1
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EXHIBIT 4.1
QUEEN SAND RESOURCES, INC.
(a Delaware corporation)
as Issuer
AND
THE SUBSIDIARY GUARANTORS
PARTIES HERETO
TO
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
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INDENTURE
Dated as of July 1, 1998
-----------------------------------
$125,000,000
Series A and Series B
12 1/2
% Senior Notes due 2008
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2
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of June 15, 1998
Trust Indenture Indenture
Act Section Section
---------------- ---------
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
3
Trust Indenture Indenture
Act Section Section
---------------- ---------
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
4
TABLE OF CONTENTS
Page
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 104. Acts of Holders; Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 105. Notices, Etc., to Trustee, Company and Guarantors. . . . . . . . . . . . . . . . . . . . . 27
SECTION 106. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 107. Conflict with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 108. Effect of Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 110. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 111. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 112. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 114. No Personal Liability of Partners, Stockholders, Officers, Directors. . . . . . . . . . . . 29
ARTICLE TWO
Note Forms
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE THREE
The Notes
SECTION 301. Title and Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 303. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 304. Temporary Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 305. Registration, Registration of Transfer and Exchange. . . . . . . . . . . . . . . . . . . . 32
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes. . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 307. Payment of Interest; Interest Rights Preserved. . . . . . . . . . . . . . . . . . . . . . 41
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 310. Computation of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 402. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE FIVE
Remedies
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 502. Acceleration of Maturity; Rescission and Annulment. . . . . . . . . . . . . . . . . . . . 46
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 505. Trustee May Enforce Claims Without Possession of Notes. . . . . . . . . . . . . . . . . . . 47
SECTION 506. Application of Money Collected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 515. Waiver of Usury, Stay or Extension Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 604. Not Responsible for Recitals or Issuance of Notes. . . . . . . . . . . . . . . . . . . . . 53
SECTION 605. May Hold Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 610. Resignation and Removal; Appointment of Successor. . . . . . . . . . . . . . . . . . . . . 54
SECTION 611. Acceptance of Appointment by Successor. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 613. Preferential Collection of Claims Against Company. . . . . . . . . . . . . . . . . . . . . 56
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 702. Preservation of Information; Communications to Holders. . . . . . . . . . . . . . . . . . 57
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Limitation on Merger, Sale or Consolidation. . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 802. When a Subsidiary Guarantor May Merge or
Transfer Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders. . . . . . . . . . . . . . . . . . . . 59
SECTION 902. Supplemental Indentures with Consent of Holders. . . . . . . . . . . . . . . . . . . . . . 59
SECTION 903. Execution of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 906. Reference in Notes to Supplemental Indentures. . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest. . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1003. Money for Note Payments to be Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1004. Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1005. Maintenance of Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1006. Payment of Taxes and Other Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1007. Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1008. Limitation on Incurrence of Additional Indebtedness. . . . . . . . . . . . . . . . . . . . 64
SECTION 1009. Limitation on Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 1010. Limitations on Distributions from Restricted Subsidiaries. . . . . . . . . . . . . . . . . 68
SECTION 1011. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1012. Limitation on Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1013. Limitation on Asset Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1014. Limitation on Issuances and Sales of Capital Stock of Restricted Subsidiaries. . . . . . . 73
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SECTION 1015. Repurchase of Notes at the Option of the Holder Upon a Change of Control. . . . . . . . . . 73
SECTION 1016. Investment Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1017. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 1018. Restricted and Unrestricted Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 1019. Future Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1020. Statement by Officers as to Default; Compliance
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 1021. Waiver of Certain Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Right of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1102. Applicability of Article. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1103. Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 1104. Selection by Trustee of Notes to Be Redeemed. . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1105. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1106. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 1107. Notes Payable on Redemption Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 1108. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . 81
SECTION 1202. Defeasance and Discharge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 1203. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 1204. Conditions to Defeasance or Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 82
SECTION 1205. Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous
Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 1206. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE THIRTEEN
Subsidiary Guarantees
SECTION 1301. Subsidiary Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 1302. Execution and Delivery of Subsidiary Guarantees. . . . . . . . . . . . . . . . . . . . . . 87
SECTION 1309. Application of Certain Terms and Provisions to the Subsidiary Guarantors. . . . . . . . . . 89
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Annex A FORM OF NOTE
Annex B FORM OF SUBSIDIARY GUARANTEE
Annex C FORM OF REGULATION S CERTIFICATE FOR HOLDER
Annex D SCHEDULE OF AFFILIATE AGREEMENTS
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9
INDENTURE, dated as of July 1, 1998, among Queen Sand Resources, Inc.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at ▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇), the
Company's existing and certain future now or hereafter party hereto
Subsidiaries (the "Subsidiary Guarantors") and ▇▇▇▇▇▇ Trust and Savings Bank, a
banking corporation duly organized and existing under the laws of the State of
Illinois, as Trustee (herein called the "Trustee").
Each party agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Company's 12 1/2%
Series A Senior Notes due 2008 and the 12 1/2% Series B Senior Notes due 2008
to be exchanged for the 12 1/2% Series A Senior Notes due 2008 of the Company
in accordance with the terms hereof:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP.
(4) unless otherwise specifically set forth herein, all
calculations or determinations of a Person shall be performed or made on a
consolidated basis in accordance with GAAP; and
(5) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"12% Bonds" means the Series A Deutschemark denominated (DEM) 12%
notes issued by the Company and being due and payable on July 15, 2000, and any
renewals, extensions or replacements (but not increases in principal amount)
thereof.
10
"40-day restricted period" has the meaning set forth in Section 201.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Assets" means (i) any Property (other than cash, Permitted
Short-Term Investments or securities) used in the Oil and Gas Business or any
business ancillary thereto, (ii) Investments in any other Person engaged in the
Oil and Gas Business or any business ancillary thereto (including the
acquisition from third parties of Capital Stock of such Person) made in
compliance with Section 1009 and as a result of which such other Person becomes
a Restricted Subsidiary in compliance with Section 1018, (iii) the acquisition
from third parties of Capital Stock of a Restricted Subsidiary, (iv) the costs
of acquiring, exploiting, developing and exploring in respect of oil and gas
properties or (v) Permitted Business Investments.
"Adjusted Consolidated Net Tangible Assets" means (without
duplication), as of the date of determination, the remainder of: (i) the sum of
(a) discounted future net revenues from proved oil and gas reserves of the
Company and its Restricted Subsidiaries calculated in accordance with
Commission guidelines before any state, federal or foreign income taxes, as
estimated by the Company and confirmed by a nationally recognized firm of
independent petroleum engineers in a reserve report prepared as of the end of
the Company's most recently completed fiscal year for which audited financial
statements are available, as increased by, as of the date of determination, the
estimated discounted future net revenues from (1) estimated proved oil and gas
reserves acquired since such year-end, which reserves were not reflected in
such year-end reserve report, and (2) estimated oil and gas reserves
attributable to upward revisions of estimates of proved oil and gas reserves
since such year-end due to exploration, development or exploitation activities,
in each case calculated in accordance with SEC guidelines (utilizing the prices
utilized in such year-end reserve report), and decreased by, as of the date of
determination, the estimated discounted future net revenues from (3) estimated
proved oil and gas reserves produced or disposed of since such year-end and (4)
estimated oil and gas reserves attributable to downward revisions of estimates
of proved oil and gas reserves since such year-end due to changes in geological
conditions or other factors which would, in accordance with standard industry
practice, cause such revisions, in each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in such year-end reserve report);
provided that, in the case of each of the determinations made pursuant to
clauses (1) through (4), such increases and decreases shall be as estimated by
the Company's petroleum engineers, unless there is a Material Change as a
result of such acquisitions, dispositions or revisions, in which event the
discounted future net revenues utilized for purposes of this clause (i)(a)
shall be confirmed in writing by a nationally recognized firm of independent
petroleum engineers, (b) 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 attributable, based on the Company's books and
records as of a date no earlier than the date of the Company's latest annual or
quarterly financial statements, (c) the Net Working Capital on a date no
earlier than the date of the Company's latest annual or quarterly financial
statements and (d) the greater of (1) the net book value on a date no earlier
than the date of the Company's latest annual or quarterly financial statements
and (2) the appraised value, as estimated by independent appraisers, of other
tangible assets (including, without duplication,
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Investments in unconsolidated Restricted Subsidiaries) of the Company and its
Restricted Subsidiaries, as of the date no earlier than the date of the
Company's latest audited financial statements, minus (ii) the sum of (a)
minority interests, (b) any net gas balancing liabilities of the Company and
its Restricted Subsidiaries reflected in the Company's latest audited financial
statements, (c) to the extent included in (i)(a) above, the discounted future
net revenues, calculated in accordance with Commission guidelines (utilizing
the prices utilized in the Company's year-end reserve report), 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 (determined, if applicable, using the schedules
specified with respect thereto) and (d) the discounted future net revenues,
calculated in accordance with Commission guidelines, attributable to reserves
subject to Dollar-Denominated Production Payments which, based on the estimates
of production and price assumptions included in determining the discounted
future net revenues specified in (i)(a) above, would be necessary to fully
satisfy the payment obligations of the Company and its Restricted Subsidiaries
with respect to Dollar-Denominated Production Payments (determined, if
applicable, using the schedules specified with respect thereto).
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the amount by which the fair value of the Property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guaranty, of such Subsidiary Guarantor at such date.
"Affiliate" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person or (ii)
which beneficially owns or holds directly or indirectly 10% or more of the
Voting Stock of such specified Person or of any Subsidiary of such specified
Person. For the purposes of this definition, "control," when used with respect
to any specified Person, means the power to direct the management and policies
of such Person directly or indirectly, whether through the ownership of Voting
Stock, by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (collectively, "dispositions," and
including, without limitation, dispositions pursuant to any consolidation or
merger) by such Person or any of its Restricted Subsidiaries in any single
transaction or series of transactions of (i) shares of Capital Stock or other
ownership interests of another Person (including Capital Stock of Restricted
Subsidiaries and Unrestricted Subsidiaries) or (ii) any other Property of such
Person or any of its Restricted Subsidiaries; provided, however, that the term
"Asset Sale" shall not include: (a) the disposition of Permitted Short-Term
Investments, inventory, accounts receivable or other Property (excluding the
disposition of oil and gas in place and other interests in real property unless
made in connection with a Permitted Business Investment) in the ordinary course
of business; (b) the disposition of Property received in settlement of debts
owing to the Company or any Restricted Subsidiary as a result of foreclosure,
perfection or enforcement of any Lien or debt, which debts were owing
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12
to the Company or any Restricted Subsidiary in the ordinary course of business
of the Company or such Restricted Subsidiary; (c) any disposition that
constitutes a Restricted Payment made in compliance with Section 1009; (d) when
used with respect to the Company, any disposition of all or substantially all
of the Property of the Company permitted pursuant to Section 801; (e) the
disposition of any Property by the Company or a Restricted Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary; (f) the disposition of any
asset with a Fair Market Value of less than $5.0 million; or (g) any Production
Payment and Reserve Sale created, incurred, issued, assumed or guaranteed in
connection with the financing of, and within 90 days after the acquisition of,
the Property that is subject thereto.
"Assigned Restricted Subsidiary Indebtedness" means Indebtedness of a
Restricted Subsidiary to the Company that the Company has assigned to the
lenders under any Senior Credit Facility, as collateral securing Indebtedness
of the Company under such Senior Credit Facility.
"Attributable Indebtedness" means the total net amount of rent
required to be paid during the remaining primary term of any particular lease
under which any person is at the time liable, discounted at the rate per annum
equal to the weighted average interest rate borne by the Notes.
"Average Life" means, with respect to any Indebtedness, at any date of
determination, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years (and any portion thereof) from the date of
determination to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund or mandatory
redemption payment requirements) of such Indebtedness multiplied by (b) the
amount of each such principal payment by (ii) the sum of all such principal
payments.
"Bankruptcy Code" means 11 U.S.C. Section 101 et seq.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the
definition of Change of Control and Affiliate has the meaning attributed to it
in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue
Date), whether or not applicable.
"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 authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
or Chicago, Illinois are authorized or obligated by law or executive order to
close.
"Capital Lease Obligation" means any obligation which is required to
be classified and accounted for as a capital lease obligation in accordance
with GAAP, and the amount of Indebtedness represented by such obligation shall
be the capitalized amount of such obligation determined in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment
date of rent or any other amount due in respect of such obligation. For
purposes of Section 1011, a Capital Lease Obligation shall be deemed to be
secured by a Lien on the Property being leased.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to subscribe for or to acquire an equity
interest in such Person; provided, however, that "Capital Stock" shall not
include Redeemable Stock.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $500 million and a ▇▇▇▇▇ Bank
Watch Rating of "B" or better, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clauses (ii) and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from ▇▇▇▇▇'▇ or S&P and, in each case, maturing
within six months after the date of acquisition.
"CEDEL" has the meaning set forth in Section 201.
"Change of Control" has the meaning specified in Section 1015.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Company" shall mean such successor Person.
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14
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"consolidated" means, with respect to the Company, the consolidated
accounts of its Subsidiaries with those of the Company, all in accordance with
GAAP; provided that "consolidated" will not include consolidation of the
accounts of any Unrestricted Subsidiary with the accounts of the Company.
"Consolidated Interest Coverage Ratio" means, as of the date of the
transaction giving rise to the need to calculate the Consolidated Interest
Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate amount
of EBITDA of the Company and its consolidated Restricted Subsidiaries for the
four full fiscal quarters immediately prior to the Transaction Date for which
financial statements are available to (ii) the aggregate Consolidated Interest
Expense of the Company and its Restricted Subsidiaries that is anticipated to
accrue during a period consisting of the fiscal quarter in which the
Transaction Date occurs and the three fiscal quarters immediately subsequent
thereto (based upon the pro forma amount and maturity of, and interest payments
in respect of, Indebtedness of the Company and its Restricted Subsidiaries
expected by the Company to be outstanding on the Transaction Date), assuming
for the purposes of this measurement the continuation of market interest rates
prevailing on the Transaction Date and base interest rates in respect of
floating interest rate obligations equal to the base interest rates on such
obligations in effect as of the Transaction Date; provided, that if the Company
or any of its Restricted Subsidiaries is a party to any Interest Rate
Protection Agreement which would have the effect of changing the interest rate
on any Indebtedness of the Company or any of its Restricted Subsidiaries for
such four quarter period (or a portion thereof), the resulting rate shall be
used for such four quarter period or portion thereof; provided further that any
Consolidated Interest Expense with respect to Indebtedness Incurred or retired
by the Company or any of its Restricted Subsidiaries during the fiscal quarter
in which the Transaction Date occurs shall be calculated as if such
Indebtedness was so Incurred or retired on the first day of the fiscal quarter
in which the Transaction Date occurs. In addition, if since the beginning of
the four full fiscal quarter period preceding the Transaction Date, (a) the
Company or any of its Restricted Subsidiaries shall have engaged in any Asset
Sale, EBITDA for such period shall be reduced by an amount equal to the EBITDA
(if positive), or increased by an amount equal to the EBITDA (if negative),
directly attributable to the assets which are the subject of such Asset Sale
for such period calculated on a pro forma basis as if such Asset Sale and any
related retirement of Indebtedness had occurred on the first day of such period
or (b) the Company or any of its Restricted Subsidiaries shall have acquired
any material assets, EBITDA shall be calculated on a pro forma basis as if such
asset acquisitions had occurred on the first day of such four fiscal quarter
period.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, (i) the sum of (a) the aggregate amount of
cash and noncash interest expense (including capitalized interest) of such
Person and its Restricted Subsidiaries for such period as
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15
determined on a consolidated basis in accordance with GAAP in respect of
Indebtedness (including, without limitation, (1) any amortization of debt
discount, (2) net costs associated with Interest Rate Protection Agreements
(including any amortization of discounts), (3) the interest portion of any
deferred payment obligation, (4) all accrued interest and (5) all commissions,
discounts, commitment fees, origination fees and other similar fees and charges
owed with respect to the Senior Credit Facilities and other Indebtedness) paid,
accrued or scheduled to be paid or accrued during such period; (b) Redeemable
Stock dividends of such Person (and of its Restricted Subsidiaries if paid to a
Person other than such Person or its Restricted Subsidiaries) declared and
payable other than in kind; (c) the portion of any rental obligation of such
Person or its Restricted Subsidiaries in respect of any Capital Lease
Obligation allocable to interest expense in accordance with GAAP; (d) the
portion of any rental obligation of such Person or its Restricted Subsidiaries
in respect of any Sale and Leaseback Transaction that is Indebtedness allocable
to interest expense (determined as if such obligation were treated as a Capital
Lease Obligation); and (e) to the extent any Indebtedness of any other Person
(other than Restricted Subsidiaries) is Guaranteed by such Person or any of its
Restricted Subsidiaries, the aggregate amount of interest paid, accrued or
scheduled to be paid or accrued by such other Person during such period
attributable to any such Indebtedness; less (ii) to the extent included in (i)
above, amortization or write-off of deferred financing costs of such Person and
its Restricted Subsidiaries during such period; in the case of both (i) and
(ii) above, after elimination of intercompany accounts among such Person and
its Restricted Subsidiaries and as determined in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided that there shall be excluded therefrom, without
duplication, (i) the amount of non-cash writedowns attributable to any period
ending on or before January 1, 1999 if in compliance with GAAP or Commission
guidelines, and plus or minus, as appropriate, foreign currency translation
adjustments, all determined on a consolidated basis; (ii) items classified as
extraordinary gains or losses net of tax (less all fees and expenses relating
thereto); (iii) any gain or loss, net of taxes, on the sale or other
disposition of assets (less all fees and expenses relating thereto and
including the Capital Stock of any other Person) (but in no event shall this
clause (iv) apply to the sale in the ordinary course of business of oil, gas or
other hydrocarbons produced or manufactured or other personal property other
than oil and gas in place); (v) the net income of any Subsidiary of such
specified Person to the extent the transfer to that Person of that income is
restricted by contract or otherwise, except for any cash dividends or cash
distributions actually paid by such Subsidiary to such Person during such
period; (vi) the net income (or loss) of any other Person in which such
specified Person or any of its Restricted Subsidiaries has an interest (which
interest does not cause the net income of such other Person to be consolidated
with the net income of such specified Person in accordance with GAAP or is an
interest in a consolidated Unrestricted Subsidiary), except to the extent of
the amount of cash dividends or other cash distributions actually paid to such
Person or its Restricted Subsidiaries by such other Person during such period;
(vii) the net income of any Person acquired by such specified Person or any of
its Restricted Subsidiaries in a pooling-of-interests transaction for any
period prior to the date of
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such acquisition; (viii) any gain or loss, net of taxes, realized on the
termination of any employee pension benefit plan; (ix) any adjustments of a
deferred tax liability or asset pursuant to Statement of Financial Accounting
Standards No. 109 which result from changes in enacted tax laws or rates; and
(x) the cumulative effect of a change in accounting principles.
"Consolidated Net Tangible Assets" means (without duplication), as of
the date of determination, the sum of (a) discounted future net revenues from
proved oil and gas reserves of the Company and its Restricted Subsidiaries
calculated in accordance with Commission guidelines before any state, federal
or foreign income taxes, as estimated by the Company and confirmed by a
nationally recognized firm of independent petroleum engineers in a reserve
report prepared as of the end of the Company's most recently completed fiscal
year for which audited financial statements are available, as increased by, as
of the date of determination, the estimated discounted future net revenues from
(1) estimated proved oil and gas reserves acquired since such year-end, which
reserves were not reflected in such year-end reserve report, and (2) estimated
oil and gas reserves attributable to upward revisions of estimates of proved
oil and gas reserves since such year-end due to exploration, development or
exploitation activities, in each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in such year-end reserve report), and
decreased by, as of the date of determination, the estimated discounted future
net revenues from (3) estimated proved oil and gas reserves produced or
disposed of since such year-end and (4) estimated oil and gas reserves
attributable to downward revisions of estimates of proved oil and gas reserves
since such year-end due to changes in geological conditions or other factors
which would, in accordance with standard industry practice, cause such
revisions, in each case calculated in accordance with Commission guidelines
(utilizing the prices utilized in such year-end reserve report); provided that,
in the case of each of the determinations made pursuant to clauses (1) through
(4), such increases and decreases shall be as estimated by the Company's
petroleum engineers, unless there is a Material Change as a result of such
acquisitions, dispositions or revisions, in which event the discounted future
net revenues utilized for purposes of this clause (i)(a) shall be confirmed in
writing by a nationally recognized firm of independent petroleum engineers, (b)
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 attributable, based on the Company's books and records as of a date no
earlier than the date of the Company's latest annual or quarterly financial
statements, (c) the Net Working Capital on a date no earlier than the date of
the Company's latest annual or quarterly financial statements and (d) the
greater of (1) the net book value on a date no earlier than the date of the
Company's latest annual or quarterly financial statements and (2) the appraised
value, as estimated by independent appraisers, of other tangible assets
(including, without duplication, Investments in unconsolidated Restricted
Subsidiaries) of the Company and its Restricted Subsidiaries, as of the date no
earlier than the date of the Company's latest audited financial statements.
"Consolidated Net Worth" of any Person means the stockholders' equity
of such Person and its Restricted Subsidiaries, as determined on a consolidated
basis in accordance with GAAP, less (to the extent included in stockholders'
equity) amounts attributable to Redeemable Stock of such Person or its
Restricted Subsidiaries.
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17
"Corporate Trust Office" means the principal office of the Trustee at
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (telecopier no. (▇▇▇) ▇▇▇-▇▇▇▇),
attention: Corporate Trust Department at which at any particular time its
corporate trust business shall be administered.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Credit Agreement" means the Amended and Restated Credit Agreement,
dated as of April 17, 1998, by and among the Company, Queen Sand Resources,
Inc., a Nevada corporation, Bank of Montreal, Enron Capital & Trade Resources
Corp., Joint Energy Development Investments II Limited Partnership and each of
the lenders now or hereafter signatories thereto and Bank of Montreal, as agent
for such lenders, as the same may be amended, modified, extended, renewed,
refunded, replaced or refinanced from time to time.
"Default" has the meaning set forth in Section 602.
"Defaulted Interest" has the meaning specified in Section 307.
"Definitive Notes" means Notes that are in the form of Annex A hereof
that do not include the information called for by footnotes 1 and 7 thereof.
"Depositary" has the meaning set forth in Section 201.
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"EBITDA" means with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus (i) the sum of, to
the extent reflected in the consolidated income statement of such Person and
its Restricted Subsidiaries for such period from which Consolidated Net Income
is determined and deducted in the determination of such Consolidated Net
Income, without duplication, (a) income tax expense (but excluding income tax
expense relating to sales or other disposition of assets (including the Capital
Stock of any other Person) the gains and losses from which are excluded in the
determination of such Consolidated Net Income), (b) Consolidated Interest
Expense, (c) depreciation and depletion expense, (d) amortization expense, (e)
exploration expense, and (f) any other noncash charges including, without
limitation, unrealized foreign exchange losses; less (ii) the sum of, to the
extent reflected in the consolidated income statement of such Person and its
Restricted Subsidiaries for such period from which Consolidated Net Income is
determined and added in the determination of such Consolidated Net Income,
without duplication (a) income tax recovery (but excluding income tax recovery
relating to sales or other dispositions of assets (excluding the Capital Stock
of any other Person) the gains and losses from which are included in the
determination of such Consolidated Net Income) and (b) unrealized foreign
exchange gains.
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"ECT Credit Agreement" means that certain Subordinated Revolving
Credit Loan Agreement, dated as of December 29, 1997, by and among Queen Sand
Resources, Inc., a Nevada corporation, and Enron Capital & Trade Resources
Corp., as agent for itself and the other lenders now or hereafter party
thereto, as the same may be amended, modified, extended, renewed, refunded,
replaced or refinanced from time to time.
"Equity Offering" means any public or private sale of Capital Stock
(including options, warrants or rights with respect thereto) of the Company.
"Equity Interest" of any Person means any shares, interests,
participations or other equivalents (however designated) in such Person's
equity, and shall in any event include any Capital Stock issued by, or
partnership or membership interests in, such Person.
"Euroclear" has the meaning set forth in Section 201.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" refers to the Securities Exchange Act of 1934 as it may
be amended and any successor act thereto.
"Exchange Notes" means the 12 1/2% Series B Senior Notes due 2008, as
supplemented from time to time in accordance with the terms hereof, to be
issued pursuant to this Indenture in connection with the offer to exchange the
Exchange Notes for the Initial Notes that may be made by the Company pursuant
to the Registration Rights Agreement.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchanged Properties" means properties used or useful in the Oil and
Gas Business received by the Company or a Restricted Subsidiary in trade or as
a portion of the total consideration for other such properties.
"Fair Market Value" means, with respect to any assets to be
transferred pursuant to any Asset Sale or Sale and Leaseback Transaction or any
non-cash consideration or property transferred or received by any Person, the
fair market value of such consideration or property as determined in good faith
by the Board of Directors of the Company as evidenced by a certified resolution
delivered to the Trustee; provided that if such resolution indicates that such
fair market value is equal to or in excess of $5.0 million and such transaction
involves any Affiliate of the Company (other than a Restricted Subsidiary),
such resolution shall be accompanied by the written opinion of an independent,
nationally recognized investment banking firm or appraisal firm, in either case
specializing or having a specialty in the type and subject matter of the
transaction (or series of transactions) at issue, to the effect that such
consideration or property is fair, from a financial point of view, to such
Person.
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"GAAP" means United States generally accepted accounting principles as
in effect on the date of the Indenture, unless stated otherwise.
"Global Note" means a Note (including a Rule 144A Global Note or a
Regulation S Global Note) that contains the information referred to in
footnotes 1 and 7 to the form of Note as set forth in Annex A hereof.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, and including, without limitation,
any Lien on the assets of such Person securing obligations to pay Indebtedness
of the primary obligor and any obligation of such Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
or to purchase (or to advance or supply funds for the purchase or payment of)
any security for the payment of such Indebtedness, (ii) to purchase Property,
securities or services for the purpose of assuring the holder of such
Indebtedness of the payment of such Indebtedness, or (iii) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness (and "Guaranteed", "Guaranteeing" and "Guarantor" shall have
meanings correlative to the foregoing); provided, however, that a Guarantee by
any Person shall not include (a) endorsements by such Person for collection or
deposit, in either case, in the ordinary course of business or (b) a
contractual commitment by one Person to invest in another Person for so long as
such Investment is reasonably expected to constitute a Permitted Investment
under clause (ii) of the definition of Permitted Investments.
"Holder" means a Person in whose name a Note is registered in the
Securities Register.
"IAI Notes" means Notes sold to Institutional Accredited Investors.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or obligation on the balance sheet of such Person (and
"Incurrence", "Incurred", "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that a change in GAAP that
results in an obligation of such Person that exists at such time, and is not
theretofore classified as Indebtedness, becoming Indebtedness shall not be
deemed an Incurrence of such Indebtedness. For purposes of this definition,
Indebtedness of the Company or a Restricted Subsidiary held by a Wholly Owned
Subsidiary shall be deemed to be Incurred by the Company or such Restricted
Subsidiary in the event such Wholly Owned Subsidiary ceases to be a Wholly
Owned Subsidiary or in the event such Indebtedness is transferred to a Person
other than the Company or a Wholly Owned Subsidiary. For purposes of this
definition, any non-interest bearing or other discount Indebtedness shall be
deemed to have been incurred only on the date of original issue thereof.
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"Indebtedness" means at any time (without duplication), with respect
to any Person, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any Obligation of such Person for
borrowed money, (ii) any Obligation of such Person evidenced by bonds,
debentures, notes, Guarantees or other similar instruments, including, without
limitation, any such Obligations Incurred in connection with the acquisition of
Property, assets or businesses, (iii) any reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (iv) any Obligation of such
Person issued or assumed as the deferred purchase price of Property or services
(other than Trade Accounts Payable and other accrued current liabilities
incurred in the ordinary course of business), (v) any Capital Lease Obligation
of such Person, (vi) the maximum fixed redemption or repurchase price of
Redeemable Stock of such Person at the time of determination, (vii) any payment
obligation of such Person under Interest Rate Protection Agreements or Oil and
Gas Hedging Contracts at the time of determination, (viii) any obligation to
pay rent or other payment amounts of such Person with respect to any Sale and
Leaseback Transaction to which such Person is a party and (ix) any obligation
of the type referred to in clauses (i) through (viii) of this paragraph of
another Person and all dividends of another Person the payment of which, in
either case, such Person has Guaranteed or is responsible or liable, directly
or indirectly, as obligor, Guarantor or otherwise; provided that Indebtedness
shall not include Production Payments and Reserve Sales. For purposes of this
definition, the maximum fixed repurchase price of any Redeemable Stock that
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Redeemable Stock as if such Redeemable Stock were repurchased
on any date on which Indebtedness shall be required to be determined pursuant
to the terms of this Indenture; provided, however, that if such Redeemable
Stock is not then permitted to be repurchased, the repurchase price shall be
the book value of such Redeemable Stock. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional Obligations as described above and the maximum liability at such
date in respect of any contingent Obligations described above.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Independent Investment Banker" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Securities Inc.
and its successor or, if such firm is unwilling or unable to select the
applicable Comparable Treasury Issue, an independent investment banking
institution of national standing appointed by the Trustee.
"Initial Notes" means the 12 1/2% Series A Senior Notes due 2008, as
supplemented from time to time in accordance with the terms hereof, issued
under this Indenture that contain the information referred to in footnotes 1,
5, 6 and 8 to the form of Note as set forth in Annex A hereof.
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"Initial Purchasers" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Securities Inc., CIBC
▇▇▇▇▇▇▇▇▇▇▇ Corp. and Societe Generale Securities Corp. (each an "Initial
Purchaser").
"Initial Subsidiary Guarantors" means Queen Sand Resources, Inc., a
Nevada corporation, Northland Operating Co., a Nevada corporation, and Corrida
Resources, Inc., a Nevada corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act who are not also QIBs.
"Interest Payment Date" means each January 1 and July 1, commencing
January 1, 1999.
"Interest Rate Protection Agreement" means, with respect to any
Person, any interest rate swap agreement, forward rate agreement, interest rate
cap or collar agreement or other financial agreement or arrangement entered
into for the purpose of limiting or managing interest rate risks, to or under
which such Person is a party or otherwise obligated.
"Investment" means, with respect to any Person (i) any amount paid by
such Person, directly or indirectly, to any other Person for Capital Stock or
other Property of, or as a capital contribution to, any other Person or (ii)
any direct or indirect loan or advance to any other Person (other than accounts
receivable of such Person arising in the ordinary course of business);
provided, however, that Investments shall not include extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices and any increase in the equity ownership in any Person resulting from
retained earnings of such Person.
"Issue Date" means the date on which the Notes were first issued under
the Indenture.
"JEDI II" means Joint Energy Development Investments II Limited
Partnership.
"Lien" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien (statutory or other), charge, easement, encumbrance, preference,
priority or other security or similar agreement or preferential arrangement of
any kind or nature whatsoever on or with respect to such Property (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing). For
purposes of Section 1011, a Capital Lease Obligation shall be deemed to be
secured by a Lien on the Property being leased.
"Liquid Securities" means securities (i) of an issuer that is not an
Affiliate of the Company, (ii) that are publicly traded on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market and (iii)
as to which the Company is not subject to any restrictions on sale or transfer
(including any volume restrictions under Rule 144 under the Securities Act or
any other restrictions imposed by the Securities Act) or as to which a
registration statement under the Securities Act covering the resale thereof is
in effect for as long as the securities are held; provided, that securities
meeting the requirements of clauses (i), (ii)
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and (iii) above shall be treated as Liquid Securities from the date of receipt
thereof until and only until the earlier of (x) the date on which such
securities are sold or exchanged for cash or Permitted Short-Term Investments
and (y) 180 days following the date of receipt of such securities. If such
securities are not sold or exchanged for cash or Permitted Short-Term
Investments within 180 days of receipt thereof, for purposes of determining
whether the transaction pursuant to which the Company or a Restricted
Subsidiary received the securities was in compliance with Section 1013, such
securities shall be deemed not to have been Liquid Securities at any time.
"Liquidated Damages" shall have the meaning specified in the
Registration Rights Agreement.
"Material Change" means an increase or decrease (except to the extent
resulting from changes in prices) of more than 30% during a fiscal quarter in
the estimated discounted future net revenues from proved oil and gas reserves
of the Company and its Restricted Subsidiaries, calculated in accordance with
clause (i)(a) of the definition of Adjusted Consolidated Net Tangible Assets;
provided, however, that the following will be excluded from the calculation of
Material Change: (i) any acquisitions during the quarter of oil and gas
reserves with respect to which the Company's estimate of the discounted future
net revenues from proved oil and gas reserves has been confirmed by independent
petroleum engineers and (ii) any dispositions of Properties during such quarter
that were disposed of in compliance with Section 1013.
"Maturity", when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Net Available Cash" from an Asset Sale means cash proceeds received
therefrom (including (i) any cash proceeds received by way of deferred payment
of principal pursuant to a note or installment receivable or otherwise, but
only as and when received and (ii) the Fair Market Value of Liquid Securities
and Permitted Short-Term Investments, and excluding (i) any other consideration
received in the form of assumption by the acquiring Person of Indebtedness or
other obligations relating to such properties or assets and (ii) except to the
extent subsequently converted to cash, Liquid Securities or Permitted
Short-Term Investments within 240 days after such Asset Sale, consideration
constituting Exchanged Properties or consideration other than Permitted
Consideration), in each case net of (a) all legal, title and recording
expenses, commissions and other fees and expenses incurred, and all federal,
state, foreign and local taxes required to be paid or accrued as a liability
under GAAP as a consequence of such Asset Sale, (b) all payments (which
payments are made in a manner that results in the permanent reduction in the
balance of such Indebtedness and, if applicable, a permanent reduction in any
outstanding commitment for future incurrences of Indebtedness thereunder) made
on any Indebtedness (but specifically excluding Indebtedness of the Company and
its Restricted Subsidiaries assumed in connection with or in anticipation of
such Asset Sale) which is secured by any assets subject to
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such Asset Sale, in accordance with the terms of any Lien upon such assets, or
which must by its terms, or in order to obtain a necessary consent to such
Asset Sale or by applicable law, be repaid out of the proceeds from such Asset
Sale, (c) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Sale and (d) the deduction of appropriate amounts to be provided by the seller
as a reserve, in accordance with GAAP, against any liabilities associated with
the assets disposed of in such Asset Sale and retained by the Company or any
Restricted Subsidiary after such Asset Sale (to the extent such reserves are
not subsequently reversed within 365 days after such Asset Sale); provided,
however, that if any consideration for an Asset Sale (which would otherwise
constitute Net Available Cash) is required to be held in escrow pending
determination of whether a purchase price adjustment will be made, such
consideration (or any portion thereof) shall become Net Available Cash only at
such time as it is released to such Person or its Restricted Subsidiaries from
escrow; and provided, further, however, that any Exchanged Properties and any
consideration other than Permitted Consideration received in connection with an
Asset Sale which is subsequently converted to cash, Liquid Securities or
Permitted Short-Term Investments within 240 days after such Asset Sale shall be
deemed to be Net Available Cash at such time and shall thereafter be applied in
accordance with Section 1013.
"Net Working Capital" means (i) all current assets of the Company and
its Restricted Subsidiaries, less (ii) all current liabilities of the Company
and its Restricted Subsidiaries, except current liabilities included in
Indebtedness, in each case as set forth in financial statements of the Company
prepared in accordance with GAAP.
"Notes" means, collectively, the Initial Notes and, when and if issued
as provided in the Registration Rights Agreement, the Exchange Notes.
"Notes Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Obligation" means any principal, interest, premium, penalty, fee and
any other liability payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the offering memorandum, dated June 30,
1998, relating to the offering of the Notes.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officer's
Certificate given pursuant to Section 1020 shall be the principal executive,
financial or accounting officer of the Company.
"Oil and Gas Business" means the business of exploiting, exploring
for, developing, acquiring and producing hydrocarbons and other related energy
businesses.
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"Oil and Gas Hedging Contract" means, with respect to any Person, any
agreement or arrangement, or any combination thereof, financially tied to oil
and gas or other hydrocarbon prices, transportation or basis costs or
differentials, or similar factors, that is customary in the Oil and Gas
Business and is entered into for the purpose of limiting or managing risks
associated with fluctuations in such prices, costs, differentials or similar
factors.
"Oil and Gas Liens" means (i) Liens on any specific property or any
interest therein, construction thereon or improvement thereto to secure all or
any part of the costs incurred for surveying, exploration, drilling,
extraction, development, operation, production, construction, alteration,
repair or improvement of, in, under or on such property and the plugging and
abandonment of ▇▇▇▇▇ located thereon (it being understood that, in the case of
oil and gas producing properties, or any interest therein, costs incurred for
"development" shall include costs incurred for all facilities relating to such
properties or to projects, ventures or other arrangements of which such
properties form a part or which relate to such properties or interests); (ii)
Liens on an oil or gas producing property to secure obligations Incurred or
guarantees of obligations Incurred in connection with or necessarily incidental
to commitments for the purchase or sale of, or the transportation or
distribution of, the products derived from such property; (iii) Liens arising
under partnership agreements, oil and gas leases, overriding royalty
agreements, net profits agreements, production payment agreements, royalty
trust agreements, master limited partnership agreements, farm-out agreements,
division orders, contracts for the sale, purchase, exchange, transportation,
gathering or processing of oil, gas or other hydrocarbons, unitizations and
pooling designations, declarations, orders and agreements, development
agreements, operating agreements, production sales contracts, area of mutual
interest agreements, gas balancing or deferred production agreements,
injection, repressuring and recycling agreements, salt water or other disposal
agreements, seismic or geophysical permits or agreements, and other agreements
which are customary in the Oil and Gas Business, provided in all instances that
such Liens are limited to the assets that are the subject of the relevant
agreement; (iv) Liens arising in connection with Production Payments and
Reserve Sales; and (v) Liens on pipelines or pipeline facilities that arise by
operation of law.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Notes, means, as of the date
of determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Notes; provided, that if such Notes are to be redeemed,
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notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(iii) Notes which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect of
which there shall have been presented to the Trustee proof satisfactory to it
that such Notes are held by a bona fide purchaser in whose hands such Notes are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor upon the Notes shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes which the Trustee knows to be so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest (and Liquidated Damages, if any)
on any Notes on behalf of the Company.
"Permitted Business Investments" means Investments and expenditures
made in the ordinary course of, and of a nature that is or shall have become
customary in, the Oil and Gas Business as a means of actively engaging therein
through agreements, transactions, interests or arrangements which permit one to
share risks or costs, comply with regulatory requirements regarding local
ownership or satisfy other objectives customarily achieved through the conduct
of Oil and Gas Business jointly with third parties, including, without
limitation, (i) ownership interests in oil and gas properties or gathering,
transportation, processing, storage or related systems and (ii) Investments and
expenditures in the form of or pursuant to operating agreements, processing
agreements, farm-in agreements, farm-out agreements, development agreements,
area of mutual interest agreements, unitization agreements, pooling
arrangements, joint bidding agreements, service contracts, joint venture
agreements, partnership agreements (whether general or limited), subscription
agreements, stock purchase agreements and other similar agreements with third
parties (including Unrestricted Subsidiaries).
"Permitted Hedging Agreements" means (i) Oil and Gas Hedging Contracts
to the extent entered into to limit or manage risks incurred in the ordinary
course of business and (ii) Interest Rate Protection Agreements but only to the
extent that the stated aggregate notional amount thereunder does not exceed
100% of the aggregate principal amount of the Indebtedness of the Company or a
Restricted Subsidiary covered by such Interest Rate Protection Agreements at
the time such agreements were entered into.
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"Permitted Indebtedness" has the meaning set forth in Section 1008.
"Permitted Investments" means any and all of the following: (i)
Permitted Short-Term Investments; (ii) Investments in property, plant and
equipment used in the ordinary course of business and Permitted Business
Investments; (iii) Investments by any Restricted Subsidiary in the Company;
(iv) Investments by the Company or any Restricted Subsidiary in any Restricted
Subsidiary; (v) Investments by the Company or any Restricted Subsidiary in a
Person where that Person becomes a Restricted Subsidiary or transfers or
assigns all of its assets to the Company (including the acquisition from a
third party of the Capital Stock of a Restricted Subsidiary or any other
Person) if such Person or a Subsidiary of such Person will, as a result of the
making of such Investment and all other contemporaneous related transactions,
become a Restricted Subsidiary or be merged or consolidated with or transfer or
convey all or substantially all of its assets to the Company or a Restricted
Subsidiary; (vi) Investments in the form of securities received from Asset
Sales, provided, that such Asset Sales are made in compliance with Section
1013; (vii) Investments in negotiable instruments held for collection, lease,
utility and other similar deposits, and stock, obligations or other securities
received in settlement of debts (including, without limitation, under any
bankruptcy or other similar proceeding) owing to the Company or any of its
Restricted Subsidiaries as a result of foreclosure, perfection or enforcement
of any Liens or Indebtedness, in each of the foregoing cases in the ordinary
course of business of the Company or such Restricted Subsidiary; (viii)
Investments in the form of Permitted Hedging Agreements of the Company and its
Restricted Subsidiaries; and (ix) Investments pursuant to any agreement or
obligation of the Company or any of its Restricted Subsidiaries as in effect on
the Issue Date (other than Investments described in clauses (i) through (viii)
above).
"Permitted Lien" has the meaning set forth in Section 1011.
"Permitted Refinancing Indebtedness" means Indebtedness ("new
Indebtedness") Incurred in exchange for, or proceeds of which are used to
refinance, other Indebtedness ("old Indebtedness"), provided, however, that (i)
such new Indebtedness is in an aggregate principal amount not in excess of the
sum of (a) the aggregate principal amount then outstanding of the old
Indebtedness (or, if such old Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination), and
(b) an amount necessary to pay any fees and expenses, including premiums
related to such exchange or refinancing, (ii) such new Indebtedness has a
Stated Maturity no earlier than the Stated Maturity of the old Indebtedness,
(iii) such new Indebtedness has an Average Life to Stated Maturity at the time
such new Indebtedness is Incurred that is equal to or greater than the Average
Life to Stated Maturity of the old Indebtedness at such time and (iv) such new
Indebtedness shall only be permitted if (A) in the case of any refinancing or
refunding of Indebtedness that is pari passu with the Notes the refinancing or
refunding Indebtedness is made pari passu with the Notes or subordinated to the
Notes, (B) in the case of any refinancing or refunding of Indebtedness that is
subordinated to the Notes the refinancing or refunding of Indebtedness is made
subordinated to the Notes at least to the same extent as the Indebtedness being
refinanced or refunded was subordinated to the Notes
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and (C) in the case of the refinancing or refunding of Indebtedness that is
subordinated to the Notes, the refinancing or refunding Indebtedness by its
terms, or by the terms of any agreement or instrument pursuant to which such
Indebtedness is issued, (x) does not provide for payments of principal of such
Indebtedness at the stated maturity thereof or by way of a sinking fund
applicable thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company or such Restricted Subsidiary
(including any redemption, retirement or repurchase which is contingent upon
events or circumstances, but excluding any retirement required by virtue of
acceleration of such Indebtedness upon an event of default thereunder), in each
case prior to the final stated maturity of the Indebtedness being refinanced or
refunded and (y) does not permit redemption or other retirement (including
pursuant to an offer to purchase made by the Company or such Restricted
Subsidiary) of such Indebtedness at the option of the holder thereof prior to
the final stated maturity of the Indebtedness being refinanced or refunded,
other than a redemption or other retirement at the option of the holder of such
Indebtedness (including pursuant to an offer to purchase made by the Company or
such Restricted Subsidiary), which is conditioned upon the change of control of
the Company or such Restricted Subsidiary)
"Permitted Short-Term Investments" means (i) Investments in U.S.
Government Obligations maturing within one year of the date of acquisition
thereof, (ii) Investments in demand accounts, time deposit accounts,
certificates of deposit, bankers acceptances and money market deposits maturing
within one year of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America or
any State thereof or the District of Columbia that is a member of the Federal
Reserve System having capital, surplus and undivided profits aggregating in
excess of $500.0 million and whose long-term indebtedness is rated "A" (or
higher) according to Moody's, (iii) Investments in demand accounts, time
deposit accounts, certificates of deposit, bankers acceptances and money market
deposits maturing within one year of the date of acquisition thereof issued by
a Canadian bank to which the Bank Act (Canada) applies having capital, surplus
and undivided profits aggregating in excess of U.S. $500.0 million, (iv)
Investments in deposits available for withdrawal on demand with any commercial
bank that is organized under the laws of any country in which the Company or
any Restricted Subsidiary maintains an office or is engaged in the Oil and Gas
Business, provided that (a) all such deposits have been made in such accounts
in the ordinary course of business and (b) such deposits do not at any one time
exceed $20.0 million in the aggregate, (v) repurchase and reverse repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (i) entered into with a bank meeting the
qualifications described in either clause (ii) or (iii), (vi) Investments in
commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America or
any State thereof or the District of Columbia with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P and (vii) Investments in any money market
mutual fund having assets in excess of $250.0 million substantially all of
which consist of other obligations of the types described in clauses (i), (ii),
(v) and (vi) hereof.
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"Person" means any individual, corporation, partnership, joint
venture, limited liability company, unlimited liability company, trust, estate,
unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment
of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person; provided, however, that
"Preferred Stock" shall not include Redeemable Stock.
"Prepayment Offer" has the meaning set forth in Section 1013.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Principal Property" means any oil and gas properties and oil and gas
gathering assets or related group of such assets of the Company having a fair
market value in excess of $10.0 million.
"Production Payments and Reserve Sales" means the grant or transfer by
the Company or a Restricted Subsidiary to any Person of a royalty, overriding
royalty, net profits interest, production payment (whether volumetric or dollar
denominated), partnership or other interest in oil and gas properties, reserves
or the right to receive all or a portion of the production or the proceeds from
the sale of production attributable to such properties where the holder of such
interest has recourse solely to such production or proceeds of production,
subject to the obligation of the grantor or transferor to operate and maintain,
or cause the subject interests to be operated and maintained, in a reasonably
prudent manner or other customary standard or subject to the obligation of the
grantor or transferor to indemnify for environmental, title or other matters
customary in the Oil and Gas Business.
"pro forma" includes, with respect to an acquisition or the incurrence
of Indebtedness in connection therewith, all adjustments, permitted or required
to be included pursuant to Article 11 of Regulation S-X under the Exchange Act.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock and other
securities issued by any other Person (but excluding Capital Stock or other
securities issued by such first mentioned Person).
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"Purchase Date" means the settlement date specified by the Company in
a Prepayment Offer or Change of Control Offer, which shall be within three
business days of the expiration date specified in such offer.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
"Redeemable Stock" of any Person means any equity security of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including on the
happening of an event), is or could become required to be redeemed for cash or
other Property or is or could become redeemable for cash or other Property at
the option of the holder thereof, in whole or in part, on or prior to the first
anniversary of the Stated Maturity of the Notes; or is or could become
exchangeable at the option of the holder thereof for Indebtedness at any time
in whole or in part, on or prior to the first anniversary of the Stated
Maturity of the Notes; provided, however, that Redeemable Stock shall not
include the Series A Preferred Stock, the Series B Preferred Stock, the Series
C Preferred Stock or any security by virtue of the fact that it may be
exchanged or converted at the option of the holder for Capital Stock of the
Company having no preference as to dividends or liquidation over any other
Capital Stock of the Company.
"Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the registration rights
agreement made and entered into as of the Issue Date among the Company and the
Initial Purchasers.
"Regular Record Date" means each June 15 and July 15.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" has the meaning set forth in Section 305.
"Regulation S Notes" has the meaning set forth in Section 201.
"Regulation S Global Note" has the meaning set forth in Section 201.
"Regulation S Permanent Global Note" has the meaning set forth in
Section 201.
"Regulation S Temporary Global Note" has the meaning set forth in
Section 201.
"Restricted Payment" means (i) a dividend or other distribution
declared or paid on the Capital Stock or Redeemable Stock of the Company or to
the Company's stockholders (other than
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dividends, distributions or payments made solely in Capital Stock of the
Company or in options, warrants or other rights to purchase or acquire Capital
Stock or Redeemable Stock), or declared and paid to any Person other than the
Company or any of its Restricted Subsidiaries on the Capital Stock or
Redeemable Stock of any Restricted Subsidiary, (ii) a payment made by the
Company or any of its Restricted Subsidiaries (other than to the Company or any
Restricted Subsidiary) to purchase, redeem, acquire or retire any Capital Stock
or Redeemable Stock or any options, warrants or other rights to acquire such
Capital Stock or Redeemable Stock of the Company or of a Restricted Subsidiary,
(iii) a payment made by the Company or any of its Restricted Subsidiaries to
redeem, repurchase, defease or otherwise acquire or retire for value (including
pursuant to mandatory repurchase covenants), prior to any scheduled maturity,
scheduled sinking fund or scheduled mandatory redemption, any Subordinated
Indebtedness of the Company except (a) to the extent such Indebtedness may be
purchased out of Net Available Cash in compliance with Section 1013, (b) to the
extent such Indebtedness may be purchased out of the net cash proceeds of one
or more Equity Offerings as described in Section 1101, (c) out of Net Available
Cash and to the extent required by the indenture or other agreement or
instrument pursuant to which any other Indebtedness was issued, an offer to
purchase such Indebtedness upon a disposition of assets, (d) to the extent of
Excess Proceeds remaining after compliance with Section 1013, and to the extent
required by the indenture or other agreement or instrument pursuant to which
any Indebtedness was issued, an offer to purchase such Indebtedness upon a
disposition of assets, and (e) upon a "Change of Control" (even if such event
is not a Change of Control under the Indenture) to the extent required by the
indenture or other agreement or instrument pursuant to which any Indebtedness
was issued provided the Company is then in compliance with Section 1015, (iv)
an Investment (other than a Permitted Investment) by the Company or a
Restricted Subsidiary in any Person other than the Company or a Restricted
Subsidiary, or (v) the sale or issuance of Capital Stock of a Restricted
Subsidiary to a Person other than the Company or another Restricted Subsidiary
if the result thereof is that such Restricted Subsidiary shall cease to be a
Restricted Subsidiary, in which event the amount of such "Restricted Payment"
shall be the Fair Market Value of the remaining interest, if any, in such
former Restricted Subsidiary held by the Company and its other Restricted
Subsidiaries.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated an Unrestricted Subsidiary in the manner provided in
Section 1018.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Notes" has the meaning set forth in Section 201.
"Rule 144A Global Note" has the meaning set forth in Section 201.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means, with respect to any Person,
any direct or indirect arrangement (excluding, however, any such arrangement
between such Person and a
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Wholly Owned Restricted Subsidiary of such Person or between one or more Wholly
Owned Restricted Subsidiaries of such Person) pursuant to which Property is
sold or transferred by such Person or a Restricted Subsidiary of such Person
and is thereafter leased back from the purchaser or transferee thereof by such
Person or one of its Restricted Subsidiaries.
"Securities Act" refers to the Securities Act of 1933 as it may be
amended and any successor act thereto.
"Securities Register" and "Securities Registrar" have the respective
meaning specified in Section 305.
"Senior Credit Facilities" means collectively, one or more senior
credit facilities or commercial paper facilities with banks or other
institutional lenders (including, without limitation, the credit facility
pursuant to the Credit Agreement and the ECT Revolving Credit Agreement),
together with any guarantees, security and related documents, as all such
credit facilities and documents may be amended, supplemented, extended,
increased, refinanced or replaced from time to time.
"Significant Subsidiary" means, at any date of determination, any
Subsidiary of a Person that, together with its Subsidiaries, (i) for the most
recent fiscal year of such Person, accounted for more than 5% of the
consolidated revenues of such Person and its Subsidiaries or (ii) as of the end
of such fiscal year, was the owner of more than 5% of the consolidated assets
of such Person and its Subsidiaries.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any security or any
installment of principal thereof or interest thereon, means the date specified
in such security as the fixed date on which the principal of such security or
such installment of principal or interest is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such contingency has
occurred).
"Subordinated Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Notes or
the relevant Subsidiary Guarantor pursuant to a written agreement to that
effect.
"Subsidiary" of a Person means (i) another Person which is a
corporation a majority of whose Voting Stock is at the time, directly or
indirectly, owned or controlled by (a) the first Person, (b) the first Person
and one or more of its Subsidiaries or (c) one or more of the first Person's
Subsidiaries or (ii) another Person which is not a corporation (x) at least 50%
of the ownership interest of which and (y) the power to elect or direct the
election of a majority of the
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directors or other governing body of which are controlled by Persons referred
to in clause (a), (b) or (c) above.
"Subsidiary Guarantors" means (i) as of the Issue Date, the Initial
Subsidiary Guarantors, and (ii) thereafter, unless released from their
Subsidiary Guarantees as permitted by the Indenture, the Initial Subsidiary
Guarantors and any other Restricted Subsidiary that becomes a guarantor of the
Notes in compliance with the provisions of the Indenture and executes a
supplemental indenture agreeing to be bound by the terms of the Indenture.
"Subsidiary Guarantee" has the meaning set forth in Section 1301.
"Trade Accounts Payable" means accounts payable or other obligations
of the Company or any Restricted Subsidiary to trade creditors created or
assumed by the Company or such Restricted Subsidiary in the ordinary course of
business in connection with the obtaining of goods or services.
"Transaction Date" has the meaning set forth in the definition of
"Consolidated Interest Coverage Ratio."
"Transfer Restricted Notes" means Notes that bear or are required to
bear the legend set forth in Section 305(g)(i).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means (i) each Subsidiary of the Company
that the Company has designated pursuant to Section 1018 as an Unrestricted
Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian, with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder
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of such depository receipt; provided, however, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Volumetric Production Payments" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
to the extent all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company.
"Wholly Owned Subsidiary" means any Subsidiary of the Company to the
extent all of the Capital Stock or other ownership interests in such
Subsidiary, other than any directors' qualifying shares mandated by applicable
law, is owned directly or indirectly by the Company.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as it may reasonably request or as
may be required under the Trust Indenture Act. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to be given
by an officer of the Company, or an Opinion of Counsel, if to be given by
counsel, and shall comply with the requirements of the Trust Indenture Act and
any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
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(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company with respect to such
factual matters unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Date.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are received
by the Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient
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for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining
the Holders entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any action,
authorized or permitted to be given or taken by Holders. If not set by the
Company prior to the first solicitation of a Holder made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date, only the Holders on such date (or
their duly designated proxies) shall be entitled to give or take, or vote on,
the relevant action.
(d) The ownership of Notes shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Note.
SECTION 105. Notices, Etc., to Trustee, Company and Guarantors.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, by the Company or by any Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office in Person
or mailed by first class mail (registered or certified, return receipt
requested), telecopier (with original sent by overnight air courier) or
overnight air courier guaranteeing next day delivery, or
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(2) the Company or any Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and in Person or mailed by first class mail
(registered on certified, return receipt requested), telecopier (with original
sent by overnight air courier) or overnight air courier guaranteeing next day
delivery, to the Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, or by overnight air
courier guaranteeing next day delivery to each Holder affected by such event,
at his address as it appears in the Securities Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be part
of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
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SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the
Trustee shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Notes 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.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Notes, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date or Purchase
Date, or at the Stated Maturity, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity, as the case may be.
SECTION 114. No Personal Liability of Partners, Stockholders, Officers,
Directors.
No direct or indirect stockholder, employee, officer or director, as
such, past, present or future of the Company, the Subsidiaries or any successor
entity shall have any personal liability in connection with this Indenture or
the Notes solely by reason of his or its status as such stockholder, employee,
officer or director. Each Holder of Notes by accepting a Note waives and
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releases all such liability and further acknowledges such waiver and release
are part of the consideration for the issuance of the Notes.
ARTICLE TWO
Note Forms
SECTION 201. Forms Generally.
The Notes (including the Trustee's certificates of authentication) and
the Subsidiary Guarantees shall be in substantially the forms set forth in
Annex A and Annex B, respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Notes, as evidenced by their
execution of the Notes.
The Definitive Notes shall be printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted or required by the rules of any securities exchange on which
the Notes may be listed, all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
The Initial Notes are being offered and sold to (i) qualified
institutional buyers in reliance on Rule ▇▇▇▇ ("▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇"), (▇▇) a
limited number of Institutional Accredited Investors ("IAI Notes") and (iii) in
offshore transactions in reliance on Regulation S ("Regulation S Notes").
Rule 144A Notes initially will be represented by one or more Notes in
registered global form without interest coupons (collectively, the "Rule 144A
Global Note"). The Rule 144A Global Note will be deposited upon issuance with
the Trustee as custodian for The Depository Trust Company (the "Depositary"),
in Chicago, Illinois and registered in the name of the Depositary or its
nominee, in each case for credit to an account of a direct or indirect
participant in the Depositary.
IAI Notes will be represented by definitive certificates registered in
the name of the registered holder thereof.
Regulation S Notes initially will be represented by one or more
temporary Notes in registered global form without interest coupons
(collectively, the "Regulation S Temporary Global Note"). The Regulation S
Temporary Global Note will be deposited on behalf of the subscribers thereof
with a custodian for the Depositary. The Regulation S Temporary Global Note
will be registered in the name of a nominee of the Depositary for credit to the
subscribers' respective accounts at Euroclear System ("Euroclear") and Cedel
Bank, S.A. ("CEDEL"). Beneficial
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interests in the Regulation S Temporary Global Note may be held only through
Euroclear or CEDEL.
Within a reasonable period of time after the expiration of the "40-day
restricted period" (within the meaning of Rule 903(c)(3) of Regulation S under
the Securities Act) (the "40-day restricted period"), the Regulation S
Temporary Global Note will be exchanged for one or more permanent Notes in
registered global form without interest coupons (the "Regulation S Permanent
Global Notes" and, together with the Regulation S Temporary Global Note, the
"Regulation S Global Note") upon delivery to the Trustee of certification as
provided in Section 305(f) hereof. During the 40-day restricted period,
beneficial interests in the Regulation S Temporary Global Note may be held only
through Euroclear or CEDEL (as indirect participants in the Depositary), and,
pursuant to the Depositary's procedures, beneficial interests in the Regulation
S Temporary Global Note may not be transferred to a Person that takes delivery
thereof in the form of an interest in the Rule 144A Global Note or a Definitive
Note. After the 40-day restricted period, (i) beneficial interests in the
Regulation S Permanent Global Notes may be transferred to a Person that takes
delivery in the form of an interest in the Rule 144A Global Note and (ii)
beneficial interests in the Rule 144A Global Note may be transferred to a
Person that takes delivery in the form of an interest in the Regulation S
Permanent Global Notes, provided, that the certification requirements described
in Section 305(e) hereof are complied with.
The provisions of the "Operating Procedures of the Euroclear System"
and the "Terms and Conditions Governing Use of Euroclear" and the "General
Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall
be applicable to transfers of beneficial interests in the Regulation S Global
Note that are held by participants through Euroclear or Cedel Bank.
ARTICLE THREE
The Notes
SECTION 301. Title and Terms.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $125,000,000, except for Notes
authenticated and delivered upon registration of, transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1108
or in connection with a Prepayment Offer or Change of Control Offer pursuant to
Sections 1013 or 1015.
The Initial Notes shall be known and designated as the "12 1/2% Series
A Senior Notes due 2008" of the Company. Their Stated Maturity shall be July
1, 2008 and they shall bear interest at 12 1/2% from the Issue Date or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, as the case may be, payable semi-annually on January 1 and July
1, commencing January 1, 1999, until the principal thereof is paid or made
available for payment.
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The principal of (and premium, if any) and interest (and Liquidated
Damages, if any) on the Notes shall be payable at the office or agency of the
Company in the Borough of Manhattan, The City of New York maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Securities Register.
The Notes shall be subject to repurchase by the Company pursuant to a
Prepayment Offer or Change of Control Offer, respectively, as provided in
Sections 1013 and 1015.
The Notes shall be subject to defeasance at the option of the Company
as provided in Article Twelve.
SECTION 302. Denominations.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution and Authentication.
The Notes shall be executed on behalf of the Company by its Chairman
of the Board, its President or one of its Vice Presidents, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes; and the Trustee in accordance with
such Company Order shall authenticate and deliver such Notes as in this
Indenture provided and not otherwise.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
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SECTION 304. Temporary Notes.
Pending the preparation of Definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
Definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Company will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at any office or agency of the Company
designated pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes the Company shall
execute and upon request of a Company Order the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
authorized denominations. Until so exchanged the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
collectively referred to as the "Securities Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. The Trustee is hereby
appointed "Securities Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at an office
or agency of the Company designated pursuant to Section 1002 for such purpose,
the Company shall execute, and upon request of a Company Order the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denominations and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute, and upon
request of a Company Order the Trustee shall authenticate and deliver, the
Notes which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligation of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
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(a) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented to the Securities Registrar with a request (x) to register
the transfer of such Definitive Notes or (y) to exchange such Definitive Notes
for an equal principal amount of Definitive Notes of other authorized
denominations, the Securities Registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, however, that the Definitive Notes surrendered for registration
of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and the
Securities Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Transfer Restricted Notes that are
Definitive Notes, shall be accompanied by the following additional information
and documents, as applicable:
(A) if such Transfer Restricted Note is being
delivered to the Securities Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the Note); or
(B) if such Transfer Restricted Note is being
transferred to a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) that is aware that any sale of Notes to it will be made in
reliance on Rule 144A under the Securities Act and that is acquiring such
Transfer Restricted Note for its own account or for the account of another such
"qualified institutional buyer," a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the Note); or
(C) if such Transfer Restricted Note is being
transferred pursuant to an exemption from registration in accordance with Rule
144, or outside the United States in an offshore transaction in compliance with
Rule 904 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the Note); or
(D) if such Transfer Restricted Note is being
transferred in reliance on another exemption from the registration requirements
of the Securities Act and with all applicable securities laws of the States of
the United States, a certification from such Holder to that effect (in
substantially the form set forth on the reverse of the Note) and an Opinion of
Counsel from the Holder reasonably acceptable to the Company, the Trustee and
to the Securities Registrar to the effect that such transfer is in compliance
with the Securities Act.
(b) Restrictions on Transfer of a Definitive Note for a Beneficial
Interest in a Global Note. A Definitive Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
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(i) if such Definitive Note is a Transfer Restricted
Note and is being transferred for an interest in the Rule 144A Global Note,
certification, in substantially the form set forth on the reverse of the Note,
that such Definitive Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in accordance with
Rule 144A under the Securities Act;
(ii) if such Definitive Note is a Transfer Restricted Note
and is being transferred for an interest in the Regulation S Permanent Global
Note pursuant to an exemption from registration in accordance with Rule 144, or
outside the United States in an offshore transaction in compliance with Rule
904 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the Note); and
(iii) whether or not such Definitive Note is a Transfer
Restricted Note, written instructions directing the Trustee to make, or to
direct the Notes Custodian to make, an endorsement on the Global Note to
reflect an increase in the aggregate principal amount of the Notes represented
by the Global Note, then the Trustee shall cancel such Definitive Note and
cause, or direct the Notes Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Notes
Custodian, the aggregate principal amount of the Global Note to be increased
accordingly. If no Global Notes are then outstanding, the Company shall issue
and upon receipt of a Company Order the Trustee shall authenticate a new Global
Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. Except as set forth in clause (d) through (f), a Global
Note 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.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) A beneficial interest in a Global Note is
exchangeable for Definitive Notes in registered certificated form if (A) the
Depositary (x) notifies the Company that it is unwilling or unable to continue
as depositary for the Global Note and the Company thereupon fails to appoint a
successor depositary or (y) has ceased to be a clearing agency registered under
the Exchange Act, (B) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Notes in certificated form
or (C) there shall have occurred and be continuing an Event of Default or any
event which after notice or lapse of time or both would be an Event of Default
with respect to the Notes. In all cases, Definitive Notes delivered in
exchange for any Global Note or beneficial interests therein will be registered
in the names, and issued in any approved denominations, requested by or on
behalf of the Depositary (in
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accordance with its customary procedures) and will bear the applicable
restrictive legend, unless the Company determines otherwise in compliance with
applicable law.
(ii) 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 Note, and upon receipt by the Trustee of a written instruction or
such other form of instructions as is customary for the Depositary or the
Person designated by the Depositary as having such a beneficial interest in a
Transfer Restricted Note only, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the Depositary as being the beneficial
owner, a certification from the transferor to that effect (in substantially the
form set forth on the reverse of the Note); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) that is aware that any sale of Notes to it will be made in
reliance on Rule 144A under the Securities Act and that is acquiring such
beneficial interest in the Transfer Restricted Note for its own account or the
account of another such "qualified institutional buyer", a certification to
that effect from the transferor (in substantially the form set forth on the
reverse of the Note); or
(C) if such beneficial interest is being
transferred pursuant to an exemption from registration in accordance with Rule
144, or outside the United States in an offshore transaction in compliance with
Rule 904 under the Securities Act, or pursuant to an effective registration
statement under the Securities Act, a certification from the transferor to that
effect (in substantially the form set forth on the reverse of the Note); or
(D) if such beneficial interest in being
transferred in reliance on another exemption from the registration requirements
of the Securities Act and in accordance with all applicable securities laws of
the States of the United States, a certification to that effect from the
transferor (in substantially the form set forth on the reverse of the Note) and
an Opinion of Counsel from the transferee or transferor reasonably acceptable
to the Company and to the Securities Registrar to the effect that such transfer
is in compliance with the Securities Act, then the Trustee shall cause, or
direct the Notes Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Notes
Custodian, the aggregate principal amount of the Global Note to be reduced
accordingly and, following such reduction, the Company will execute and, upon
receipt of a Company Order, the Trustee will authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount.
(e) Exchanges between Regulation S Notes and Rule 144A Notes.
Prior to the expiration of the 40-day restricted period, beneficial interests
in the Regulation S Temporary Global Note may not be transferred to a Person
who takes delivery in the form of an interest in a Rule 144A Global Note. After
the expiration of the 40-day restricted period, beneficial interests
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in Regulation S Permanent Global Notes may be transferred to a Person who takes
delivery in the form of an interest in a Rule 144A Global Note. 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 the Regulation S Global Note, then
the Trustee shall cause, or direct the Notes Custodian to cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Notes Custodian, the aggregate principal amount of the applicable
Regulation S Global Note to be decreased and the aggregate principal amount of
the Rule 144A Global Note to be increased by the principal amount of the
beneficial interest in the Regulation S Global Note to be exchanged, to credit,
or cause to be credited, to the account of the transferor a beneficial interest
in the Rule 144A Global Note equal to the reduction in the aggregate principal
amount of the Regulation S Global Note, and to debit, or cause to be debited,
from the account of the transferor the beneficial interest in the Regulation S
Global Note that is being exchanged or transferred.
Prior to the expiration of the 40-day restricted period, beneficial
interests in the Rule 144A Global Note may not be transferred to any Person
that takes delivery thereof in the form of an interest in the Regulation S
Temporary Global Note. After the expiration of the 40-day restricted period,
beneficial interests in the Rule 144A Global Note may be transferred to a
Person who takes delivery in the form of an interest in the Regulation S
Permanent Global Notes only upon receipt by the Trustee of a written
certification from the transferor to the effect that such transfer is being
made in accordance with Rule 904 of Regulation S. 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 the Rule 144A Global Note, then the Trustee
shall cause, or direct the Notes Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depositary and the
Notes Custodian, the aggregate principal amount of the Rule 144A Global Note to
be decreased and the aggregate principal amount of the Regulation S Global Note
to be increased by the principal amount of the beneficial interest in the Rule
144A Global Note to be exchanged, to credit, or cause to be credited, to the
account of the transferor a beneficial interest in the Regulation S Global Note
equal to the reduction in the aggregate principal amount of the Rule 144A
Global Note, and to debit, or cause to be debited, from the account of the
transferor the beneficial interest in the Rule 144A Global Note that is being
exchanged or transferred.
(f) Restrictions on Transfer and Exchange of Regulation S
Temporary Global Notes. A holder of a beneficial interest in a Regulation S
Temporary Global Note must provide Euroclear or CEDEL, as the case may be, with
a certificate in the form set forth in Annex C certifying that the beneficial
owner of the interest in the Regulation S Temporary Global Note is either not a
U.S. Person (as defined below) or has purchased such interest in a transaction
that is exempt from the registration requirements under the Securities Act (the
"Regulation S Certificate"), and Euroclear or CEDEL, as the case may be, must
provide to the Trustee (or to the Paying Agent if other than the Trustee) a
certificate in the form set forth in Annex C prior to (i) the payment of
interest or principal with respect to such holder of beneficial interests in
the Regulation S Temporary Global Note and (ii) any exchange of such beneficial
interest for a beneficial interest in the Regulation S Permanent Global Notes.
"U.S. Person" means (i) any
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individual resident in the United States, (ii) any partnership or corporation
organized or incorporated under the laws of the United States, (iii) any estate
of which an executor or administrator is a U.S. Person (other than an estate
governed by foreign law and of which at least one executor or administrator is
a non-U.S. Person who has sole or shared investment discretion with respect to
its asset(s)), (iv) any trust of which any trustee is a U.S. Person (other than
a trust of which at least one trustee is a non-U.S. Person who has sole or
shared investment discretion with respect to its assets and no beneficiary of
the trust (and no settlor if the trust is revocable) is a U.S. Person), (v) any
agency or branch of a foreign entity located in the United States, (vi) any
non-discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary for the benefit or account of a U.S. Person, (vii)
any discretionary or similar account (other than an estate or trust) held by a
dealer or other fiduciary organized, incorporated or (if an individual)
resident in the United States (other than such an account held for the benefit
or account of a non-U.S. Person), (viii) any partnership or corporation
organized or incorporated under the laws of a foreign jurisdiction and formed
by a U.S. Person principally for the purpose of investing in securities not
registered under the Securities Act (unless it is organized or incorporated and
owned, by accredited investors within the meaning of Rule 501(a) under the
Securities Act who are not natural persons, estates or trusts); provided,
however, that the term "U.S. Person" shall not include (A) a branch or agency
of a U.S. Person that is located and operating outside the United States for
valid business purposes as a locally regulated branch or agency engaged in the
banking or insurance business, (B) any employee benefit plan established and
administered in accordance with the law, customary practices and documentation
of a foreign country and (C) the international organizations set forth in
Section 902(o)(7) of Regulation S under the Securities Act and any other
similar international organizations, and their agencies, affiliates and pension
plans.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii),
(iii), (iv) and (v), each Note certificate evidencing the Global Notes and the
Definitive Notes (and all Notes issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES
FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE
HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE
OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE
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RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),
(4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2) (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A CERTIFICATE IN THE FORM ATTACHED TO THIS SECURITY IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. AN
INSTITUTIONAL ACCREDITED INVESTOR OR A NON-U.S. PERSON HOLDING THIS SECURITY
AGREES IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES, LEGAL
OPINIONS AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR"
AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT
IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION.
Additional legend for Regulation S Notes:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IS AVAILABLE.
(ii) Except as permitted by the following paragraphs
(iii), (iv) and (v), each Regulation S Temporary Global Note (and all Notes
issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the form set forth in the form of
Note attached to this Indenture.
(iii) Except as permitted by the following paragraphs (iv)
and (v), each Regulation S Permanent Global Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear a legend in substantially
the form set forth in the form of Note attached to this Indenture.
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(iv) Upon any sale or transfer of a Transfer Restricted
Note (including any Transfer Restricted Note represented by a Global Note)
pursuant to Rule 144 or an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Note,
the Securities Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Note for a Definitive Note that does not bear the legend
set forth in (i), (ii) or (iii) above and rescind any restriction on the
transfer of such Transfer Restricted Note; and
(B) any such Transfer Restricted Note represented
by a Global Note shall not be subject to the provisions set forth in (i), (ii)
or (iii) above (such sales or transfers being subject only to the provisions of
Section 305(c) hereof); provided, however, that with respect to any request for
an exchange of a Transfer Restricted Note that is represented by a Global Note
for a Definitive Note that does not bear a legend, which request is made in
reliance upon Rule 144, the Holder thereof shall certify in writing to the
Securities Registrar that such request is being made pursuant to Rule 144 (such
certification to be in substantially the form set forth on the reverse of the
Note).
(v) Any Exchange Notes issued in connection with the
Exchange Offer shall not bear the legend set forth in (i), (ii) or (iii) above
and the Trustee shall rescind any restriction on the transfer of such Exchange
Notes.
(h) Cancellation and/or Adjustment of Global Note. At such time
as all beneficial interests in a Global Note have either been exchanged for
Definitive Notes or beneficial interests in other Global Notes, redeemed,
repurchased or canceled, such Global Note shall be returned to or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for Definitive Notes or a
beneficial interest in another Global Note, redeemed, repurchased or canceled,
the principal amount of Notes represented by such Global Note shall be reduced
and an endorsement shall be made on such Global Note, by the Trustee or the
Notes Custodian, at the direction of the Trustee, to reflect such reduction.
(i) Obligations with respect to Transfers and Exchanges of
Definitive Notes. To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive Notes and
Global Notes at the Securities Registrar's request.
(j) General. No service charge shall be made for any registration
of transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 304, 906 or 1108 or in
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accordance with any Prepayment Offer or Change of Control Offer pursuant to
Section 1013 or 1015 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 1104 and ending at the close of business on the
day of such mailing, or (ii) to register the transfer of or exchange any Note
so selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
Neither the Trustee or the Securities Registrar shall have any
obligation or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Note (including any
transfers between or among Depositary participants or beneficial owners of
interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture,
and to examine the same to determine substantial compliance as to form with the
express requirements thereof. Nothing herein shall require the Trustee or
Securities Registrar to confirm the truth or accuracy of any representations or
statements made in any certificates.
Prior to due presentment for the registration of a transfer of any
Note, the Trustee and the Company may deem and treat the Person in whose name
any Note is registered as the absolute power of such Note for all purposes, and
none of the Trustee or the Company shall be affected by notice to the contrary.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
If any mutilated Note is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
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Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date immediately preceding such Interest Payment
Date.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his
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address as it appears in the Securities Register, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Note is registered as the owner of such Note for the
purpose of receiving payment of principal of (and premium, if any) and (subject
to Section 307) interest (and Liquidated Damages, if any) on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Notes surrendered for payment, redemption, registration of
transfer or exchange or any Prepayment Offer or Change of Control Offer
pursuant to Section 1013 or 1015 shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
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ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Notes not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest (and Liquidated Damages, if any) to the date of
such deposit (in the case of Notes which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article Four, the obligations of the Company to the Trustee under Section
607 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) the failure by the Company to pay any installment of interest
(or Liquidated Damages, if any) on the Notes as and when the same becomes due
and payable and the continuance of any such failure for 30 days;
(2) the failure by the Company to pay all or any part of the
principal or premium, if any, on the Notes when and as the same becomes due and
payable at maturity, redemption, by acceleration or otherwise, including,
without limitation, payment of the Change of Control Payment or the Prepayment
Offer Payment, or otherwise;
(3) the failure by the Company or any Restricted Subsidiary of the
Company to observe or perform the provisions of Article VIII;
(4) the failure by the Company or any Restricted Subsidiary of
the Company to observe or perform any other covenant or agreement contained in
the Notes or the Indenture and the continuance of such failure for a period of
30 days after written notice is given to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate principal
amount of the Notes outstanding, specifying such Default;
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(5) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any Restricted
Subsidiary of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any such
Subsidiary a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company or any such Subsidiary under any applicable Federal or State
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any such Subsidiary or
of any substantial part of the property of the Company or any such Subsidiary,
or ordering the winding up or liquidation of the affairs of the Company or any
such Subsidiary, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of 60
consecutive days;
(6) the commencement by the Company or any Restricted Subsidiary
of the Company of a voluntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by the Company or any such Subsidiary to the entry of a decree or order
for relief in respect of the Company or any Restricted Subsidiary of the
Company in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or any Restricted Subsidiary of the Company, or the filing by the
Company or any such Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by the Company or any such Subsidiary to the filing of such petition or
to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the Company
or any Restricted Subsidiary of the Company or of any substantial part of the
property of the Company or any Restricted Subsidiary of the Company, or the
making by the Company or any Restricted Subsidiary of the Company of an
assignment for the benefit of creditors, or the admission by the Company or any
such Subsidiary in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company or any such
Subsidiary in furtherance of any such action;
(7) a default beyond any applicable grace period in the payment of
the principal of (or premium, if any, on) or interest on any Indebtedness of
the Company (other than the Notes) or any Restricted Subsidiary, for money
borrowed when due (whether resulting from maturity, acceleration, mandatory
redemption or otherwise), or any other default causing acceleration of any
Indebtedness of the Company or any Restricted Subsidiary for money borrowed,
with an aggregate principal amount in excess of $5.0 million;
(8) a final unappealable unsatisfied judgment or final
unappealable unsatisfied judgments not covered by insurance for the payment of
money are entered against the Company or any Restricted Subsidiary of the
Company in an aggregate amount in excess of $15 million by a court or courts of
competent jurisdiction, which judgments remain unstayed, undischarged or
unbonded for a period (during which execution shall not be effectively stayed)
of 60 days; or
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(9) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of this Indenture and such Subsidiary
Guarantee) or a Subsidiary Guarantor denies or disaffirms its obligations under
its Subsidiary Guarantee.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(5) or (6)) occurs and is continuing, then and in every such case,
unless the principal of all of the Notes shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Notes may declare all the Notes to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders). If an Event of Default specified in Section
501(5) or (6) occurs, the Notes will be immediately due and payable without any
declaration or other Act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a majority
in aggregate principal amount of the Outstanding Notes, by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if and except on default with respect to any provision requiring a
supermajority approval to amend, which may be waived only by such
supermajority, all existing Events of Default, other than the non-payment of
the principal of, premium, if any, and interest (and Liquidated Damages, if
any) on the Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (and Liquidated
Damages, if any) on any Note when such interest (and Liquidated Damages, if
any) becomes due and payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Note at the Maturity thereof or, with respect to any
Note required to have been purchased pursuant to a Prepayment Offer or Change
of Control Offer made by the Company, at the Purchase Date hereof, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Notes, the whole amount then due and payable on such Notes for principal
(and premium, if any) and interest (and Liquidated Damages, if any), and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal (and premium, if any) and on any overdue interest and
Liquidated Damages, at the rate provided by
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the Notes, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Notes), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Notes or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for election of a
trustee in bankruptcy or similar official and may be a member of the creditors'
committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be
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brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest (or Liquidated Damages, if any), upon presentation of the
Notes and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection, including
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses and disbursements of the Trustee, its agents and counsel
and all other amounts due the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest (and Liquidated Damages, if
any) on the Notes in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Notes for principal (and
premium, if any) and interest (and Liquidated Damages, if any), respectively.
THIRD: To the Company or to such party as a court of competent
jurisdiction shall direct.
SECTION 507. Limitation on Suits.
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Notes; it being understood and intended
that no one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders, or to obtain or to seek
to obtain priority or preference over any other Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest (and Liquidated Damages, if any) on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of redemption, on the
Redemption Date or in the case of a Prepayment Offer or Change of Control Offer
made by the Company and required to be accepted as to such Note, on the
Purchase Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of a majority in aggregate principal amount of the
Outstanding Notes shall 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 the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture or involve the Trustee in personal liability, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes may on behalf of the Holders of all the Notes waive
any past Default or Event of Default hereunder and its consequences, except a
Default or Event of Default with respect to any provision requiring a
supermajority to amend, which Default or Event of Default may only be waived by
such a supermajority, except a Default or Event of Default
(1) in the payment of the principal of (or premium, if any) or
interest (or Liquidated Damages, if any) on any Note (including any Note which
is required to have been purchased pursuant to a Prepayment Offer or Change of
Control Offer which has been made by the Company), or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
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SECTION 514. 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, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess reasonable
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it 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.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any 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 for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any Default hereunder, to
the extent it has knowledge of such Default, as and to the extent provided by
the Trust Indenture Act. The term "Default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default. Except in
the case of a Default or Event of Default in payment of principal of, premium
if any, or interest on, any Note, the Trustee may withhold the notice if and so
long
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as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) before the Trustee acts or refrains from acting, it may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonable to it against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by
agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
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(h) the Trustee shall not be required to given any bond or surety
in respect of the performance of its powers and duties hereunder.
(i) the permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty.
(j) except for (i) a Default under Sections 501(1) or (2) hereof,
or (ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not be
deemed to have notice of any default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less
than 25% in aggregate principal amount of the Securities then outstanding; as
used herein, the term "actual knowledge" means the actual fact or statement of
knowing, without any duty to make any investigation with regard thereto.
SECTION 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or
application by the Company of the Notes or the proceeds thereof.
SECTION 605. May Hold Notes.
The Trustee, any Paying Agent, any Securities Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Notes and, subject to Sections 608 and 613, may otherwise
deal with the Company with the same rights it would have if it were not
Trustee, Paying Agent, Securities Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time, and the Trustee shall
be entitled to, reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
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(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Article Five hereof, the expenses (including
reasonable fees and expenses of its counsel) and the compensation for the
services in connection therewith are intended to constitute expense of
administration under any applicable bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and a Corporate
Trust Office or agent in the Borough of Manhattan, The City of New York or
Chicago, Illinois. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered
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to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Notes, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608
after written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Notes
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
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SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Notes), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
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(a) semi-annually, not more than 15 days after each Regular Record
Date a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Securities Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Securities Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Notes and the
corresponding rights and duties of the Trustee, shall be provided by the Trust
Indenture Act.
(c) Every Holder of Notes, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to the names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Notes are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Notes are listed on any stock
exchange.
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ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Limitation on Merger, Sale or Consolidation.
(a) (i) The Company will not merge or consolidate with or into any
other Person (whether or not the Company is the surviving entity), and (ii) the
Company will not and will not permit its Restricted Subsidiaries to, directly
or indirectly, sell, transfer, assign, lease, convey or otherwise dispose of
all or substantially all of the Property of the Company and its Restricted
Subsidiaries taken as a whole to any Person in any one transaction or a series
of transactions (including, without limitation, dispositions pursuant to
mergers, consolidations, Investments and Production Payments and Reserve
Sales), in each case unless: (A) the Surviving Entity (as defined) shall be a
corporation organized and existing under the laws of the United States of
America or a State thereof or the District of Columbia; (B) in the case of a
transaction described in clause (ii) above, such Property shall have been
transferred as an entirety or virtually as an entirety to one Person; (C)
immediately before and immediately after giving effect to such transaction or
series of transactions on a pro forma basis, no Default or Event of Default
shall have occurred and be continuing; (D) except in the case of a merger of
the Company with a Restricted Subsidiary, immediately after giving effect to
such transaction or series of transactions on a pro forma basis, the Surviving
Entity would be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 1008; (E) except in the case of a
merger of the Company with a Restricted Subsidiary, immediately after giving
effect to such transaction or series of transactions on a pro forma basis, the
Surviving Entity shall have a Consolidated Net Worth equal to or greater than
the Consolidated Net Worth of the Company immediately prior to the transaction
or series of transactions; (F) if the Company is not the Surviving Entity, then
(1) the Surviving Entity shall have executed and delivered to the Trustee a
supplemental indenture satisfactory to the Trustee pursuant to which the
Surviving Entity assumes the obligations of the Company under the Indenture and
the Notes, (2) each Subsidiary Guarantor (unless it is the Surviving Entity)
shall have executed and delivered to the Trustee a supplemental indenture
satisfactory to the Trustee confirming that such Subsidiary Guarantor's
Subsidiary Guaranty remains in full force and effect and guarantees the
Surviving Entity's obligations under the Indenture and the Notes, and (3) in
the case of a transaction described in clause (ii) above in which the
transferee assumes all of the obligations of the Company under the Indenture
and the Notes, the Company shall be released and shall no longer be considered
an obligor under the Indenture and the Notes; and (G) the Company, and if the
Company is not the Surviving Entity the Surviving Entity, shall have delivered
to the Trustee an Officer's Certificate (attaching the calculations to
demonstrate compliance with (D) and (E) above) and an Opinion of Counsel, each
stating that such merger, consolidation or disposition and any such
supplemental indentures comply with the terms of the Indenture. The Term
"Surviving Entity" shall mean the Person referred to in clauses (i) and (ii)
above (a) formed by or surviving any such merger or consolidation involving the
Company or (b) to which any sale, transfer, assignment, lease, conveyance or
other disposition is made.
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(b) With respect to each transaction or series of transactions
described in subsection (a) above, giving effect to such transaction or series
of transactions on a pro forma basis shall include, without limitation, (i)
treating any Indebtedness not previously the obligation of the Company or any
of its Restricted Subsidiaries which becomes an obligation of the Company or
any of its Restricted Subsidiaries in connection with or as a result of such
transaction or series of transactions as having been incurred at the time of
the transaction or series of transactions and (ii) giving effect to any
Indebtedness incurred or anticipated to be incurred in connection with such
transaction or series of transactions.
SECTION 802. When a Subsidiary Guarantor May Merger or Transfer Assets.
Each Subsidiary Guarantor may merge or consolidate with or dispose of
its assets to the Company or a Wholly Owned Restricted Subsidiary that is a
Subsidiary Guarantor except to the extent any such transaction is limited by
Section 801. In addition, each Subsidiary Guarantor may merge or consolidate
with or dispose of its assets to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary that is a Subsidiary Guarantor), regardless of
whether such Person is an Affiliate of such Subsidiary Guarantor, if: (i)
immediately after such transaction, and giving effect thereto, no Default or
Event of Default has occurred and is continuing; (ii) such transaction was
subject to, and consummated in compliance with, as appropriate, either Section
801 or Section 1013; and (iii) the Company shall have delivered to the Trustee
an Officer's Certificate and an Opinion of Counsel, each stating that such
transaction complies with the above provisions and that all conditions
precedent relating to such transaction have been complied with.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, the Subsidiary Guarantors, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto,
in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(3) to secure the Notes pursuant to the requirements of Section
1011 or otherwise; or
(4) to comply with any requirements of the Commission in order to
effect and maintain the qualification of this Indenture under the Trust
Indenture Act; or
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(5) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action pursuant to this clause (5) shall not adversely
affect the interests of the Holders in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, the Subsidiary Guarantors and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of amending or
supplementing this Indenture or any supplemental indenture or modifying the
rights of the Holders; provided, however, that no such modification may,
without the consent of Holders of at least 66 2/3% in aggregate principal
amount of Notes at the time outstanding, modify the provisions (including the
defined terms used therein) of Section 1015 or the guarantee or subordination
provisions of the Indenture in a manner adverse to the Holders; and provided
that no such modification may, without the consent of each Holder thereby:
(1) change the Stated Maturity on any Note, or reduce the
principal amount thereof or the rate (or extend the time for payment) of
interest thereon or any premium payable upon the redemption at the option of
the Company thereof, or change the place of payment where, or the coin or
currency in which, any Note or any premium or interest (or Liquidated Damages,
if any) thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof (or, in
the case of redemption at the option of the Company, on or after the Redemption
Date), or reduce the Change of Control Payment or the Prepayment Offer Payment
or alter the provisions (including the defined terms used therein) regarding
the right of the Company to redeem the Notes at its option in a manner adverse
to the Holders, or
(2) reduce the percentage in principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such amendment,
supplemental indenture or waiver provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1021 except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
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Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company and each of the Guarantors, as the case may
be, authorizing the execution of any such amended or supplemental Indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of the Holders of Notes as aforesaid, and upon receipt by the
Trustee of the documents described in Section 6.03 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
SECTION 903. Execution of Supplemental Indentures.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
Neither the Company nor any Guarantor may sign an amendment or supplemental
Indenture until its respective Board of Directors approves it. In executing
any amended or supplemental Indenture, the Trustee shall be entitled to receive
and (subject to Section 6.01) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture and that there has been compliance with all conditions precedent.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Notes theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
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ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and
premium, if any) and any interest (and Liquidated Damages, if any) on the Notes
in accordance with the terms of the Notes and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes 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 Corporate Trust Office of the Trustee's agent, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York) where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Company 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 1003. Money for Note Payments to be Held in Trust.
(a) If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (and premium, if any)
or interest (and Liquidated Damages, if any) on any of the Notes, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal (and premium, if any) or interest (and Liquidated Damages,
if any) so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.
(b) Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of (and premium, if any) or
interest (and Liquidated Damages, if any) on any Notes, deposit with a Paying
Agent a sum sufficient to pay the principal (and
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premium, if any) or interest (and Liquidated Damages, if any) so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, interest or Liquidated Damages, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
(c) The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest (and Liquidated Damages, if any)
on Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any Default by the Company
(or any other obligor upon the Notes) in the making of any payment of principal
(and premium, if any) or interest (and Liquidated Damages, if any); and
(3) at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
(d) The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
(e) 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 (and
premium, if any) or interest (and Liquidated Damages, if any) on any Note and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability and
responsibility of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days
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from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight and Section 1013, the Company and its
Subsidiary Guarantors will do or cause to be done all things necessary to
preserve and keep in full force and effect their existence, rights (charter and
statutory) and franchises; provided, however, that the Company and its
Subsidiary Guarantors shall not be required to preserve any such right or
franchise if the Board of Directors in good faith shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or its Subsidiaries and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Subsidiary Guarantor of the
Company to be maintained and kept in good condition, repair and working order
(ordinary wear and tear excepted) and supplied with all necessary equipment and
will 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 of such properties if such discontinuance is, in the judgment of the Board
of Directors in good faith, desirable in the conduct of its business or the
business of any of its Subsidiaries taken as a whole and not disadvantageous in
any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiary Guarantors or upon the income, profits or property of the Company or
any of its Subsidiaries, and (2) 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 of its Subsidiaries; 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 1007. Maintenance of Insurance.
The Company shall, and shall cause its Subsidiary Guarantors to, keep
at all times all of their properties which are of an insurable nature insured
against loss or damage with insurers believed by the Company to be responsible
to the extent that property, in the reasonable good
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faith opinion of the Company, of similar character is usually so insured by
corporations similarly situated and owning like properties in accordance with
customary business practice.
SECTION 1008. Limitation on Incurrence of Additional Indebtedness.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(other than Permitted Indebtedness) unless, after giving pro forma effect to
the incurrence of such Indebtedness and the receipt and application of the
proceeds thereof, (i) no Default or Event of Default would occur as a
consequence of, or be continuing following, such Incurrence and application and
(ii) the Consolidated Interest Coverage Ratio would exceed (i) 2.25 to 1.0 if
such Incurrence is between the Issue Date and July 1, 1999 and (ii) 2.50 to 1.0
if such Incurrence is thereafter.
(b) "Permitted Indebtedness" means any and all of the following:
(i) Indebtedness arising under the Indenture, including without limitation the
Notes and the Subsidiary Guarantees; (ii) Indebtedness under the Senior Credit
Facilities, to the extent that the aggregate principal amount of all
Indebtedness under the Senior Credit Facilities, together with all Indebtedness
Incurred pursuant to clause (ix) of this paragraph in respect of Indebtedness
previously Incurred pursuant to this clause (ii), at any one time outstanding
does not exceed the greater of (a) $35.0 million and (b) $8.0 million, plus 15%
of Adjusted Consolidated Net Tangible Assets determined as of the date of the
Incurrence of such Indebtedness; provided, however, that the maximum amount
available to be outstanding under the Senior Credit Facilities as Permitted
Indebtedness pursuant to this clause (ii) shall be permanently reduced by the
amount of Net Available Cash from Asset Sales used to permanently repay
Indebtedness under the Senior Credit Facilities (with a permanent reduction of
the related commitment to lend or the amount available to be refinanced in the
case of a revolving credit facility) and not subsequently reinvested in
Additional Assets or used to permanently reduce other Indebtedness to the
extent permitted pursuant to Section 1013; provided, however, that the
application of any such Net Available Cash from Asset Sales shall not
permanently reduce the amount of Permitted Indebtedness under this clause (ii)
below $10.0 million in principal amount plus related accrued interest and
costs; (iii) Indebtedness to the Company or any of its Wholly Owned Restricted
Subsidiaries by any of its Restricted Subsidiaries or Indebtedness of the
Company to any of its Wholly Owned Restricted Subsidiaries (but only so long as
such Indebtedness is held by the Company or a Wholly Owned Restricted
Subsidiary); (iv) Indebtedness in respect of bid, performance or surety
obligations issued by or for the account of the Company or any Restricted
Subsidiary in the ordinary course of business, including guarantees and letters
of credit functioning as or supporting such bid, performance or surety
obligations (in each case other than for an obligation for money borrowed); (v)
Indebtedness under Permitted Hedging Agreements; (vi) obligations relating to
oil or gas balancing positions arising in the ordinary course of business that
are customary in the Oil and Gas Business; (vii) Indebtedness outstanding on
the Issue Date (which is not repaid with the proceeds of the Note Offering) not
otherwise permitted in clauses (i) through (vi) above; (viii) Indebtedness not
otherwise permitted to be Incurred pursuant to this paragraph (excluding any
Indebtedness Incurred pursuant to the provisions of the Indenture described in
the immediately preceding paragraph), provided that the aggregate principal
amount of all Indebtedness Incurred
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pursuant to this clause (viii), together with all Indebtedness Incurred
pursuant to clause (ix) of this paragraph in respect of Indebtedness previously
Incurred pursuant to this clause (viii), at any one time outstanding does not
exceed $15.0 million; (ix) Indebtedness Incurred in exchange for, or the
proceeds of which are used to refinance, (a) Indebtedness referred to in
clauses (i) through (viii) of this paragraph (including Indebtedness previously
Incurred pursuant t this clause (ix)) and (b) Indebtedness Incurred pursuant to
Section 1008(a), provided that such Indebtedness is Permitted Refinancing
Indebtedness; and (x) Indebtedness consisting of obligations in respect of
purchase price adjustments, indemnities or Guarantees in connection with the
acquisition or disposition of assets.
SECTION 1009. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
if, at the time of and after giving effect to the proposed Restricted Payment,
(i) any Default or Event of Default would have occurred and be continuing, (ii)
the Company could not incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 1008 or (iii) the aggregate
amount expended or declared for all Restricted Payments from the Issue Date
would exceed the sum (without duplication) of the following:
(i) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis commencing on the last day of the fiscal
quarter immediately preceding the Issue Date, and ending on the last day of the
fiscal quarter ending on or immediately preceding the date of such proposed
Restricted Payment (or, if such aggregate Consolidated Net Income shall be a
loss, minus 100% of such loss), plus
(ii) the aggregate net cash proceeds, or the Fair Market
Value of Property other than cash, received by the Company on or after the
Issue Date from the issuance or sale (other than to a Subsidiary of the
Company) of Capital Stock of the Company or any options, warrants or rights to
purchase Capital Stock of the Company, plus
(iii) the aggregate net cash proceeds or the Fair Market
Value of Property other than cash received by the Company as capital
contributions to the Company (other than from a Subsidiary of the Company) on
or after the Issue Date, plus
(iv) the aggregate net cash proceeds received by the
Company upon the exercise of any options, warrants or rights to purchase shares
of Capital Stock of the Company (other than from a Subsidiary of the Company)
on or after the Issue Date, plus
(v) the aggregate net cash proceeds received on or after
the Issue Date by the Company from the issuance or sale (other than to any
Subsidiary of the Company) of convertible debt or convertible Redeemable Stock
that has been converted into or exchanged for Capital Stock of the Company,
together with the aggregate cash received by the Company at the time of such
conversion or exchange, plus
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(vi) to the extent not otherwise included in the Company's
Consolidated Net Income, an amount equal to the net reduction in Investments
made by the Company and its Restricted Subsidiaries subsequent to the Issue
Date in any Person resulting from (1) payments of interest on debt, dividends,
repayments of loans or advances or other transfers or distributions of
Property, in each case to the Company or any Restricted Subsidiary from any
Person other than the Company or a Restricted Subsidiary, and in an amount not
to exceed the book value of such Investments previously made in such Person
that were treated as Restricted Payments, or (2) the designation of any
Unrestricted Subsidiary as a Restricted Subsidiary, and in an amount not to
exceed the lesser of (x) the book value of all Investments previously made in
such Unrestricted Subsidiary that were treated as a Restricted Payments and (y)
the Fair Market Value of such Unrestricted Subsidiary.
(b) The limitations set forth in paragraph (a) above will not
prevent the Company or any Restricted Subsidiary from making the following
Restricted Payments so long as, at the time thereof, no Default or Event of
Default shall have occurred and be continuing (except in the case of clause (i)
below under which the payment of a dividend is permitted, so long as the
declaration of such dividend was made in compliance with Section 1009(a)):
(i) the payment of any dividend on Capital Stock of the
Company or any Restricted Subsidiary within 60 days after the declaration
thereof, if at such declaration date such dividend could have been paid in
compliance with Section 1009(a);
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any Restricted
Subsidiary, in exchange for, or out of the aggregate net cash proceeds of, a
substantially concurrent issuance and sale (other than to a Subsidiary of the
Company) of Capital Stock of the Company;
(iii) the making of any principal payment on or the
repurchase, redemption, defeasance or other acquisition or retirement for
value, prior to any scheduled principal payment, scheduled sinking fund payment
or maturity, of any Indebtedness (other than Redeemable Stock) in exchange for,
or out of the aggregate net cash proceeds of, a substantially concurrent
issuance and sale (other than to a Subsidiary of the Company) of Capital Stock
of the Company;
(iv) the making of any principal payment on or the
repurchase, redemption, defeasance or other acquisition or retirement for value
of Indebtedness in exchange for, or out of the aggregate net cash proceeds of,
a substantially concurrent Incurrence (other than a sale to a Subsidiary of the
Company) of Indebtedness so long as such new Indebtedness is Permitted
Refinancing Indebtedness and such new Indebtedness (A) has an Average Life to
Stated Maturity that is longer than the Average Life to Stated Maturity of the
Notes and (B) has a Stated Maturity for its final scheduled principal payment
that is at least 91 days later than the Stated Maturity of the final scheduled
principal payment of the Notes;
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(v) loans made to officers, directors or employees of the
Company or any Restricted Subsidiary approved by the Board of Directors (or a
duly authorized officer), the proceeds of which are used solely (A) to purchase
common stock of the Company in connection with a restricted stock or employee
stock purchase plan, or to exercise stock options received pursuant to an
employee or director stock option plan or other incentive plan, in a principal
amount not to exceed the exercise price of such stock options or (B) to
refinance loans, together with accrued interest thereon, made pursuant to item
(A) of this clause (v); and
(vi) the repurchase, redemption or other acquisition or
retirement for value of the Company's 12% Bonds outstanding on the date hereof.
The actions described in clauses (i), (ii), (iii) and (v) of this
Section 1009(b) shall be Restricted Payments that shall be permitted to be
taken in accordance with this Section 1009(b) but shall reduce the amount that
would otherwise be available for Restricted Payments under paragraph (a)
(provided that any dividend paid pursuant to clause (i) of this Section 1009(b)
shall reduce the amount that would otherwise be available under Section 1009(a)
when declared, but not also when subsequently paid pursuant to such clause
(i)), and the actions described in clause (iv) of this Section 1009(b) shall be
Restricted Payments that shall be permitted to be taken in accordance with this
Section 1009(b) but shall not reduce the amount that would otherwise be
available for Restricted Payments under Section 1009(a).
SECTION 1010. Limitations on Distributions from Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, assume or otherwise cause or
suffer to exist or become effective, or enter into any agreement with any
Person that would cause to become effective, any consensual encumbrance or
restriction on the legal right of any Restricted Subsidiary to (i) pay
dividends, in cash or otherwise, or make any other distributions on or in
respect of its Capital Stock or Redeemable Stock held by the Company or a
Subsidiary Guarantor, (ii) pay any Indebtedness or other obligation owed to the
Company or any Subsidiary Guarantor, (iii) make any Investments in the Company
or any Subsidiary Guarantor, or (iv) transfer any of its property or assets to
the Company or any Subsidiary Guarantor. Such limitation will not apply (a)
with respect to clauses (iii) and (iv) only, to encumbrances and restrictions
(1) in existence under or by reason of any agreements in effect on the Issue
Date, (2) required under Senior Credit Facilities that are not more restrictive
than those in effect under the Senior Credit Facilities on the Issue Date, (3)
in existence with respect to a Restricted Subsidiary at the time it became a
Restricted Subsidiary if (A) such encumbrance or restriction was not created in
anticipation of or in connection with the transactions pursuant to which the
Restricted Subsidiary became a Restricted Subsidiary and (B) immediately
following such transaction, on a pro forma basis, the Company could incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 1008 or (4) which result from the renewal, refinancing,
extension or amendment of an agreement referred to in the immediately preceding
clauses (1), (2) and (3), provided, such replacement or encumbrance or
restriction is no more restrictive to the Company or Restricted Subsidiary and
is not materially less favorable to the Holders of Notes than those under or
pursuant to the
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agreement evidencing the Indebtedness so extended, renewed, refinanced or
replaced, and (b) with respect to clause (iv) only, to (1) any restriction on
the sale, transfer or other disposition of assets or Property as a result of a
Lien permitted under Section 1011, (2) any encumbrance or restriction arising
in connection with an acquisition of Property, so long as such encumbrance or
restriction relates solely to the Property so acquired (including future
improvements thereon, accessions thereto and proceeds thereof) and was not
created in anticipation of or in connection with such acquisition, (3)
customary provisions restricting subletting or assignment of leases and
customary provisions in other agreements that restrict assignment of such
agreements or rights thereunder, (4) any encumbrance or restriction due to
applicable law, (5) customary restrictions contained in asset sale agreements
limiting the transfer of such assets pending the closing of such sale and (6)
restrictions contained in purchase money obligations for Property acquired in
the ordinary course of business with respect to transfers of such Property.
SECTION 1011. Limitation on Liens.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into, create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) on or with respect to any
Property of the Company or such Restricted Subsidiary, whether owned on the
Issue Date or acquired after the Issue Date, or any interest therein or any
income or profits therefrom, unless the Notes (and, in the case of a Restricted
Subsidiary which is a Subsidiary Guarantor, the Subsidiary Guaranty of such
Subsidiary) are secured equally and ratably with (or prior to) any and all
other obligations secured by such Lien.
(b) "Permitted Liens" means any and all of the following: (i)
Liens existing as of the Issue Date; (ii) Liens securing the Notes, the
Subsidiary Guarantees and other obligations arising under the Indenture; (iii)
any Lien existing on any Property (including future improvements thereon,
accessions thereto and proceeds thereof) of a Person at the time such Person is
merged or consolidated with or into the Company or a Subsidiary Guarantor or
becomes a Restricted Subsidiary that is a Subsidiary Guarantor (and not
incurred in anticipation of or in connection with such transaction), provided
that such Liens are not extended to other Property of the Company or the
Subsidiary Guarantors; (iv) any Lien existing on any Property (including future
improvements thereon, accessions thereto and proceeds thereof) at the time of
the acquisition thereof (and not incurred in anticipation of or in connection
with such transaction), provided that such Liens are not extended to other
Property of the Company or the Subsidiary Guarantors; (v) any Lien incurred in
the ordinary course of business incidental to the conduct of the business of
the Company or the Subsidiary Guarantors or the ownership of their Property
(including, without limitation, (a) easements, rights of way and similar
encumbrances, (b) rights or title of lessors under leases (other than Capital
Lease Obligations), (c) rights of collecting banks having rights of setoff,
revocation, refund or chargeback with respect to money or instruments of the
Company or the Subsidiary Guarantors or on deposit with or in the possession of
such banks, (d) Liens imposed by law, including without limitation, Liens under
workers' compensation or similar legislation and mechanics', carriers',
warehousemens', materialmens', suppliers' and vendors' Liens, (e) Liens
incurred to secure performance of obligations with respect to statutory or
regulatory requirements, performance or return-of-money bonds, surety bonds or
other obligations of a like
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nature and incurred in a manner consistent with industry practice and (f) Liens
on deposits made in the ordinary course of business), in each case which are
not incurred in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of Property (other than
Trade Accounts Payable) and which do not in the aggregate impair in any
material respect the use of Property in the operation of the business of the
Company and its Restricted Subsidiaries taken as a whole; (vi) Liens for taxes,
assessments and governmental charges not yet due or the validity of which are
being contested in good faith by appropriate proceedings, promptly instituted
and diligently conducted, and for which adequate reserves have been established
to the extent required by GAAP; (vii) Liens incurred to secure appeal bonds and
judgment and attachment Liens, in each case in connection with litigation or
legal proceedings that are being contested in good faith by appropriate
proceedings so long as reserves have been established to the extent required by
GAAP as in effect at such time and so long as such Liens do not encumber assets
by an amount in excess of $5.0 million; (viii) Liens securing Permitted Hedging
Agreements of the Company and its Restricted Subsidiaries; (ix) Oil and Gas
Liens Incurred in the ordinary course of the business of the Company and its
Restricted Subsidiaries; (x) purchase money security interests (including,
without limitation, Capital Lease Obligations) granted in connection with the
acquisition of fixed assets in the ordinary course of business of the Company
and its Restricted Subsidiaries, provided, that (a) such Liens attach only to
the Property (including future improvements thereon, accessions thereto and
proceeds thereof) so acquired with the purchase money Indebtedness secured
thereby and (b) the Indebtedness secured by such Liens is not in excess of the
purchase price of such Property; (xi) Liens resulting from the deposit of funds
or evidences of Indebtedness in trust for the purpose of decreasing or
defeasing Indebtedness of the Company or any of its Subsidiaries so long as
such deposit of funds is permitted by the provisions of the Indenture described
under Section 1009 hereof; (xii) Liens resulting from a pledge of Capital Stock
of a Person that is not a Restricted Subsidiary; (xiii) Liens, including liens
resulting from the pledge of Capital Stock of Restricted Subsidiaries, to
secure obligations arising from time to time under the Senior Credit
Facilities; (xiv) Liens to secure any permitted extension, renewal,
refinancing, refunding or exchange (or successive extensions, renewals,
refinancings, refundings or exchanges), in whole or in part, of or for any
Indebtedness secured by Liens referred to in clauses (i), (ii), (iii), (iv),
(x) and (xiii) above; provided, however, that (a) such new Lien shall be
limited to all or part of the same Property (including future improvements
thereon, accessions thereto and proceeds thereof) that secured the original
Lien and (b) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of (1) the outstanding principal
amount or, if greater, the committed amount of the Indebtedness secured by such
original Lien immediately prior to such extension, renewal, refinancing,
refunding or exchange and (2) an amount necessary to pay any fees and expenses,
including premiums, related to such refinancing, refunding, extension, renewal
or replacement; (xv) Liens encumbering property or assets under construction
arising from progress or partial payments by a customer of the Company or its
Restricted Subsidiaries relating to such property or assets; and (xvi) Liens in
favor of the Company or a Subsidiary Guarantor. Notwithstanding anything in
this paragraph to the contrary, the term "Permitted Liens" does not include
Liens resulting from the creation, incurrence, issuance, assumption or
Guarantee of any Production Payment and Reserve Sale other than (a) Production
Payments and Reserve Sales in connection with the acquisition of Properties
after the Issue Date, provided that any such Liens
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created in connection therewith are created, incurred, issued, assumed or
guaranteed in connection with the financing of, and within 90 days after the
acquisition of, the Property that is subject thereto, (b) Production Payments
and Reserve Sales, other than those described in clause (a) of this sentence,
to the extent such Production Payments and Reserve Sales constitute Asset Sales
made pursuant to and in compliance with Section 1013, or (c) Oil and Gas Liens
that are not Dollar-Denominated Production Payments or Volumetric Production
Payments, that are incurred in the ordinary course of business of the Company
and its Restricted Subsidiaries, and that may be deemed under the definition of
Production Payments and Reserve Sales to constitute Production Payments and
Reserve Sales.
SECTION 1012. Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, conduct any business or
enter into any transaction or series of transactions (including, but not
limited to, but excluding transactions under those certain agreements in
existence on the Issue Date and more particularly described on Annex D, the
sale, transfer, disposition, purchase, exchange or lease of Property, the
making of any Investment, the giving of any Guarantee or the rendering of any
service) with or for the benefit of any Affiliate of the Company (other than
the Company or a Wholly Owned Restricted Subsidiary), unless (i) such
transaction or series of transactions is on terms no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with a Person that is not an Affiliate of
the Company or such Restricted Subsidiary, and (ii) with respect to a
transaction or series of transactions involving aggregate payments by or to the
Company or such Restricted Subsidiary having a Fair Market Value equal to or in
excess of (a) $1.0 million but less than $5.0 million, the Board of Directors
of the Company (including a majority of the disinterested members of the Board
of Directors of the Company) approves such transaction or series of
transactions and, in its good faith judgment, believes that such transaction or
series of transactions complies with clause (i) of this paragraph, as evidenced
by a certified resolution delivered to the Trustee or (b) $5.0 million, (1) the
Company receives from an independent, nationally recognized investment banking
firm or appraisal firm, in either case specializing or having a specialty in
the type and subject matter of the transaction (or series of transactions) at
issue, a written opinion that such transaction (or series of transactions) is
fair, from a financial point of view, to the Company or such Restricted
Subsidiary and (2) the Board of Directors of the Company (including a majority
of the disinterested members of the Board of Directors of the Company) approves
such transaction or series of transactions and, in its good faith judgment,
believes that such transaction or series of transactions complies with clause
(i) of this paragraph, as evidenced by a certified resolution delivered to the
Trustee.
(b) The limitations of Section 1012(a) do not apply to (i) the
payment of reasonable and customary compensation (including pursuant to stock
option and stock purchase plans) to directors of the Company or any of its
Restricted Subsidiaries who are not employees of the Company or any of its
Restricted Subsidiaries, (ii) indemnities of officers and directors of the
Company or any Subsidiary consistent with such Person's bylaws and applicable
statutory provisions, (iii) the Company's and its Restricted Subsidiaries'
employee compensation and other
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benefit arrangements or (iv) Investments in Unrestricted Subsidiaries which are
deemed to be Restricted Payments under Section 1009.
SECTION 1013. Limitation on Asset Sales.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, consummate any Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time
of such Asset Sale at least equal to the Fair Market Value of the shares and
assets subject to such Asset Sale and (ii) at least 75% of the consideration
paid to the Company or such Restricted Subsidiary in connection with such Asset
Sale is in the form of cash or Cash Equivalents or Exchanged Properties
("Permitted Consideration").
(b) The Net Available Cash from Asset Sales by the Company or a
Restricted Subsidiary may be applied by the Company or such Restricted
Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or
is required by the terms of any Indebtedness of the Company or such Restricted
Subsidiary), to (i) prepay, repay or purchase Indebtedness of the Company or a
Subsidiary Guarantor or Indebtedness of such Restricted Subsidiary (in each
case excluding Indebtedness owed to the Company or an Affiliate of the Company
(other than pursuant to a Senior Credit Facility) and Indebtedness of the
Company or a Subsidiary Guarantor which is subordinated to the Notes or the
applicable Subsidiary Guaranty), (ii) to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary) or (iii) purchase Notes (excluding Notes owned by the
Company or an Affiliate of the Company, other than pursuant to an offer made to
all holders of the Notes).
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within 365 days from the date of such
Asset Sale shall constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $10.0 million, the Company will be required to make an
offer to purchase Notes having an aggregate principal amount equal to the
aggregate amount of Excess Proceeds (the "Prepayment Offer") at a purchase
price equal to 100% of the principal amount of such Notes plus accrued and
unpaid interest and Liquidated Damages, if any, to the Purchase Date (as
defined) (the "Prepayment Offer Payment") in accordance with the procedures
(including prorating in the event of oversubscription) set forth in this
Section 1013, but, if the terms of any Indebtedness (other than Indebtedness
which is subordinated to the Notes or a Subsidiary Guaranty) require that an
offer to purchase such Indebtedness be made contemporaneously with the
Prepayment Offer, then the Excess Proceeds shall be prorated between the
Prepayment Offer and such other offer in accordance with the aggregate
outstanding principal amounts of the Notes and such other Indebtedness, and the
aggregate principal amount of Notes for which the Prepayment Offer is made
shall be reduced accordingly. If the aggregate principal amount of Notes
tendered by Holders thereof exceeds the amount of available Excess Proceeds,
then such Excess Proceeds will be allocated pro rata according to the principal
amount of the Notes tendered and the Trustee will select the Notes to be
purchased in accordance with the Indenture. To the extent that any portion of
the amount of
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Excess Proceeds remains after compliance with the second sentence of this
paragraph and provided that all Holders of Notes have been given the
opportunity to tender their Notes for purchase as described in the following
paragraph (d), the Company or such Restricted Subsidiary may use such remaining
amount for general corporate purposes and the amount of Excess Proceeds will be
reset to zero.
(d) Within five days after the 365th day following the date of an
Asset Sale, the Company shall, if it is obligated to make an offer to purchase
the Notes pursuant to the preceding paragraph (c), send a written Prepayment
Offer notice, by first-class mail, to the Holders of the Notes (the "Prepayment
Offer Notice"), accompanied by such information regarding the Company and its
Subsidiaries as the Company in good faith believes will enable such Holders of
the Notes to make an informed decision with respect to the Prepayment Offer.
The Prepayment Offer Notice will state, among other things, (i) that the
Company is offering to purchase Notes pursuant to the provisions of the
Indenture, (ii) that any Note (or any portion thereof) accepted for payment
(and duly paid on the Purchase Date) pursuant to the Prepayment Offer shall
cease to accrue interest on the Purchase Date, (iii) that any Notes (or
portions thereof) not properly tendered will continue to accrue interest, (iv)
the purchase price and purchase date, which shall be, subject to any contrary
requirements of applicable law, no less than 30 days nor more than 60 days
after the date the Prepayment Offer Notice is mailed (the "Purchase Date"), (v)
the aggregate principal amount of Notes to be purchased, (vi) a description of
the procedure which Holders of Notes must follow in order to tender their Notes
and the procedures that Holders of Notes must follow in order to withdraw an
election to tender their Notes for payment, and (vii) all other instructions
and materials necessary to enable Holders to tender Notes pursuant to the
Prepayment Offer.
(e) On or before the Purchase Date, the Company will (i) accept
for payment Notes or portions thereof properly tendered pursuant to the
Prepayment Offer, (ii) deposit with the Paying Agent in immediately available
funds an amount equal to the Prepayment Offer Payment in respect of Notes or
portions thereof so tendered and (iii) deliver, or cause to be delivered, to
the Trustee the Notes so accepted together with an Officer's Certificate
listing the Notes or portions thereof tendered to the Company and accepted for
payment. The Paying Agent shall promptly mail to each holder of Notes so
accepted payment in an amount equal to the Prepayment Offer Payment for such
Notes and the Trustee shall, upon receipt of a written order in the form of an
Officer's Certificate, promptly authenticate and mail to each holder a new
Notes in a principal amount equal to any unpurchased portion of the Notes
surrendered, if any; provided, that each such new Note shall be in a principal
amount of $1,000 or any integral multiple thereof. The Company will announce
publicly the results of a Prepayment Offer on or as soon as practicable after
the Purchase Date.
(f) The Company will comply, to the extent applicable, with the
requirements of Rules 13e-4 and 14e-1 under the Exchange Act and any other
securities laws or regulations thereunder to the extent such laws and
regulations are applicable in connection with the purchase of Notes as
described above. To the extent that the provisions of any securities laws or
regulations conflict with the provisions relating to the Prepayment Offer, the
Company will comply with the
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applicable securities laws and regulations and will not be deemed to have
breached its obligations described above.
SECTION 1014. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries.
The Company will not (i) permit any Restricted Subsidiary to sell or
otherwise issue any Capital Stock other than to the Company or one of its
Wholly Owned Restricted Subsidiaries or (ii) permit any Person other than the
Company or a Wholly Owned Restricted Subsidiary to own any Capital Stock of any
other Restricted Subsidiary, except, in each case, for (a) directors'
qualifying shares, (b) the Capital Stock of a Restricted Subsidiary owned by a
Person at the time such Restricted Subsidiary became a Restricted Subsidiary or
acquired by such Person in connection with the formation of the Restricted
Subsidiary, or transfers thereof or (c) a sale of all of the Capital Stock of a
Restricted Subsidiary owned by the Company or its Subsidiaries effected in
accordance with the provisions of Section 1013.
SECTION 1015. Repurchase of Notes at the Option of the Holder Upon a Change
of Control.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes will have the right, at such Holder's option, pursuant to an offer
(subject only to conditions required by applicable law, if any) by the Company
(the "Change of Control Offer"), to require the Company to repurchase all or
any part of such Holder's Notes (provided, that the principal amount of such
Notes must be $1,000 or an integral multiple thereof) on a date (the "Change of
Control Payment Date") that is no fewer than 30 days and no later than 60 days
from the date of the Change of Control Offer, at a cash price equal to 101% of
the principal amount thereof (the "Change of Control Payment") plus accrued and
unpaid interest and Liquidated Damages, if any, to the Change of Control
Payment Date. The Change of Control Offer shall be made within 30 days
following a Change of Control and shall state, among other things: (i) that a
Change of Control has occurred and a Change of Control Offer is being made
pursuant to the Indenture and that all Notes (or portions thereof) properly
tendered will be accepted for payment; (ii) the purchase price and the Change
of Control Payment Date; (iii) that any Note (or portion thereof) accepted for
payment (and duly paid on the Change of Control Payment Date) pursuant to the
Change of Control Offer shall cease to accrue interest on the Change of Control
Payment Date; (iv) that any Notes (or portions thereof) not properly tendered
will continue to accrue interest; (v) a description of the transaction or
transactions constituting the Change of Control; (vi) the procedures that
Holders of Notes must follow in order to tender their Notes (or portions
thereof) for payment and the procedures that Holders of Notes must follow in
order to withdraw an election to tender Notes (or portions thereof) for
payment; and (vii) all other instructions and materials necessary to enable
Holders to tender Notes pursuant to the Change of Control Offer.
(b) A "Change of Control" shall be deemed to occur if (i) any
"person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring,
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holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act), becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act) of 50% or more of the total voting power of
all classes of the Voting Stock of the Company or warrants or options to
acquire such Voting Stock, calculated on a fully diluted basis, (ii) the sale,
lease, conveyance or transfer of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole (other than to any
Wholly Owned Restricted Subsidiary) shall have occurred, (iii) the stockholders
of the Company shall have approved any plan of liquidation or dissolution of
the Company, (iv) the Company consolidates with or merges into another Person
or any Person merges into the Company in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is
reclassified into or exchanged for cash, securities or other property, other
than any such transaction where (a) the outstanding Voting Stock of the Company
is reclassified into or exchanged for Voting Stock of the surviving corporation
that is Capital Stock and (b) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less
than a majority of the Voting Stock of the surviving corporation immediately
after such transaction in substantially the same proportion as before the
transaction or (v) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Company's Board of Directors
(together with any new directors whose election or appointment by such board or
whose nomination for election by the stockholders of the Company was approved
by a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Company's Board of Directors then in office, excluding
directors elected by JEDI II or its affiliates.
(c) On or before the Change of Control Payment Date, the Company
will (i) accept for payment Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
cash sufficient to pay the Change of Control Payment (together with accrued and
unpaid interest and Liquidated Damages, if any) of all Notes so tendered and
(iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Paying Agent (or the Company, if so acting) promptly will pay the
Holders of Notes so accepted an amount equal to the Change of Control Payment
(together with accrued and unpaid interest and Liquidated Damages, if any), and
the Trustee promptly will authenticate and deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered.
Any Notes not so accepted will be delivered promptly by the Company to the
Holder thereof. The Company publicly will announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(d) Any Change of Control Offer will be made in compliance with
all applicable laws, rules and regulations, including, if applicable,
Regulation 14E under the Exchange Act and the rules thereunder and all other
applicable Federal and state securities laws and any provisions of the
Indenture which conflict with such laws shall be deemed to be superseded by the
provisions of such laws.
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(e) If the Change of Control Payment Date hereunder is on or after
an interest payment Record Date and on or before the associated Interest
Payment Date, any accrued and unpaid interest (and Liquidated Damages, if any)
due on such Interest Payment Date will be paid to the Person in whose name a
Note is registered at the close of business on such Record Date, and such
interest (and Liquidated Damages, if applicable) will not be payable to Holders
who tender the Notes pursuant to such Change of Control Offer.
(f) Prior to making a Change of Control Offer pursuant to
paragraph (a), but in any event within 90 days following such Change of
Control, the Company will (i) obtain any required consents under the Credit
Agreement and the ECT Credit Agreement to permit the making of the Change of
Control Offer and the purchase of Notes pursuant to this Section 1015, or (ii)
repay all or a portion of the outstanding Indebtedness of the Company and its
Subsidiaries to the extent necessary (including, if necessary, payment in full
of such Indebtedness and payment of any prepayment premiums, fees, expenses or
penalties) to permit the making of the Change of Control Offer and the purchase
of Notes pursuant to this Section 1015 without such consent.
(g) The obligations with respect to Change of Control Offer shall
be satisfied to the extent actually performed by a third party in accordance
with the terms of this Indenture.
SECTION 1016. Investment Company.
The Company will not, and will not permit any of its Subsidiaries to,
be required to register as an "investment company" (as that term is defined in
the Investment Company Act of 1940, as amended), or otherwise become subject to
registration under the Investment Company Act.
SECTION 1017. Reports.
Whether or not the Company is subject to the reporting requirement of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder and to prospective purchasers of Notes identified to
the Company by an Initial Purchaser within 15 days after it is or would have
been (if it were subject to such reporting obligations) required to file such
with the Commission, annual and quarterly financial statements substantially
equivalent to financial statements that would have been included in reports
filed with the Commission, if the Company were subject to the requirements of
Section 13 or 15(d) of the Exchange Act, including, with respect to annual
information only, a report thereon by the Company's certified independent
public accountants as such would be required in such reports to the Commission,
and, in each case, together with a management's discussion and analysis of
financial condition and results of operations which would be so required and,
unless the Commission will not accept such reports, file with the Commission
the annual, quarterly and other reports which it is or would have been required
to file with the Commission.
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SECTION 1018. Restricted and Unrestricted Subsidiaries.
Unless defined or designated as an Unrestricted Subsidiary, any Person
that becomes a Subsidiary of the Company or any of its Restricted Subsidiaries
shall be classified as a Restricted Subsidiary subject to the provisions of the
next paragraph. The Company may designate a Subsidiary (including a newly
formed or newly acquired Subsidiary) of the Company or any of its Restricted
Subsidiaries as an Unrestricted Subsidiary if (i) such Subsidiary does not at
such time own any Capital Stock, Redeemable Stock or Indebtedness of, or own or
hold any Lien on any property of, the Company or any other Restricted
Subsidiary, (ii) such Subsidiary does not at such time have any Indebtedness or
other obligations which, if in default, would result (with the passage of time
or notice or otherwise) in a default on any Indebtedness of the Company or any
Restricted Subsidiary and (iii)(a) such designation is effective immediately
upon such Subsidiary becoming a Subsidiary of the Company or of a Restricted
Subsidiary, (b) the Subsidiary to be so designated has total assets of $1,000
or less or (c) if such Subsidiary has total assets greater than $1,000, then
such redesignation as an Unrestricted Subsidiary is deemed to constitute a
Restricted Payment in an amount equal to the Fair Market Value of the Company's
direct and indirect ownership interest in such Subsidiary, and such Restricted
Payment would be permitted to be made at the time of such designation under
Section 1009 hereof. Except as provided in clauses (iii)(b) and (c) of this
paragraph, no Restricted Subsidiary may be redesignated as an Unrestricted
Subsidiary. The designation of an Unrestricted Subsidiary or removal of such
designation shall be made by the Board of Directors of the Company or a
committee thereof pursuant to a certified resolution delivered to the Trustee
and shall be effective as of the date specified in the applicable certified
resolution, which shall not be prior to the date such certified resolution is
delivered to the Trustee.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition or otherwise, but excluding the creation by the
Company of a new Wholly Owned Restricted Subsidiary) unless, after giving
effect to such action, transaction or series of transactions, on a pro forma
basis, (i) the Company could Incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 1008 hereof and (ii) no
Default or Event of Default would occur or be continuing.
SECTION 1019. Future Guarantors.
The Company shall cause any Subsidiary that becomes a Restricted
Subsidiary (and any Restricted Subsidiary that previously was an Unrestricted
Subsidiary and becomes a Restricted Subsidiary) after the Issue Date to execute
and deliver to the Trustee a supplemental indenture pursuant to which such
Restricted Subsidiary will become a Subsidiary Guarantor and shall enter into a
Subsidiary Guarantee as provided in Section 1308.
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SECTION 1020. Statement by Officers as to Default; Compliance Certificates.
(a) The Company will deliver to the Trustee, within 90 days after
the end of each fiscal year, and within 60 days after the end of each fiscal
quarter (other than the fourth fiscal quarter), of the Company ending after the
date hereof an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of Section 801 or
Sections 1004 to 1019, inclusive, and if the Company shall be in default,
specifying all such Defaults and the nature and status thereof of which they
may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible
and in any event within 10 days after the Company becomes aware or should
reasonably become aware of the occurrence of a Default or an Event of Default,
an Officers' Certificate setting forth the details of such Default or Event of
Default, and the action which the Company proposes to take with respect
thereto.
(c) So long as not contrary to the then-current recommendations of
the American Institute of Certified Public Accountants, the Company shall
deliver to the Trustee within 90 days after the end of each fiscal year a
written statement by the Company's independent public accountants stating (A)
that their audit examination has included a review of the terms of this
Indenture and the Notes as they relate to accounting matters, and (B) whether,
in connection with their audit examination, any Default has come to their
attention and, if such a Default has come to their attention, specifying the
nature and period of the existence thereof.
SECTION 1021. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801 and Sections 1004 to 1019, if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Notes shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect; provided, however, with respect to any provision requiring a
supermajority approval to waive, such provision may only be waived by such a
supermajority, and with respect to a covenant or provision which cannot be
modified or amended without the consent of the Holder of each outstanding Note
affected, such provision may only be waived by the consent of each and every
Holder of outstanding Note affected.
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ARTICLE ELEVEN
Redemption of Notes
SECTION 1101. Right of Redemption.
The Company will not have the right to redeem any Notes prior to July
1, 2003 (other than out of the cash proceeds of an Equity Offering, as
described below). The Notes will be redeemable for cash at the option of the
Company, in whole or in part, at any time on and after July 1, 2003, at the
Redemption Prices specified in the form of Note hereinafter set forth together
with any applicable accrued and unpaid interest and Liquidated Damages, if any,
thereon to the Redemption Date (subject to the right of Holders of Record on a
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date). Notwithstanding the foregoing, on or prior to
July 1, 2001, the Company may, at any time or from time to time, redeem up to
an aggregate of 20% of the aggregate principal amount of the Notes originally
outstanding at a Redemption Price equal to 112.5% of the principal amount
thereof (subject to the right of Holders of Record on a Record Date to receive
interest due on an Interest Payment Date that is on or prior to such Redemption
Date) plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of redemption, with cash from the cash proceeds to the Company of one or
more Equity Offerings; provided, that at least 80% of the aggregate principal
amount of the Notes originally outstanding remain outstanding immediately after
the occurrence of each such redemption; provided, further, that such notice of
redemption shall be sent within 30 days after the date of closing of any such
Equity Offering, and such redemption shall occur within 60 days after the date
such notice is sent.
SECTION 1102. Applicability of Article.
Redemption of Notes at the election of the Company, as permitted by
any provision of this Indenture, shall be made in accordance with such
provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at
the election of the Company of less than all the Notes, the Company shall, at
least 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Notes to be redeemed.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
(a) If less than all the Notes are to be redeemed, the particular
Notes to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Notes not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
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(equal to $1,000 or any integral multiple thereof) of the principal amount of
Notes of a denomination larger than $1,000.
(b) The Trustee shall promptly notify the Company and each
Securities Registrar in writing of the Notes selected for redemption and, in
the case of any Notes selected for partial redemption, the principal amount
thereof to be redeemed.
(c) For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Notes shall
relate, in the case of any Notes redeemed or to be redeemed only in part, to
the portion of the principal amount of such Notes which has been or is to be
redeemed.
SECTION 1105. Notice of Redemption.
(a) Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Notes to be redeemed, at his address
appearing in the Securities Register.
(b) All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Notes are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Notes to be redeemed, and in the case of
partial redemption, a statement as to the effect that upon surrender of such
Notes, a new Note or Notes in a principal amount equal to the unredeemed
portion thereof will be issued,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Note to be redeemed, and
(5) the place or places where such Notes are to be
surrendered for payment of the Redemption Price.
(c) Notice of redemption of Notes to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company if the Company gives
notice to the Trustee at least 45 days prior to the Redemption Date.
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SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and any applicable accrued
interest and Liquidated Damages on, all the Notes which are to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amount necessary to pay the redemption price of, Liquidated
Damages, if any, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest and Liquidated Damages,
if any, shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after an interest record date but on
or prior to the related interest payment date, then any accrued and unpaid
interest and Liquidated Damages, if any, shall be paid to the Person in whose
name such Note was registered at the close of business on such record date. If
any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes.
SECTION 1107. Notes Payable on Redemption Date.
(a) Notice of redemption having been given as aforesaid, the Notes
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price any applicable
accrued interest) such Notes shall not bear interest. Upon surrender of any
such Note for redemption in accordance with said notice, such Note shall be
paid by the Company at the Redemption Price, together with any applicable
accrued interest and Liquidated Damages to the Redemption Date; provided,
however, that installments of interest whose Interest Payment Date is on or
prior to the Redemption Date shall be payable to the Holders of such Notes, or
one or more Predecessor Notes, registered as such at the close of business on
the relevant Record Dates according to their terms and the provisions of
Section 307.
(b) If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate provided by the
Note.
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SECTION 1108. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered at
an office or agency of the Company designated for that purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option, elect to have its obligations and the
obligations of the Subsidiary Guarantors discharged with respect to the
Outstanding Notes upon compliance with the conditions set forth below in this
Article Twelve.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, the Company shall be deemed to have paid and
discharged the entire indebtedness represented and the Subsidiary Guarantors
shall be deemed to have been discharged from their obligations, and this
Indenture shall cease to be of further effect as to all outstanding Notes and
Subsidiary Guarantees ("Legal Defeasance"), except as to (i) rights of Holders
to receive payments in respect of the principal of, premium, if any, and
interest (and Liquidated Damages, if any) on such Notes when such payments are
due from the trust funds; (ii) the Company's obligations with respect to such
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes, and the maintenance of an office or agency for
payment and money for security payments held in trust; (iii) the rights,
powers, trust, duties, and immunities of the Trustee, and the Company's
obligations in connection therewith; and (iv) the Legal Defeasance provisions
of this Article Twelve, all of which shall survive until otherwise terminated
or discharged hereunder. Subject to compliance with this Article Twelve, the
Company may exercise its option under this Section 1202 notwithstanding the
prior exercise of its option under Section 1203.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, the Company may, at its option and at any time,
elect to have the obligations of the Company and the Subsidiary Guarantors
released with respect to (i) its obligations under Sections
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1005 through 1019, inclusive, and clauses (D) and (E) of Section 801(a)(ii) and
(ii) the occurrence of an event specified in Sections 501(4), (with respect to
any of Sections 1005 through 1019, inclusive), 501(7) and 501(8) shall not be
deemed to be an Event of Default on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"). For this purpose,
such covenant defeasance means that 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 Section or clause, whether directly or indirectly by reason
of any reference elsewhere herein to any such Section or clause or by reason of
any reference in any such Section or clause to any other provision herein or in
any other document, but the remainder of this Indenture and such Notes shall be
unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1202 or Section 1203 to the then Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 609 who shall agree to comply with the provisions of this Article
Twelve 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 Notes, (A) U.S. legal tender in
an amount, or (B) U.S. Government Obligations 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,
money in an amount, or (C) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants or investment
bankers 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 (and Liquidated Damages, if any) on such Notes on the stated date
for payment thereof or on the redemption date of such principal or installment
of principal of, premium, if any, or interest (or Liquidated Damages, if any)
on such Notes. The Holders of Notes must have a valid, perfected, exclusive
security interest in such trust. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged
or (y) 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, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository
receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act
of 1933, as amended) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government
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Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
(2) In the case of an election of Legal Defeasance under Section
1202, before the date that is one year prior to the Stated Maturity, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States stating that (x) the Company has received from, or there has been
published by the Internal Revenue Service, a ruling or (y) since the date of
this Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of the Outstanding Notes will not recognize income,
gain or loss for Federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would have been the case if
such deposit, defeasance and discharge had not occurred.
(3) In the case of an election of Covenant Defeasance under
Section 1203, before the date that is one year prior to the Stated Maturity,
the Company shall have delivered to the Trustee an Opinion of Counsel in the
United States, reasonably acceptable to such Trustee, to the effect that the
Holders of the Outstanding Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and Covenant Defeasance
and will be subject to Federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such deposit and
covenant defeasance had not occurred.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Notes, if then listed on any Notes exchange,
will not be delisted as a result of such deposit.
(5) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 608 and for
purposes of the Trust Indenture Act with respect to any Notes of the Company.
(6) No Default or Event of Default which with notice or lapse of
time or both would become an Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit).
(7) 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 (other than this Indenture) to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
interest of preferring the Holders of such Notes over any other creditors of
the Company or with the intent of defeating, hindering, or delaying or
defrauding any other creditors of the Company or others.
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(9) 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
1202 or the Covenant Defeasance under Section 1203 (as the case may be) have
been complied with.
(10) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company as defined
in the Investment Company Act of 1940, as amended, or such trust shall be
qualified under such act or exempt from regulation thereunder.
SECTION 1205. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
(a) Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee--collectively,
for purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Notes, of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.
(b) The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Notes.
(c) Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it
as provided in Section 1204 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent defeasance or
covenant defeasance.
SECTION 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1202 or 1203 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, or if a Default from a bankruptcy or insolvency event occurs
at any time during the period ending on the 91st day after the date of a
deposit by the Company hereunder, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Twelve until such time as the Trustee or
Paying Agent is permitted to apply all such
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money in accordance with Section 1202 or 1203; provided, however, that if the
Company makes any payment of principal of (and premium, if any) or interest
(and Liquidated Damages, if any) on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or the
Paying Agent.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, 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 Notes shall thereafter, as a 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; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining shall be repaid to the Company.
ARTICLE THIRTEEN
Subsidiary Guarantees
SECTION 1301. Subsidiary Guarantees.
(a) Subject to the provisions of this Article Thirteen, each
Subsidiary Guarantor, jointly and severally, hereby irrevocably and
unconditionally guarantees to each Holder and to the Trustee and its successors
and assigns (the "Subsidiary Guarantee"): (i) the full and punctual payment of
principal of, premium, if any, and interest on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture and the Notes and (ii) the full
and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Notes (all the
foregoing being hereinafter collectively called the "Obligations"). Each
Subsidiary Guarantor further agrees that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from such
Subsidiary Guarantor and that such Subsidiary Guarantor will remain bound under
this Article Thirteen notwithstanding any extension or renewal of any
Obligation.
(b) Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Notes or the Obligations. The obligations of
each Subsidiary Guarantor hereunder shall not be affected by (a)
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the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Notes or any other agreement or otherwise, (b) any extension or
renewal of any thereof, (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Notes or any other
agreement, (d) the release of any security held by any Holder or the Trustee
for the Obligations of any of them, (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Obligations, or (f) any change in the ownership of such Subsidiary Guarantor.
(c) Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Obligations.
(d) Each Subsidiary Guaranty will be a senior unsecured obligation
of the applicable Subsidiary Guarantor and will rank pari passu with any
existing and future unsubordinated indebtedness of such Subsidiary Guarantor,
but will be effectively subordinated to the rights of holders of secured
unsubordinated indebtedness of such Subsidiary Guarantor to the extent of the
value of the collateral securing such indebtedness.
(e) Except as expressly set forth in Sections 1201, 901, 902, 1303
and 1307, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of such Subsidiary Guarantor
or would otherwise operate as a discharge of such Subsidiary Guarantor as a
matter of law or equity.
(f) Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of, premium,
if any, or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
(g) In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of, premium, if any, or interest on any
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Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Obligation, each Subsidiary Guarantor hereby promises to and will, upon receipt
of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders or the Trustee an amount equal to the sum of (i) the unpaid
amount of such Obligations, (ii) accrued and unpaid interest on such Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Obligations of the Company to the Holders and the Trustee.
(h) Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Obligations guaranteed hereby
until payment in full of all Obligations and all obligations to which the
Obligations are subordinated. Each Subsidiary Guarantor further agrees that,
as between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article Five for the purposes of such Subsidiary Guarantor's
Subsidiary Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article Five, such Obligations (whether or not
due and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of this Section.
(i) Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 1302. Execution and Delivery of Subsidiary Guarantees.
(a) To evidence the Subsidiary Guarantees set forth in Section
1301 hereof, each of the Subsidiary Guarantors agrees that a notation of its
Subsidiary Guarantee substantially in the form of Annex B hereto shall be
endorsed on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of such Subsidiary Guarantor by its
Chairman of the Board, its President or one of its Vice Presidents, and
attested to by its Secretary or one of its Assistant Secretaries.
(b) Each of the Subsidiary Guarantors agrees that the Subsidiary
Guarantees set forth in this Article Thirteen will remain in full force and
effect and apply to all the Notes notwithstanding any failure to endorse on
each Note a notation of the Subsidiary Guarantees.
(c) If an individual whose manual or facsimile signature is on a
Note shall have ceased to hold such office prior to the authentication and
delivery of the Note on which the Subsidiary Guarantees are endorsed, the
Subsidiary Guarantees shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantees set forth in this Indenture on behalf of the Subsidiary
Guarantors.
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SECTION 1303. Limitation on Liability.
Any term or provision of this indenture to the contrary
notwithstanding, the maximum aggregate amount of the Obligations guaranteed
hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that
can be hereby guaranteed without rendering this Indenture, as it relates to
such Subsidiary Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. To effectuate the foregoing intention, the obligations of
each Subsidiary Guarantor shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations hereunder, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal, state or foreign
law. Each Subsidiary Guarantor that makes a payment or distribution under a
Subsidiary Guarantee shall be entitled to a contribution from each other
Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of
each Subsidiary Guarantor.
SECTION 1304. Successors and Assigns.
This Article Thirteen shall be binding upon each Subsidiary Guarantor
and its successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Notes shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 1305. No Waiver.
Neither a failure nor a delay on the part of either the Trustee or the
Holders in exercising any right, power or privilege under this Article Thirteen
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege. The rights, remedies and benefits of the Trustee and the Holders
herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article Thirteen
at law, in equity, by statute or otherwise.
SECTION 1306. Modification.
No modification, amendment or waiver of any provision of this Article
Thirteen, nor the consent to any departure by any Subsidiary Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice
to or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in the same,
similar or other circumstances.
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SECTION 1307. Release of Subsidiary Guarantor.
Any Subsidiary Guarantor that is no longer a Restricted Subsidiary
may, by execution and delivery to the Trustee of a supplemental indenture
satisfactory to the Trustee, be released from its Subsidiary Guarantee and
cease to be a Subsidiary Guarantor. Any Subsidiary Guarantor that is
designated an Unrestricted Subsidiary in accordance with the terms of this
Indenture shall be released from and relieved of its obligations under its
Subsidiary Guaranty upon execution and delivery of a supplemental indenture
satisfactory to the Trustee. Such supplemental indenture shall be accompanied
by an Officer's Certificate and an Opinion of Counsel, each stating that such
supplemental indenture and release of the Subsidiary Guaranty complies with the
provisions of this Indenture and that all conditions precedent to such
supplemental indenture and release of the Subsidiary Guarantee have been
complied with.
SECTION 1308. Execution of Supplemental Indenture for Future Subsidiary
Guarantors.
Each Subsidiary which is required to become a Subsidiary Guarantor
pursuant to Section 1018 shall, and the Company shall cause each such
Subsidiary to, promptly execute and deliver to the Trustee a supplemental
indenture pursuant to which such Subsidiary shall become a Subsidiary Guarantor
under this Article Thirteen and shall guarantee the Obligations. Concurrently
with the execution and delivery of such supplemental indenture, the Company
shall deliver to the Trustee an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary and that, subject to the application of bankruptcy, insolvency,
moratorium, fraudulent conveyance or transfer and other similar laws relating
to creditors' rights generally and to principles of equity, whether considered
in a proceeding at law or in equity, the Subsidiary Guarantee of such
Subsidiary Guarantor is a legal, valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms.
SECTION 1309. Application of Certain Terms and Provisions to the Subsidiary
Guarantors.
(a) For purposes of any provision of this Indenture which provides
for the delivery by any Subsidiary Guarantor of an Officers' Certificate and/or
an Opinion of Counsel, the definitions of such terms in Section 101 shall apply
to such Subsidiary Guarantor as if references therein to the Company were
references to such Subsidiary Guarantor.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other document which by any provision of this Indenture is
to be made by any Subsidiary Guarantor, shall be sufficient if evidenced as
described in Section 105 as if references therein to the Company were
references to such Subsidiary Guarantor.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document which by any provision of
this Indenture is required or permitted to be given or served by the Trustee or
by any Holder may be given or served as described in
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Section 105 as if references therein to the Company were references to such
Subsidiary Guarantor.
(d) Upon any application or request by any Subsidiary Guarantor to
the Trustee to take any action under any provision of this Indenture, such
Subsidiary Guarantor shall furnish to the Trustee such certificates and
opinions as are required in Section 102 hereof as if all references therein to
the Company were references to such Subsidiary Guarantor.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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[This page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
QUEEN SAND RESOURCES, INC., a
Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer,
President and Chairman of the
Board
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Secretary
QUEEN SAND RESOURCES, INC., a
Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Secretary
NORTHLAND OPERATING CO., a
Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Secretary
103
CORRIDA RESOURCES, INC., a
Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Secretary
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
Attest:
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Assistant Secretary
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Annex A
FORM OF NOTE
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or 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 Depositary
Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇)(▇▇▇ "Depositary"), to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of the Depositary (and any payment
is made to Cede & Co. or such other entity as is requested by an authorized
representative of the Depositary), 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 HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES
FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE
HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE
OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS
THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2) (3) OR (7) UNDER THE SECURITIES ACT
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO
---------------
(1) This paragraph should only be added if the Note is issued in global
form.
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105
THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE,
(5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR OR A NON-U.S. PERSON HOLDING THIS
SECURITY AGREES IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH
CERTIFICATES, LEGAL OPINIONS AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION.(2)
THIS NOTE IS A REGULATION S TEMPORARY GLOBAL NOTE AS SPECIFIED IN THE
INDENTURE. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 305 OF THE
INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS REGULATION S
TEMPORARY GLOBAL NOTE MAY BE MADE FOR AN INTEREST IN A REGULATION S PERMANENT
GLOBAL NOTE OR A RULE 144A GLOBAL NOTE DURING THE 40-DAY RESTRICTED PERIOD.(3)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, UNLESS AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS THEREOF IS AVAILABLE.(4)
---------------
(2) This sentence should be included only for the Transfer Restricted
Notes.
(3) This paragraph should be included only for the Transfer Restricted
Notes.
(4) This paragraph should be included only for Regulation S Permanent
Global Notes.
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106
QUEEN SAND RESOURCES, INC.
12 1/2% [SERIES A] [SERIES B] SENIOR NOTES DUE 2008
CUSIP No. [747927 AA 9 Rule 144A] U.S.$125,000,000
[747927 AB 7 Series B]
[747927 AC 5 IAI]
Queen Sand Resources, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to _______, or _________
registered assigns, the principal sum of one hundred twenty-five million
dollars on July 1, 2008, and to pay interest thereon from the Issue Date or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on January 1 and July 1 in each year,
commencing January 1, 1999, at 12 1/2% until the principal hereof is paid or
made available for payment, and (to the extent that the payment of such
interest shall be legally enforceable) at the rate of 2% per annum on any
overdue principal and premium and on any overdue installment of interest and
Liquidated Damages, if any, until paid as specified on the reverse hereof[;
provided, however, in the event of a Registration Default, the Company shall
pay Liquidated Damages to the holder hereof at a rate of 0.5% per annum during
the 90-day period immediately following the occurrence of any Registration
Default and shall increase by 0.25% per annum at the end of each subsequent
90-day period, but in no event shall such rate exceed 1.50% per annum].(5)
The interest (and Liquidated Damages, if any) so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record
Date for such payment, which shall be the June 15 or December 15 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest (and Liquidated Damages, if any) not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Notes not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest (and
Liquidated Damages, if any) on this Note will be made at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, The
City of New York, in such coin or currency of the
---------------
(5) This proviso should be included only for the Initial Notes.
98
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Securities
Register.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
QUEEN SAND RESOURCES, INC., a
Delaware corporation
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
Attest:
--------------------------
Name:
---------------------
Title:
--------------------
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108
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
Dated:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
as Trustee
By:
---------------------------
Authorized Officer
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The [Rule 144A] [Regulation S Temporary] [Regulation S Permanent]
[Global] Note is one of a duly authorized issue of Notes of the Company
designated as its 12 1/2% [Series A] [Series B] Senior Notes due 2008 (herein
called the "Notes"), limited in aggregate principal amount to $125,000,000,
issued and to be issued under an Indenture, dated as of July 1, 1998 (herein
called the "Indenture"), among the Company, the Subsidiary Guarantors parties
thereto and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Notes and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
The Notes are subject to redemption upon not less than 30 nor more than
60 days' notice by mail, at any time on and after July 1, 2003, as a whole or
in part, at the option of the Company, at the following Redemption Prices
(expressed as a percent of the principal amount) which, if during the
twelve-month period beginning on July 1 of the years indicated
Redemption
Year Price
---- -----
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106.2500%
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.6875%
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.1250%
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.5625%
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0000%;
in each case plus interest thereon accruing from the most recent Interest
Payment Date to which interest has been paid or duly provided for, provided
that interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Notes of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.
Notwithstanding the foregoing, at any time on or prior to July 1, 2001,
the Company may, at any time or from time to time, redeem up to an aggregate
of 20% of the aggregate principal amount of the Notes originally outstanding at
a Redemption Price equal to 112.5% of the principal amount thereof (subject to
the right of Holders of record on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such Redemption Date) plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of redemption,
with cash from the cash proceeds to the Company of one or more Equity
Offerings; provided, that at least 80% of the aggregate principal amount of the
Notes originally outstanding remain outstanding immediately after the
occurrence of each such redemption; provided, further, that such notice of
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110
redemption shall be sent within 30 days after the date of closing of any such
Equity Offering, and such redemption shall occur within 60 days after the date
such notice is sent.
The Notes do not have the benefit of any sinking fund obligations.
In the event of redemption or purchase pursuant to a Prepayment Offer or
Change of Control Offer of this Note in part only, a new Note or Notes for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, there may be
declared due and payable the principal amount of the Notes, in the manner and
with the effect provided in the Indenture. Upon any acceleration of maturity of
the Notes, all principal of and accrued interest and Liquidated Damages, if
any, on the Notes shall be due and payable immediately.
The Indenture provides that, subject to certain conditions, if (i)
certain Net Available Cash is available to the Company as a result of Asset
Sales or (ii) a Change of Control occurs, the Company shall be required to make
a Prepayment Offer or Change of Control Offer, respectively, for all of the
Notes.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this Note or (ii) certain restrictive covenants and
Events of Default with respect to this Note, in each case upon compliance with
certain conditions set forth therein.
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 rights of the Holders of the Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of a
majority in aggregate principal amount of the Notes at the time Outstanding.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Notes at the time Outstanding,
on behalf of the Holders of all the Notes, 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 the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note 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) and
interest (and Liquidated Damages, if any) on this Note at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Securities Register,
upon surrender of this Note for registration
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111
of transfer at the office or agency of the Company in the Borough of Manhattan,
The City of New York and at any other office or agency maintained by the
Company for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Notes, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes are issuable only in 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, Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year of
twelve 30-day months.
No direct or indirect stockholder, employee, officer or director, as
such, past, present or future of the Company, the Subsidiaries or any successor
entity shall have any personal liability in connection with this Note solely by
reason of his or its status as such stockholder, employee, officer or director.
Each Holder by accepting this Note waives and releases all such liability and
further acknowledges the waiver and release are part of the consideration for
the issuance of this Note.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture. In addition to the rights
provided to Holders of the Notes under the Indenture, Holders of Notes shall
have all the rights set forth in the Registration Rights Agreement.(6)
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
-----------------------
(6) This sentence should be included only for the Initial Notes.
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112
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased in its entirety by the
Company pursuant to Section 1013 or 1015 of the Indenture, check the box:
[ ]
If you want to elect to have only a part of this Note purchased by the
Company pursuant to Section 1013 or 1015 of the Indenture, state the amount: $
Dated: Your Signature:
--------------------
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or
trust company)
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SCHEDULE OF EXCHANGES(7)
The following exchanges relating to this Global Note have been made:
Principal Amount of
Amount of decrease Amount of increase this Global Note Signature of authorized
in Principal Amount in Principal Amount following such officer of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Notes Custodian
-------------------------------------------------------------------------------------------------------------------------
---------------
(7) This schedule should only be added if the Note is issued in global
form.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
TRANSFER RESTRICTED NOTES(8)
Re: 12 1/2% SERIES A SENIOR NOTES DUE 2008 OF QUEEN SAND RESOURCES, INC.
This Certificate relates to $ __________ principal amount of Notes held
in (check applicable space) _____ book-entry or _____ definitive form by
___________ (the "Transferor").
The Transferor (check applicable box):
[ ] has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Note held by the Depositary
a Note or Notes in definitive, registered form of authorized denominations and
an aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above-captioned Notes and as provided in Section 305 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:
[ ] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 305(a)(ii)(A) or Section
305(d)(ii)(A) of the Indenture).
[ ] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A promulgated under the Securities Act) that is
aware that any sale of Notes to it will be made in reliance on Rule 144A under
the Securities Act and that is acquiring such Transfer Restricted Note for its
own account, or for the account of another such "qualified institutional buyer"
(in satisfaction of Section 305(a)(ii)(B) or Section 305(d)(ii)(B) of the
Indenture).
[ ] Such Note is being transferred pursuant to an exemption from
registration in accordance with Rule 144, or outside the United States in an
Offshore Transaction in compliance with Rule 904 under the Securities Act, or
pursuant to an effective registration statement under the Securities Act (in
satisfaction of Section 305(a)(ii)(C) or Section 305(d)(ii)(C) of the
Indenture).
[ ] Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act and in accordance with applicable securities laws of the states
of the United States, other than as provided in the immediately
---------------
(8) This Certificate shall be included only for Initial Notes.
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preceding paragraph. An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
Certificate (in satisfaction of Section 305(a)(ii)(D) or Section 305(d)(ii)(D)
of the Indenture).
--------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-----------------------------
Date:
----------------------------
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
NOTES(9)
Re: 12 1/2% SENIOR NOTES DUE 2008 OF QUEEN SAND RESOURCES, INC.
This Certificate relates to $ __________ principal amount of Notes held
in (check applicable space) _____ book-entry or _____ definitive form by
___________ (the "Transferor").
The Transferor (check applicable box):
[ ] has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Note held by the Depositary
a Note or Notes in definitive, registered form of authorized denominations and
an aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
-----------------------------
[INSERT NAME OF TRANSFEROR]
By:
-------------------------
Date:
----------------------------
---------------
(9) This certificate shall be included only for the Exchange Notes.
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Annex B
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors listed below (hereinafter referred to as the
"Subsidiary Guarantors," which term includes any successors or assigns under
the Indenture, dated as of July 1, 1998 (the "Indenture"), among the Company,
the Subsidiary Guarantors and ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee, and
any additional Subsidiary Guarantors), have irrevocably and unconditionally
guaranteed (i) the due and punctual payment of the principal of, premium, if
any, and interest (and Liquidated Damages, if any) on the 12 1/2% Senior Notes
due 2008 (the "Notes") of Queen Sand Resources, Inc., a Delaware corporation
(the "Company"), whether at stated maturity, by acceleration or otherwise, the
due and punctual payment of interest on the overdue principal, and premium if
any, and (to the extent permitted by law) interest on any interest and
Liquidated Damages, if any, on the Notes, and the due and punctual performance
of all other obligations of the Company, to the Holders or the Trustee all in
accordance with the terms set forth in Article Thirteen of the Indenture, (ii)
in case of any extension of time of payment or renewal of any Notes or any such
other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise, and (iii) the payment of any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Subsidiary Guarantee.
The obligations of each Subsidiary Guarantor to the Holder and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article Thirteen of the Indenture and reference is hereby made to
such Indenture for the precise terms of this Subsidiary Guarantee.
No stockholder, officer, director, employee or incorporator, as such,
past, present or future of each Subsidiary Guarantor shall have any liability
by reason of his or its status as such stockholder, officer, director, employee
or incorporator for any obligations of any Subsidiary Guarantor under the
Notes, the Indenture or its Subsidiary Guarantee or for any claim based on, in
respect of, or by reason of, such obligations or their creation.
This is a continuing guarantee and shall remain in full force and effect
and shall be binding upon each Subsidiary Guarantor and its successors and
assigns until full and final payment of all of the Company's obligations under
the Notes and Indenture and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders, and, in the event of any transfer of
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This is a guarantee of payment and not of collectibility.
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The obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee shall be limited to the extent necessary to insure that it does not
constitute a fraudulent transfer or conveyance under applicable law.
The obligation evidenced by this Subsidiary Guarantee is, to the extent
provided in the Indenture, and this Subsidiary Guarantee is subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Subsidiary Guarantee, by accepting the same, (a) agrees to and shall be bound
by such provisions, and (b) authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
THE TERMS OF ARTICLE THIRTEEN OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
All terms used in this Subsidiary Guarantee which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
[Subsidiary Guarantor]
By
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Name
---------------------------
Title
--------------------------
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Annex C
[FORM OF REGULATION S CERTIFICATE FOR HOLDER]
CERTIFICATE TO BE DELIVERED UPON RECEIPT OF PAYMENT OF PRINCIPAL OR INTEREST
WITH RESPECT TO A REGULATION S TEMPORARY GLOBAL NOTE OR THE EXCHANGE OF A
REGULATION S TEMPORARY GLOBAL NOTE FOR REGULATION S PERMANENT GLOBAL NOTE
Re: 12 1/2% SENIOR NOTES DUE 2008 OF QUEEN SAND RESOURCES, INC.
The undersigned as the Holder of a beneficial interest in a Regulation S
Temporary Global Note is delivering this certificate concurrently with (check
one):
[ ] the receipt of a payment of interest or principal with respect
to a Regulation S Temporary Global Note; or
[ ] its written order to Euroclear or CEDEL, as the case may be,
to exchange its beneficial interest in the Regulation S Temporary Global Note
for beneficial interest in a Regulation S Permanent Global Note.
In connection with the above, the undersigned hereby certifies that:
[ ] the undersigned as the Holder of the beneficial interest in
the Regulation S Temporary Global Note is not a U.S. Person (as defined in
Section 305); or
[ ] the undersigned has purchased its interest in the Regulation S
Temporary Global Note in a transaction that is exempt from the registration
requirements under the Securities Act.
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[INSERT NAME OF HOLDER]
By:
---------------------------------
Date
-----------------------------
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[FORM OF REGULATION S CERTIFICATE FOR EUROCLEAR AND CEDEL]
CERTIFICATE TO BE DELIVERED UPON RECEIPT OF PAYMENT OF PRINCIPAL OR INTEREST
WITH RESPECT TO A REGULATION S TEMPORARY GLOBAL NOTE OR THE EXCHANGE OF A
REGULATION S TEMPORARY GLOBAL NOTE FOR REGULATION S PERMANENT GLOBAL NOTE
Re: 12 1/2% SENIOR NOTES DUE 2008 OF QUEEN SAND RESOURCES, INC.
The undersigned is delivering this certificate concurrently with (check
one):
[ ] the receipt of a payment of interest or principal with respect
to a Regulation S Temporary Global Note; or
[ ] the exchange of a Regulation S Temporary Global Note for a
Regulation S Permanent Global Note.
In connection with the above, the undersigned hereby certifies that:
[ ] None of the holders of beneficial interests in the Regulation
S Temporary Global Note is a U.S. Person (as defined in Section 305); or
[ ] Each of the holders of beneficial interests in the Regulation
S Temporary Global Note has purchased its interest in a transaction that is
exempt from the registration requirements under the Securities Act.
[▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, BRUSSELS OFFICE, AS
OPERATOR OF THE EUROCLEAR CLEARANCE
SYSTEM] [CEDEL BANK, SOCIETE ANONYME]
By:
------------------------------------
Date:
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Annex D
Existing Agreements
1. Securities Purchase Agreement dated as of March 27, 1997 between Joint
Energy Investments Limited Partnership, a Delaware limited
partnership, and Queen Sand Resources, Inc., a Delaware corporation.
2. Registration Rights Agreement by and between Queen Sand Resources,
Inc., a Delaware corporation, and Joint Energy Investments Limited
Partnership, a Delaware limited partnership, dated May 6, 1997.
3. Letter Agreement by and between Queen Sand Resources, Inc., a Delaware
corporation, and ECT Securities Corp., a Delaware corporation, dated
May 6, 1997.
4. Stockholders Agreement by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, EIBOC Investments Ltd., a Barbados
corporation, Queen Sand Resources, Inc., a Delaware corporation, and
Joint Energy Developments Investments Limited Partnership, a Delaware
limited partnership, dated May 6, 1997.
5. Common Stock Purchase Warrant Representing Right to Purchase 495,215
Shares of Common Stock of Queen Sand Resources, Inc., a Delaware
corporation, issued to Joint Energy Development Investments Limited
Partnership, a Delaware limited partnership, on January 6, 1998.
6. Common Stock Purchase Warrant Representing Right to Purchase 49,522
Shares of Common Stock of Queen Sand Resources, Inc., a Delaware
corporation, issued to Joint Energy Development Investments Limited
Partnership, a Delaware limited partnership, on January 6, 1998.
7. Common Stock Purchase Warrant Representing Right to Purchase 99,043
Shares of Common Stock of Queen Sand Resources, Inc., a Delaware
corporation, issued to Joint Energy Development Investments Limited
Partnership, a Delaware limited partnership, on January 6, 1998.
8. Common Stock Purchase Warrant Representing Right to Purchase 74,282
Shares of Common Stock of Queen Sand Resources, Inc., a Delaware
corporation, issued to Joint Energy Development Investments Limited
Partnership, a Delaware limited partnership, on January 6, 1998.
9. Common Stock Purchase Warrant Representing Right to Purchase 123,804
Shares of Common Stock of Queen Sand Resources, Inc., a Delaware
corporation, issued
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to Joint Energy Development Investments Limited Partnership, a
Delaware limited partnership, on January 6, 1998.
10. Common Stock Purchase Warrant Representing Right to Purchase 167,135
Shares of Common Stock of Queen Sand Resources, Inc., a Delaware
corporation, to be issued to Joint Energy Development Investments
Limited Partnership, a Delaware limited partnership.
11. ECT Hedge Agreements described in the Offering Memorandum.
12. Subordinated Revolving Credit Loan Agreement dated as of December 29,
1997, executed by Queen Sand Resources, Inc., certain lenders now or
hereafter parties thereto, and Enron Capital & Trade Resources Corp.,
as agent ("ECT Agent") for the lenders ("ECT Lenders"), as amended by
First Amendment to Loan Agreement among Queen Sand Resources, Inc. as
borrower, ECT Agent, and ECT Lenders, effective as of July 1, 1998.
13. Promissory Note, executed by Queen Sand Resources, Inc. and payable to
the order of Enron Capital & Trade Resources Corp. in the original
principal amount of $10,000,000.
14. Guaranty, executed by Queen Sand Resources, Inc., a Delaware
corporation, in favor of ECT Agent and the ECT Lenders.
15. Guaranty, executed by Corrida Resources, Inc., a Nevada corporation,
and Northland Operating Co., a Nevada corporation, in favor of ECT
Agent and the ECT Lenders.
16. Subordination Agreement, executed by the Agent in favor of the Bank of
Montreal as agent for the senior lenders, Queen Sand Resources, Inc.
and the Guarantors.
17. Registration Rights Agreement among Queen Sand Resources, Inc., a
Delaware corporation, the ECT Agent and Joint Energy Development
Investments Limited Partnership.
18. Mortgage, Line of Credit Mortgage, Deed of Trust, Assignment of
Production, Security Agreement and Financing Statement, dated
effective as of December 29, 1997, executed by Queen Sand Resources,
Inc. to ▇▇▇▇ ▇. ▇▇▇▇▇, Trustee, for the benefit of ECT Agent and the
ECT Lenders, which is to be recorded in the Real Property Records of
Anderson, Harrison, Limestone, Panola, Crockett, Ector, ▇▇▇▇▇▇,
▇▇▇▇▇▇, Ward, Dawson, Sterling, Martin, Reagan, Irion, Midland,
Glasscock, Archer, ▇▇▇▇▇, Baylor and Tyler Counties, Texas; ▇▇▇▇, ▇▇▇
and ▇▇▇▇▇▇ Counties, New Mexico; Beckham, Cimarron, Oklahoma and
Washita
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Counties, Oklahoma; St. ▇▇▇▇, St. ▇▇▇▇▇▇, Vermilion and Calcasieu
Parishes, Louisiana; and Amite, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, and ▇▇▇▇▇
Counties, Mississippi.
19. Amended and Restated Credit Agreement, dated as of April 17, 1998,
among Queen Sand Resources, Inc., a Delaware corporation, Queen Sand
Resources, Inc., a Nevada corporation, the Bank of Montreal and the
Lenders signatory thereto, as amended by First Amendment to Amended
and Restated Credit Agreement executed effective as of July 1, 1998,
among Queen Sand Resources, Inc., a Delaware corporation, Queen Sand
Resources, Inc., a Nevada corporation, the Bank of Montreal and the
Lenders signatory thereto.
20. Amended and Restated Guaranty Agreement executed by Queen Sand
Resources, Inc., a Delaware corporation, in favor of the Bank of
Montreal, as agent, dated as of April 17, 1998.
21. Amended and Restated Guaranty Agreement executed by Northland
Operating Co. in favor of the Bank of Montreal, as agent, dated as of
April 17, 1998.
22. Promissory Note in the original principal amount of $20,833,333.25
dated as of April 17, 1998 payable to ECT.
23. Promissory Note in the original principal amount of $20,833,333.25
dated as of April 17, 1998 payable to JEDI.
24. Guaranty Agreement dated as of August 1, 1997 executed by Corrida
Resources, Inc., a Nevada corporation, in favor of the Bank of
Montreal, as agent, as amended.
25. Amended and Restated Security Agreement dated as of April 17, 1998
executed by Queen Sand Resources, Inc., a Nevada corporation, in favor
of the Bank of Montreal.
26. Mortgage, Deed of Trust, Assignment of Production, Security Agreement,
Fixture Filing and Financing Statement, dated as of April 17, 1998,
executed by Queen Sand Resources, Inc., a Nevada corporation, to ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, Trustee, for the benefit of the Bank of Montreal, as
collateral agent, for JEDI, the Bank of Montreal and ECT, which is to
be recorded in, among other places, the Real Property Records of
certain counties in Texas in which a portion of the Mortgaged Property
described therein is located.
27. Fee letter agreement dated April 17, 1998 between Queen Sand
Resources, Inc., a Nevada corporation, and the Bank of Montreal.
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28. Note Purchase Agreement (Variable Rate Senior Second Secured Notes due
2003) dated April 17, 1998 between Queen Sand Resources, Inc., a
Delaware corporation, Queen Sand Resources, Inc., a Nevada
corporation, and the Bank of Montreal.
29. Note Purchase Agreement (Variable Rate Senior Second Secured Notes due
2003) dated April 17, 1998 between Queen Sand Resources, Inc., a
Delaware corporation, Queen Sand Resources, Inc., a Nevada
corporation, and ECT.
30. Note Purchase Agreement (Variable Rate Senior Second Secured Notes due
2003) dated April 17, 1998 between Queen Sand Resources, Inc., a
Delaware corporation, Queen Sand Resources, Inc., a Nevada
corporation, and JEDI.
31. Promissory Notes, executed by Queen Sand Resources, Inc., a Nevada
corporation, and payable to the order of (i) the Bank of Montreal in
the original principal amount of $20,000,000, (ii) ECT in the original
principal amount of $5,000,000, and (iii) JEDI in the original
principal amount of $5,000,000.
32. Fee Letters executed by Queen Sand Resources, Inc., a Nevada
corporation, in favor of JEDI, the Bank of Montreal and ECT.
33. Mortgage, Deed of Trust, Assignment of Production, Security Agreement,
Fixture Filing and Financing Statement executed by Queen Sand
Resources, Inc., a Nevada corporation, to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee,
for the benefit of the Bank of Montreal, as collateral agent, for
JEDI, the Bank of Montreal and ECT, which is to be recorded in, among
other places, the Real Property Records of certain counties in Texas
in which a portion of the Mortgaged Property described therein is
located.
34. Note Purchase Agreement (Variable Rate Senior Third Secured Equity
Bridge Notes due 2003) dated April 17, 1998 between Queen Sand
Resources, Inc., a Delaware corporation, Queen Sand Resources, Inc., a
Nevada corporation, and the Bank of Montreal.
35. Note Purchase Agreement (Variable Rate Senior Third Secured Equity
Bridge Notes due 2003) dated April 17, 1998 between Queen Sand
Resources, Inc., a Delaware corporation, Queen Sand Resources, Inc., a
Nevada corporation, and ECT.
36. Note Purchase Agreement (Variable Rate Senior Third Secured Equity
Bridge Notes due 2003) dated April 17, 1998 between Queen Sand
Resources, Inc., a Delaware corporation, Queen Sand Resources, Inc., a
Nevada corporation, and JEDI.
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37. Promissory Notes executed by Queen Sand Resources, Inc., a Nevada
corporation, and payable to the order of (i) the Bank of Montreal in
the original principal amount of $20,000,000, (ii) ECT in the original
principal amount of $5,000,000, and (iii) JEDI in the original
principal amount of $5,000,000.
38. Fee Letters executed by Queen Sand Resources, Inc., a Nevada
corporation, in favor of JEDI, the Bank of Montreal and ECT.
39. Mortgage, Deed of Trust, Assignment of Production, Security Agreement,
Fixture Filing and Financing Statement executed by Queen Sand
Resources, Inc., a Nevada corporation, to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee,
for the benefit of the Bank of Montreal, as collateral agent, for
JEDI, the Bank of Montreal and ECT, which is to be recorded in, among
other places, the Real Property Records of certain counties in Texas
in which a portion of the Mortgaged Property described therein is
located.
40. Warrant Agreement dated April 17, 1998 by Queen Sand Resources, Inc.,
a Delaware corporation, in favor of JEDI, the Bank of Montreal and ECT
(the "Warrant Agreement").
41. Warrant dated April 17, 1998 issued by Queen Sand Resources, Inc., a
Delaware corporation, to ECT pursuant to the Warrant Agreement.
42. Warrant dated April 17, 1998 issued by Queen Sand Resources, Inc., a
Delaware corporation, to JEDI pursuant to the Warrant Agreement.
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