall inure to the benefit of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges herein conferred upon that party shall
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automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof and in the Indenture.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
NAME OF EACH GUARANTOR
Attest:___________________________ By:____________________________________
Secretary President
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the notation of the Guarantee of the 10 3/4% [Series C]
[Series D] Senior Notes due 2006 referred to in the within-mentioned Indenture.
Authenticated:
Dated:____________________________ Bank One, N.A.
Trustee
By:_____________________________________
Authorized Signatory
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR TRANSFER OF SENIOR NOTES
______________, 199__
Bank One, N.A.
c/o Bank One Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Operations
Re: National Energy Group, Inc.
10 3/4% Series C Senior Notes due 2006 (the "Securities")
Reference is hereby made to the Indenture dated as of August 21, 1997
(the "Indenture") between National Energy Group, Inc., and Bank One, N.A.
Capitalized terms used but not defined herein shall have the meanings given
them in the Indenture.
This certificate relates to $_______________ aggregate principal
amount of Securities which are held in*
[ ] book-entry
or
[ ] definitive form
in the name of ______________________________________________ (the
"Transferor"). The Transferor hereby requests that the Securities be
transferred to _____________________________________ (the "Transferee").
The Transferor hereby certifies that the Transferor is familiar with
the Indenture relating to the above-captioned Securities and further certifies
that*:
[ ] such Securities (constituting either a Definitive Security in the
amount indicated above that is being exchanged for a beneficial
interest in the Global Security pursuant to Section 2.06(d) of the
Indenture or a beneficial interest in the amount indicated above in
the Global Security that is being transferred pursuant to Section
2.06(e) of the Indenture) are being
______________________________
* Check applicable box.
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106
transferred to a Person that the Transferor reasonably believes is a
Qualified Institutional Buyer in accordance with Rule 144A under the
Securities Act; or
[ ] the Transferor has requested by written order that the Trustee
deliver to the Transferee in exchange for a beneficial interest in the
Global Security held by the Depositary a Definitive Security or
Securities in an aggregate principal amount equal to such beneficial
interest in the Global Security (or the portion thereof indicated
above) in accordance with Section 2.06(f) of the Indenture, and*
[ ] the Transferee is the Person designated by the
Depositary as being the beneficial owner of the
interest in the Global Security; or
[ ] the Transferor reasonably believes the
Transferee to be a Qualified Institutional Buyer; or
[ ] such transfer is being made in reliance on Rule
144 or Rule 904 or another exemption (specify:
______________________________________) from the
registration requirements of the Securities Act, and
an opinion of counsel accompanies this Certificate;
or
[ ] the Transferor has requested by written order that the Trustee
exchange or register the transfer of a Definitive Security or
Securities for a Definitive Security or Securities:
[ ] to a Person the Transferor reasonably believes to be a
Qualified Institutional Buyer; or
[ ] in reliance on Rule 144 or Rule 904 or another exemption
(specify: __________________________________) from the
registration requirements of the Securities Act, and an
opinion of counsel accompanies the Certificate.
In connection with such request, and in respect of such Securities,
the Transferee confirms that:
1. The Transferee understands that the Securities have not been
and may not be registered under the Securities Act, and are being sold to it in
a transaction that is exempt from the registration requirements of the
Securities Act.
2. The Transferee hereby represents that it is a corporation,
partnership or other entity or person having such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Securities, and the Transferee is (or any account
for which it is purchasing is) (check box, if applicable):
______________________________
* Check applicable box.
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107
[ ] an Institutional Accredited Investor or
[ ] a Qualified Institutional Buyer,
as such terms are defined in the Securities Act, able to bear the economic risk
of investment in the Securities.
3. The Transferee undertakes that it is acquiring the Securities
for its own account (or for accounts as to which the Transferee exercises sole
investment discretion and has authority to make, and does make, the statements
contained in this certificate) and not with a view to any distribution of the
Securities, subject, nevertheless, to the understanding that the disposition of
its property shall at all times be and remain within the Transferee's control.
4. The Transferee acknowledges that it understands that the
Securities will be issued either as (a) a Global Security** and the Transferee
will own a beneficial interest therein or (b) a Definitive Security under which
the Securities will be delivered to the Transferee in registered form only and,
in either case, the Security will bear a legend substantially to the following
effect:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED TO OR FOR THE ACCOUNT OR BENEFIT OF ANY PERSON
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) WHICH IS AN
INSTITUTION (AN "INSTITUTIONAL ACCREDITED INVESTOR"), (2) AGREES THAT
IT WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD AS COMPLIES WITH RULE 144 UNDER THE SECURITIES ACT) AFTER THE
LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS SECURITY AND THE LAST
DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THIS SECURITY (THE "RESALE RESTRICTION TERMINATION DATE") RESELL,
PLEDGE OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER,
(B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE RESALE
PROVISIONS OF RULE 144A UNDER THE
___________________________________
* Check applicable box.
** If book entry, each beneficial owner must be a Qualified Institutional
Buyer.
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108
SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A WRITTEN
CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY, (D)
PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
OF THE SECURITIES ACT, (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (G) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT IN EACH OF THE FOREGOING CASES TO ANY
REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE
PROPERTY OF SUCH ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHICH THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED
TRANSFEREE IS NOT A QUALIFIED INSTITUTIONAL BUYER, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING
RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE
RESTRICTION TERMINATION DATE.
and (c) such certificates will be reissued without the foregoing legend only in
the event of a disposition of the Securities in accordance with the provisions
of paragraph 5(c) or (d) below, or at the Transferee's request at such times as
the Transferee would be permitted to dispose of the Securities in accordance
with paragraph 5(d) below.
5. The Transferee agrees that in the event that at some future
time it wishes to dispose of any of the Securities, it will not do so unless:
(a) the Securities are sold to the Company or any
Subsidiary thereof;
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(b) the Securities are sold to an Institutional
Accredited Investor or Qualified Institutional Buyer, that, prior to such
transfer, furnishes to the Trustee a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Securities (the form of which letter can be obtained from such Trustee);
(c) the Securities are sold pursuant to Rule 144 under
the Securities Act; or
(d) the Securities are sold pursuant to an effective
registration statement under the Securities Act.
Very truly yours,
---------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
----------------------------------
Dated: , Title:
-------------------- ----- ---------------------------------
---------------------------------------
[Insert Name of Transferee]
By:
------------------------------------
Name:
----------------------------------
Dated: , Title:
-------------------- ----- ---------------------------------
cc: National Energy Group, Inc.
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EXHIBIT C
FORM OF LEGAL OPINION ON TRANSFER
___________, _____
(Date)
National Energy Group, Inc.
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
c/o Bank One Trust Company, N.A.
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Attention: Corporate Trust Operations
Re: National Energy Group, Inc.
10 3/4% Series C Senior Notes due 2006
Ladies and Gentlemen:
This opinion is being furnished to you in connection with the
sale by _____________ (the "Transferor") to _____________ (the "Transferee") of
$_______________ aggregate principal amount of 10 3/4% Series C Senior Notes
due 2006 of (the "Securities").
We have examined such documents and records as we have deemed
appropriate. In our examination of the foregoing, we have assumed the
authenticity of all documents, the genuineness of all signatures and the due
authorization, execution and delivery of the aforementioned by each of the
parties thereto. We have further assumed the accuracy of the representations
of the Transferee contained in the Certificate Delivered Upon Exchange or
Transfer of Senior Notes executed and delivered by the Transferee and the
Transferor in connection with the sale of the Securities. We have also assumed
that the sale of the Securities to the Transferor was exempt from the
registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "Securities Act").
Based on the foregoing, we are of the opinion that the sale to
the Transferee of the Securities does not require registration of such
Securities under the Securities Act and is authorized and permitted under the
terms of the Indenture.
Very truly yours,
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EXHIBIT D
OFFICERS' CERTIFICATE OF NONDEFAULT
NATIONAL ENERGY GROUP, INC.
This Officers' Certificate is provided pursuant to Section
4.03(a) of the Indenture dated as of August 21, 1997 between National Energy
Group, Inc. (the "Company") and Bank One, N.A., as Trustee (the "Indenture").
A review of the activities of the Company and the Subsidiaries
during the preceding fiscal year ending [ , ], has been
made under the supervision of the Officers signing below with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under the Indenture. In addition, each such Officer signing this
certificate states that, to the best of such Officer's knowledge, the Company
and each Guarantor has kept, observed, performed and fulfilled each and every
covenant contained in the Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of the Indenture.
This Officers' Certificate is intended to comply with TIA Section 314(a)(4).
Additionally, each Officer signing below has read each
covenant or condition set forth in the Indenture and has made such examination
or investigation as is necessary, in the opinion of each such Officer, to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with, which examination or investigation was
conducted in the course of the Officers' routine operational management of the
Company. In the opinion of each such Officer, each such covenant or condition
has been complied with.
EXECUTED THIS __________ day of ______________________, _____.
NATIONAL ENERGY GROUP, INC.,
a Delaware corporation
*By:___________________________________
By:___________________________________
* This certificate must be signed by the principal executive, financial or
accounting Officer (as well as one other Officer).
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EXHIBIT E
TRANSFEREE LETTER OF REPRESENTATION
National Energy Group, Inc.
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▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Bank One, N.A.
c/o Bank One Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Operations
Ladies and Gentlemen:
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and unless
so registered, may not be sold except as permitted in the following sentence.
We agree on our own behalf and on behalf of any investor account for which we
are purchasing Securities to offer, sell or otherwise transfer such Securities
prior to the date which is two years after the later of the date of original
issue and the last date on which the Company or any affiliate or the Company
was the owner of such Securities (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the issuer of such Securities, (b)
for so long as the Securities are eligible for resale pursuant to Rule 144A
under the Securities Act, to a person we reasonably believe is a Qualified
Institutional Buyer under Rule 144A that purchases for its own account or for
the account of a Qualified Institutional Buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, (c) to an "Accredited
Investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) which is an institution (an "Institutional Accredited Investor") that is
purchasing for his own account or for the account of such an Institutional
Accredited Investor, (d) pursuant to the resale limitations provided by Rule
144 under the Securities Act (if available), (e) pursuant to a registration
statement which has been declared effective under the Securities Act, (f)
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 of the Securities Act, or (g) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or
accounts be at all times within our or their control and to compliance with any
applicable state securities law. The foregoing restrictions on sale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (c)
above prior to the Resale Restriction Termination Date, the transferor
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shall deliver a letter from the transferee substantially in the form of this
letter to the Company and the Trustee which shall provide, among other things,
that the transferee is an Institutional Accredited Investor and that it is
acquiring such Securities for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Company
and the Trustee reserve the right prior to any offer, sale or other transfer
prior to the Resale Restriction Termination Date of the Securities pursuant to
clauses (d), (e), (f) or (g) above to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the Company
and the Trustee.
2. We are an Institutional Accredited Investor or, if the
transfer is of a beneficial interest in the Global Security, a "qualified
institutional buyer" in accordance with Rule 144A under the Securities Act, in
either case purchasing for our own account or for the account of such an
Institutional Accredited Investor as to each of which we exercise sole
investment discretion and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Securities, and we and any accounts
for which we are acting are each able to bear the economic risk of our or its
investments for an indefinite period.
3. All of you are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
--------------------------------------------
(Name of Purchaser)
By:
-----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
-------------------------------------
▇-▇
▇▇▇
▇▇▇▇ transfer, the Securities should be registered in the name of the new
beneficial owner as follows:
Name: __________________________________________________________
Address: ____________________________________________________
____________________________________________________
____________________________________________________
Taxpayer ID Number: ____________________________________________
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