EXHIBIT 4.5
FOURTH SUPPLEMENTAL INDENTURE
THIS FOURTH SUPPLEMENTAL INDENTURE dated as of November 1, 2004 (this
"Supplemental Indenture"), is entered into by and among Pioneer Natural
Resources Company, a Delaware corporation (the "Company"), Pioneer Natural
Resources USA, Inc., a Delaware corporation, for purposes of agreeing to make
certain guarantees pursuant to Section 2 hereof (the "Guarantor"), and Wachovia
Bank, National Association, as trustee (the "Trustee"). Capitalized terms used
herein and not otherwise defined have the meanings set forth in the Indenture
referred to below.
RECITALS
A. The Company (as successor to Evergreen Resources, Inc.) has
heretofore executed and delivered to the Trustee an indenture
(as heretofore amended and supplemented, the "Indenture"),
dated as of March 10, 2004, providing for the issuance of
5.875% Senior Subordinated Notes due 2012 (the "Securities").
B. Section 9.2 of the Indenture provides that, with the consent
of Holders representing at least a majority of the principal
amount of the Securities then outstanding, the Company and the
Trustee may enter into an indenture supplemental to the
Indenture for the purpose of amending or supplementing the
Indenture, including amendments to the subordination
provisions of the Indenture that are not adverse to Holders.
C. The Company desires to enter into, and has requested the
Trustee to join with it in entering into this Supplemental
Indenture for the purpose of amending the Indenture in certain
respects as permitted by Section 9.2 of the Indenture. The
Guarantor desires to agree to be obligated to guarantee the
Securities on the terms and conditions set forth in this
Supplemental Indenture.
D. The execution and delivery of this Supplemental Indenture has
been authorized by the Company and the Guarantor.
E. The Company (i) has received the consent of the Holders of a
majority in principal amount of the outstanding Securities, as
certified by an Officers' Certificate delivered to the Trustee
simultaneously with the execution and delivery of this
Supplemental Indenture, (ii) has delivered to the Trustee
simultaneously with the execution and delivery of this
Supplemental Indenture an Opinion of Counsel relating to this
Supplemental Indenture as contemplated by Section 9.6 of the
Indenture, and (iii) has satisfied all other conditions
required under Article 9 of the Indenture to enable the
Company and the Trustee to enter into t his Supplemental
Indenture.
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, the parties hereto agree, subject to the terms and conditions
hereinafter set forth, as follows for the benefit of the Trustee and the Holders
of the Securities:
Section 1. Amendments to the Indenture.
(a) Definitions. Section 1.1 of the Indenture is hereby amended by:
(i) adding the definitions specified in Schedule I hereto;
(ii) amending and restating the definitions specified in
Schedule II hereto to read as set forth on Schedule II; and
(iii) deleting in their entirety all terms and their
respective definitions for which all references are eliminated in the
Indenture as a result of the amendments set forth in Section 1 of this
Supplemental Indenture, including without limitation the word
"Subordinated" in the name of the Securities and the following
definitions: "ACNTA"; "Commodity Agreements"; "Currency Agreement";
"Interest Rate Agreement"; "Permitted Business Investments";
"Production Payments"; and "Sale/Leaseback Transaction."
(b) Covenants.
(i) Each of Sections 4.3 (Limitation on Indebtedness), 4.4
(Limitation on Restricted Payments), 4.6 (Limitation on Liens), 4.8
(Limitation on Sales of Assets and Subsidiary Stock), 4.9 (Limitation
on Affiliate Transactions), 4.14 (Change of Control), and 4.23
(Effectiveness of Covenants) of the Indenture is hereby amended and
restated in its entirety to read as set forth on Schedule III hereto;
(ii) Each of Sections 4.5 (Limitation on Layering), 4.7
(Limitation on Restrictions on Distributions from Restricted
Subsidiaries), 4.10 (Limitation on Sale of Capital Stock of Restricted
Subsidiaries), 4.11 (Future Subsidiary Guarantees), and 4.12
(Limitation on Lines of Business) and all of Article XI (Subsidiary
Guaranty) of the Indenture are hereby deleted in its entirety;
(c) Elimination of Subordination of Securities. The Securities shall
not be subordinated pursuant to the provisions of Article X of the Indenture.
Article X of the Indenture is hereby deleted in its entirety. The Securities
shall be senior unsecured obligations of the Company ranking pari passu with
other existing and future senior unsecured indebtedness of the Company.
Section 2. Obligation to Guarantee. If at any time any of the Company's
6.50% Senior Notes due 2008, 9-5/8% Senior Notes due 2010, 7.50% Senior Notes
due 2012 (the "7.50% Notes"), 5.875% Senior Notes Due 2016, or 7.20% Senior
Notes due 2028 (all of such senior notes, collectively, the "Other Senior
Notes") are guaranteed by the Guarantor pursuant to the terms of the applicable
indenture related to such senior notes, then the Company, the Guarantor and the
Trustee shall as soon as reasonably practicable thereafter execute and deliver a
supplemental indenture to the Indenture pursuant to which the Guarantor shall
unconditionally guarantee the Notes on substantially the same terms as the
Guarantor shall have guaranteed the 7.50% Notes; provided, however, that if the
Guarantor is not required to guarantee the 7.50% Notes or if the 7.50% Notes are
no longer outstanding, then the Guarantor shall guarantee the Notes on
substantially the same terms as the most recently issued series of Other Senior
Notes that are guaranteed. The Company, the Guarantor and the Trustee, as
applicable, also shall execute and deliver such other documents, instruments or
certificates as are reasonably necessary or appropriate to effect the required
guarantee of the Notes.
Section 3. Miscellaneous.
(a) Execution of Supplemental Indenture. This Supplemental
Indenture is executed and shall be construed as an indenture
supplemental to the Indenture and, as provided in the Indenture, this
Supplemental Indenture forms a part of the Indenture.
(b) 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.
(c) 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.
(d) Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
2
(e) 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 Company.
3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be signed on their behalf by their duly authorized representatives
as of the date first above written.
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
PIONEER NATURAL RESOURCES USA, INC.
FOR PURPOSES OF SECTION 2 ONLY
By: /s Xxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
----------------------------------------------
Name:
Title: Authorized Signatory
S-1
SCHEDULE I
"Additional Assets" means (1) any Property (other than Indebtedness or
Capital Stock) used in the Oil and Gas Business; (2) the Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary; or (3)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary; provided, however, that any such Restricted
Subsidiary described in clauses (2) or (3) above is primarily engaged in the Oil
and Gas Business.
"Adjusted Consolidated Net Tangible Assets" means (without duplication), as
of the date of determination, the remainder of:
(a)______ the sum of (i) discounted future net revenues from
proved oil and gas reserves of the Company and its Subsidiaries calculated in
accordance with SEC guidelines before any provincial, territorial, state,
Federal or foreign income taxes, as estimated by the Company in a reserve report
prepared as of the end of the Company's most recently completed fiscal year for
which audited financial statements are available, as increased by, as of the
date of determination, the estimated discounted future net revenues from (A)
estimated proved oil and gas reserves acquired since such year end, which
reserves were not reflected in such year end reserve report, and (B) estimated
oil and gas reserves attributable to upward revisions of estimates of proved oil
and gas reserves since such year end due to exploration, development or
exploitation activities, in each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in such year end reserve report), and
decreased by, as of the date of determination, the estimated discounted future
net revenues from (C) estimated proved oil and gas reserves produced or disposed
of since such year end, and (D) estimated oil and gas reserves attributable to
downward revisions of estimates of proved oil and gas reserves since such year
end due to changes in geological conditions or other factors which would, in
accordance with standard industry practice, cause such revisions, in each case
calculated on a pre-tax basis and substantially in accordance with SEC
guidelines (utilizing the prices utilized in such year end reserve report), in
each case as estimated by the Company's petroleum engineers or any independent
petroleum engineers engaged by the Company for that purpose; (ii) the
capitalized costs that are attributable to oil and gas properties of the Company
and its Subsidiaries to which no proved oil and gas reserves are attributable,
based on the Company's books and records as of a date no earlier than the date
of the Company's latest available annual or quarterly financial statements;
(iii) the Net Working Capital on a date no earlier than the date of the
Company's latest annual or quarterly financial statements; and (iv) the greater
of (A) the net book value of other tangible assets of the Company and its
Subsidiaries, as of a date no earlier than the date of the Company's latest
annual or quarterly financial statement, and (B) the appraised value, as
estimated by independent appraisers, of other tangible assets of the Company and
its Subsidiaries, as of a date no earlier than the date of the Company's latest
audited financial statements; minus
(b)______ the sum of (i) Minority Interests; (ii) any net gas
balancing liabilities of the Company and its Subsidiaries reflected in the
Company's latest audited financial statements; (iii) to the extent included in
(a)(i) above, the discounted future net revenues, calculated in accordance with
SEC guidelines (utilizing the prices utilized in the Company's year end reserve
report), attributable to reserves which are required to be delivered to third
parties to fully satisfy the obligations of the Company and its Subsidiaries
with respect to Volumetric Production Payments (determined, if applicable, using
the schedules specified with respect thereto); and (iv) the discounted future
net revenues, calculated in accordance with SEC guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments which, based on the
estimates of production and price assumptions included in determining the
discounted future net revenues specified in (a)(i) above, would be necessary to
fully satisfy the payment obligations of the Company and its Subsidiaries with
respect to Dollar-Denominated Production Payments (determined, if applicable,
using the schedules specified with respect thereto).
If the Company changes its method of accounting from the
successful efforts method to the full cost or a similar method of accounting,
"Adjusted Consolidated Net Tangible Assets" will continue to be calculated as if
the Company were still using the successful efforts method of accounting.
"Asset Disposition" means any sale, lease, transfer or other disposition
(or series of related sales, leases, transfers or dispositions) by the Company
Schedule I-1
or any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of
(1)______ any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Restricted
Subsidiary),
(2)______ all or substantially all the assets of any division
or line of business of the Company or any Restricted Subsidiary or
(3)______ any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary
(other than, in the case of (1), (2) and (3) above, (A) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary; (B) for purposes of Section 4.8 only, a
disposition that constitutes a Restricted Payment permitted by Section 4.4 or a
Permitted Investment (including transfers of assets to an oil and gas royalty
trust); (C) a disposition of assets with a fair market value of less than
$5,000,000; (D) the sale or transfer (whether or not in the ordinary course of
business) of crude oil and natural gas properties or direct or indirect
interests in real property; provided, however, that at the time of such sale or
transfer such properties do not have associated with them any proved
reserves;(E) the abandonment, farm-out, lease or sublease of developed or
undeveloped crude oil and natural gas properties in the ordinary course of
business; (F) the trade or exchange by the Company or any Restricted Subsidiary
of any crude oil and natural gas Property owned or held by the Company or such
Restricted Subsidiary for any crude oil and natural gas Property owned or held
by another Person; (G) the sale or transfer of mineral products or surplus or
obsolete equipment, in each case in the ordinary course of business; and (H) any
disposition that constitutes a Change of Control).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (1) the sum of the products of
the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of or redemption or similar payment with
respect to such Indebtedness multiplied by the amount of such payment by (2) the
sum of all such payments.
"Commodity Price Protection Agreement" means, in respect of any Person, any
forward contract, commodity swap agreement, commodity option agreement or other
similar agreement or arrangement designed to protect such Person against
fluctuations in commodity prices.
"Consolidated Net Worth" of any Person means the stockholders' equity of
such Person and its Subsidiaries, as determined on a consolidated basis in
accordance with GAAP, less (to the extent included in stockholders' equity)
amounts attributable to Redeemable Stock of such Person or its Subsidiaries.
"Credit Facility" means, with respect to the Company, the credit facility
made available to the Company pursuant to the Credit Agreement dated as of
December 16, 2003, and the Credit Agreement, dated as of September 28, 2004, in
each case among the Company and the lenders named therein, together with any
Refinancings thereof by a lender or a syndicate of lenders. It is understood and
agreed that the Credit Facility may be refinanced, refunded, extended, renewed
or replaced (through one or more such refinancings, refundings, extensions,
renewals or replacements), as a whole, or in part, from time to time after the
termination of the applicable Credit Facility.
"Currency Exchange Protection Agreement" means, in respect of any Person,
any foreign exchange contract, currency swap agreement, currency option or other
similar agreement or arrangement designed to protect such Person against
fluctuations in currency exchange rates.
"EBITDA" for any period means the sum of Consolidated Net Income, plus the
following to the extent deducted in calculating such Consolidated Net Income:
(1)______ all income tax expense of the Company and its
consolidated Restricted Subsidiaries,
Schedule I-2
(2)______ Consolidated Interest Expense,
(3)______ depreciation and amortization expense of the Company
and its consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in a
prior period),
(4)______exploration and abandonments expense (if applicable)
and
(5)______ all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash expenditures in any
future period); and
in each case for such period, and less, to the extent included in calculating
such Consolidated Net Income and in excess of any costs or expenses attributable
thereto and deducted in calculating such Consolidated Net Income, the sum of (x)
the amount of deferred revenues that are amortized during such period and are
attributable to reserves that are subject to Volumetric Production Payments, and
(y) amounts recorded in accordance with GAAP as repayments of principal and
interest pursuant to Dollar-Denominated Production Payments. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization and non-cash charges of, a Restricted Subsidiary
shall be added to Consolidated Net Income to compute EBITDA only to the extent
(and in the same proportion) that the net income of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"Guarantor" means Pioneer Natural Resources USA, Inc.
"Interest Rate Protection Agreement" means, in respect of any Person, any
interest rate swap agreement, interest rate option agreement, interest rate cap
agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement designed to protect such Person against
fluctuations in interest rates.
"Permitted Business Investment" means any investment made in the ordinary
course of, and of a nature that is or shall have become customary in, the Oil
and Gas Business including investments or expenditures for 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 (i) ownership interests in oil and gas properties,
processing facilities, gathering systems, pipelines or ancillary real property
interests and (ii) 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
(including for limited liability companies) with third parties, excluding,
however, Investments in corporations other than Restricted Subsidiaries.
"Permitted Holders" means Southeastern Asset Management Inc. and its
Affiliates; provided, however, that a Person shall cease to be a Permitted
Holder upon making a filing with the Securities and Exchange Commission that
indicates such Person has acquired or holds the Company's Voting Stock with a
purpose or effect of changing or influencing control of the Company or in
connection with or as a participant in any transaction having that purpose or
effect.
"Principal Property" means any property owned or leased by the Company or
any Subsidiary, the gross book value of which exceeds one percent of
Consolidated Net Worth.
Schedule I-3
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including Capital Stock and other securities issued by any other
Person (but excluding Capital Stock or other securities issued by such first
mentioned Person).
"Purchase Money Lien" means a Lien on property securing Indebtedness
Incurred by the Company or any of its Subsidiaries to provide funds for all or
any portion of the cost of (i) acquiring such property incurred before, at the
time of, or within six months after the acquisition of such property or (ii)
constructing, developing, altering, expanding, improving or repairing such
property or assets used in connection with such property.
"Rating Agency" means Standard & Poor's Ratings Group, Inc. and Xxxxx'x
Investors Services, Inc. or if Standard & Poor's Ratings Group, Inc. or Xxxxx'x
Investors Services, Inc. or both shall not make a rating on the Securities
publicly available, a nationally recognized statistical rating agency or
agencies, as the case may be, selected by the Company (as certified by a
resolution of the Board of Directors) which shall be substituted for Standard &
Poor's Ratings Group, Inc. or Xxxxx'x Investors Services, Inc. or both, as the
case may be.
"Redeemable Stock" of any Person means any equity security of such Person
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or otherwise (including on the happening of an
event), is or could become required to be redeemed for cash or other property or
is or could become redeemable for cash or other property at the option of the
holder thereof, in whole or in part, on or prior to the first anniversary of the
Stated Maturity of the Securities; or is or could become exchangeable at the
option of the holder thereof for Indebtedness at any time in whole or in part,
on or prior to the first anniversary of the Stated Maturity of the Securities;
provided, however, that Redeemable Stock shall not include any security that may
be exchanged or converted at the option of the holder for Capital Stock of the
Company having no preference as to dividends or liquidation over any other
Capital Stock of the Company.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1)______ such Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2)______ such Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is equal to or greater
than the Average Life of the Indebtedness being Refinanced, and
(3)______ such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Restricted Payment" with respect to any Person means
(1)______ the declaration or payment of any dividends or any
other distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such Person) or
similar payment to the direct or indirect holders of its Capital Stock (other
than dividends or distributions payable solely in its Capital Stock (other than
Disqualified Stock) and dividends or distributions payable solely to the Company
or a Restricted Subsidiary, and other than pro rata dividends or other
Schedule I-4
distributions made by a Subsidiary that is not a Wholly-Owned Subsidiary to
minority stockholders (or owners of an equivalent interest in the case of a
Subsidiary that is an entity other than a corporation)),
(2)______ the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any Person or
of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock), provided, however, that the Company may
purchase, redeem or otherwise acquire or retire for value common stock of the
Company in an amount not to exceed $10.0 million in the aggregate in any fiscal
year for all such transactions after April 11, 2000, made pursuant to this
proviso and the amount of such purchase, redemption or other acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments;
(3)______ the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations of such Person (other than the purchase, repurchase, or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of such purchase, repurchase or other
acquisition) or
(4)______ the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Subsidiary leases any Principal Property
that has been or is to be sold or transferred by the Company or the Subsidiary
to such Person, other than (i) temporary leases for a term, including renewals
at the option of the lessee, of not more than five years, (ii) leases between
the Company and a Subsidiary or between Subsidiaries, (iii) leases of Principal
Property executed by the time of, or within 12 months after the latest of, the
acquisition, the completion of construction or improvement, or the commencement
of commercial operation of the Principal Property, and (iv) arrangements
pursuant to any provision of law with an effect similar to the former Section
168(f)(8) of the Internal Revenue Code of 1954.
"Subordinated Obligation" means, with respect to a Person, any Indebtedness
of such Person (whether outstanding on the date the Securities are issued or
thereafter Incurred) which is subordinate or junior in right of payment to the
Securities or a Subsidiary Guaranty of such Person, as the case may be, pursuant
to a written agreement to that effect.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary Guarantor permitted
under Section 4.3(b)(12).
"Temporary Cash Investments" means any of the following:
(1)______ any investment in direct obligations of the United
States of America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof,
(2)_____ investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of
$50,000,000 (or the foreign currency equivalent thereof) and has outstanding
debt that is rated "A" (or such similar equivalent rating) or higher by at least
one nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a registered
broker dealer or mutual fund distributor,
(3)______ repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (1) above
entered into with a bank meeting the qualifications described in clause (2)
above,
Schedule I-5
(4)______ investments in commercial paper, maturing not more
than 90 days after the date of acquisition, issued by a corporation (other than
an Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Xxxxx'x Investors Services, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group, and
(5)______ investments in securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Services, Inc.
Schedule I-6
SCHEDULE II
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.4 and 4.8 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Change of Control" means the occurrence of any of the following events:
(1)______ any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause (1) such person shall be
deemed to have "beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of the Company; provided, however, that the
Permitted Holders do not have the right or ability by contract or otherwise to
elect or designate for election a majority of the Board of Directors (for the
purposes of this clause (1), such other person shall be deemed to beneficially
own any Voting Stock of a Person (the "specified person") held by any other
Person (the "parent entity"), if such other person is the beneficial owner (as
defined above in this clause (1)), directly, of more than 50% of the voting
power of the Voting Stock of such parent entity and the Permitted Holders do not
have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
entity);
(2)_____ individuals who on the date the Securities are issued
constituted the Board of Directors (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66-2/3% of the directors
of the Company then still in office who were either directors on the date the
Securities are issued or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office;
(3)_____ the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4)______ the sale of all or substantially all the assets of
the Company (determined on a consolidated basis) to another Person (other than,
in all such cases, a Person that is controlled by the Permitted Holders), other
than a transaction following which the transferee Person becomes the obligor in
respect of the Securities and a Subsidiary of the transferor of such assets.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of:
(x)______ the aggregate amount of EBITDA for the period of the
most recent four consecutive fiscal quarters ending at least 45 days prior to
the date of such determination to
(y)______ Consolidated Interest Expense for such four fiscal
quarters;
provided, however, that:
(1)______ if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA
Schedule II-1
and Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such Indebtedness
had been Incurred on the first day of such period,
(2)______ if the Company or any Restricted Subsidiary has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid, repurchased,
defeased or otherwise discharged (in each case other than Indebtedness Incurred
under any revolving credit facility unless such Indebtedness has been
permanently repaid and has not been replaced) on the date of the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and
Consolidated Interest Expense for such period shall be calculated on a pro forma
basis as if such discharge had occurred on the first day of such period and as
if the Company or such Restricted Subsidiary has not earned the interest income
actually earned during such period in respect of cash or Temporary Cash
Investments used to repay, repurchase, defease or otherwise discharge such
Indebtedness,
(3)______ if since the beginning of such period the Company or
any Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to the EBITDA (if
negative), directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale),
(4)______ if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) shall have made an Investment
in any Restricted Subsidiary (or any person which becomes a Restricted
Subsidiary) or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction requiring a calculation to be made
hereunder, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first day
of such period and
(5)______ if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period) shall
have made any Asset Disposition, any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or acquisition
occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest of such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such total interest expense, and to the extent
incurred by the Company or its Restricted Subsidiaries, without duplication,
(1)______ interest expense attributable to capital leases and
the interest expense attributable to leases constituting part of a Sale and
Leaseback Transaction,
Schedule II-2
(2)______ amortization of debt discount or premium and debt
issuance cost,
(3)______ capitalized interest,
(4)______ non-cash interest expenses,
(5)______ commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing,
(6)______ net payments or receipts pursuant to Interest Rate
Protection Agreements,
(7)______ Disqualified Stock dividends in respect of all
Disqualified Stock held by Persons other than the Company or a Wholly-Owned
Subsidiary (other than dividends payable solely in Capital Stock (other than
Disqualified Stock) of the issuer of such Disqualified Stock),
(8)______ interest incurred in connection with Investments in
discontinued operations,
(9)______ interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by (or secured by the
assets of) the Company or any Restricted Subsidiary and
(10)_____ the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust;
provided, however, "Consolidated Interest Expense" shall not include (a) any
Consolidated Interest Expense with respect to any Production Payments and
Reserve Sales, (b) to the extent included in total interest expense,
amortization or write-off of deferred financing costs of such Person or (c)
accretion of interest charges on future plugging and abandonment obligations,
future retirement benefits and other obligations that do not constitute
Indebtedness.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:
(1)_____ any net income of any Person (other than the Company)
if such Person is not a Restricted Subsidiary, except that subject to the
exclusion contained in clause (4) below, the Company's equity in the net income
of any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in clause (3)
below);
(2)______ any net income (or loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition;
(3)______ any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Restricted
Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend or other distribution (subject, in the case of
a dividend or other distribution paid to another Restricted Subsidiary,
to the limitation contained in this clause) and
Schedule II-3
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4)______ any gain or loss net of taxes realized upon the sale
or other disposition of any assets of the Company, its consolidated Subsidiaries
or any other Person (including pursuant to any sale-and-leaseback arrangement)
which is not sold or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other disposition of any Capital
Stock of any Person;
(5)______ extraordinary gains or losses net of taxes;
(6)______ any non-xxxx xxxx-to-market adjustments to assets or
liabilities or write-downs of non-current assets net of taxes, provided,
however, that any ceiling limitation write-downs in accordance with GAAP shall
be treated as capitalized costs, as if such write-downs had not occurred; and
(7)______ the cumulative effect of a change in accounting
principles net of taxes.
Notwithstanding the foregoing, for the purpose of Section 4.4 only, there shall
be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such Section pursuant to Section
4.4(a)(3)(D).
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable at the option of the holder) or upon the
happening of any event:
(1)______ matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise;
(2)______ is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock; or
(3)______ is mandatorily redeemable or must be purchased upon
the occurrence of certain events or otherwise, in whole or in part,
in each case on or prior to the first anniversary of the Stated Maturity of the
Notes; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if (1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the terms applicable to the Securities in Sections 4.8 and
4.14 of this Indenture and (2) any such requirement only becomes operative after
compliance with such terms applicable to the Notes, including the purchase of
any Securities tendered pursuant thereto.
"Government Contract Lien" means any Lien required by any contract,
statute, regulation or order in order to permit the Company or any of its
Subsidiaries to perform any contract or subcontract made by it with or at the
request of the United States or any State thereof or any department, agency or
instrumentality of either or to secure partial, progress, advance or other
payments by the Company or any of its Subsidiaries to the United States or any
State thereof or any department, agency or instrumentality of either pursuant to
the provisions of any contract, statute, regulation or order.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Protection Agreement, Currency Exchange Protection
Agreement, Commodity Price Protection Agreement or other similar agreement.
Schedule II-4
"Indebtedness" means, with respect to any Person, at any date, any of the
following, without duplication:
(1)______ any liability, contingent or otherwise, of such
Person
(A) for borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such Person or only to a portion thereof),
(B) evidenced by a note, bond, debenture or similar instrument or
(C) for the payment of money relating to a Capitalized Lease Obligation
or other obligation (whether issued or assumed) relating to the
deferred purchase price of property;
(2)______ all conditional sale obligations and all obligations
under any title retention agreement (even if the rights and remedies of the
seller under such agreement in the event of default are limited to repossession
or sale of such property);
(3)______ all obligations for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit transaction other
than as entered into in the ordinary course of business;
(4)______ the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock of such Person or, with respect to any Preferred Stock of any Subsidiary
of such Person, the principal amount of such Preferred Stock to be determined in
accordance with the Indenture (but excluding, in each case, any accrued
dividends);
(5)_____ all indebtedness of others of the type referred to in
clauses (i) through (iv) hereof secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on any asset or property (including, without limitation, leasehold
interests and any other tangible or intangible property) of such Person, whether
or not such indebtedness is assumed by such Person or is not otherwise such
Person's legal liability; provided that if the obligations so secured have not
been assumed in full by such Person or are otherwise not such Person's legal
liability in full, the amount of such indebtedness for the purposes of this
definition shall be limited to the lesser of the amount of such indebtedness
secured by such Lien or the fair market value of the assets or the property
securing such lien;
(6)_____ all indebtedness of others of the type referred to in
clauses (i) through (v) hereof (including all interest and dividends on any
Indebtedness or Preferred Stock of any other Person the payment of which is)
guaranteed, directly or indirectly, by such Person or that is otherwise its
legal liability or which such Person has agreed to purchase or repurchase or in
respect of which such Person has agreed contingently to supply or advance funds;
and
(7)______ to the extent not otherwise included in this
definition, obligations in respect of Hedging Obligations.
Notwithstanding the preceding, Indebtedness shall not include (a) accounts
payable arising in the ordinary course of business, (b) any obligations in
respect of prepayments for gas or oil production or gas or oil imbalances, (c)
estimated asset retirement obligations required to be recorded as liabilities
under GAAP, and (d) Production Payments and Reserve Sales.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person.
Schedule II-5
For purposes of the definition of "Unrestricted Subsidiary," the definition
of "Restricted Payment" and Section 4.4,
(1)_____ "Investment" shall include the portion (proportionate
to the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and
(2)______ any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Net Available Cash" from an Asset Disposition means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and proceeds
from the sale or other disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other
noncash form), in each case net of
(1)______ all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Disposition,
(2)______ all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition,
(3)______ all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Disposition and
(4)______ the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the Property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Recourse Debt" means Indebtedness or that portion of Indebtedness of
the Company or a Restricted Subsidiary incurred in connection with the
acquisition by the Company or a Restricted Subsidiary of any Property and as to
which:
(1)______ the holders of such Indebtedness agree in writing
that they will look solely to the Property so acquired and securing such
Indebtedness for payment on or in respect of such Indebtedness and
(2)______ no default with respect to such Indebtedness would
permit (after notice or passage of time or both), according to the terms of any
other Indebtedness of the Company or a Restricted Subsidiary, any holder of such
other Indebtedness to declare a default under such other Indebtedness or cause
the payment of such other Indebtedness to be accelerated or payable prior to its
stated maturity.
Schedule II-6
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman, the President or any Vice President and by the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary of
the Company. Each such certificate shall include the statements provided for in
Section 12.5, if applicable.
"Opinion of Counsel" means an opinion in writing signed by legal counsel
for the Company (which counsel may be an employee of the Company), or outside
counsel for the Company. Each such opinion shall include the statements provided
for in Section12.5, if applicable.
"Oil and Gas Business" means (a) the acquisition, exploration,
exploitation, development, production, operation and disposition of interests in
oil, gas and other hydrocarbon properties, (b) the gathering, marketing,
treating, processing, storage, refining, selling and transporting of any
production from such interests or properties and products produced in
association therewith, (c) any power generation and electrical transmission
business and (d) any business or activity relating to, arising from, or
necessary, appropriate or incidental to the activities described in the
foregoing clauses (a) through (c) of this definition.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in:
(1)______the Company, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary;
(2)_____ another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
(3)______ cash and Temporary Cash Investments;
(4)______ receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the Company
or any such Restricted Subsidiary deems reasonable under the circumstances;
(5)_____ payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business;
(6)______ loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary;
(7)______ stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments;
(8)______ any Person to the extent such Investment represents
the non-cash portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.8;
(9)______ Permitted Business Investments;
(10)_____ Investments intended to promote the Company's
strategic objectives in the Oil and Gas Business in an aggregate amount not to
exceed $50.0 million at any one time outstanding, measured as of the date such
Investments are made, without giving effect to any subsequent changes in value
(which Investments shall be deemed no longer outstanding only upon the return of
capital thereof);
(11)_____ Investments in any units of any oil and gas royalty
trust; and
(12)_____ Investments made pursuant to Hedging Obligations of
the Company and the Restricted Subsidiaries.
Schedule II-7
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government bonds
to secure performance, surety or appeal bonds to which such Person is a party or
which are otherwise required of such Person, or deposits as security for
contested taxes or import duties or for the payment of rent or other obligations
of like nature, in each case Incurred in the ordinary course of business; (b)
Liens imposed by law, such as carriers', warehousemen's, laborers',
materialmen's, landlords', vendors', workmen's, operators', producers'
(including those arising pursuant to Article 9.319 of the Texas Uniform
Commercial Code or other similar statutory provisions of other states with
respect to production purchased from others) and mechanics' Liens, in each case
for sums not yet due or being contested in good faith by appropriate
proceedings; (c) Liens for property taxes, assessments and other governmental
charges or levies not yet delinquent or subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings; (d) minor
survey exceptions, minor encumbrances, easements or reservations of or with
respect to, or rights of others for or with respect to, licenses, rights-of-way,
sewers, electric and other utility lines and usages, telegraph and telephone
lines, pipelines, surface use, operation of equipment, permits, servitudes and
other similar matters, or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such Person or to
the ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (e) Liens existing on or provided for under the terms
of agreements existing on the date on which the 5.875% Senior Notes due 2016 of
the Company were originally issued; (f) Liens on property or assets of, or any
shares of stock of or secured debt of, any Person at the time the Company or any
of its Subsidiaries acquired the property or the Person owning such property,
including any acquisition by means of a merger or consolidation with or into the
Company or any of its Subsidiaries; (g) Liens securing a Hedging Obligation so
long as such Hedging Obligation is of the type customarily entered into in
connection with, and is entered into for the purpose of, limiting risk; (h)
Liens upon specific properties of the Company or any of its Subsidiaries
securing Indebtedness Incurred in the ordinary course of business to provide all
or part of the funds for the exploration, drilling or development of those
properties; (i) Purchase Money Liens and Liens securing Non-Recourse Debt;
provided, however, that the related purchase money Indebtedness and Non-Recourse
Debt, as applicable, shall not be secured by any Property or assets of the
Company or any Restricted Subsidiary other than the Property acquired by the
Company with the proceeds of such purchase money Indebtedness or Non-Recourse
Debt, as applicable; (j) Liens securing only Indebtedness of a wholly owned
Subsidiary of the Company to the Company or to one or more wholly owned
Subsidiaries of the Company; (k) Liens on any property to secure bonds for the
construction, installation or financing of pollution control or abatement
facilities or other forms of industrial revenue bond financing or Indebtedness
issued or Guaranteed by the United States, any state or any department, agency
or instrumentality thereof; (l) Government Contract Liens; (m) Liens in respect
of Production Payments and Reserve Sales; (n) Liens resulting from the deposit
of funds or evidences of Indebtedness in trust for the purpose of defeasing
Indebtedness of the Company or any of its Subsidiaries; (o) legal or equitable
encumbrances deemed to exist by reason of negative pledges or the existence of
any litigation or other legal proceeding and any related lis pendens filing
(excluding any attachment prior to judgment, judgment lien or attachment lien in
aid of execution on a judgment); (p) rights of a common owner of any interest in
property held by such Person; (q) farmout, carried working interest, joint
operating, unitization, royalty, overriding royalty, sales and similar
agreements relating to the exploration or development of, or production from,
oil and gas properties entered into the ordinary course of business; (r) any
defects, irregularities or deficiencies in title to easements, rights-of-way or
other properties which do not in the aggregate materially adversely affect the
value of such properties or materially impair their use in the operation of the
business of such Person; and (s) Liens to secure any refinancing, refunding,
extension, renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements), as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (e)
through (m); provided, however, that (i) such new Lien shall be limited to all
or part of the same property that secured the original Lien (plus improvements
on such property) and (ii) the Indebtedness secured by such Lien at such time is
not increased to any amount greater than the sum of (A) the outstanding
principal amount or, if greater, committed amount of the Indebtedness described
under clauses (e) through (m) at the time the original Lien became a Permitted
Lien under this Indenture and (B) an amount necessary to pay any fees and
expenses, including premiums, related to such refinancing, refunding, extension,
renewal or replacement.
Schedule II-8
"Production Payments and Reserve Sales" means the grant or transfer by the
Company or a Subsidiary of the Company to any Person of a royalty, overriding
royalty, net profits interest, production payment (whether volumetric or dollar
denominated), partnership or other interest in oil and gas properties, reserves
or the right to receive all or a portion of the production or the proceeds from
the sale of production attributable to such properties, including any such
grants or transfers pursuant to incentive compensation programs on terms that
are reasonably customary in the Oil and Gas Business for geologists,
geophysicists and other providers of technical services to the Company or a
Subsidiary of the Company.
"Senior Indebtedness" means, with respect to a Person,
(1)______ Indebtedness of such Person, whether outstanding on
the Issue Date or thereafter Incurred, and
(2)______ accrued and unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person to the extent post-filing interest is
allowed in such proceeding) in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is responsible or
liable unless, in the case of (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided
that such obligations are subordinate in right of payment to the Securities;
provided, however, that Senior Indebtedness of such Person shall not include:
(1)______ any obligation of such Person to any Subsidiary,
(2)______ any liability for Federal, state, local or other
taxes owed or owing by such Person,
(3)______ any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities),
(4)______ any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in any
respect to any other Indebtedness or other obligation of such Person or
(5)_____ that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Subsidiary Guarantor" means any Subsidiary of the Company, including the
Guarantor, which incurs a Guarantee under Section 4.3(b)(12) hereof.
"Unrestricted Subsidiary" means:
(1)______ any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below; and
(2)______ any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary of the Company) to be
an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any
property of, the Company or any other Subsidiary of the Company that is not a
Subsidiary of the Subsidiary to be so designated; provided, however, that either
(A) the Subsidiary to be so designated has total assets of $1,000 or less or (B)
if such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.4. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (A) the Company could Incur
$1.00 of additional Indebtedness under Section 4.3(a) and (B) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
Schedule II-9
the resolution of the Board of Directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Restricted
Subsidiary) is owned by the Company or one or more Wholly-Owned Subsidiaries.
Schedule II-10
SCHEDULE III
Section 4.3. Limitation on Indebtedness.
(a)______ The Company shall not, and shall not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company and its Restricted Subsidiaries shall be
entitled to Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto on a pro forma basis, no Default has occurred and is
continuing and the Consolidated Coverage Ratio exceeds 2.0 to 1.
(b)______ Notwithstanding the foregoing paragraph (a), so long
as no Default has occurred and is continuing, the Company and the Restricted
Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Facility, including
any amendment, modification, supplement, extension, restatement,
replacement (including replacement after the termination of such Credit
Facility), restructuring, increase, renewal, or Refinancing thereof
from time to time in one or more agreements or instruments; provided,
however, that, after giving effect to any such Incurrence, the
aggregate principal amount of such Indebtedness then outstanding does
not exceed the greater of (i) $675.0 million less the sum of all
principal payments since April 11, 2000, with respect to such
Indebtedness pursuant to Section 4.9(a)(3)(A) and (ii) the sum of (x)
$100 million and (y) 20% of the Adjusted Consolidated Net Tangible
Assets determined as of the date of the Incurrence of such
Indebtedness;
(2) Indebtedness owed to and held by the Company or a Restricted
Subsidiary; provided, however, that any subsequent issuance or transfer
of any Capital Stock which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of
such Indebtedness (other than to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence
of such Indebtedness by the obligor thereon;
(3) the Securities;
(4) Indebtedness outstanding on April 11, 2000 (other than Indebtedness
described in clause (1), (2) or (3) of this Section 4.3(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on
or prior to the date on which such Subsidiary was acquired by the
Company (other than Indebtedness Incurred in connection with, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Subsidiary became a Subsidiary or was acquired by the
Company);
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.3(a) or pursuant to clause (3), (4) or (5) of
this Section 4.3(b) or this clause (6); provided, however, that to the
extent such Refinancing Indebtedness directly or indirectly Refinances
Indebtedness of a Subsidiary Incurred pursuant to clause (5), such
Refinancing Indebtedness shall be Incurred only by such Subsidiary;
(7) Hedging Obligations consisting of Interest Rate Protection
Agreements directly related to Indebtedness permitted to be Incurred by
the Company pursuant to this Indenture;
(8) Non-Recourse Debt;
(9) Indebtedness in respect of bid, performance, reimbursement or
surety obligations issued by or for the account of the Company or any
Restricted Subsidiary in the ordinary course of business, including
Guarantees and letters of credit functioning as or supporting such bid,
performance, reimbursement or surety obligations (in each case other
than for an obligation for money borrowed);
Schedule III-1
(10) Indebtedness consisting of obligations in respect of purchase
price adjustments, indemnities or Guarantees of the same or similar
matters in connection with the acquisition or disposition of Property;
(11) Indebtedness under Commodity Price Protection Agreements and
Currency Exchange Protection Agreements entered into in the ordinary
course of business for the purpose of limiting risks that arise in the
ordinary course of business of the Company and its Restricted
Subsidiaries;
(12) Indebtedness consisting of the Subsidiary Guarantee of the
Guarantor (including any reinstatement of such Subsidiary Guarantee)
and any Subsidiary Guarantee by the Company or a Subsidiary Guarantor
of Indebtedness Incurred pursuant to paragraph (a) or pursuant to
clause (1), (2), (3), (4), (7), (11) or (13) or pursuant to clause (6)
to the extent the Refinancing Indebtedness Incurred thereunder directly
or indirectly Refinances Indebtedness Incurred pursuant to paragraph
(a) or pursuant to clauses (3) or (4); and
(13) Indebtedness in an aggregate principal amount which, when taken
together with all other Indebtedness of the Company outstanding on the
date of such Incurrence (other than Indebtedness permitted by clauses
(1) through (12) of this Section 4.3(b) or Section 4.3(a)), does not
exceed $50 million.
(c)______ Notwithstanding the foregoing, neither the Company
nor any Subsidiary Guarantor shall Incur any Indebtedness pursuant to Section
4.3(b) if the proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations of the Company or a Subsidiary Guarantor unless
such Indebtedness shall be subordinated to the Securities or to the Subsidiary
Guaranty of such Subsidiary Guarantor to at least the same extent as such
Subordinated Obligations.
(d)______ For purposes of determining compliance with this
Section 4.3, (1) in the event that an item of Indebtedness meets the criteria of
more than one of the types of Indebtedness described herein, the Company, in its
sole discretion, shall classify such item of Indebtedness at the time of
Incurrence and only be required to include the amount and type of such
Indebtedness in one of the above clauses and (2) the Company shall be entitled
at the time of such Incurrence to divide and classify an item of Indebtedness in
more than one of the types of Indebtedness described herein.
(e)______ For purposes of determining compliance with any U.S.
dollar denominated restriction on the Incurrence of Indebtedness where the
Indebtedness Incurred is denominated in a different currency, the amount of such
Indebtedness will be the U.S. Dollar Equivalent determined on the date of the
Incurrence of such Indebtedness, provided, however, that if any such
Indebtedness denominated in a different currency is subject to a Currency
Exchange Protection Agreement with respect to U.S. dollars covering all
principal, premium, if any, and interest payable on such Indebtedness, the
amount of such Indebtedness expressed in U.S. dollars will be as provided in
such Currency Exchange Protection Agreement. The principal amount of any
Refinancing Indebtedness Incurred in the same currency as the Indebtedness being
Refinanced will be the U.S. Dollar Equivalent of the Indebtedness Refinanced,
except to the extent that (1) such U.S. Dollar Equivalent was determined based
on a Currency Exchange Protection Agreement, in which case the Refinancing
Indebtedness will be determined in accordance with the preceding sentence, and
(2) the principal amount of the Refinancing Indebtedness exceeds the principal
amount of the Indebtedness being Refinanced, in which case the U.S. Dollar
Equivalent of such excess, will be determined on the date such Refinancing
Indebtedness is Incurred.
Section 4.4. Limitation on Restricted Payments.
(a)______ The Company shall not, and shall not permit any
Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness under Section 4.3(a); or
Schedule III-2
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since April 11, 2000, would exceed the sum of
(without duplication):
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from July 1, 2000,
to the end of the most recent fiscal quarter ending at least
45 days prior to the date of such Restricted Payment (or, in
case such Consolidated Net Income shall be a deficit, minus
100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other
than Disqualified Stock) after April 11, 2000 (other than an
issuance or sale to a Subsidiary of the Company and other than
an issuance or sale to an employee stock ownership plan or to
a trust established by the Company or any of its Subsidiaries
for the benefit of their employees) and 100% of any cash
capital contribution received by the Company from its
shareholders after April 11, 2000; plus
(C) the amount by which Indebtedness of the Company is reduced
on the Company's balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company) after April 11,
2000, of any Indebtedness of the Company convertible or
exchangeable for Capital Stock (other than Disqualified Stock)
of the Company (less the amount of any cash, or the fair value
of any other property, distributed by the Company upon such
conversion or exchange); plus
(D) an amount equal to the sum of (x) the net reduction in the
Investments (other than Permitted Investments) made by the
Company or any Restricted Subsidiary in any Person resulting
from repurchases, repayments or redemptions of such
Investments by such Person, proceeds realized on the sale of
such Investment, proceeds representing the return of capital
(excluding dividends and distributions), in each case received
by the Company or any Restricted Subsidiary and (y) to the
extent such Person is an Unrestricted Subsidiary, the portion
(proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of such
Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any such Person or Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made
(and treated as a Restricted Payment) by the Company or any
Restricted Subsidiary in such Person or Unrestricted
Subsidiary; plus
(E) $25 million.
(b)______ The provisions of Section 4.4(a) shall not prohibit:
(1) any Restricted Payment (other than a Restricted Payment described
in clause (1) of the definition of "Restricted Payment") made out of
the Net Cash Proceeds of the substantially concurrent sale of, or made
by exchange for, Capital Stock of the Company (other than Disqualified
Stock and other than Capital Stock issued or sold to a Subsidiary of
the Company or an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit
of their employees) or a substantially concurrent cash capital
contribution received by the Company from its shareholders; provided,
however, that (A) such Restricted Payment shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale or such cash capital contribution (to the
extent so used for such Restricted Payment) shall be excluded from the
calculation of amounts under Section 4.4(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or a Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Indebtedness which is
permitted to be Incurred pursuant to Section 4.3; provided, however,
that such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
Schedule III-3
(3) dividends paid within 60 days after the date of declaration thereof
if at such date of declaration such dividend would have complied with
this Section 4.4; provided, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments; or
(4) so long as no Default has occurred and is continuing the repurchase
or other acquisition of shares of or options to purchase shares of,
Capital Stock of the Company or any of its Subsidiaries from employees,
former employees, directors or former directors of the Company or any
of its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to purchase or
sell, shares of such Capital Stock; provided, however, that the
aggregate amount of such repurchases and other acquisitions shall not
exceed $3 million in any calendar year; provided further, however, that
such repurchases and other acquisitions shall be excluded in the
calculation of the amount of Restricted Payments.
Section 4.6. Limitation on Liens.
The Company shall not, and shall not permit any of its Subsidiaries to
create or permit to exist any Lien on any Principal Property or shares of
capital stock or Indebtedness of a Subsidiary of the Company that owns or leases
Principal Property, whether owned on the Issue Date or thereafter acquired,
securing any obligation unless the Company contemporaneously secures the
Securities equally and ratably with (or prior to) such obligation until such
time as such obligations are no longer secured by a Lien. The preceding sentence
shall not require the Company to secure the Securities if the Lien consists of
either of the following:
_________(a)______ Permitted Liens; or
_________(b)_____ Liens securing Indebtedness if, after giving
pro forma effect to the Incurrence of such Indebtedness (and the receipt and
application of the proceeds thereof) or the securing of outstanding
Indebtedness, the sum of (without duplication) (i) all Indebtedness of the
Company and its Subsidiaries secured by Liens on Principal Property (other than
Permitted Liens) and (ii) all Attributable Indebtedness in respect of Sale and
Leaseback Transactions with respect to any Principal Property, at the time of
determination does not exceed 15% of Adjusted Consolidated Net Tangible Assets.
Section 4.8. Limitation on Sales of Assets and Subsidiary Stock.
(a)______ The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless (1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors, of the shares and assets
subject to such Asset Disposition; (2) at least 75% of the consideration thereof
received by the Company or such Restricted Subsidiary is in the form of cash,
cash equivalents, Additional Assets or any combination thereof ("Permitted
Consideration"); provided, however, that the Company and its Restricted
Subsidiaries shall be permitted to receive Property other than Permitted
Consideration, so long as the aggregate fair market value, as determined in the
good faith of the Board of Directors, of all such Property other than Permitted
Consideration received from Asset Dispositions and held by the Company and the
Restricted Subsidiaries at any one time shall not exceed 10% of Adjusted
Consolidated Net Tangible Assets; and (3) an amount equal to 100% of the Net
Available Cash from such Asset Disposition is applied by the Company (or such
Restricted Subsidiary, as the case may be) (A) first, to the extent the Company
elects (or is required by the terms of any Indebtedness), to prepay, repay,
redeem or purchase Senior Indebtedness of the Company or Indebtedness (other
than any Disqualified Stock) of a Restricted Subsidiary (in each case other than
Indebtedness owed to the Company or an Affiliate of the Company) within one year
from the later of the date of such Asset Disposition or the receipt of such Net
Available Cash; (B) second, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A), to the extent the Company
elects, to acquire Additional Assets within one year from the later of the date
of such Asset Disposition or the receipt of such Net Available Cash; and (C)
third, to the extent of the balance of such Net Available Cash after application
in accordance with clauses (A) and (B), to make an Offer to the holders of the
Securities (and to holders of other Senior Indebtedness of the Company
designated by the Company) to purchase Securities (and such other Senior
Schedule III-4
Indebtedness) pursuant to and subject to the conditions of Section 4.8(b);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary shall permanently retire such Indebtedness and shall cause
the related loan commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or purchased. Notwithstanding
the foregoing provisions of this Section 4.8, the Company and the Restricted
Subsidiaries shall not be required to apply any Net Available Cash in accordance
with this Section 4.8(a) except to the extent that the aggregate Net Available
Cash from all Asset Dispositions which are not applied in accordance with this
Section 4.8(a) exceeds $20.0 million. Pending application of Net Available Cash
pursuant to this Section 4.8(a), such Net Available Cash shall be invested in
Temporary Cash Investments or applied to temporarily reduce revolving credit
indebtedness.
For the purposes of this Section 4.8(a), the following are deemed to be
cash or cash equivalents: (1) the assumption of Indebtedness of the Company or
any Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition and (2) securities received by the Company or any Restricted
Subsidiary from the transferee that are promptly converted by the Company or
such Restricted Subsidiary into cash.
(b)______ In the event of an Asset Disposition that requires
the purchase of Securities (and other Senior Indebtedness) pursuant to Section
4.8(a)(3)(C), the Company shall purchase Securities tendered pursuant to an
offer by the Company for the Securities and such other Senior Indebtedness (the
"Offer") at a purchase price of 100% of their principal amount (or, in the event
such other Senior Indebtedness was issued with significant original issue
discount, 100% of the accreted value thereof), without premium, plus accrued but
unpaid interest (or, in respect of such other Senior Indebtedness, such lesser
price, if any, as may be provided for by the terms of such Senior Indebtedness
in accordance with the procedures (including prorationing in the event of over
subscription) set forth in Section 4.8(c). If the aggregate purchase price of
Securities (and any other Senior Indebtedness tendered pursuant to the Offer)
exceeds the Net Available Cash allotted to their purchase, the Company shall
select the Securities and other Senior Indebtedness to be purchased on a pro
rata basis but in round denominations, which in the case of the Securities will
be denominations of $1,000 principal amount or multiples thereof. The Company
shall not be required to make an Offer to purchase Securities (and other Senior
Indebtedness pursuant to this Section 4.8 if the Net Available Cash available
therefor is less than $20.0 million (which lesser amount shall be carried
forward for purposes of determining whether such an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by
the Company either in whole or in part (subject to prorating as
described in Section 4.8(b) in the event the Offer is oversubscribed)
in integral multiples of $1,000 of principal amount, at the applicable
purchase price. The notice shall specify a purchase date not less than
30 days nor more than 60 days after the date of such notice (the
"Purchase Date") and shall contain such information concerning the
business of the Company which the Company in good faith believes will
enable such Holders to make an informed decision (which at a minimum
will include (A) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset
Dispositions otherwise described in the offering materials (or
corresponding successor reports), (B) a description o f material
developments in the Company's business subsequent to the date of the
latest of such Reports, and (C) if material, appropriate pro forma
financial information) and all instructions and materials necessary to
tender Securities pursuant to the Offer, together with the information
contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver
to the Trustee an Officers' Certificate as to (A) the amount of the
Offer (the "Offer Amount"), including information as to any other
Senior Indebtedness included in the Offer, (B) the allocation of the
Net Available Cash from the Asset Dispositions pursuant to which such
Offer is being made and (C) the compliance of such allocation with the
provisions of Section 4.8(a) and (b). On such date, the Company shall
also irrevocably deposit with the Trustee or with a Paying Agent (or,
Schedule III-5
if the Company is acting as its own Paying Agent, segregate and hold in
trust) in Temporary Cash Investments, maturing on the last day prior to
the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the Offer Amount to
be held for payment in accordance with the provisions of this Section.
If the Offer includes other Senior Indebtedness, the deposit described
in the preceding sentence may be made with any other paying agent
pursuant to arrangements satisfactory to the Trustee. Upon the
expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and
are to be accepted by the Company. The Trustee shall, on the Purchase
Date, mail or deliver payment (or cause the delivery of payment) to
each tendering Holder in the amount of the purchase price. In the event
that the aggregate purchase price of the Securities delivered by the
Company to the Trustee is less than the Offer Amount applicable to the
Securities, the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.8.
(3) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business
Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than
one Business Day prior to the Purchase Date, a telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Security which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing his election
to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that the Securities were accepted for
payment by the Company in accordance with the terms of this covenant. A
Security shall be deemed to have been accepted for purchase at the time
the Trustee, directly or through an agent, mails or delivers payment
therefor to the surrendering Holder.
(d)______ The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Securities
pursuant to this Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue of its
compliance with such securities laws or regulations.
Section 4.9. Limitation on Affiliate Transactions.
(a)______ The Company shall not, and shall not permit any
Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with any Affiliate of
the Company (an "Affiliate Transaction") unless (1) the terms thereof are no
less favorable to the Company or such Restricted Subsidiary than those that
could be obtained at the time of such transaction in arm's-length dealings with
a Person who is not an Affiliate; (2) if such Affiliate Transaction involves an
amount in excess of $1.0 million but less than $5.0 million, an officer of the
Company certifies that such Affiliate Transaction complies with clause (1) of
this paragraph, evidenced by an Officer's Certificate delivered to the Trustee;
(3) if such Affiliate Transaction involves an amount equal to or in excess of
$5.0 million but less than $20.0 million, the terms of the Affiliate Transaction
are set forth in writing and a majority of the non-employee directors of the
Company disinterested with respect to such Affiliate Transactions have
determined in good faith that the criteria set forth in clause (1) are satisfied
and have approved the relevant Affiliate Transaction as evidenced by a Board of
Directors resolution; and (4) if such Affiliate Transaction involves an amount
equal to or in excess of $20.0 million, the Board of Directors shall also have
received a written opinion from an investment banking firm of national
prominence that is not an Affiliate of the Company to the effect that such
Affiliate Transaction is fair, from a financial standpoint, to the Company and
its Restricted Subsidiaries.
(b)______ The provisions of Section 4.9(a) shall not prohibit
(1) any Investment or other Restricted Payment, in each case permitted to be
made pursuant to Section 4.4; (2) any issuance of securities, or other payments,
Schedule III-6
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved by
the Board of Directors, (3) loans or advances to officers, directors or
employees in the ordinary course of business of the Company or its Restricted
Subsidiaries; (4) the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or its
Restricted Subsidiaries; (5) any transaction with a Restricted Subsidiary or
joint venture or similar entity which would constitute an Affiliate Transaction
solely because the Company or a Restricted Subsidiary owns an equity interest in
or otherwise controls such Restricted Subsidiary, joint venture or similar
entity; (6) the issuance or sale of any Capital Stock (other than Disqualified
Stock) of the Company; (7) indemnities of officers, directors or employees of
the Company or any Subsidiary consistent with such Person's charter, bylaws and
applicable statutory provisions; (8) any severance or employment agreement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business; and (9) any transaction or series of transactions
pursuant to any agreement or obligation of the Company or any of its Restricted
Subsidiaries in effect on the Issue Date.
Section 4.14. Change of Control.
(a)______ Upon the occurrence of a Change of Control, each
Holder shall have the right to require that the Company purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of holders of record on the relevant record date to
receive interest on the relevant interest payment date), in accordance with the
terms contemplated in Section 4.14(b).
(b)______ Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income and capitalization, each after giving effect to such Change of
Control);
(3) the purchase date (which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c)_____ Holders electing to have Securities purchased will be
required to surrender the Securities, with an appropriate form duly completed,
to the Company at the address specified in the notice at least three Business
Days prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the purchase date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Securities
which were delivered for purchase by the Holder and a statement that such Holder
is withdrawing his election to have such Securities purchased.
(d)_____ On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e)______ Notwithstanding the foregoing provisions of this
Section, the Company shall 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
Schedule III-7
forth in Section applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f)______ The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Securities
pursuant to this Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue of its
compliance with such securities laws or regulations.
Section 4.23. Effectiveness of Covenants.
During any period of time that (a) the Securities have an Investment Grade
Rating from either of the Rating Agencies and (b) no Default or Event of Default
has occurred and is continuing under the Indenture, the Company and the
Restricted Subsidiaries will not be subject to the provisions in Sections 4.3
(Limitation on Indebtedness), 4.4 (Limitation on Restricted Payments), 4.8
(Limitation on Sales of Assets and Subsidiary Stock), 4.9 (Limitation on
Affiliate Transactions), and 4.14 (Change of Control) of the Indenture
(collectively, the "Suspended Covenants"). In the event that the Company and the
Restricted Subsidiaries are not subject to the Suspended Covenants for any
period of time as a result of the preceding sentence and, subsequently, one or
both of the Rating Agencies withdraws its ratings or downgrades the ratings
assigned to the Securities below the required Investment Grade Ratings so that
the Securities do not have an Investment Grade Rating from either Rating Agency,
or a Default or Event of Default occurs and is continuing, then the Company and
the Restricted Subsidiaries will thereafter again be subject to the Suspended
Covenants and compliance with the Suspended Covenants with respect to Restricted
Payments made after the time of such withdrawal, downgrade, Default or Event of
Default will be calculated in accordance with the terms of Section 4.4 as though
such covenant had been in effect during the entire period of time from the date
the Securities are issued; provided, however, that if at any time the Securities
have an Investment Grade Rating from both of the Rating Agencies and either a
rating of Baa2 (or the equivalent) by Xxxxx'x or BBB (or the equivalent) by S&P,
then the Company and the Restricted Subsidiaries will not be subject to the
Suspended Covenants from and after such time, notwithstanding anything to the
contrary in this Section 4.23, and thereafter the application of the Suspended
Covenants to the Company and the Restricted Subsidiaries will be permanently
terminated and the Suspended Covenants will be of no force and effect.
Schedule III-8
