EXHIBIT 4.1
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EXECUTION COPY
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▇▇▇▇▇▇▇ Petroleum Corporation
and each of the Guarantors named herein
SERIES A
9.90% SENIOR NOTES DUE 2009
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INDENTURE
Dated as of May 8, 2002
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The Bank of Nova Scotia Trust Company of New York
Trustee
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CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310(a)(1)............................................ 7.10
(a)(2).......................................... 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.10
(b)............................................. 7.10
(c)............................................. N.A.
311(a)............................................... 7.11
(b)............................................. 7.11
(c)............................................. N.A.
312(a)............................................... 2.05
(b)............................................. 12.03
(c)............................................. 12.03
313(a)............................................... 7.06
(b)(2).......................................... 7.06; 7.07
(c)............................................. 7.06; 12.02
(d)............................................. 7.06
314(a)............................................... 4.03;12.02; 12.05
(c)(1).......................................... 12.04
(c)(2).......................................... 12.04
(c)(3).......................................... N.A.
(e)............................................. 12.05
(f)............................................. N.A.
315(a)............................................... 7.01
(b)............................................. 7.05,12.02
(c)............................................. 7.01
(d)............................................. 7.01
(e)............................................. 6.11
316(a) (last sentence)............................... 2.09
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
(c)............................................. 2.12
317(a)(1)............................................ 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
318(a)............................................... 12.01
(b)............................................. N.A.
(c)............................................. 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions................................................1
Section 1.02 Other Definitions.........................................22
Section 1.03 Incorporation by Reference of Trust Indenture Act.........22
Section 1.04 Rules of Construction.....................................23
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating...........................................23
Section 2.02 Execution and Authentication..............................24
Section 2.03 Registrar and Paying Agent................................24
Section 2.04 Paying Agent to Hold Money in Trust.......................25
Section 2.05 Holder Lists..............................................25
Section 2.06 Transfer and Exchange.....................................25
Section 2.07 Replacement Notes.........................................36
Section 2.08 Outstanding Notes.........................................37
Section 2.09 Treasury Notes............................................37
Section 2.10 Temporary Notes...........................................37
Section 2.11 Cancellation..............................................37
Section 2.12 Defaulted Interest........................................38
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee........................................38
Section 3.02 Selection of Notes to Be Redeemed or Purchased............38
Section 3.03 Notice of Redemption......................................39
Section 3.04 Effect of Notice of Redemption............................39
Section 3.05 Deposit of Redemption or Purchase Price...................40
Section 3.06 Notes Redeemed or Purchased in Part.......................40
Section 3.07 Optional Redemption.......................................40
Section 3.08 Mandatory Redemption......................................41
Section 3.09 Offer to Purchase by Application of Excess Proceeds.......41
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes..........................................43
Section 4.02 Maintenance of Office or Agency...........................43
Section 4.03 Reports...................................................43
Section 4.04 Compliance Certificate....................................44
Section 4.05 Taxes.....................................................45
Section 4.06 Stay, Extension and Usury Laws............................45
Section 4.07 Restricted Payments.......................................45
Section 4.08 Dividend and Other Payment Restrictions
Affecting Subsidiaries..................................47
Section 4.09 Incurrence of Indebtedness and Issuance of
Preferred Stock.........................................49
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TABLE OF CONTENTS
PAGE
Section 4.10 Asset Sales...............................................51
Section 4.11 Transactions with Affiliates..............................52
Section 4.12 Liens.....................................................53
Section 4.13 Corporate Existence.......................................53
Section 4.14 Offer to Repurchase Upon Change of Control................54
Section 4.15 Payments for Consent......................................55
Section 4.16 Additional Note Guarantees................................55
Section 4.17 Payment of Additional Amounts.............................55
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries...56
Section 4.19 Business Activities.......................................57
ARTICLE 5.
SUCCESSORS
Section 5.01 Amalgamation, Merger, Consolidation or Sale of Assets.....57
Section 5.02 Successor Corporation Substituted.........................58
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.........................................58
Section 6.02 Acceleration..............................................59
Section 6.03 Other Remedies............................................60
Section 6.04 Waiver of Past Defaults...................................60
Section 6.05 Control by Majority.......................................61
Section 6.06 Limitation on Suits.......................................61
Section 6.07 Rights of Holders of Notes to Receive Payment.............61
Section 6.08 Collection Suit by Trustee................................61
Section 6.09 Trustee May File Proofs of Claim..........................61
Section 6.10 Priorities................................................62
Section 6.11 Undertaking for Costs.....................................62
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.........................................63
Section 7.02 Rights of Trustee.........................................63
Section 7.03 Individual Rights of Trustee..............................64
Section 7.04 Trustee's Disclaimer......................................64
Section 7.05 Notice of Defaults........................................65
Section 7.06 Reports by Trustee to Holders of the Notes................65
Section 7.07 Compensation and Indemnity................................65
Section 7.08 Replacement of Trustee....................................66
Section 7.09 Successor Trustee by Merger, etc..........................67
Section 7.10 Eligibility; Disqualification.............................67
Section 7.11 Preferential Collection of Claims Against Company.........67
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or
Covenant Defeasance.....................................67
Section 8.02 Legal Defeasance and Discharge............................67
Section 8.03 Covenant Defeasance.......................................68
Section 8.04 Conditions to Legal or Covenant Defeasance................68
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TABLE OF CONTENTS
PAGE
Section 8.05 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions...........69
Section 8.06 Repayment to Company......................................70
Section 8.07 Reinstatement.............................................70
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.......................70
Section 9.02 With Consent of Holders of Notes..........................71
Section 9.03 Compliance with Trust Indenture Act.......................72
Section 9.04 Revocation and Effect of Consents.........................73
Section 9.05 Notation on or Exchange of Notes..........................73
Section 9.06 Trustee to Sign Amendments, etc...........................73
ARTICLE 10.
NOTE GUARANTEES
Section 10.01 Guarantee.................................................73
Section 10.02 Limitation on Guarantor Liability.........................74
Section 10.03 Execution and Delivery of Note Guarantee..................74
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms........75
Section 10.05 Releases Following Sale of Assets.........................76
ARTICLE 11.
satisfaction and discharge
Section 11.01 Satisfaction and Discharge................................76
Section 11.02 Application of Trust Money................................77
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls..............................77
Section 12.02 Notices...................................................78
Section 12.03 Communication by Holders of Notes with Other
Holders of Notes........................................79
Section 12.04 Certificate and Opinion as to Conditions Precedent........79
Section 12.05 Statements Required in Certificate or Opinion.............79
Section 12.06 Rules by Trustee and Agents...............................79
Section 12.07 No Personal Liability of Directors, Officers,
Employees and Stockholders..............................80
Section 12.08 Governing Law.............................................80
Section 12.09 No Adverse Interpretation of Other Agreements.............80
Section 12.10 Successors................................................80
Section 12.11 Severability..............................................80
Section 12.12 Counterpart Originals.....................................80
Section 12.13 Table of Contents, Headings, etc..........................80
Section 12.14 Consent to Jurisdiction...................................80
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of May 8, 2002 among ▇▇▇▇▇▇▇ Petroleum Corporation,
a corporation incorporated under the laws of the Province of Alberta, Canada
(the "COMPANY"), the Guarantors (as defined) and The Bank of Nova Scotia Trust
Company of New York, as trustee (the "TRUSTEE").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 9.90% Series A Senior Notes due 2009 (the "NOTES"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 DEFINITIONS.
"144A GLOBAL NOTE" means a Global Note substantially in the form of
Exhibit [A/A-1] hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Restricted Subsidiary
of such specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Restricted Subsidiary of, such specified
Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person
provided that any Indebtedness of such Person that is redeemed,
defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transaction by which such other Person is
merged with or into, or becomes a Restricted Subsidiary of, such
specified Person, or such assets are acquired from such Person, will
not be Acquired Debt.
"ADDITIONAL AMOUNTS" has the meaning assigned to that term in Section
4.17(a)(3) hereof.
"ADDITIONAL INTEREST" means all liquidated damages then owing pursuant
to Section 2 of the Registration Rights Agreement.
"ADDITIONAL NOTES" means an unlimited amount of Notes (other than the
Initial Notes) issued under this Indenture in accordance with Sections 2.02 and
4.09 hereof, as part of the same series as the Initial Notes.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means, without duplication,
as of the date of determination; the sum of:
(1) 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 provincial, state or
federal income taxes), as confirmed by a nationally recognized firm of
independent petroleum engineers (which shall include Outtrim ▇▇▇▇▇
Associates Ltd.) in a reserve report prepared as of the end of the
Company's most recently completed fiscal year, as
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INCREASED BY, as of the date of determination, the discounted future
net revenues of (a) estimated proved oil and gas reserves acquired
since the date of such year-end reserve report, and (b) estimated oil
and gas reserves attributable to extensions, discoveries and other
additions and upward revisions of estimates of proved oil and gas
reserves since the date of such year-end reserve report due to
exploration, development or exploitation activities, in each case,
calculated in accordance with Commission 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 of (c) estimated proved oil and gas reserves produced or
disposed of since the date of such year-end reserve report and (d)
reductions in estimated proved oil and gas reserves attributable to
downward revisions of estimates of proved oil and gas reserves since
the date of such year-end reserve report due to changes in geological
conditions or other factors that would, in accordance with standard
industry practice, cause such revisions, in each case calculated in
accordance with Commission guidelines (utilizing the prices in such
year-end reserve report), PROVIDED that, in the case of each of the
determinations made pursuant to clauses (a) through (d), 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 case the discounted
future net revenues utilized for purposes of this clause (1) shall be
confirmed in a written report of a nationally recognized firm of
independent petroleum engineers (which shall include Outtrim ▇▇▇▇▇
Associates Ltd.) delivered to the Trustee;
(2) 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 most recent available internal quarterly financial
statements,
(3) the Consolidated Net Working Capital of the Company on a
date no earlier than the date of the Company's most recently available
internal quarterly financial statements, and
(4) the greater of (a) the net book value of other tangible
assets of the Company on a date no earlier than the date of the
Company's most recently available internal quarterly financial
statements or (b) the appraised value, as estimated by independent
appraisers, of other tangible assets of the Company and its Restricted
Subsidiaries, in either case, as of the date of the Company's most
recently available internal quarterly financial statements,
MINUS the sum of:
(1) minority interests,
(2) any net gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's most recently
available internal quarterly financial statements,
(3) to the extent included in the first clause (1) 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 that are required to
be delivered to third parties to fully satisfy the obligations of the
Company and its Restricted Subsidiaries with respect to Volumetric
Production Payments on the schedules specified with respect thereto,
(4) the discounted future net revenues, calculated in
accordance with Commission guidelines, attributable to reserves subject
to Dollar-Denominated Production Payments that, based on the estimates
of production and price assumptions included in determining the
discounted future net revenues specified in the first clause (1) above,
would be necessary to fully
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satisfy the payment obligations of the Company and its Restricted
Subsidiaries with respect to Dollar-Denominated Production Payments on
the schedules specified with respect thereto, and
(5) 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 that
are subject to participation, partnership, vendor financing or other
agreements then in effect, or that are otherwise required to be
delivered to third parties but only to the extent that such third
parties are then entitled to such reserves, or in the case of vendor
financing or other encumbrances reduced only by the value of such
encumbrances.
If the Company changes its method of accounting from the full cost
method to the successful efforts method or a similar method of
accounting, "Adjusted Consolidated Net Tangible Assets" will continue
to be calculated as if the Company were still using the full cost
method of accounting.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; PROVIDED that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings.
"AGENT" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"APPLICABLE PROCEDURES" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than sales of inventory in the ordinary course
of business consistent with past practices; PROVIDED that the sale,
conveyance or other disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole will be
governed by Section 4.14 hereof and/or Section 5.01 hereof and not by
the provisions of Section 4.10 hereof covenant; and
(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions
that involves assets having a fair market value of less than US$1.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Subsidiary to the
Company or to another Subsidiary;
3
(4) consisting of worn-out, obsolete or retired equipment or
facilities in the ordinary course of business;
(5) the sale or lease of equipment, inventory, including
current production, accounts receivable or other assets in the ordinary
course of business;
(6) the sale or other disposition of cash or Cash Equivalents;
(7) any transfer of properties or assets (including Capital
Stock) that is governed by Section 5.01 hereof; or that is a Restricted
Payment or Permitted Investment that is permitted by Section 4.07
hereof;
(8) the sale or transfer (whether or not in the ordinary
course of business) of oil and gas properties or direct or indirect
interests in real property, provided that at the time of such sale or
transfer such properties do not have associated with them any proved
reserves;
(9) the abandonment, farm-out, lease or sublease of developed
or undeveloped oil and gas properties in the ordinary course of
business or resulting from any pooling, unit or farm-out agreement
entered into in the ordinary course of business;
(10) the trade or exchange by the Company or any Subsidiary of
the Company of any oil and gas property owned or held by the Company or
such Subsidiary for any oil and gas property owned or held by another
Person;
(11) the sale or transfer of hydrocarbons or other mineral
products in the ordinary course of business; and
(12) a Permitted Investment.
"BANKRUPTCY LAW" means the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada) or any other Canadian federal or
provincial law relating to, or Title 11, U.S. Code or any similar federal or
state law for, the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the board of directors of
the corporation which is the general partner of the partnership; and
(3) with respect to any other Person, the board or committee
of such Person serving a similar function.
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"BROKER-DEALER" has the meaning set forth in the Registration Rights
Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be classified and accounted for as a capitalized lease
obligation on a balance sheet in accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock of any
class;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means:
(1) United States or Canadian dollars;
(2) securities issued by or directly and fully guaranteed or
insured by the federal governments of Canada or the United States of
America or any agency or instrumentality thereof (provided that the
full faith and credit of the federal governments of Canada or the
United States is pledged in support of those securities) having
maturities of not more than 270 days from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of 270 days or less from the date of acquisition, bankers'
acceptances with maturities not exceeding 270 days and overnight bank
deposits, in each case, with any lender party to the Credit Agreement
or with any United States commercial bank or any Canadian chartered
bank having capital and surplus in excess of US$500.0 million and a
Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper rated at least P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. or A-1 by Standard & Poor's Rating Services or at least
R-1 by Dominion Bond Rating Service and in each case maturing within
270 days after the date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger, amalgamation or
consolidation), in one or a series of related transactions, of all or
5
substantially all of the properties or assets of the Company and its
Restricted Subsidiaries, taken as a whole, to any "person" (as that
term is used in Section 13(d)(3) of the Exchange Act);
(2) the adoption or approval by the Board of Directors of the
Company or its stockholders of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above) becomes the Beneficial Owner, directly
or indirectly, of more than 50% of the Voting Stock of the Company,
measured by voting power rather than number of shares; or
(4) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"CLEARSTREAM" means Clearstream Banking, S.A., or any successor
securities clearing agency.
"COMPANY" means ▇▇▇▇▇▇▇ Petroleum Corporation, and any and all
successors thereto.
"CONSOLIDATED CASH FLOW" means with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period PLUS:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted
in computing such Consolidated Net Income; PLUS
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; PLUS
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income; PLUS
(4) depreciation, depletion, amortization (including
amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period)
and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in
any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries
for such period to the extent that such depreciation, depletion,
amortization and other non-cash expenses were deducted in computing
such Consolidated Net Income; MINUS
(5) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course
of business; and MINUS
(6) to the extent included in determining Consolidated Net
Income, the sum of:
6
(i) the amount of deferred revenues that are amortized
during such period and that are attributable to reserves that are
subject to Volumetric Production Payments; and
(ii) amounts recorded in accordance with GAAP as
repayments of principal and interest pursuant to Dollar-Denominated
Production Payments,
in each case, on a consolidated basis and determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income (but not loss) of any Person acquired in a
pooling of interests transaction for any period prior to the date of
such acquisition will be excluded;
(4) the cumulative effect of a change in accounting principles
will be excluded;
(5) any non-cash charges related to a ceiling test write-down
under GAAP will be excluded; and
(6) to the extent not otherwise included, any gain on the
disposition of a Restricted Investment will be included.
"CONSOLIDATED NET WORKING CAPITAL" of any Person as of any date of
determination means the difference (shown on the balance sheet of such Person
and its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP as of the end of the most recent fiscal quarter of such Person for
which internal financial statements are available) between (i) all current
assets of such Person and its Restricted Subsidiaries and (ii) all current
liabilities of such Person and its Restricted Subsidiaries except the current
portion of long-term Indebtedness.
"CONSOLIDATED NET WORTH" means, with respect to any specified Person as
of any date, the sum of:
(1) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance
sheet as of such date with respect to any series of preferred stock
(other than Disqualified Stock) that by its terms is not entitled to
the payment of dividends unless such dividends may be declared and paid
only out of
7
net earnings in respect of the year of such declaration and payment,
but only to the extent of any cash received by such Person upon
issuance of such preferred stock.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of
this Indenture; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or
election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" will be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT AGREEMENT" means that certain Second Amended and Restated
Credit Agreement dated as of May 8, 2002, among the Company, as borrower,
certain Canadian chartered banks, as lenders, Bank of Montreal, as lead arranger
and administrative agent, The Bank of Nova Scotia, as syndication agent, and The
Toronto-Dominion Bank, as documentation agent, including any related notes,
debentures, pledges, guarantees, security documents, instruments and agreements
executed from time to time in connection therewith, and in each case as amended,
modified, restated, renewed, replaced or refinanced from time to time, including
any agreement extending the maturity of, refinancing, replacing or otherwise
restructuring or adding Subsidiaries as additional borrowers or guarantors
thereunder, and all or any portion of the Indebtedness and other Obligations
under such agreement or agreements or any successor or replacement agreement or
any agreements, and whether by the same or any other agent, lender or group of
lenders. For greater certainty, it is acknowledged that Interest Rate
Agreements, Currency Agreements and Oil and Gas Hedging Contracts entered into
with a person that at that time is a lender (or an affiliate thereof) under the
Credit Agreement are separate from, are not included within and do not form part
of any above inclusions of the Credit Agreement.
"CREDIT FACILITIES" means one or more credit or debt facilities
(including, without limitation, under the Credit Agreement) or commercial paper
facilities, in each case with banks or other institutional lenders providing
for, among other things, revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"CURRENCY AGREEMENT" means any financial arrangement entered into
between a Person (or its Restricted Subsidiaries) and a counterparty on a case
by case basis in connection with a foreign exchange futures contract, currency
swap agreement, currency option or currency exchange or other similar currency
related transactions, the purpose of which is to mitigate or eliminate its
exposure to fluctuations in exchange rates and currency values.
"CUSTODIAN" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"DEFAULT" means the occurrence of any event that is or with the passage
of time or the giving of notice or both would be an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that
8
such Note shall not bear the Global Note Legend and shall not have the "Schedule
of Exchanges of Interests in the Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder of the Capital Stock), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder of the Capital Stock, in whole or in
part, prior to the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 4.07 hereof.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERINGS" means any public or private sale of equity
securities of the Company (other than Disqualified Stock) generating gross
proceeds to the Company of at least US$10.0 million.
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear clearance system, or any successor securities clearing agency.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
"EXCHANGE OFFER" has the meaning set forth in the Registration Rights
Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in
the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date hereof.
"FAIR MARKET VALUE" means, with respect to any asset, property or
service, the price that could be negotiated in an arm's length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Unless
otherwise specified in this Indenture, in the case of a transaction with respect
to the Company or any of its Restricted Subsidiaries exceeding US$10.0 million,
fair market value will be determined by the Board of
9
Directors of the Company acting in good faith and will be evidenced by a
resolution delivered to the Trustee.
"FIXED CHARGES" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of
credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Interest Rate Agreements; PLUS
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; PLUS
(3) any interest expense on Indebtedness of another Person
(other than such Person or its Restricted Subsidiaries) that is
Guaranteed by such Person or one of its Restricted Subsidiaries or
secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon;
PLUS
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of Disqualified Stock of such
Person or any of its Restricted Subsidiaries, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current combined federal, provincial, state and local statutory
tax rate of such Person or any of its Restricted Subsidiaries,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases or redeems any Indebtedness (other than ordinary
working capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during
the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date will be given pro forma
effect as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period
will be calculated on a pro forma basis in accordance with Regulation
S-X under the
10
Securities Act, but without giving effect to clause (3) of the proviso
set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded;
and
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles, consistently
applied, which are in effect in Canada from time to time.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"GUARANTEE" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTORS" means each of:
(1) the Company's existing Subsidiaries; and
(2) any other Subsidiary that executes a Note Guarantee in
accordance with the provisions of this Indenture;
and their respective successors and assigns.
"HEDGING OBLIGATIONS" means, with respect to any specified Person, the
outstanding amount of all obligations of such Person and its Restricted
Subsidiaries under all Currency Agreements and all Interest Rate Agreements,
together with all interest, fees and other amounts payable thereon or in
connection therewith.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any specified Person at any date,
any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
11
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable;
(6) representing any Hedging Obligations;
(7) in respect of Production Payments;
(8) in respect of Oil and Gas Hedging Contracts; or
(9) all conditional sale obligations and all obligations under
title retention agreements, but excluding a title retention agreement
to the extent it constitutes an operating lease under Canadian law,
if and to the extent any of the preceding items (other than letters of credit,
Hedging Obligations and Oil and Gas Hedging Contracts) would appear as a
liability upon a balance sheet of the specified Person prepared in accordance
with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of
others secured by a Lien on any asset of the specified Person (whether or not
such Indebtedness is assumed by the specified Person) and, to the extent not
otherwise included, the Guarantee by the specified Person of any indebtedness of
any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due, in
the case of any other Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"INITIAL NOTES" means the first US$165.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"INITIAL PURCHASERS" means ▇▇▇▇▇▇ Brothers, BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇, Scotia
Capital and TD Securities.
"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 RATE AGREEMENT" means any financial arrangement entered into
between a Person (or its Restricted Subsidiaries) and a counterparty on a case
by case basis in connection with interest rate swap transactions, interest rate
options, cap transactions, floor transactions, collar transactions and other
12
similar interest rate protection related transactions, the purpose of which is
to mitigate or eliminate its exposure to fluctuations in interest rates.
"INVESTMENTS" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. "Investments"
shall exclude extensions of trade credit in the ordinary course of business for
terms not greater than 90 days. If the Company or any Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the Company, the Company
will be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Company's Investments in such
Subsidiary that were not sold or disposed of in an amount determined as provided
in the final paragraph of Section 4.07 hereof. The acquisition by the Company or
any Subsidiary of the Company of a Person that holds an Investment in a third
Person will be deemed to be an Investment by the Company or such Subsidiary in
such third Person in an amount equal to the fair market value of the Investment
held by the acquired Person in such third Person in an amount determined as
provided in the final paragraph of Section 4.07 hereof.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or the City of Calgary, Alberta, or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue on such payment for the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien (statutory
or otherwise), pledge, charge, security interest or encumbrance upon or with
respect to any property of any kind, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or other title
retention agreement, but excluding a title retention agreement to the extent it
constitutes an operating lease under Canadian law, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"MATERIAL CHANGE" means an increase or decrease (excluding changes that
result solely from changes in prices) of more than 30% during a fiscal quarter
in the estimated discounted future net cash flows from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with the first clause (1) of the definition of Adjusted Consolidated
Net Tangible Assets; provided, however, that the estimated future net cash flows
from:
(i) any acquisitions during the quarter of oil and
gas reserves that have been audited by a nationally recognized firm of
independent petroleum engineers (which shall include Outtrim ▇▇▇▇▇
Associates Ltd.), and
(ii) any disposition of properties held at the beginning
of such quarter that have been disposed of as provided in Section 4.10
hereof.
13
will be excluded from the calculation of Material Change.
"NET INCOME" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale; or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment
of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Indebtedness under a Credit Facility secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights
that the holders of the Indebtedness may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon notice,
lapse of time or both any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any of its Restricted Subsidiaries subject to customary exceptions
for environmental, title, fraud and similar matters.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTE GUARANTEE" means the Guarantee by each Guarantor of the Company's
payment obligations under this Indenture and on the Notes, executed pursuant to
the provisions of this Indenture.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture.
14
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"OIL AND GAS BUSINESS" means:
(1) the acquisition, exploration, development, operation and
disposition of interests in oil, gas and other hydrocarbon properties,
(2) the gathering, marketing, treating, processing, storage,
selling and transporting of any production from such interests or
properties,
(3) the exploration for or development, production, treatment,
processing, storage, transportation or marketing of oil, gas and other
minerals and products produced in association therewith,
(4) evaluating, participating in or pursuing any other
activity or opportunity that is primarily related to clauses (1)
through (3) above, and
(5) any activity that is ancillary to or necessary or
appropriate for the activities described in clauses (1) through (4) of
this definition,
provided that, in respect of the Company, the determination of what reasonably
constitutes a permissible Oil and Gas Business pursuant to clauses (1) to (5)
above shall be made in good faith by the Board of Directors of the Company.
"OIL AND GAS HEDGING CONTRACTS" means any transaction, arrangement or
agreement entered into between a Person (or any of its Restricted Subsidiaries)
and a counterparty on a case by case basis, including any futures contract, a
commodity option, a swap, a forward sale or otherwise, the purpose of which is
to mitigate, manage or eliminate its exposure to fluctuations in commodity
prices, including contracts settled by physical delivery of the commodity not
settled within 60 days of the date of any such contract; provided that
Production Payments will not be treated as Oil and Gas Hedging Contracts for the
purposes of this Indenture.
"OIL AND GAS INVESTMENTS" means any Investments made in the ordinary
course of, and of a nature that is or shall have become customary in, the Oil
and Gas Business as a means of actively exploiting, exploring for, acquiring,
developing, producing, processing, gathering, marketing or transporting oil and
gas through agreements, transactions, interests or arrangements which permit one
to share risks or costs, comply with regulatory requirements regarding local
ownership or satisfy other objectives customarily achieved through the conduct
of Oil and Gas Business jointly with third parties, including, without
limitation:
15
(1) ownership interests in oil and gas properties, processing
facilities or gathering systems or ancillary real property interests
and
(2) Investments 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 agreements, 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.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"PERMITTED ASSETS" means any and all long-term assets that are used or
useful in an Oil and Gas Business.
"PERMITTED INVESTMENTS" means, without duplication:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment:
(i) such Person becomes a Restricted Subsidiary of the
Company; or
(ii) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or a Restricted Subsidiary of
the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(6) any Investments received in compromise of obligations of
such persons incurred in the ordinary course to trade creditors or
customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of any trade creditor or customer;
(7) Hedging Obligations and Oil and Gas Hedging Contracts;
(8) Oil and Gas Investments;
16
(9) loans or advances made (a) to any officer, director or
employee of the Company or any of its Restricted Subsidiaries that are
approved by a duly authorized officer, the proceeds of which are used
solely to exercise stock options received pursuant to an employee stock
option plan or other incentive plan, in a principal amount not to
exceed the exercise price of such stock options and (b) to refinance
loans, together with accrued interest thereon, made pursuant to this
clause (9); PROVIDED such loans do not exceed US$5.0 million at any one
time outstanding; and
(10) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (10)
that are at the time outstanding not to exceed US$10.0 million.
"PERMITTED LIENS" means, as of any date:
(1) Liens on assets of the Company and any Subsidiary securing
Indebtedness that constitutes Permitted Debt under Credit Facilities
and Obligations in respect of such Indebtedness; (2) Liens in favor of
the Company or any of the Guarantors;
(3) Liens on property of a Person existing at the time such
Person is amalgamated or merged with or into or consolidated with the
Company or any Restricted Subsidiary of the Company; PROVIDED that such
Liens were in existence prior to the contemplation of such
amalgamation, merger or consolidation and do not extend to any assets
other than those of the Person amalgamated or merged into or
consolidated with the Company or the Subsidiary;
(4) Liens securing Hedging Obligations and Oil and Gas Hedging
Contracts that constitute Permitted Debt;
(5) Liens securing the assets purchased by purchase money
indebtedness which is Permitted Debt;
(6) Liens to secure payment of royalties, revenue interests,
net profits interests and preferential rights of purchase incurred in
the ordinary course of business to the extent of the security interest
in those underlying assets;
(7) Liens for any judgments rendered that do not constitute an
Event of Default;
(8) Liens for any judgment rendered, or claim filed, against
the Company or any Restricted Subsidiary which are being contested in
good faith by appropriate proceedings that do not constitute an Event
of Default if during such contestation a stay of enforcement of such
judgment or claim is in effect;
(9) Liens on property existing at the time of acquisition of
the property by the Company or any Restricted Subsidiary of the
Company, PROVIDED that such Liens were in existence prior to the
contemplation of such acquisition;
(10) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
17
(11) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of Section 4.09(b) hereof covering
only the assets acquired with such Indebtedness;
(12) Liens existing on the date of this Indenture;
(13) Liens for taxes, assessments or other governmental
charges or claims that are not yet due and payable or, if due and
payable and delinquent, that are being contested by the Company or a
Restricted Subsidiary in good faith by appropriate proceedings promptly
instituted and diligently concluded, PROVIDED that any reserve or other
appropriate provision as is required in conformity with GAAP has been
made therefor;
(14) Liens in pipelines or pipeline facilities that arise by
operation of law;
(15) Liens arising in the ordinary course of business under
operating agreements, joint venture agreements, partnership agreements,
oil and gas leases, farm-out agreements, division orders, contracts for
the sale, transportation or exchange of oil or natural gas, unitization
and pooling declarations and agreements, area of mutual interest
agreements and other agreements (including in respect of Production
Payments), or arising by operation of law, that are customary in the
Oil and Gas Business, and easements, rights of way or other similar
rights in land in the ordinary course of business and that do not
involve borrowing of money;
(16) Liens reserved in oil and gas mineral leases for bonus or
rental payments and for compliance with the terms of such leases;
(17) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations
that do not in the aggregate exceed US$5.0 million at any one time
outstanding; and
(18) Liens securing Permitted Refinancing Indebtedness in
respect of Permitted Debt that was secured by Permitted Liens above and
securing similar property.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); PROVIDED that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the
Holders of Notes as those
18
contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government, government body or agency or other entity.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"PRODUCTION PAYMENTS" means Dollar-Denominated Production Payments and
Volumetric Production Payments, collectively.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of May 8, 2002, among the Company, the Guarantors and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"REGULATION S" means Regulation S promulgated under the Securities Act.
"REGULATION S GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
19
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"STATED MATURITY" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned
or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TRUSTEE" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only if such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
20
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; and
(5) has at least one director on its Board of Directors that
is not a director or executive officer of the Company or any of its
Restricted Subsidiaries and has at least one executive officer that is
not a director or executive officer of the Company or any of its
Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, the Company will promptly notify the Trustee thereof
and such Subsidiary will thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.09 hereof, the Company will be in default of such covenant. The Board
of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; PROVIDED that such designation will be
deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation will only be permitted if (1) such Indebtedness is permitted under
Section 4.09 hereof, calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period; (2) no Default
or Event of Default would be in existence following such designation; and (3)
such Unrestricted Subsidiary becomes a Guarantor and executes a supplemental
indenture in substantially the form of Exhibit F hereto and delivers an Opinion
of Counsel in form reasonably satisfactory to the Trustee within 10 Business
Days of the date on which it is designated to the effect that such supplemental
indenture has been duly authorized, executed and delivered and constitutes a
legal, valid and binding agreement of such Subsidiary, enforceable against such
Subsidiary in accordance with its terms.
"U.S. PERSON" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"VOLUMETRIC PRODUCTION PAYMENTS" means production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"VOTING STOCK" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
21
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.02 OTHER DEFINITIONS.
Defined in
TERM SECTION
---- -------
"AFFILIATE TRANSACTION"................................ 4.11
"ASSET SALE OFFER"..................................... 3.09
"AUTHENTICATION ORDER"................................. 2.02
"CHANGE OF CONTROL OFFER".............................. 4.14
"CHANGE OF CONTROL PAYMENT"............................ 4.14
"CHANGE OF CONTROL PAYMENT DATE"....................... 4.14
"COVENANT DEFEASANCE".................................. 8.03
"DTC".................................................. 2.03
"EVENT OF DEFAULT"..................................... 6.01
"EXCESS PROCEEDS"...................................... 4.10
"INCUR"................................................ 4.09
"LEGAL DEFEASANCE"..................................... 8.02
"OFFER AMOUNT"......................................... 3.09
"OFFER PERIOD"......................................... 3.09
"PAYING AGENT"......................................... 2.03
"PERMITTED DEBT"....................................... 4.09
"PURCHASE DATE"........................................ 3.09
"REGISTRAR"............................................ 2.03
"RESTRICTED PAYMENTS".................................. 4.07
"UNIT LEGEND".......................................... 2.06
Section 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
22
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Notes and the Note Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions;
and
(7) references to sections of or rules under the Securities
Act will be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) GLOBAL NOTES. Notes issued in global form will be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in
23
the Global Note" attached thereto). Notes issued in definitive form will be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note will represent such of the
outstanding Notes as will be specified therein and each shall provide that it
represents the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby will be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(c) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearsteam.
Section 2.02 EXECUTION AND AUTHENTICATION.
One Officer must sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
an authorized signatory of the Trustee. The signature will be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee will, from time to time, upon receipt of a written order of
the Company signed by an Officer (an "AUTHENTICATION ORDER"), authenticate Notes
(including Additional Notes) for original issue in the aggregate principal
amount stated in the Authentication Order. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate of the Company.
Section 2.03 REGISTRAR AND PAYING AGENT.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
principal Registrar will keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents in such other locations as it shall determine. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company will notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
24
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee at its corporate trust
office in the Borough of Manhattan, City of New York, State of New York to act
as the Registrar and Paying Agent and to act as Custodian with respect to the
Global Notes.
Section 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will, and the Trustee when acting as
Paying Agent agrees that it will, hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal,
premium or Additional Interest, if any, or interest on the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee and to account for any money disbursed by
it. The Company at any time may require a Paying Agent to pay all money held by
it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) will have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 HOLDER LISTS.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.06 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary;
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; or
(3) there has occurred and is continuing an Event of Default
with respect to the Notes.
25
Upon the occurrence of either of the preceding events in (1), (2) or
(3) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.07 and 2.10 hereof. A Global Note
may not be exchanged for another Note other than as provided in this Section
2.06(a), however, beneficial interests in a Global Note may be transferred and
exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES.
The transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend Global
Note may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Beneficial interests
in any Unrestricted Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(1) above,
the transferor of such beneficial interest must deliver to the
Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit
or cause to be credited a beneficial interest in another
Global Note in an amount equal to the beneficial interest
to be transferred or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the
Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1) above.
Upon
26
consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements
of this Section 2.06(b)(2) shall be deemed to have been
satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and
the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h)
hereof.
(3) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable.
(4) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN AN UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
27
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES.
(1) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in
item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a
28
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the principal amount
being so exchanged or transferred. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does
29
not bear the Private Placement Legend, a certificate from such
holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(3) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in an Unrestricted Global Note that is not an Exchange Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer
such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon satisfaction of the conditions
set forth in Section 2.06(b)(2) hereof, the Trustee will cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company will
execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(3) will be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest requests
through instructions to the Registrar from or through the Depositary
and the Participant or Indirect Participant. The Trustee will deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(3) will not bear the Private
Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS.
(1) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
30
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(2) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably
31
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of Definitive
Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
32
(2) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
broker-dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted and Unrestricted Global Notes tendered into
the Exchange Offer by Persons that certify in the applicable Letters of
Transmittal
33
that (A) they are not Broker-Dealers, (B) they are not participating in
a distribution of the Exchange Notes and (z) they are not affiliates
(as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal
amount equal to the principal amount of the Restricted Definitive Notes
accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) LEGENDS. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN THE SUBJECT OF ANY PROSPECTUS
FILED UNDER THE SECURITIES LAWS OF ANY CANADIAN PROVINCE OR TERRITORY. THE
HOLDER OF THE SECURITY BY ITS ACCEPTANCE HEREOF REPRESENTS, IF IT IS A RESIDENT
OF CANADA, THAT IT IS PURCHASING THE SECURITIES IN A TRANSACTION WHICH IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS REQUIREMENTS OF APPLICABLE CANADIAN
SECURITIES LAWS, THE SALE OF THE SECURITIES TO IT QUALIFIES (BY REASON OF THE
AMOUNT OF THE CONSIDERATION BEING PAID BY THE PURCHASER OF THE SECURITIES OR BY
REASON OF THE STATUS OF THE PURCHASER, AS THE CASE MAY BE) FOR AN EXEMPTION FROM
THE PROSPECTUS FILING AND DELIVERY OBLIGATIONS UNDER APPLICABLE CANADIAN
PROVINCIAL OR TERRITORIAL SECURITIES LAWS (PROVIDED THAT APPLICABLE FILING
OBLIGATIONS ARE SATISFIED AND ANY APPLICABLE FEES ARE PAID), AND IT HAS PROVIDED
SUCH INFORMATION AND MADE SUCH REPRESENTATIONS TO THE SELLER OF THE SECURITIES
AS MAY BE REASONABLY NECESSARY FOR THE SELLER TO RELY ON SUCH EXEMPTIONS AND
AGREES THAT IT WILL GIVE EACH PERSON TO WHOM THIS SECURITY IS
34
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE DATE ON WHICH RESALE
RESTRICTIONS TERMINATE UNDER APPLICABLE SECURITIES LAWS."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4),
(c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this
Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement
Legend.
(2) GLOBAL NOTE LEGEND. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF ▇▇▇▇▇▇▇ PETROLEUM
CORPORATION.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note will be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
35
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(1) To permit registrations of transfers and exchanges, the
Company will execute and the Trustee will authenticate Global Notes and
Definitive Notes.
(2) No service charge will be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15
and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(5) The Company will not be required:
(A) to issue, to register the transfer of or to exchange
any Notes during a period beginning at the opening of business
15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange any Note
selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
Section 2.07 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by
36
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in this Section 2.08, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a) hereof.
If a Note is replaced, paid or purchased pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by an Affiliate of the Company, will be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
will be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate certificated Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will promptly cancel all Notes surrendered for
37
registration of transfer, exchange, payment, replacement or cancellation and
will dispose of cancelled Notes (subject to the record retention requirement of
the Exchange Act) in accordance with its customary procedures. Certification of
the destruction of all cancelled Notes will be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
Section 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, PROVIDED that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities
exchange, on a PRO RATA basis, by lot or by such method as the Trustee
shall deem fair and appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
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The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, to its registered address, a notice of
redemption to each Holder whose Notes are to be redeemed, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Articles 8 or 11 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) the applicable CUSIP number, if any, and that no
representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
39
Section 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
One Business Day prior to the redemption or purchase date, the Company
will deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of and accrued and unpaid interest (including
Additional Interest, if any) on all Notes to be redeemed or purchased on that
date. The Trustee or the Paying Agent will promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption or purchase price of, and accrued
and unpaid interest (including Additional Interest, if any) on, all Notes to be
redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 NOTES REDEEMED OR PURCHASED IN PART.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and the Trustee will authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed or
unpurchased portion of the Note surrendered.
Section 3.07 OPTIONAL REDEMPTION.
(a) At any time prior to May 15, 2005, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 109.90% of the principal
amount, plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
PROVIDED that:
(1) at least 65% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and
its Subsidiaries); and
(2) the redemption occurs within 60 days of the date of the
closing of such Equity Offering.
(b) If the Company becomes obligated to pay any Additional Amounts as a
result of a change in the laws or regulations of Canada or any Canadian taxing
authority, or a change in any official position regarding the application or
interpretation thereof, which is publicly announced or becomes effective on or
after the date of this Indenture, the Company may, at its option, redeem the
Notes, in whole but not in part, upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to 100% of the principal amount thereof,
plus accrued and unpaid interest and Additional Interest, if any, to the
redemption date.
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(c) Except pursuant to this Section 3.07, the Notes will not be
redeemable at the Company's option prior to May 15, 2006.
(d) After May 15, 2006, the Company may redeem all or a part of the
Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Additional Interest, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on May 15 of the years indicated below:
YEAR PERCENTAGE
2006 ...................................... 104.950%
2007 ...................................... 102.475%
2008 and thereafter ....................... 100.000%
Section 3.08 MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "ASSET SALE
OFFER"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is PARI PASSU with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "OFFER PERIOD"). No later than three Business
Days after the termination of the Offer Period (the "PURCHASE DATE"), the
Company will apply all Excess Proceeds (the "OFFER AMOUNT") to the purchase of
Notes and such other PARI PASSU Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer and any excess
remaining may be used by the Company or a Restricted Subsidiary for any other
purpose not prohibited by this Indenture. Payment for any Notes so purchased
will be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Additional Interest, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
will contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the
terms of the Asset Sale Offer, will state:
41
(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment will
continue to accrue interest;
(4) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer will
cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(6) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company,
a Depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(7) that Holders will be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other
PARI PASSU Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other PARI PASSU
Indebtedness to be purchased on a PRO RATA basis based on the principal
amount of Notes and such other PARI PASSU Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a PRO rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
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Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 PAYMENT OF NOTES.
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Additional Interest, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Additional Interest, if any will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Additional Interest, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Additional Interest (without regard to any applicable grace or cure period) at
the same rate to the extent lawful.
Section 4.02 MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange 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
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission will 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.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03 REPORTS.
(a) Whether or not required by the Commission, so long as any Notes are
outstanding, the Company will furnish to the Holders of Notes, within the time
periods specified in the Commission's rules and regulations or cause the Trustee
to furnish to the Holders:
43
(1) all annual financial information that would be required to
be contained in a filing with the Commission on Forms 20-F or 40-F, as
applicable (or any successor forms), containing the information
required therein (or required in such successor form); and
(2) for the first three quarters of each year, all quarterly
financial information that would be required to be contained in a
filing with the Commission on Form 6-K (or any successor form)
containing in all material respects the financial information that
would be required to be included in a filing on Form 10-Q (or any such
successor form) that, regardless of applicable requirements shall, at a
minimum, contain the information that would be required to be provided
in quarterly reports under the laws of Canada or any province thereof
to securityholders of a company with securities listed on the Toronto
Stock Exchange, whether or not the Company has any of its securities so
listed,
in each case including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the
annual information only, a report on the annual financial statements by
the Company's certified independent accountants; and
(3) all current reports that would otherwise be required to be
filed with the Commission on Form 6-K if the Company were required to
file such reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries excluding the Unrestricted
Subsidiaries.
(b) In addition, all such financial information and reports will
contain all financial information required to be provided in quarterly reports
under the laws of Canada or any province thereof to security holders of a
company with securities listed on the Toronto Stock Exchange. In addition,
following the consummation of the Exchange Offer contemplated by the
Registration Rights Agreement, whether or not required by the Commission, the
Company will file a copy of all of the information and reports referred to in
clauses (1), (2) and (3) above with the Commission for public availability
within the time periods specified in the Commission's rules and regulations
(unless the Commission will not accept such a filing). In addition, the Company
and the Subsidiary Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders and prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act to the extent required by Rule 144A(d)(4).
Section 4.04 COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes
44
to take with respect thereto) and that to the best of his or her knowledge no
event has occurred and remains in existence by reason of which payments on
account of the principal of or interest, if any, on the Notes is prohibited or
if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 TAXES.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, 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 has been enacted.
Section 4.07 RESTRICTED PAYMENTS.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's Equity Interests (including,
without limitation, any payment on account of such Equity Interests in
connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's Equity Interests in
their capacity as such (other than dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company);
45
(2) purchase, retract, redeem or otherwise acquire or retire
for value (including, without limitation, in connection with any merger
or consolidation involving the Company), in whole or in part, any
Equity Interests of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Note Guarantees,
except a payment of interest or principal at the Stated Maturity
thereof; or
(4) make any Restricted Investment
(all such payments and other actions set forth in these clauses (1)
through (4) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such
Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
and
(2) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least US$1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (2), (3) and (4) of paragraph
(b) below), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning
of the first fiscal quarter during which this Indenture is
dated to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a loss, less 100%
of such loss), PLUS
(B) 100% of the aggregate net proceeds received by the
Company (including the fair market value of any Oil and Gas
Business acquired in a stock transaction) since the date of
this Indenture as a contribution to its common equity capital
or from the issue or sale of Equity Interests of the Company
(other than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible
or exchangeable debt securities of the Company that have been
converted into or exchanged for such Equity Interests (other
than Equity Interests (or Disqualified Stock or debt
securities) sold to a Subsidiary of the Company), PLUS
(C) to the extent that any Restricted Investment that was
made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (i) the
cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (ii) the
initial amount of such Restricted Investment.
(b) So long as no Default has occurred and is continuing or would be
caused thereby, the provisions of Section 4.07(a) will not prohibit:
46
(1) the payment of any dividend within 60 days after the date
of declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of this
Indenture;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the Company or
any Guarantor or of any Equity Interests of the Company in exchange
for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, Equity
Interests of the Company (other than Disqualified Stock); PROVIDED that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition
will be excluded from clause (3) (B) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(4) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any member of the
Company's (or any of its Restricted Subsidiaries') management,
directors or employees pursuant to any management equity subscription
agreement, stock option agreement or similar agreement or upon the
death, disability or termination of employment of such directors,
officers or employees; PROVIDED that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests may
not exceed US$1.0 million in any calendar year or US$5.0 million in the
aggregate since the date of this Indenture;
(5) payment of ordinary dividends on Disqualified Stock issued
after the date of this Indenture pursuant to the terms thereof as in
effect on the date of issuance; PROVIDED, that such Disqualified Stock
was issued in accordance with Section 4.09 hereof; and
(6) the making of other Restricted Payments in an aggregate
amount not to exceed US$15.0 million since the date of this Indenture.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Board of Directors whose
resolution with respect thereto will be delivered to the Trustee.
Section 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
with respect to any other interest or participation in, or measured by,
its profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
47
(3) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) will not apply to encumbrances
or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness or Credit
Facilities as in effect or which come into effect on the date of this
Indenture and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of
those agreements, PROVIDED that the amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings are not materially less favorable to
Holders of Notes, as determined by the Company's Board of Directors in
their reasonable and good faith judgment;
(2) this Indenture, the Notes and the Note Guarantees;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital Stock of
a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person,
so acquired, PROVIDED that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be
incurred;
(5) customary non-assignment provisions in contracts entered
into in the ordinary course of business and consistent with past
practice;
(6) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on that property
of the nature described in Section 4.08(a)(3);
(7) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness, PROVIDED that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially less favorable to Holders
of Notes, as determined by the Company's Board of Directors in their
reasonable and good faith judgment;
(9) agreements existing on the date of this Indenture;
(10) Liens securing Indebtedness otherwise permitted to be
incurred under Section 4.12 hereof that limit the right of the debtor
to dispose of the assets subject to such Liens;
(11) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business; and
(12) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business.
48
Section 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (in any such case, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock;
PROVIDED, HOWEVER, that the Company may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness or
issue preferred stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.5 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred stock or Disqualified Stock had been issued,
as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, "PERMITTED DEBT"):
(1) the incurrence by the Company and its Restricted
Subsidiaries of additional Indebtedness and letters of credit under
Credit Facilities in an aggregate principal amount at any one time
outstanding under this clause (1) (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of
the Company and its Restricted Subsidiaries thereunder) not to exceed
the greater of:
(i) Cdn$175.0 million, LESS the aggregate amount of all
Net Proceeds of Asset Sales that have been applied by the Company or
any of its Restricted Subsidiaries since the date of this Indenture to
permanently repay any term Indebtedness under a Credit Facility
pursuant to Section 4.10 hereof and LESS the aggregate amount of all
commitment reductions with respect to any revolving credit borrowings
under a Credit Facility that have been made by the Company or any of
its Restricted Subsidiaries since the date of this Indenture as a
result of the application of Net Proceeds of Asset Sales pursuant to
Section 4.10 hereof; and
(ii) Cdn$95.0 million plus 15% of Adjusted Consolidated
Net Tangible Assets as of the last day of the fiscal quarter for which
internal financial statements are available and immediately preceding
the date on which such additional Indebtedness is incurred;
(2) Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees
to be issued on the date of this Indenture and the Exchange Notes and
the related Note Guarantees to be issued pursuant to the Registration
Rights Agreement;
(4) the incurrence by the Company or any of the Guarantors of
Indebtedness and Obligations represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business of the Company or such Guarantor, in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (4), not to exceed US$10.0 million at
any time outstanding;
49
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under Section 4.09(a) or clauses (2),
(3), (4), (5) or (13) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that:
(i) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be unsecured; and
(ii) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary of the Company and
(ii) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary of the
Company; will be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of the Guarantors of
Hedging Obligations, PROVIDED that such Hedging Obligations were
incurred in the ordinary course of business and not for speculative
purposes;
(8) the guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section
4.09;
(9) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional
shares of the same class of Disqualified Stock will not be deemed to be
an incurrence of Indebtedness or an issuance of Disqualified Stock for
purposes of this Section 4.09; PROVIDED, in each such case, that the
amount thereof is included in Fixed Charges of the Company as accrued;
(10) the incurrence by the Company or any Guarantor of
Indebtedness or Obligations under Oil and Gas Hedging Contracts,
PROVIDED that such Contracts were entered into in the ordinary course
of business and not for speculative purposes;
(11) production imbalances arising in the ordinary course of
business;
(12) Indebtedness and Obligations in connection with one or
more standby letters of credit, Guarantees, performance or surety bonds
or other reimbursement obligations, in each case, issued in the
ordinary course of business and not in connection with the borrowing of
money or the obtaining of an advance or credit (other than advances or
credit for goods and services in the ordinary course of business and on
terms and conditions that are customary in the Oil and Gas Business,
and other than the extension of credit represented by such letter of
credit, Guarantee or performance or surety bond itself); and
(13) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time
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outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any Indebtedness incurred pursuant to
this clause (13), not to exceed US$25.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (13) above,
or is entitled to be incurred pursuant to Section 4.09(a), the Company will be
permitted to classify, or later reclassify, such item of Indebtedness in whole
or in part in any manner that complies with this Section 4.09, including by
allocation to more than one other type of Indebtedness. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture will be deemed to have been incurred on such
date in reliance on the exception provided by clause (1) of Section 4.09(b).
(c) The Company will not incur any additional Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to any
other Indebtedness of the Company unless such additional Indebtedness is also
contractually subordinated in right of payment to the Notes on substantially
identical terms; PROVIDED, HOWEVER, that no Indebtedness of the Company will be
deemed to be contractually subordinated in right of payment to any other
Indebtedness of the Company solely by virtue of being unsecured.
Section 4.10 ASSET SALES.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may
be) receives consideration at the time of the Asset Sale at least equal
to the fair market value of the assets or Equity Interests issued or
sold or otherwise disposed of;
(2) the fair market value is set forth in an Officers'
Certificate delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in the form of
cash or Permitted Assets. For purposes of this provision, each of the
following will be deemed to be cash:
(i) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet, of the Company or
any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any
Note Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability; and
(ii) any securities, notes or other obligations received
by the Company or any such Restricted Subsidiary from such transferee
that are contemporaneously, subject to ordinary settlement periods,
converted by the Company or such Restricted Subsidiary into cash, to
the extent of the cash received in that conversion.
(b) Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or the applicable Restricted Subsidiary may apply those Net
Proceeds:
51
(1) to repay or prepay Indebtedness and other Obligations that
is not subordinated to the Notes;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Oil and Gas Business;
(3) to make a capital expenditure; or
(4) to acquire other long-term assets that are used or useful
in the Oil and Gas Business.
Pending the final application of any Net Proceeds, the Company may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or invested
as provided in Section 4.10(b) will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds US$10.0 million, the Company will
make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is PARI PASSU with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other PARI PASSU Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100%
of principal amount plus accrued and unpaid interest and Additional Interest, if
any, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other PARI PASSU
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee will select the Notes and such other PARI PASSU
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero. The Company's
ability to make an Asset Sale Offer is currently restricted by the terms of the
Credit Agreement.
(d) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
Section 4.11 TRANSACTIONS WITH AFFILIATES.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "AFFILIATE TRANSACTION"), unless:
(1) the Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
52
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of US$2.5 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.11 and that such Affiliate
Transaction has been approved by a majority of the disinterested
members of the Board of Directors; and
(ii) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in
excess of US$15.0 million, an opinion as to the fairness to the Company
or the relevant Restricted Subsidiary of such Affiliate Transaction
from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing in Canada or the United
States.
(b) The following items will be deemed not to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a):
(1) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest in, or
controls, such Person;
(4) payment of reasonable and customary compensation or fees
to, or the execution of customary expense reimbursement,
indemnification or similar arrangements with, the Company or any of its
Restricted Subsidiaries or any of their respective directors and
officers in the ordinary course of business;
(5) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company; and
(6) Restricted Payments that are permitted by Section 4.07
hereof.
Section 4.12 LIENS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) securing Indebtedness or trade payables upon or with respect to
any of their property or assets, now owned or hereafter acquired, unless all
payments due under this Indenture and the Notes are secured on an equal and
ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
Section 4.13 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or
other existence of each of its Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from
time to time) of the Company or any such Subsidiary; and
53
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to preserve
any such right, license or franchise, or the corporate, partnership or other
existence of any of its Subsidiaries, if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.14 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) If the Company does not make a Change of Control Offer upon the
occurrence of a Change of Control, each Holder of Notes will have the right to
require the Company to repurchase all or any part (equal to US$1,000 or an
integral multiple of US$1,000) of that Holder's notes pursuant to a Change of
Control Offer on the terms set forth in this Section 4.14. Upon the occurrence
of a Change of Control, the Company will make an offer (a "CHANGE OF CONTROL
OFFER") to each Holder to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of each Holder's Notes at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Additional Interest, if any, on the Notes repurchased to the date of
purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in the notice (the "CHANGE OF CONTROL
PAYMENT DATE"), which date will be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures required by
this Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the Change of Control provisions of this Indenture,
the Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under the Change of Control
provisions of this Indenture by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company or its
designated agent will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; PROVIDED that each new Note will be in a
principal amount of US$1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
54
(c) Notwithstanding anything to the contrary in this Section 4.14, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.14 and Section 3.09 hereof and purchases all Notes validly tendered
and not withdrawn under the Change of Control Offer.
Section 4.15 PAYMENTS FOR CONSENT.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.16 ADDITIONAL NOTE GUARANTEES.
If the Company or any of its Subsidiaries acquires or creates another
Restricted Subsidiary after the date of this Indenture, then the Company will
cause that newly acquired or created Restricted Subsidiary to execute a Note
Guarantee pursuant to a supplemental indenture in substantially the form of
Exhibit F hereto and deliver an Opinion of Counsel to the Trustee in form
reasonably satisfactory to the Trustee within ten Business Days of the date on
which it was acquired or created to the effect that such supplemental indenture
has been duly authorized, executed and delivered by that Restricted Subsidiary
and constitutes a valid and binding agreement of that Restricted Subsidiary,
enforceable in accordance with its terms (subject to customary exceptions).
Section 4.17 PAYMENT OF ADDITIONAL AMOUNTS
(a) All payments made by the Company or on behalf of the Company with
respect to the Notes will be made without withholding or deduction for any taxes
imposed by any Canadian taxing authority, unless required by law or the
interpretation or administration thereof by the relevant taxing authority. If
the Company is obligated to withhold or deduct any amount on account of taxes
imposed by any Canadian taxing authority from any payment made with respect to
the Notes, the Company will:
(1) make such withholding or deduction;
(2) remit the full amount deducted or withheld to the relevant
government authority in accordance with the applicable law;
(3) pay such additional amounts (collectively, "ADDITIONAL
AMOUNTS") as may be necessary so that the net amount received by each
Holder (including Additional Amounts) after such withholding or
deduction will not be less than the amount the Holder would have
received if such taxes had not been withheld or deducted;
(4) furnish to the Trustee for the benefit of the Holders,
within 30 days after the date of the payment of any taxes is due, an
official receipt of the relevant government authority for all amounts
deducted or withheld, or if such receipt is not obtainable, other
evidence of payment by the Company of those taxes;
55
(5) indemnify and hold harmless each Holder, other than as
described below, for the amount of:
(i) any taxes (including interest and penalties) paid by
such Holder as a result of payments made on or with respect thereto,
and
(ii) any taxes imposed with respect to any reimbursement
under clause (a)(5)(i) above or this clause (a)(5)(ii), but excluding
any such taxes on such Holder's net income; and
(6) at least 15 days prior to each date on which any
Additional Amounts are payable, deliver to the Trustee an Officers'
Certificate setting forth the calculation of the Additional Amounts to
be paid and such other information as the Trustee may request to enable
the Trustee to pay such Additional Amounts to Holders on the payment
date and on the date Additional Amounts are payable, delivered to the
Trustee an amount of money equal to the Additional Amounts.
(b) Notwithstanding the foregoing, the Company will not pay Additional
Amounts to a Holder in respect of a beneficial owner of a Note:
(1) with which the Company does not deal at arm's length
(within the meaning of the Income Tax Act (Canada)) at the time of
making such payment, or
(2) which is subject to such taxes by reason of its being
connected with Canada or any province or territory thereof otherwise
than by the mere acquisition, holding or disposition of Notes or the
receipt of payments thereunder.
Any reference in this Indenture to the payment of principal, premium,
if any, interest, Additional Interest, Change of Control or Asset Sale purchase
price, redemption price or any other amount payable under or with respect to any
Note, will be deemed to include the payment of Additional Amounts to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof. The Company's obligation to make payments of Additional Amounts
will survive any termination of this Indenture or the defeasance of any rights
hereunder.
Section 4.18 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
the Company and its Restricted Subsidiaries in the Subsidiary so designated will
be deemed to be an Investment made as of the time of the designation and will
reduce the amount available for Restricted Payments under Section 4.07(a) hereof
or Permitted Investments, as determined by the Company. That designation will
only be permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would
not cause a Default.
56
Section 4.19 BUSINESS ACTIVITIES
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than the Oil and Gas Business, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
ARTICLE 5.
SUCCESSORS
Section 5.01 AMALGAMATION, MERGER, CONSOLIDATION OR SALE OF ASSETS.
(a) The Company may not, directly or indirectly: (1) amalgamate,
consolidate or merge with or into another Person (whether or not the Company is
the surviving corporation); or (2) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such amalgamation,
consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, conveyance or other disposition has been
made is a corporation organized or existing under the laws of Canada or
any province thereof or the United States, any state of the United
States or the District of Columbia;
(2) the Person formed by or surviving any such amalgamation,
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
has been made assumes all the obligations of the Company under the
Notes, this Indenture and the Registration Rights Agreement;
(3) immediately after such transaction no Default or Event of
Default exists;
(4) the Company or the Person formed by or surviving any such
amalgamation, consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, conveyance or other
disposition has been made:
(i) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction; and
(ii) will, on the date of such transaction after giving
pro forma effect thereto and any related financing transactions as if
the same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least US$1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth
in Section 4.09(a) hereof;
(5) the transactions will not result in the Company or the
surviving corporation being required to make any deduction or
withholding on account of taxes as described in Section 4.17 hereof
that the Company would not have been required to make had such
transactions or series of transactions not occurred;
(6) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for under in this Section 5.01 have been complied
with.
57
(b) In addition, the Company may not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of the Guarantors.
Section 5.02 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any amalgamation, consolidation or merger, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company in a transaction that is subject
to, and that complies with the provisions of Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
amalgamated or merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such amalgamation, consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and such successor
corporation may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company herein; PROVIDED, HOWEVER, that the predecessor Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company's assets in a transaction
that is subject to, and that complies with the provisions of, Section 5.01
hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 EVENTS OF DEFAULT.
Each of the following is an "EVENT OF DEFAULT":
(1) default for 30 days in the payment when due of interest
on, or Additional Interest with respect to the Notes;
(2) default in payment when due of the principal of, or
premium, if any, on the Notes;
(3) failure by the Company or any of its Restricted
Subsidiaries to comply with Sections 4.14, 4.10 or 5.01 hereof;
(4) failure by the Company or any of its Restricted
Subsidiaries to comply with any of the other agreements in this
Indenture for 60 days after written notice has been given to the
Company by the Trustee or to the Company and the Trustee by Holders of
at least 25% of the outstanding principal amount of the Notes;
(5) default under any other mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
this Indenture, if that default:
(a) is caused by a failure to pay principal of, or interest or premium,
if any, on such Indebtedness prior to the expiration of the applicable grace or
cure period provided in such Indebtedness on the date of such default (a
"Payment Default"); or
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(b) results in the acceleration of such Indebtedness prior to its
express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default which remains
outstanding or the maturity of which has been so accelerated,
aggregates US$10.0 million or more, PROVIDED that if any such default
is cured or waived or any such acceleration rescinded, or such
Indebtedness is repaid, within a period of 10 days from the
continuation of such default beyond the applicable grace or cure period
or the occurrence of such acceleration, as the case may be, such Event
of Default under this Indenture and any consequential acceleration of
the Notes shall be automatically rescinded, so long as such rescission
does not conflict with any judgment or decree;
(6) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of US$10.0
million, which judgments are not paid, discharged or stayed for a
period of 60 days;
(7) except as permitted by this Indenture, any Note Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any
Significant Subsidiary, or any Person acting on behalf of any
Significant Subsidiary, shall deny or disaffirm its obligations under
its Note Guarantee; and
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary in
an involuntary case;
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary or
for all or substantially all of the property of the Company or
any of its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days;
Section 6.02 ACCELERATION.
In the case of an Event of Default specified in clause (8) of Section
6.01 hereof, with respect to the Company or any of its Significant Subsidiaries
or any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
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Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (8) of Section 6.01 hereof occurs all outstanding Notes shall be due and
payable immediately without further action or notice. The Holders of a majority
in aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
If an Event of Default occurs on or after May 15, 2006 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to May 15, 2006 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium shall
also become and be immediately due and payable in an amount, for each of the
years beginning on May 15 of the years set forth below, as set forth below
(expressed as a percentage of the principal amount of the Notes on the date of
payment that would otherwise be due but for the provisions of this sentence):
YEAR PERCENTAGE
2002....................................... 109.900%
2003....................................... 109.900%
2004....................................... 109.900%
2005....................................... 107.425%
2006....................................... 104.950%
Section 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, interest and
Additional Interest, if any, on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by written notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, premium, interest and Additional Interest, if
any, on the Notes (including in connection with an Asset Sale Offer or Change of
Control Offer); PROVIDED, HOWEVER, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising
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therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue
the remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Additional
Interest, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Additional Interest, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
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Section 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Additional Interest, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Additional Interest, if any and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
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ARTICLE 7.
TRUSTEE
Section 7.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (e) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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Section 7.02 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) 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.
(h) The Trustee 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.
Section 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 TRUSTEE'S DISCLAIMER.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in
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the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
Section 7.05 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium or
Additional Interest, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA ss. 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA ss. 313(d). The Company will promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 COMPENSATION AND INDEMNITY.
(a) The Company will pay to the Trustee from time to time compensation
agreed to with the Trustee for its acceptance of this Indenture and services
hereunder. The Trustee's compensation will not be limited by any law on
compensation of a trustee of an express trust. The Company will reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses will include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee will notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor will defend the claim and the Trustee will cooperate
in the defense. The Trustee may have separate counsel and the Company will pay
the reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent
will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
65
(d) To secure the Company's payment obligations in this Section 7.07,
the Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01 (8) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIAss. 313(b)(2) to
the extent applicable.
Section 7.08 REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, PROVIDED all sums owing to
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the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof will continue
for the benefit of the retiring Trustee.
Section 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.
Section 7.10 ELIGIBILITY; DISQUALIFICATION.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus (together with that of
its parent) of at least $100 million as set forth in its most recent published
annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose,
Legal Defeasance means that the Company and the Guarantors will be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or discharged
hereunder:
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(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium and
Additional Interest, if any, on such Notes when such payments are due
from the trust referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from each of their obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18 and
4.19 hereof and clause (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(7)
hereof will not constitute Events of Default.
Section 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
In order to exercise either Legal Defeasance under Section 8.02 or
Covenant Defeasance under Section 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants in Canada or the
United States, to pay the principal of, premium, interest and
Additional Interest, if any, on the outstanding Notes on the stated
date for payment thereof or on the applicable redemption date, as the
case may be;
(2) in the case of an election under Section 8.02 hereof, the
Company has delivered to the Trustee an Opinion of Counsel in the
United States confirming that:
68
(A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a
change in the applicable federal income tax law,
in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof, the
Company has delivered to the Trustee (i) an Opinion of Counsel in the
United States confirming that the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred and (b) an Opinion of Counsel qualified to practice in Canada
or a ruling from Canada Customs and Revenue Agency to the effect that
Holders of the Notes who are not resident in Canada will not recognize
income, gain or loss for Canadian federal, provincial or territorial
income tax or other tax purposes as a result of such deposit and
defeasance and will only be subject to Canadian federal, provincial or
territorial income tax and other taxes on the same amounts, in the same
manner and at the same times as would have been the case had such
deposit and defeasance not occurred;
(4) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit);
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Restricted Subsidiaries is a party or by
which the Company or any of its Restricted Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for under this Indenture relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
Section 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will 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
69
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, premium and
Additional Interest, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium or
Additional Interest, if any, or interest on any Note and remaining unclaimed for
two years (or such shorter period of time for return of such monies to the
Company under applicable abandoned property laws) after such principal, premium
or Additional Interest, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) will be
discharged from such trust; and the Holder of such Note will thereafter be
permitted to look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, will 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 will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 8.07 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantor's obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; PROVIDED,
HOWEVER, that, if the Company makes any payment of principal of, premium or
Additional Interest, if any, or interest on any Note following the reinstatement
of its obligations, the Company will be subrogated to the rights of the Holders
of such Notes to receive such payment from the money held by the Trustee or
Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees or the Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company or Guarantor pursuant to Article 5 or Article 10 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any such Holder;
(5) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA; or
(6) to allow any Guarantor to execute a supplemental indenture
and/or a Note Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 WITH CONSENT OF HOLDERS OF NOTES.
(a) Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture (including,
without limitation, Sections 3.09, 4.10 and 4.14 hereof), the Note Guarantees
and the Notes with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding voting as a single class
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium,
interest or Additional Interest, if any, on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture, the Note Guarantees or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes). Section 2.08 hereof shall determine which Notes are considered to be
"outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental Indenture unless such
71
amended or supplemental Indenture directly affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
(b) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.09, 4.10 and
4.15 hereof;
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of or premium or Additional Interest, if any, or interest on
the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the
then outstanding Notes and a waiver of the payment default that
resulted from such acceleration);
(5) make any Note payable in money other than that stated in
the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium or
Additional Interest, if any, on the Notes;
(7) release any Guarantor from any of its obligations under
its Note Guarantee or this Indenture, except in accordance with the
terms of this Indenture.
(8) waive a redemption payment with respect to any Note (other
than a payment required by one of the covenants described above under
Section 4.14 hereof);or
(9) make any change in this Section 9.02.
Section 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes will be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
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Section 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign any amended or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental Indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
NOTE GUARANTEES
Section 10.01 GUARANTEE.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium, interest and Additional
Interest, if any, on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest on the Notes, if any,
if lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.
73
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and performance and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 10.02 LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 10, result
in the obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Section 10.03 EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 10.01, each initial
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be
74
endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee and that this Indenture will be executed on behalf of
such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 10.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Subsidiary after
the date of this Indenture, if required by Section 4.16 hereof, the Company will
cause such Subsidiary to comply with the provisions of Section 4.16 hereof and
this Article 10, to the extent applicable.
Section 10.04 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 10.05 or Articles 4 or 5, no
Guarantor may sell or otherwise dispose of all or substantially all of its
assets to, or consolidate, amalgamate or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than the Company or
another Guarantor, unless:
(1) immediately after giving effect to such transaction, no
Default or Event of Default exists;
(2) either:
(i) subject to Section 10.05 hereof, the Person acquiring
the property in any such sale or disposition or the Person formed by or
surviving any such consolidation, amalgamation or merger
unconditionally assumes all the obligations of that Guarantor, pursuant
to a supplemental indenture, under the Notes, this Indenture and the
Note Guarantee on the terms set forth herein or therein; or
(ii) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.10 hereof; and
the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
under in this Section 10.04 have been complied with.
In case of any such consolidation, amalgamation merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor to the date of such amalgamation, consolidation,
merger, sale or conveyance, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Note
75
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued will in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, notwithstanding clauses
(a) and (b) above, nothing contained in this Indenture or in any of the Notes
will prevent any consolidation, amalgamation or merger of a Guarantor with or
into the Company or another Guarantor, or will prevent any sale or conveyance of
the property of a Guarantor as an entirety or substantially as an entirety to
the Company or another Guarantor.
Section 10.05 RELEASES FOLLOWING SALE OF ASSETS.
In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, amalgamation,
consolidation or otherwise, or a sale or other disposition of all of the Capital
Stock of any Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Restricted Subsidiary of the
Company, then such Guarantor (in the event of a sale or other disposition, by
way of merger, amalgamation, consolidation or otherwise, of all of the Capital
Stock of such Guarantor) or the corporation acquiring the property (in the event
of a sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Note
Guarantee; PROVIDED that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof. Upon delivery by the Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section 4.10
hereof, the Trustee will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Note
Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 SATISFACTION AND DISCHARGE.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(i) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and Notes for
whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee
for cancellation; or
(ii) all Notes that have not been delivered to the Trustee
for cancellation have become due and payable by reason of the making of
a notice of redemption or otherwise or will become due and payable
within one year and the Company or any Guarantor has irrevocably
76
deposited or caused to be deposited with the Trustee as trust funds in
trust solely for the benefit of the Holders, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient without consideration of any reinvestment
of interest, to pay and discharge the entire indebtedness on the Notes
not delivered to the Trustee for cancellation for principal, premium
and Additional Interest, if any, and accrued interest to the date of
maturity or redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or will occur as a result of
such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid
all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or on the redemption date, as the case
may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 11.02 and Section 8.06 will
survive. In addition, nothing in this Section 11.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 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; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01; PROVIDED that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
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ARTICLE 12.
MISCELLANEOUS
Section 12.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss.318(c), the imposed duties will control.
Section 12.02 NOTICES.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company and/or any Guarantor:
▇▇▇▇▇▇▇ Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President and CFO
With a copy to:
Fraser, ▇▇▇▇▇▇ Casgrain LLP
30th Floor
▇▇▇ -▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇
If to the Trustee:
The Bank of Nova Scotia Trust Company of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Trust Officer
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) will
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 answered back, if telexed; 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; provided that
notices and communications to the Trustee shall not be deemed given until actual
receipt thereof by the Trustee
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed
78
to any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (which must include the
statements set forth in Section 12.05 hereof) stating that, in the
opinion of the signatories thereto, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(2) an Opinion of Counsel (which must include the statements
set forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA ss. 314(e)
and must include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
79
Section 12.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Note Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. The waiver may not be effective
to waive liabilities under the federal securities laws.
Section 12.08 GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10 SUCCESSORS.
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 10.05.
Section 12.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 12.12 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 12.13 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
80
Section 12.14 CONSENT TO JURISDICTION.
Each party irrevocably agrees that any legal suit, action or proceeding
arising out of or based upon this Indenture or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City of New York or the courts of the
State of New York in each case located in the Borough of Manhattan in the City
of New York (collectively, the "Specified Courts"), and irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. The parties further agree that service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum. Each party not located in the United States hereby
irrevocably appoints CT Corporation System, which currently maintains a New York
City office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ of America, as its agent to receive service of process or other legal
summons for purposes of any such action or proceeding that may be instituted in
any state or federal court in the City and State of New York.
[Signatures on following page]
81
SIGNATURES
Dated as of May 8, 2002
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
HORNET ENERGY LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
867791 ALBERTA LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
899776 ALBERTA LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
▇▇▇▇▇▇▇ PETROLEUM by its managing partner,
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ TRUST COMPANY OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
83
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the date of the Indenture:
HORNET ENERGY LTD.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LTD.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LTD.
▇▇▇▇▇▇▇ PETROLEUM
I-1
EXHIBIT A
[Face of Note]
================================================================================
CUSIP/CINS 204940 AC 4
9.90% Series A Senior Notes due 2009
No. ___ $163,850,000
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
promises to pay to CEDE & CO.
----------
or registered assigns,
the principal sum of
Dollars on May 15, 2009.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Dated: May 8, 2002
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
(SEAL)
This is one of the Notes referred to
in the within-mentioned Indenture:
THE BANK OF NOVA SCOTIA TRUST COMPANY OF NEW YORK,
as Trustee
By:
--------------------------------------------
Authorized Signatory
================================================================================
A-1
[Back of Note]
9.90% Series A Senior Notes due 2009
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF ▇▇▇▇▇▇▇ PETROLEUM
CORPORATION.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN
EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN THE SUBJECT OF ANY PROSPECTUS
FILED UNDER THE SECURITIES LAWS OF ANY CANADIAN PROVINCE OR TERRITORY. THE
HOLDER OF THE SECURITY BY ITS ACCEPTANCE HEREOF REPRESENTS, IF IT IS A RESIDENT
OF CANADA, THAT IT IS PURCHASING THE SECURITIES IN A TRANSACTION WHICH IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS
A-2
REQUIREMENTS OF APPLICABLE CANADIAN SECURITIES LAWS, THE SALE OF THE SECURITIES
TO IT QUALIFIES (BY REASON OF THE AMOUNT OF THE CONSIDERATION BEING PAID BY THE
PURCHASER OF THE SECURITIES OR BY REASON OF THE STATUS OF THE PURCHASER, AS THE
CASE MAY BE) FOR AN EXEMPTION FROM THE PROSPECTUS FILING AND DELIVERY
OBLIGATIONS UNDER APPLICABLE CANADIAN PROVINCIAL OR TERRITORIAL SECURITIES LAWS
(PROVIDED THAT APPLICABLE FILING OBLIGATIONS ARE SATISFIED AND ANY APPLICABLE
FEES ARE PAID), AND IT HAS PROVIDED SUCH INFORMATION AND MADE SUCH
REPRESENTATIONS TO THE SELLER OF THE SECURITIES AS MAY BE REASONABLY NECESSARY
FOR THE SELLER TO RELY ON SUCH EXEMPTIONS AND AGREES THAT IT WILL GIVE EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE DATE ON WHICH RESALE RESTRICTIONS TERMINATE UNDER APPLICABLE SECURITIES
LAWS.
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. ▇▇▇▇▇▇▇ Petroleum Corporation, an Alberta,
Canada corporation (the "Company"), promises to pay interest on the
principal amount of this Note at 9.90% per annum from May 8, 2002 until
maturity and shall pay the Additional Interest, if any, payable
pursuant to Section 2 of the Registration Rights Agreement referred to
below. The Company will pay interest and Additional Interest, if any,
semi-annually in arrears on May 15 and November 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day
(each, an "Interest Payment Date"). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; PROVIDED that if
there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED,
FURTHER, that the first Interest Payment Date shall be November 15,
2002. The Company will pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per
annum in excess of the rate then in effect; it will pay interest
(including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Additional
Interest, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
(2) METHOD OF PAYMENT. The Company will pay interest on the
Notes (except defaulted interest) and Additional Interest, if any, to
the Persons who are registered Holders of Notes at the close of
business on the May 1 or November 1 next preceding the Interest Payment
Date, even if such Notes are cancelled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. The Notes will be
payable as to principal, premium and Additional Interest, if any, and
interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Additional Interest, if
any, may be made by check mailed to the Holders at their addresses set
forth in the register of Holders; PROVIDED that payment by wire
transfer of immediately available funds will be required with respect
to principal of and interest, premium and Additional Interest, if any,
on, all Global Notes and all other Notes the Holders of which will have
provided wire transfer instructions to the Company or the Paying Agent.
Such payment will be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
and private debts.
A-3
(3) PAYING AGENT AND REGISTRAR. Initially, The Bank of Nova
Scotia Trust Company of New York, the Trustee under the Indenture, will
act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of
its Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture
dated as of May 8, 2002 (the "Indenture") among the Company, the
Guarantors and the Trustee. The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are unsecured obligations of the
Company, unlimited in aggregate principal amount.
(5) OPTIONAL REDEMPTION.
Except as set forth in the second paragraph of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to May 15, 2006.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Additional Interest, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on May 15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2006.............................................. 104.950%
2007.............................................. 102.475%
2008 and thereafter............................... 100.000%
Notwithstanding the provisions of the first paragraph of this
Paragraph 5, at any time prior to May 15, 2005, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under the Indenture at a redemption price equal to 109.90% of the
principal amount thereof; PROVIDED that at least 65% in aggregate principal
amount of the Notes issued under the Indenture remains outstanding immediately
after the occurrence of such redemption and that such redemption occurs within
60 days of the date of the closing of such equity offering.
(6) MANDATORY REDEMPTION.
The Company will not be required to make mandatory redemption payments
with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(i) If there is a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of
each Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and
Additional Interest thereon, if any, to the date of purchase the
"Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
A-4
(ii) If the Company or a Subsidiary consummates any Asset
Sales, and the aggregate amount of Excess Proceeds exceeds $10.0
million, the Company will commence an offer to all Holders of Notes and
all holders of other Indebtedness that is PARI PASSU with the Notes
containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of
assets (an "Asset Sale Offer") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes and other
PARI PASSU Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and
Additional Interest thereon, if any, to the date fixed for the closing
of such offer in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes and other
PARI PASSU Indebtedness tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company (or such Subsidiary) may use
such deficiency for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes and other PARI
PASSU Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and other PARI
PASSU Indebtedness to be purchased on a PRO RATA basis. Holders of
Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date
to each Holder whose Notes are to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for
redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note
may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or
exchange offer for, Notes) and any existing default or compliance with
any provision of the Indenture or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Notes). Without the consent of any Holder affected, the Indenture or
the Notes may be amended or supplemented to cure any ambiguity, defect
or
A-5
inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the assumption of the
Company's or any Guarantor's obligations to Holders of the Notes in
case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture
of any such Holder, to comply with the requirements of the SEC in order
to effect or maintain the qualification of the Indenture under the
Trust Indenture Act, to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture, or to allow
any Guarantor to execute a supplemental indenture to the Indenture
and/or a Note Guarantee with respect to the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Additional
Interest on the Notes; (ii) default in payment when due of principal of
or premium, if any, on the Notes when the same becomes due and payable
at maturity, upon redemption (including in connection with an offer to
purchase) or otherwise, (iii) failure by the Company to comply with
Section Sections 4.14, 4.10 or 5.01 of the Indenture; (iv) failure by
the Company for 60 days after notice to the Company by the Trustee or
the Holders of at least 25% in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class to
comply with certain other agreements in the Indenture, the Notes; (v)
default under certain other agreements relating to Indebtedness of the
Company which default results in the acceleration of such Indebtedness
prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days;
(vii) except as permitted by the Indenture, any Note Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Significant
Subsidiary, or any Person acting on behalf of any Significant
Subsidiary, shall deny or disaffirm its obligations under its Note
Guarantee; and (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries. If any
Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders
of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture,
and the Company is required upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company or any of the
Guarantors, as such, will not have any liability for any
A-6
obligations of the Company or such Guarantor under the Notes, the Note
Guarantees or the Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
(15) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global
Notes and Restricted Definitive Notes will have all the rights set
forth in the A/B Exchange Registration Rights Agreement dated as of May
8, 2002, among the Company, the Guarantors and the other parties named
on the signature pages thereof or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights
agreements, if any, among the Company, the Guarantors and the other
parties thereto, relating to rights given by the Company and the
Guarantors to the purchasers of any Additional Notes (collectively, the
"Registration Rights Agreement").
(18) CUSIP NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the
Trustee may use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
▇▇▇▇▇▇▇ Petroleum Corporation
▇▇▇▇▇ ▇▇▇▇
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Vice President of Finance and Chief Financial Officer
A-7
EXHIBIT A
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
----------------------------------
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
----------------
Your Signature:
----------------------------------------
(Sign exactly as your name appears on the face
of this Note)
Signature Guarantee*:
---------------------------
----------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1
EXHIBIT A
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the appropriate box below:
[_] Section 4.10 [_] Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$
---------------
Date:
----------------
Your Signature:
----------------------------------------
(Sign exactly as your name appears on the face
of this Note)
Tax Identification No.:
--------------------------------
Signature Guarantee*:
----------------------------
----------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1
EXHIBIT A
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:
-------------------------------------------------------------------------------------------------------------------------
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
DATE OF EXCHANGE THIS GLOBAL NOTE THIS GLOBAL NOTE (OR INCREASE) CUSTODIAN
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
* THIS SCHEDULE SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
A-1
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
▇▇▇▇▇▇▇ Petroleum Corporation
Suite 3300
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
[REGISTRAR ADDRESS BLOCK]
Re: 9.90% Senior Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 8, 2002 (the
"INDENTURE"), among ▇▇▇▇▇▇▇ Petroleum Corporation, as issuer (the "COMPANY"),
the Guarantors named on the signature pages thereto and The Bank of Nova Scotia
Trust Company if New York, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "TRANSFEROR") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "TRANSFER"),
to ___________________________ (the "TRANSFEREE"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and, (iii) the transaction is
not part of a plan or scheme to evade the registration
B-1
requirements of the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [_] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [_] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [_] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) an Opinion of Counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Definitive Notes and in the Indenture and the
Securities Act.
4. [_] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a)[_] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
B-2
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b)[_] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c)[_] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:
------------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________), or
(iii) [_] IAI Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________), or
(iii) [_] IAI Global Note (CUSIP _________); or
(iv) [_] Unrestricted Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
▇▇▇▇▇▇▇ Petroleum Corporation
Suite 3300
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
[REGISTRAR ADDRESS BLOCK]
Re: 9.90% Senior Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of May 8, 2002 (the
"INDENTURE"), among ▇▇▇▇▇▇▇ Petroleum Corporation, as issuer (the "COMPANY"),
the Guarantors named on the signature pages thereto and The Bank of Nova Scotia
Trust Company if New York, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
__________________________, (the "OWNER") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "SECURITIES Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for
C-1
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [_] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [_] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
C-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated:
------------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
▇▇▇▇▇▇▇ Petroleum Corporation
Suite 3300
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
[REGISTRAR ADDRESS BLOCK]
Re: 9.90% Senior Notes due 2009
Reference is hereby made to the Indenture, dated as of May 8, 2002 (the
"INDENTURE"), among ▇▇▇▇▇▇▇ Petroleum Corporation, as issuer (the "COMPANY"),
the guarantors named on the signature pages thereto and The Bank of Nova Scotia
Trust Company of New York, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [_] a beneficial interest in a Global Note, or
(b) [_] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
----------------------------------------
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
Dated:
------------------
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of May 8, 2002 (the "INDENTURE") among
▇▇▇▇▇▇▇ Petroleum Corporation, (the "COMPANY"), the Guarantors listed on
Schedule I thereto and The Bank of Nova Scotia Trust Company of New York, as
trustee (the "TRUSTEE"), (a) the due and punctual payment of the principal of,
premium and Additional Interest, if any, and interest on the Notes (as defined
in the Indenture), whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal of and
interest on the Notes, if any, if lawful, and the due and punctual performance
of all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms of the Indenture and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are
expressly set forth in Article 10 of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Note Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to
take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; PROVIDED, HOWEVER, that the
Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated
and subject in right of payment upon any defeasance of this Note in accordance
with the provisions of the Indenture.
HORNET ENERGY LTD.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LTD.
899776 ALBERTA LTD.
▇▇▇▇▇▇▇ PETROLEUM
By:
-----------------------------------------
Name:
Title:
E-1
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE AND GUARANTEE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of
________________, 200__, among __________________ (the "GUARANTEEING
SUBSIDIARY"), a subsidiary of ▇▇▇▇▇▇▇ Petroleum Corporation (or its permitted
successor), an Alberta corporation (the "COMPANY"), the Company, the other
Guarantors (as defined in the Indenture referred to herein) and The Bank of Nova
Scotia Trust Company of New York, as trustee under this Indenture referred to
below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of May 8, 2002 providing for
the issuance of an aggregate principal amount of up to $165,000,000 of 9.90%
Senior Notes due 2009 (the "NOTES");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "NOTE GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture,
to jointly and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Notes or the obligations
of the Company hereunder or thereunder, that:
(i) the principal of, and premium and Additional
Interest, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal
of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that
same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.
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Failing payment when due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the
same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of
the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the
Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense
of a Guarantor.
(c) The following is hereby waived: diligence,
presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged
except by complete performance of the obligations contained in
the Notes and the Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any
court or otherwise to return to the Company, the Guarantors,
or any custodian, trustee, liquidator or other similar
official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled
to any right of subrogation in relation to the Holders in
respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the
purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration
in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such
obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of
this Note Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the
Holders under the Note Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after
giving effect to any maximum amount and all other contingent
and fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive contribution
from or payments made by or on behalf of any other Guarantor
in respect of the obligations of such other Guarantor under
Article 10 of the Indenture, this new Note Guarantee shall be
limited to the maximum amount permissible such that the
obligations of such Guarantor under this Note Guarantee will
not constitute a fraudulent transfer or conveyance.
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3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Note Guarantees shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Note Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) Except as otherwise provided in Section 10.05 and
Articles 4 and 5 of the Indenture, the Guaranteeing Subsidiary
may not sell or otherwise dispose of all substantially all of
its assets to, or amalgamate, consolidate with or merge with
or into (whether or not such Guarantor is the surviving
Person) another Person, other than the Company or another
Guarantor unless:
(i) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(ii) either (A) subject to Sections 10.04 and 10.05
of the Indenture, the Person acquiring the property in any such
sale or disposition or the Person formed by or surviving any
such amalgamation, consolidation or merger unconditionally
assumes all the obligations of that Guarantor, pursuant to a
supplemental indenture, under the Notes, the Indenture and the
Note Guarantee on the terms set forth herein or therein; or (B)
the Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of the Indenture,
including without limitation, Section 4.10 thereof; and
(iii) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for under in this
Section 10.04 have been complied with.
(b) In case of any such amalgamation, consolidation,
merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and
delivered to the Trustee, of the Note Guarantee endorsed upon
the Notes and the due and punctual performance of all of the
covenants and conditions of the Indenture to be performed by
the Guarantor to the date of such amalgamation, consolidation,
merger, sale or conveyance, such successor Person shall
succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such
successor Person thereupon may cause to be signed any or all
of the Note Guarantees to be endorsed upon all of the Notes
issuable under the Indenture which theretofore shall not have
been signed by the Company and delivered to the Trustee. All
the Note Guarantees so issued shall in all respects have the
same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance
with the terms of the Indenture as though all of such Note
Guarantees had been issued at the date of the execution
hereof.
(c) Except as set forth in Articles 4 and 5 and
Section 10.05 of the Indenture, and notwithstanding clauses
(a) and (b) above, nothing contained in the Indenture or in
any of the Notes shall prevent any amalgamation, consolidation
or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
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5. RELEASES.
(a) In the event of any sale or other disposition of
all or substantially all of the assets of any Guarantor, by
way of amalgamation, merger, consolidation or otherwise, or a
sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before
or after giving effect to such transaction) a Restricted
Subsidiary of the Company, then such Guarantor (in the event
of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the capital stock of
such Guarantor) or the corporation acquiring the property (in
the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Note
Guarantee; PROVIDED that the Net Proceeds of such sale or
other disposition are applied in accordance with the
applicable provisions of the Indenture, including without
limitation Section 4.10 of the Indenture. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee shall execute any
documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Note
Guarantee.
(b) Any Guarantor not released from its obligations
under its Note Guarantee shall remain liable for the full
amount of principal of and interest on the Notes and for the
other obligations of any Guarantor under the Indenture as
provided in Article [10] of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or any Guaranteeing Subsidiary under the Notes, any Note
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the SEC that such a waiver is against
public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20
[GUARANTEEING SUBSIDIARY]
By:
--------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ PETROLEUM CORPORATION
By:
--------------------------------------
Name:
Title:
[EXISTING GUARANTORS]
By:
--------------------------------------
Name:
Title:
The Bank of Nova Scotia Trust Company of New York,
as Trustee
By:
--------------------------------------
Authorized Signatory
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