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XXXXXX OIL & GAS CORPORATION,
Issuer
XXXXXX OIL CORPORATION,
Subsidiary Guarantor
XXXXXX OPERATING COMPANY, LTD.
Subsidiary Guarantor
10 3/8% Senior Subordinated Notes Due 2006
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INDENTURE
Dated as of October 15, 1996
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UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(a)(5) .............................. 7.10
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 12.03
(c) .............................. 12.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 12.02
(d) .............................. 7.06
314(a) .............................. 4.02; 4.13;
12.02
(b) .............................. N.A.
(c)(1) .............................. 12.04
(c)(2) .............................. 12.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) ............................. 12.05
(f) .............................. N.A.
315(a) .............................. 7.01
(b) .............................. 7.05; 12.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) ........................... 12.06
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
(c) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 12.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Page
----
SECTION 1.01. Definitions ............................ 1
SECTION 1.02. Other Definitions ...................... 33
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act ........................ 34
SECTION 1.04. Rules of Construction .................. 34
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating ........................ 35
SECTION 2.02. Execution and Authentication ........... 36
SECTION 2.03. Registrar and Paying Agent ............. 36
SECTION 2.04. Paying Agent To Hold Money in Trust..... 37
SECTION 2.05. Securityholder Lists ................... 37
SECTION 2.06. Replacement Securities ................. 37
SECTION 2.07. Outstanding Securities ................. 38
SECTION 2.08. Temporary Securities ................... 38
SECTION 2.09. Cancellation ........................... 39
SECTION 2.10. Defaulted Interest ..................... 39
SECTION 2.11. CUSIP Numbers .......................... 39
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee ..................... 40
SECTION 3.02. Selection of Securities To Be
Redeemed ............................. 40
SECTION 3.03. Notice of Redemption ................... 40
SECTION 3.04. Effect of Notice of Redemption ......... 41
SECTION 3.05. Deposit of Redemption Price ............ 41
SECTION 3.06. Securities Redeemed in Part ............ 42
2
ARTICLE 4
COVENANTS
Page
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SECTION 4.01. Payment of Securities .................. 42
SECTION 4.02. SEC Reports ............................ 42
SECTION 4.03. Limitation on Indebtedness ............. 43
SECTION 4.04. Limitation on Restricted Payments ...... 47
SECTION 4.05. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries ......................... 49
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock ..................... 51
SECTION 4.07. Limitation on Affiliate Transactions.... 53
SECTION 4.08. Change of Control ...................... 55
SECTION 4.09. Limitation on the Sale or Issuance
of Capital Stock of Restricted
Subsidiaries.......................... 56
SECTION 4.10. Limitation on Liens..................... 57
SECTION 4.11. Limitation on Sale/Leaseback
Transactions.......................... 57
SECTION 4.12. Future Guarantors....................... 57
SECTION 4.13. Compliance Certificate ................. 57
SECTION 4.14. Further Instruments and Acts ........... 58
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer
Assets ............................... 58
SECTION 5.02. When Subsidiary Guarantors May
Merge or Transfer Assets.............. 59
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default ...................... 60
SECTION 6.02. Acceleration ........................... 62
SECTION 6.03. Other Remedies ......................... 63
SECTION 6.04. Waiver of Past Defaults ................ 63
SECTION 6.05. Control by Majority .................... 64
SECTION 6.06. Limitation on Suits .................... 64
SECTION 6.07. Rights of Holders To Receive Payment ... 65
SECTION 6.08. Collection Suit by Trustee ............. 65
3
Page
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SECTION 6.09. Trustee May File Proofs of Claim ....... 65
SECTION 6.10. Priorities ............................. 65
SECTION 6.11. Undertaking for Costs .................. 66
SECTION 6.12. Waiver of Stay or Extension Laws ....... 66
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee ...................... 67
SECTION 7.02. Rights of Trustee ...................... 68
SECTION 7.03. Individual Rights of Trustee ........... 69
SECTION 7.04. Trustee's Disclaimer ................... 69
SECTION 7.05. Notice of Defaults ..................... 69
SECTION 7.06. Reports by Trustee to Holders .......... 69
SECTION 7.07. Compensation and Indemnity ............. 70
SECTION 7.08. Replacement of Trustee ................. 71
SECTION 7.09. Successor Trustee by Merger ............ 72
SECTION 7.10. Eligibility; Disqualification .......... 72
SECTION 7.11. Preferential Collection of Claims
Against Company ...................... 72
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities;
Defeasance ........................... 73
SECTION 8.02. Conditions to Defeasance ............... 74
SECTION 8.03. Application of Trust Money ............. 75
SECTION 8.04. Repayment to Company ................... 76
SECTION 8.05. Indemnity for Government
Obligations .......................... 76
SECTION 8.06. Reinstatement .......................... 76
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders ............. 77
SECTION 9.02. With Consent of Holders ................ 78
SECTION 9.03. Compliance with Trust Indenture Act .... 79
SECTION 9.04. Revocation and Effect of Consents
and Waivers .......................... 79
4
Page
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SECTION 9.05. Notation on or Exchange of
Securities ........................... 80
SECTION 9.06. Trustee To Sign Amendments ............. 80
SECTION 9.07. Payment for Consent .................... 80
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement To Subordinate .............. 80
SECTION 10.02. Liquidation, Dissolution,
Bankruptcy .......................... 81
SECTION 10.03. Default on Designated Senior
Indebtedness ........................ 81
SECTION 10.04. Acceleration of Payment of
Securities .......................... 83
SECTION 10.05. When Distribution Must Be Paid
Over ................................ 83
SECTION 10.06. Subrogation ........................... 83
SECTION 10.07. Relative Rights ....................... 83
SECTION 10.08. Subordination May Not Be Impaired
by Company .......................... 84
SECTION 10.09. Rights of Trustee and Paying
Agent ............................... 84
SECTION 10.10. Distribution or Notice to
Representative ...................... 84
SECTION 10.11. Article 10 Not To Prevent Events of
Default or Limit Right To
Accelerate .......................... 84
SECTION 10.12. Trust Moneys Not Subordinated ......... 85
SECTION 10.13. Trustee Entitled To Rely .............. 85
SECTION 10.14. Trustee To Effectuate
Subordination ....................... 85
SECTION 10.15. Trustee Not Fiduciary for Holders
of Senior Indebtedness .............. 86
SECTION 10.16. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions .......................... 86
ARTICLE 11
SUBSIDIARY GUARANTY
SECTION 11.01. Guarantee ............................. 86
SECTION 11.02. Limitation on Liability ............... 89
SECTION 11.03. Successors and Assigns ................ 89
5
Page
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SECTION 11.04. No Waiver ............................. 89
SECTION 11.05. Modification .......................... 90
SECTION 11.06. Release of Subsidiary Guarantor ....... 90
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls .......... 90
SECTION 12.02. Notices ............................... 91
SECTION 12.03. Communication by Holders with Other
Holders ............................. 91
SECTION 12.04. Certificate and Opinion as to
Conditions Precedent ................ 91
SECTION 12.05. Statements Required in Certificate
or Opinion .......................... 92
SECTION 12.06. When Securities Disregarded ........... 92
SECTION 12.07. Rules by Trustee, Paying Agent and
Registrar ........................... 93
SECTION 12.08. Legal Holidays ........................ 93
SECTION 12.09. Governing Law ......................... 93
SECTION 12.10. No Recourse Against Others ............ 93
SECTION 12.11. Successors ............................ 93
SECTION 12.12. Multiple Originals .................... 93
SECTION 12.13. Table of Contents; Headings ........... 93
Appendix A - Provisions Relating to Initial Securities
and Exchange Securities.
Exhibit 1 to
Appendix A - Form of Initial Security.
Exhibit 2 to
Appendix A - Form of Exchange Security.
INDENTURE dated as of October 15, 1996, among XXXXXX OIL &
GAS CORPORATION, a Delaware corporation (the "Company"),
XXXXXX OIL CORPORATION, a Delaware corporation ("Xxxxxx Oil"
and, individually, a "Subsidiary Guarantor"), XXXXXX
OPERATING COMPANY, LTD., a Texas limited partnership
("Xxxxxx Operating" and, individually, a "Subsidiary
Guarantor"), and UNITED STATES TRUST COMPANY OF NEW YORK,
a New York banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Company's 10 3/8%
Senior Subordinated Notes Due 2006 (the "Initial Securities") and, if and
when issued pursuant to a registered exchange for Initial Securities, the
Company's 10 3/8% Senior Subordinated Notes Due 2006 (the "Exchange
Securities", together with the Initial Securities, the "Securities"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in the Oil and Gas Business; (ii) 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 (iii) 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 (ii) or (iii) above is primarily
engaged in the Oil and Gas Business.
"Adjusted Consolidated Assets" means at any time the total amount of
assets of the Company and its consolidated Restricted Subsidiaries (less
applicable depreciation, amortization and other valuation reserves), after
deducting therefrom all current liabilities of the Company and its consolidated
Restricted Subsidiaries (excluding intercompany items), all as set forth on the
2
consolidated balance sheet of the Company and its consolidated Restricted
Subsidiaries as of the end of the most recent fiscal quarter ended at least
45 days prior to the date of determination.
"Adjusted Consolidated Net Tangible Assets" or "CNTA" means (without
duplication), as of the date of determination, (a) the sum of (i) discounted
future net revenues from proved oil and gas reserves of the Company and its
Restricted Subsidiaries calculated in accordance with SEC guidelines before any
state or federal income taxes, as estimated in a reserve report prepared as of
the end of the Company's most recently completed fiscal year, which reserve
report is prepared or reviewed by independent petroleum engineers, as increased
by, as of the date of determination, the discounted future net revenues of
(A) estimated proved oil and gas reserves of the Company and its Restricted
Subsidiaries attributable to any material acquisition consummated since the date
of such year-end reserve report, and (B) estimated oil and gas reserves of the
Company and its Restricted Subsidiaries attributable to material extensions,
discoveries and other additions and upward determinations of estimates of proved
oil and gas reserves due to exploration, development or exploitation, production
or other activities conducted or otherwise occurring since the date of such
year-end reserve report which would, in the case of determinations made pursuant
to clauses (A) and (B), in accordance with standard industry practice, result in
such additions or revisions, 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 discounted future net
revenues of (C) estimated proved oil and gas reserves of the Company and its
Restricted Subsidiaries produced or disposed of since the date of such year-end
reserve report and (D) reductions in the estimated oil and gas reserves of the
Company and its Restricted Subsidiaries since the date of such year-end reserve
report attributable to material downward determinations of estimates of proved
oil and gas reserves due to exploration, development or exploitation, production
or other activities conducted or otherwise occurring since the date of such
year-end reserve report which would, in the case of determinations made pursuant
to clauses (C) and (D), in accordance with standard industry practice, result in
such determinations, in each case calculated in accordance with SEC guidelines
(utilizing the prices utilized in such year-end reserve report); provided that,
in the case of each of the determinations made
3
pursuant to clauses (A) through (D), such increases and decreases shall be as
estimated by the Company's engineers, except that if as a result of such
acquisitions, dispositions, discoveries, extensions or revisions, there is a
Material Change which is an increase, then such increases and decreases in
the discounted future net revenue shall be confirmed in writing by an
independent petroleum engineer, (ii) the capitalized costs that are
attributable to oil and gas properties of the Company and its Restricted
Subsidiaries to which no proved oil and gas reserves are attributed, based on
the Company's books and records as of a date no earlier than the date of the
Company's latest annual or quarterly financial statements, (iii) the Net
Working Capital on a date no earlier than the date of the Company's latest
annual or quarterly financial statements and (iv) the greater of (I) the net
book value on a date no earlier than the date of the Company's latest annual
or quarterly financial statements and (II) the appraised value, as estimated
by independent appraisers, of other tangible assets of the Company and its
Restricted Subsidiaries as of a date no earlier than the date of the
Company's latest audited financial statements (provided that the Company
shall not be required to obtain such an appraisal of such assets if no such
appraisal has been performed), minus (b) the sum of (i) minority interests,
(ii) any gas balancing liabilities of the Company and its Restricted
Subsidiaries reflected in the Company's latest audited financial statements,
(iii) the discounted future net revenue, calculated in accordance with SEC
guidelines (utilizing the same prices utilized in the Company's year-end
reserve report), attributable to reserves subject to participation interests,
overriding royalty interests or other interests of third parties, pursuant to
participation, partnership, vendor financing or other agreements then in
effect, or which otherwise are required to be delivered to third parties,
(iv) the discounted future net revenues, calculated in accordance with SEC
guidelines (utilizing the same prices utilized in the Company's year-end
reserve report), attributable to reserves that are required to be delivered
to third parties to fully satisfy the obligations of the Company and its
Restricted Subsidiaries with respect to Volumetric Production Payments on the
schedules specified with respect thereto and (v) the discounted future net
revenues, calculated in accordance with SEC guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments that, based on the
estimates of production included in determining the discounted future net
revenues specified in the immediately preceding clause
4
(a)(i) (utilizing the same prices utilized in the Company's year-end reserve
report), would be necessary to satisfy fully the obligations of the Company
and its Restricted Subsidiaries with respect to Dollar-Denominated Production
Payments on the schedules specified with respect thereto.
"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 Section 4.04, Section 4.06 and Section 4.07 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. Shareholders and
Affiliates of Bessemer Securities Corporation ("BSC") that would not be
Affiliates of the Company other than by reason of being shareholders or
Affiliates of BSC and that neither in fact participate in the management of any
of BSC, Bessemer, Holdings or the Company, nor are controlled by BSC, Bessemer,
Holdings, the Company, or any of their respective Affiliates who in fact
participate in the management of any of BSC, Bessemer, Holdings or the Company,
shall not be deemed to be "Affiliates" of the Company.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company 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 (i) 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), (ii) all or substantially all the assets of any
division or line of business of the Company or any Restricted Subsidiary or
(iii) any other assets of the
5
Company or any Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary. Notwithstanding the
foregoing, none of the following shall be deemed to be an Asset Disposition:
(1) a disposition by a Restricted Subsidiary to the Company or by the Company
or a Restricted Subsidiary to a Wholly Owned Subsidiary, (2) for purposes of
Section 4.06 only, a disposition that constitutes a Restricted Payment
permitted by Section 4.04, (3) the sale or transfer (whether or not in the
ordinary course of business) of oil and gas properties or direct or indirect
interests in real property; PROVIDED, HOWEVER, that at the time of such sale
or transfer such properties do not have associated with them any proved
reserves, (4) the abandonment, farm-out, lease or sublease of developed or
undeveloped oil and gas properties in the ordinary course of business, (5)
the trade or exchange by the Company or any Restricted Subsidiary of any oil
and gas property owned or held by the Company or such Restricted Subsidiary
for any oil and gas property owned or held by another Person or (6) the sale
or transfer of hydrocarbons or other mineral products or surplus or obsolete
equipment in the ordinary course of business.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate implicit in the Sale/Leaseback Transaction, compounded
annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock
multiplied by the amount of such payment by (ii) the sum of all such payments.
"Banks" has the meaning specified in the Credit Agreement.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
6
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be
the date of the last payment or any other amount due under such lease prior
to the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Change of Control" means the occurrence of any of the following
events:
(i) 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 (i) such person shall
be deemed to have "beneficial ownership" of all shares that 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 35% of the
total voting power of the Voting Stock of the Company; PROVIDED, HOWEVER,
that the Permitted Holders beneficially own (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the Voting Stock of the
Company than such other person and 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 (for the purposes of this clause (i),
such other person shall be deemed to beneficially own any Voting Stock of
a specified corporation held by a parent corporation, if such other person
is the beneficial owner (as defined in this clause (i)), directly or
indirectly, of more
7
than 35% of the voting power of the Voting Stock of such parent
corporation and the Permitted Holders beneficially own (as
defined in this proviso), directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Voting Stock of such parent
corporation and 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 corporation);
(ii) during any period of two consecutive years from and after the
Issue Date, individuals who at the beginning of such period 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 a majority of the
directors of the Company then still in office who were either directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office; or
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person (other than a Person that is controlled by the Permitted Holders),
and, in the case of any such merger or consolidation, the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Company are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed or
exchanged for, in addition to any other consideration, securities of the
surviving corporation that represent, immediately after such transaction,
at least a majority of the aggregate voting power of the Voting Stock of
the surviving corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in the preamble to this
Indenture until a successor replaces it and, thereafter, means the successor
and, for purposes of
8
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) 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 (ii) 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 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 and the discharge
of any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred 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 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 (other than an Asset
Disposition involving assets having a fair market value of less than the greater
of one percent (1%) of Adjusted Consolidated Net Tangible Assets as of the end
of the Company's then most recently completed fiscal year and $2.0 million),
then EBITDA for such period shall be reduced by an amount equal to 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 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
9
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 (including by way of lease) 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 on 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
Agreement applicable to such Indebtedness if such Interest Rate Agreement has
a remaining term in excess of 12 months).
10
"Consolidated Current Liabilities" as of the date of determination
means the aggregate amount of liabilities of the Company and its consolidated
Restricted Subsidiaries which may properly be classified as current
liabilities (including taxes accrued as estimated), on a consolidated basis,
after eliminating (i) all intercompany items between the Company and any
Restricted Subsidiary and (ii) all current maturities of long-term
Indebtedness, all as determined in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP, 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,
(i) interest expense attributable to capital leases and imputed interest with
respect to Attributable Debt, (ii) capitalized interest, (iii) non-cash interest
expenses, (iv) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (v) net costs
(including amortization of fees and upfront payments) associated with interest
rate caps and other interest rate and currency options that, at the time entered
into, resulted in the Company and its Restricted Subsidiaries being net payees
as to future payouts under such caps or options, and interest rate and currency
swaps and forwards for which the Company or any of its Restricted Subsidiaries
has paid a premium, (vi) Preferred Stock dividends in respect of all Preferred
Stock held by Persons other than the Company or a Wholly Owned Subsidiary to the
extent that, by the terms of the Preferred Stock, failure to pay such dividends
would result in a bankruptcy of the issuer thereof and (vii) interest accruing
on any Indebtedness of any other Person to the extent such Indebtedness is
Guaranteed by the Company or any Restricted Subsidiary or secured by a Lien on
assets of the Company or any Restricted Subsidiary to the extent such
Indebtedness constitutes Indebtedness of the Company or any Restricted
Subsidiary (whether or not such Guarantee or Lien is called upon); PROVIDED,
HOWEVER, "Consolidated Interest Expense" shall not include any (w) amortization
of costs relating to debt issuances (including the amortization of debt
discount) other than the amortization of debt discount related to the issuance
of securities or other securities with an original issue price of not more than
90% of the principal thereof, (x) amortization of debt discount to the extent it
relates
11
to revaluations of financial instruments recognized in connection with the
Consolidation, (y) Consolidated Interest Expense with respect to any
Indebtedness Incurred pursuant to Section 4.03(b)(8) and (z) noncash interest
expense Incurred in connection with interest rate caps and other interest
rate and currency options that resulted, at the time entered into, in the
Company and its Restricted Subsidiaries being either neutral or net payors as
to future payouts under such caps or options.
"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: (i) any net income of any
Person (other than the Company) if such Person is not a Restricted Subsidiary,
except that (A) subject to the exclusion contained in clause (iv) 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 (iii) below) and (B) the Company's equity in a
net loss of any such Person for such period shall be included in determining
such Consolidated Net Income; (ii) 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; (iii) 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 (iv)
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 (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; (iv) any gain or loss realized upon the sale or other disposition of
any assets of the Company or its
12
consolidated Subsidiaries (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; (v) extraordinary gains or
losses; and (vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under Section 4.04(a)(3)(E).
"Consolidated Net Tangible Assets", as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves
and other properly deductible items) which would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, and after giving
effect to purchase accounting and after deducting therefrom Consolidated
Current Labilities and, to the extent otherwise included, the amounts of:
(i) minority interests in consolidated Subsidiaries held by Persons other
than the Company or a Restricted Subsidiary; (ii) excess of cost over fair
value of assets of businesses acquired, as determined in good faith by the
Board of Directors; (iii) any revaluation or other write-up in book value of
assets subsequent to the Issue Date as a result of a change in the method of
valuation in accordance with GAAP consistently applied; (iv) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights, licenses,
organization or developmental expenses and other intangible items; (v)
treasury stock; (vi) cash set apart and held in a sinking or other analogous
fund established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated Current
Liabilities; and (vii) Investments in and assets of Unrestricted
Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on
a consolidated basis in accordance with GAAP, as of the end of the most
13
recent fiscal quarter of the Company ending at least 45 days prior to the
taking of any action for the purpose of which the determination is being
made, as (i) the par or stated value of all outstanding Capital Stock of the
Company plus (ii) paid-in capital or capital surplus relating to such Capital
Stock plus (iii) any retained earnings or earned surplus less (A) any
accumulated deficit and (B) any amounts attributable to Disqualified Stock.
"Consolidation" means the conversion in 1994 of capital stock of
Xxxxxx Oil and units in Xxxxxx Oil & Gas Partners, Ltd., a Texas limited
partnership, into shares of common stock, Convertible Exchangeable Preferred
Stock and cumulative convertible stock of the Company.
"Contour Option" means that certain Option Agreement, dated as of
February 15, 1996, between the Company and Contour Production Company L.L.C.,
a Delaware limited liability company.
"Convertible Exchangeable Preferred Stock" means the $2.625
Convertible Exchangeable Preferred Stock of the Company.
"Credit Agreement" means that certain Credit Agreement, dated as of
February 14, 1996, by and among the Company and Texas Commerce Bank National
Association (or any successor thereto or replacement thereof) as agent and as
a lender, and certain other institutions, as lenders, including any related
notes, guarantees, collateral documents, instruments and agreements executed
in connection therewith, and in each case as amended, restated, modified,
renewed, refunded, replaced or refinanced, in whole or in part, from time to
time.
"Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, one or more debt facilities (including the Credit
Agreement) or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, production
payments, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time.
14
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Designated Senior Indebtedness" means (i) all obligations of the
Company or any Restricted Subsidiary under any Credit Facility and (ii) any
other Senior Indebtedness of the Company which, at the date of determination,
has an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least
$25.0 million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock to the extent that by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event, it (i) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (iii) is redeemable, in whole or in part,
at the option of the holder thereof, in each case described in the immediately
preceding clause (i), (ii) or (iii) on or prior to the Stated Maturity of the
Securities; 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 repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Securities shall not constitute Disqualified Stock if 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 provisions
contained in Sections 4.06 and 4.08; PROVIDED FURTHER, HOWEVER, that the
Company's Convertible Exchangeable Preferred Stock outstanding on the Issue Date
shall not be deemed Disqualified Stock.
15
"Dollar-Denominated Production Payments" means production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"EBITDA" for any period means the sum of Consolidated Net Income,
PLUS Consolidated Interest Expense PLUS the following to the extent deducted
in calculating such Consolidated Net Income: (a) provision for taxes based
on income or profits, (b) depletion and depreciation expense, (c)
amortization expense, (d) exploration costs and (e) all other non-cash
charges (excluding any such non-cash charge to the extent that it represents
an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period except
such amounts as the Company determines in good faith are nonrecurring), 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 other non-cash charges of, a Subsidiary
of the Company 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
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 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 Subsidiary or its stockholders.
"Equity Offering" means a primary offering, whether public or
private, of shares of common stock of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
16
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Issue Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession, and (iv) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma
financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in
staff accounting bulletins and similar written statements from the accounting
staff of the SEC.
"Guarantee" means, without duplication, any obligation, contingent
or otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness of any Person and any obligation, direct or indirect, contingent
or otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay
or to maintain financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Oil and Gas Hedging Contract, Interest Rate Agreement
or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the
17
time such Person becomes a Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary
at the time it becomes a Subsidiary. The term "Incurrence" when used as a
noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if
any) 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;
(ii) all Capital Lease Obligations of such Person and all Attributable Debt
in respect of Sale/Leaseback Transactions entered into by such Person; (iii)
all obligations of such Person issued or assumed as the deferred purchase
price of property (which purchase price is due more than six months after the
date of taking delivery of title to such property), including all obligations
of such Person for the deferred purchase price of property under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit); (v) the amount of all obligations
of such Person with respect to the redemption, repayment or other repurchase
of any Disqualified Stock or, with respect to any Subsidiary of such Person
the liquidation preference with respect to, any Preferred Stock (but
excluding, in each case, any accrued dividends); (vi) all obligations of such
Person relating to any Production Payment or in respect of production
imbalances (but excluding production imbalances arising in the ordinary
course of business); (vii) all obligations of the type referred to in clauses
(i) through (vi) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or
18
otherwise, including by means of any Guarantee (including, with respect to
any Production Payment, any warranties or guarantees of production or payment
by such Person with respect to such Production Payment but excluding other
contractual obligations of such Person with respect to such Production
Payment); (viii) all obligations of the type referred to in clauses (i)
through (vii) of other Persons secured by any Lien on any property or asset
of such first-mentioned Person (whether or not such obligation is assumed by
such first-mentioned Person), the amount of such obligation being deemed to
be the lesser of the value of such property or assets or the amount of the
obligation so secured and (ix) to the extent not otherwise included in this
definition, Hedging Obligations of such Person. The amount of Indebtedness
of any Person at any date shall be the outstanding balance at such date of
all unconditional obligations as described above and the maximum liability,
upon the occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date.
It is understood that none of the following shall constitute
Indebtedness: (i) indebtedness arising from agreements providing for
indemnification or adjustment of purchase price or from guarantees securing
any obligations of the Company or any of its Subsidiaries pursuant to such
agreements, incurred or assumed in connection with the disposition of any
business, assets or Subsidiary of the Company, other than guarantees or
similar credit support by the Company or any of its Subsidiaries of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such acquisition;
(ii) any trade payables and other accrued liabilities incurred in the
ordinary course of business as the deferred purchase price of property; (iii)
obligations arising from guarantees to suppliers, lessors, licensees,
contractors, franchisees or customers incurred in the ordinary course of
business; (iv) obligations (other than express Guarantees of indebtedness for
borrowed money) in respect of Indebtedness of other Persons arising in
connection with (A) the sale or discount of accounts receivable, (B) trade
acceptances and (C) endorsements of instruments for deposit in the ordinary
course of business; (v) obligations in respect of performance bonds provided
by the Company or its Subsidiaries in the ordinary course of business and
refinancings thereof; (vi) obligations arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business;
19
PROVIDED, HOWEVER, that such obligation is extinguished within two business
days of its incurrence; and (vii) obligations in respect of any obligations
under workers' compensation laws and similar legislation.
"Indenture" means this Indenture as amended or supplemented from
time to time, including the provisions of the TIA that are deemed to be a
part of and govern this Indenture and any supplemental indenture,
respectively.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement
designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers or joint interest partners or drilling
partnerships sponsored by the Company or any Restricted Subsidiary 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. For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.04, (i) "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 (ii) 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.
20
"Issue Date" means the date on which the Securities are originally
issued.
"Xxxxxx Oil" means the party named as such in the preamble to this
Indenture until a successor replaces it and, thereafter, means the successor.
"Xxxxxx Operating" means the party named as such in the preamble to
this Indenture until a successor replaces it and, thereafter, means the
successor.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Limited Recourse Indebtedness" means, with respect to any
Production Payments, Indebtedness, the terms of which limit the liability of
the Company and its Restricted Subsidiaries solely to the hydrocarbons
covered by such Production Payments; PROVIDED, HOWEVER, that no default with
respect to such Indebtedness would permit any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Material Change" means an increase or decrease (excluding changes
that result solely from changes in prices) of more than 15% during a fiscal
quarter in the discounted future net revenues from proved oil and gas
reserves of the Company and its Restricted Subsidiaries, calculated in
accordance with clause (a)(i) of the definition of Adjusted Consolidated Net
Tangible Assets; PROVIDED, HOWEVER, that the following will be excluded from
the calculation of Material Change: (i) any acquisitions during the fiscal
quarter of oil and gas reserves that have been estimated by independent
petroleum engineers and with respect to which a report or reports of such
engineers exist and (ii) any disposition of properties existing at the
beginning of such fiscal quarter that have been disposed of in compliance
with Section 4.06.
"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, but only as and when received, but excluding any other
21
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 (i) all legal, title
and recording tax expenses, commissions and other fees (including financial
and other advisory 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, (ii) 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, (iii) 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 (iv) 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.
"Net Present Value" means, with respect to any proved hydrocarbon
reserves, the discounted future net revenues associated with such reserves,
determined in accordance with the rules and regulations (including
interpretations thereof) of the SEC in effect on the Issue Date.
"Net Working Capital" means (a) all current assets of the Company
and its Restricted Subsidiaries MINUS (b) all current liabilities of the
Company and its Restricted Subsidiaries, except current liabilities included
in Indebtedness, determined in accordance with GAAP.
22
"Offering Memorandum" means the Offering Memorandum dated October
25, 1996, in connection with the sale of the Initial Securities.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Oil and Gas Business" means the business of the exploration for,
and exploitation, development, acquisition, production, processing (but not
refining), marketing, storage and transportation of, hydrocarbons, and other
related energy and natural resource businesses (including oil and gas
services businesses related to the foregoing).
"Oil and Gas Hedging Contract" means any oil and gas purchase or
hedging agreement, and other agreement or arrangement, in each case, that is
designed to provide protection against oil and gas price fluctuations.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Company or the Trustee.
"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 as a means of actively exploiting, exploring
for, acquiring, developing, producing, processing, gathering, marketing or
transporting oil and gas through agreements, transactions, interests or
arrangements which permit one to share risks or costs, comply with regulatory
requirements regarding local ownership or satisfy other objectives
customarily achieved though the conduct of Oil and Gas Business jointly with
third parties, including (i) ownership interests in oil and gas properties,
processing facilities, gathering systems 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
23
general or limited), subscription agreements, stock purchase agreements and
other similar agreements with third parties.
"Permitted Holders" means (i) the members of Contour Production
Company L.L.C., a Delaware limited liability company ("Contour"), as of the
Issue Date (the "Contour Group"), (ii) Contour, so long as Contour is
controlled (as defined in the definition of "Affiliate" above), directly or
indirectly, by the Contour Group, (iii) officers, principals, employees,
direct or indirect owners or Affiliates of Persons described in clauses (i)
or (ii), (iv) Persons who beneficially own Voting Stock of the Company on the
Issue Date and (v) officers or employees of the Company or any of its
Subsidiaries as of the Issue Date.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary; PROVIDED,
HOWEVER, that the primary business of such Restricted Subsidiary is an Oil
and Gas Business; (ii) 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; PROVIDED, HOWEVER, that such Person's primary business is an Oil
and Gas Business; (iii) Temporary Cash Investments; (iv) 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; (v) 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; (vi) loans or advances to
employees made in the ordinary course of business; (vii) 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; (viii) 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 4.06 and (ix) Permitted Business
Investments.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under
24
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 surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (b) Liens imposed by
law, such as carriers', warehousemen's and mechanics' Liens, in each case for
sums not yet due or being contested in good faith by appropriate proceedings
or other Liens arising out of judgments or awards against such Person with
respect to which such Person shall then be proceeding with an appeal or other
proceedings for review; (c) Liens for property taxes not yet subject to
penalties for non-payment or which are being contested in good faith and by
appropriate proceedings; (d) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and for the account of
such Person in the ordinary course of its business; PROVIDED, HOWEVER, that
such letters of credit do not constitute Indebtedness; (e) minor survey
exceptions, minor encumbrances, easements or reservations of, or rights of
others for, licenses, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, 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 impair their use in the operation of the business of such Person;
(f) Liens securing Indebtedness Incurred to finance the construction,
purchase or lease of, or repairs, improvements or additions to, property of
such Person (including Liens securing Indebtedness of the pollution control
or revenue bond type); PROVIDED, HOWEVER, that the Lien may not extend to any
other property owned by such Person or any of its Subsidiaries at the time
the Lien is Incurred, and the Indebtedness secured by the Lien may not be
Incurred more than 180 days after the later of the acquisition, completion of
construction, repair, improvement, addition or commencement of full operation
of the property subject to the Lien; (g) Liens securing Indebtedness
permitted under Section 4.03(b)(1) or Section 4.03(b)(8); PROVIDED, HOWEVER,
that any such Lien securing Indebtedness described in Section 4.03(b)(8)
shall be limited to the hydrocarbons related thereto and any
25
gathering systems utilized in gathering and transporting such hydrocarbons;
(h) Liens existing on the Issue Date; (i) Liens on property or shares of
Capital Stock of another Person at the time such other Person becomes a
Subsidiary of such Person; PROVIDED, HOWEVER, that such Liens are not
created, incurred or assumed in connection with, or in contemplation of, such
other Person becoming such a Subsidiary; PROVIDED FURTHER, HOWEVER, that such
Lien may not extend to any other property owned by such Person or any of its
Subsidiaries; (j) Liens on property at the time such Person or any of its
Subsidiaries acquires the property, including any acquisition by means of a
merger or consolidation with or into such Person or a Subsidiary of such
Person; PROVIDED, HOWEVER, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such acquisition;
PROVIDED FURTHER, HOWEVER, that the Liens may not extend to any other
property owned by such Person or any of its Subsidiaries; (k) Liens securing
Indebtedness or other obligations of a Subsidiary of such Person owing to
such Person or a wholly owned Subsidiary of such Person (or, in the case of
the Company, to a Wholly Owned Subsidiary); (l) Liens securing Hedging
Obligations so long as such Hedging Obligations relate to Indebtedness that
is, and is permitted to be under this Indenture, secured by a Lien on the
same property securing such Hedging Obligations; (m) Liens arising in the
ordinary course of business in favor of the United States, any state thereof,
any foreign country or any department, agency, instrumentality or political
subdivision of any such jurisdiction, to secure partial, progress, advance or
other payments pursuant to any contract or statute; (n) Liens to secure any
Refinancing (or successive Refinancings) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (f),
(h), (i) and (j); PROVIDED, HOWEVER, that (x) such new Lien shall be limited
to all or part of the same property that secured the original Lien (plus
improvements to or on such property) and (y) 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 clause (f), (h),(i) or (j) at the time the
original Lien became a Permitted Lien and (B) an amount necessary to pay any
fees and expenses, including premiums, related to such Refinancing; (o) Liens
on, or related to, properties to secure all or part of the costs incurred in
the ordinary course of business of exploration, drilling, development or
operation thereof; (p) Liens on pipeline or pipeline
26
facilities which arise out of operation of law; (q) Liens reserved in oil and
gas mineral leases for bonus or rental payments and for compliance with the
terms of such leases; and (r) Liens arising under partnership agreements, oil
and gas leases, farm-out agreements, division orders, contracts for the sale,
purchase, exchange, transportation or processing (but not the refining) of
oil, gas or other hydrocarbons, unitization and pooling declarations and
agreements, development agreements, operating agreements, area of mutual
interest agreements, and other similar agreements which are customary in the
Oil and Gas Business. Notwithstanding the foregoing, "Permitted Liens" will
not include any Lien described in clause (f), (i) or (j) above to the extent
(A) such Lien applies to any Additional Assets or Permitted Business
Investment acquired directly or indirectly from Net Available Cash pursuant
to Section 4.06(a)(i)(B) or Section 4.06(c) and (B) the fair value of such
Additional Assets or Permitted Business Investment is less than the sum of
(x) the amount of Indebtedness secured by such Lien plus (y) the amount of
Net Available Cash so invested in such Additional Assets or Permitted
Business Investment.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution
of assets upon any voluntary or involuntary liquidation or dissolution of
such corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Production Payments" means, collectively, Dollar-Denominated
Production Payments and Volumetric Production Payments.
"Programs" means Xxxxxx Partners 1992 Development Drilling Program, a
Texas limited partnership, and Xxxxxx
27
Partners 1994 Development Drilling Program, a Texas limited partnership,
together with Xxxxxx Partners 1992 Development Drilling Joint Venture, a
Texas general partnership, Xxxxxx Partners 1994 Development Drilling Joint
Venture, a Texas general partnership, and each of their respective successors.
"Public Market" means any time when at least 15% of the total issued
and outstanding common stock of the Company has been distributed by means of
an effective registration statement under the Securities Act or sales
pursuant to Rule 144 under the Securities Act.
"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
(including an Incurrence pursuant to clause (ii) of Section 5.01 or Section
5.02). "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 and Indebtedness that
is deemed to be Incurred at the time of a merger or consolidation pursuant to
clause (ii) of Section 5.01 or Section 5.02; PROVIDED, HOWEVER, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) 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 (iii) 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
(x) Indebtedness of a Subsidiary (other than a Subsidiary Guarantor) that
Refinances Indebtedness of the Company or (y) Indebtedness of the Company or
a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.
28
"Representative" means any trustee, agent or representative (if any)
for an issue of Senior Indebtedness of the Company.
"Restricted Payment" with respect to any Person means (i) 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 (x) dividends
or distributions payable solely in its Capital Stock (other than Disqualified
Stock), (y) dividends or distributions payable solely to the Company or a
Restricted Subsidiary and (z) pro rata dividends or other 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)), (ii) 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), (iii)
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 (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 acquisition) or (iv) the making of any Investment in any Person (other
than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
29
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Securities issued under this Indenture.
"Senior Indebtedness" means with respect to any Person (i)
Indebtedness of such Person, and all obligations of such Person under any
Credit Facility, whether outstanding on the Issue Date or thereafter
Incurred, and (ii) 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, with respect to obligations described in the immediately preceding
clause (i) or (ii), 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 or the
applicable Subsidiary Guaranty, as the case may be; PROVIDED, HOWEVER, that
Senior Indebtedness shall not include (1) any obligation of such Person to
any Subsidiary of such Person, (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 (other than, in the case of the Company or any of its Restricted
Subsidiaries, Indebtedness under any Credit Facility that is Incurred on the
basis of a representation by the Company to the applicable lenders that such
person is permitted to Incur such Indebtedness under this Indenture).
"Senior Subordinated Indebtedness" means (i) with respect to the
Company, the Securities and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank PARI PASSU with the
Securities in right of payment and is not subordinated by its terms in
30
right of payment to any Indebtedness or other obligation of the Company which
is not Senior Indebtedness and (ii) with respect to any Subsidiary Guarantor,
the Subsidiary Guaranty of such Subsidiary Guarantor and any other
Indebtedness of such Subsidiary Guarantor that specifically provides that
such Indebtedness is to rank PARI PASSU with such Subsidiary Guaranty in
right of payment and is not subordinated by its terms in right of payment to
any Indebtedness or other obligation of such Subsidiary Guarantor which is
not Senior Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of
the total voting power of shares of Capital Stock or other interests
(including partnership interests) entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly,
by (i) such Person, (ii) such person and one or more Subsidiaries of such
Person or (iii) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means Xxxxxx Operating, Xxxxxx Oil and each
other Restricted Subsidiary of the Company (other than the Programs) that
(i) has total net assets as of the end of the most recent fiscal year (as set
forth on the balance sheet of such Subsidiary prepared in accordance with GAAP)
equal to or greater than the greater
31
of $2.5 million and one percent (1%) of Adjusted Consolidated Net Tangible
Assets as of such date and (ii) delivers a Subsidiary Guaranty.
"Subsidiary Guaranty" means a Guarantee, pursuant to Article 11 of
this Indenture, by a Subsidiary Guarantor of the Company's obligations with
respect to the Securities, which Guarantee will be subordinated to Senior
Indebtedness of such Subsidiary Guarantor on substantially the same terms as
the Securities are subordinated to Senior Indebtedness of the Company.
"Temporary Cash Investments" means any of the following: (i) 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, (ii) 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, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of
$50.0 million (or the foreign currency equivalent thereof) and has
outstanding debt which 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, (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) above entered into with a
bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more than 180 days after the
date of acquisition, issued by a Person (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-2"
(or higher) according to Xxxxx'x Investors Service, Inc. or "A-2" (or higher)
according to Standard & Poor's Ratings Group, and (v) 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
32
Services, a division of the XxXxxx-Xxxx Companies Inc., or "A" by Xxxxx'x
Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the date of this Indenture except as
provided in Section 9.03.
"Total Assets" of the Company means the total consolidated assets of
the Company and its Restricted Subsidiaries, as shown on the most recent
balance sheet of the Company.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) 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 (ii)
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) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness
of, 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
4.04. The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary; PROVIDED, HOWEVER, that immediately after giving
effect to such designation (x) the Company could Incur $1.00 of additional
Indebtedness under Section 4.03(a) and (y) no Default shall have occurred and
be continuing. Any such designation by the Board of Directors shall be
evidenced by the Company to the Trustee by promptly filing with the Trustee a
copy of the board resolution giving effect to such
33
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer's option.
"Volumetric Production Payments" means production payment
obligations recorded as deferred revenue in accordance with GAAP, together
with all undertakings and obligations in connection therewith.
"Voting Stock" of 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 and shares
held by other Persons to the extent such shares are 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.
Section 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Affiliate Transaction" 4.07
"Bankruptcy Law" 6.01
"Blockage Notice" 10.03
"covenant defeasance option" 8.01(b)
"Custodian" 6.01
"Event of Default" 6.01
"Excess Proceeds" 4.06(a)
"Excess Proceeds Offer" 4.06(b)(i)
"Excess Proceeds Payment" 4.06(b)(i)
"Excess Proceeds Payment Date" 4.06(b)(ii)
"Guaranteed Obligations" 11.01
"legal defeasance option" 8.01(b)
34
"Legal Holiday" 12.08
"pay the Securities" 10.03
"Paying Agent" 2.03
"Payment Blockage Period" 10.03
"Registrar" 2.03
"Successor Company" 5.01
Additional terms used in this Indenture are defined in Annex A hereto.
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and, to the extent
Subsidiary Guaranties are given, such Subsidiary Guaranties.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities, including any Subsidiary Guarantors.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
Section 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
35
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the Company dated such date prepared in
accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued.
ARTICLE 2
THE SECURITIES
Section 2.01. FORM AND DATING. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in Appendix A, which is
hereby incorporated in and expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to Appendix A which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 2 to Appendix A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities
may have notations, legends or
36
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend
or endorsement is in a form acceptable to the Company). Each Security shall
be dated the date of its authentication. The terms of the Securities set
forth in Exhibit 1 and Exhibit 2 to Appendix A are part of the terms of this
Indenture.
Section 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or
agent for service of notices and demands.
Section 2.03. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent").
The Registrar shall keep a register of the Securities and of their transfer
and exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement
the provisions of this Indenture that relate to such agent. The
37
Company shall notify the Trustee of the name and address of any such agent.
If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each
due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money held by
the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee of any default by the Company in
making any such payment. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as
a separate trust fund. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
Section 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not
the Registrar, the Company shall furnish to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times
as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.
Section 2.06. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate and deliver a replacement Security
if the requirements of Section 8-405 of the Uniform
38
Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
Section 2.07. OUTSTANDING SECURITIES. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.06, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient
to pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may
be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
Section 2.08. TEMPORARY SECURITIES. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate and deliver temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations
that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for temporary
Securities.
39
Section 2.09. CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such
destruction to the Company unless the Company directs the Trustee to deliver
canceled Securities to the Company. The Company may not issue new Securities
to replace Securities it has redeemed, paid or delivered to the Trustee for
cancellation.
Section 2.10. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in
any lawful manner. The Company may pay the defaulted interest to the persons
who are Securityholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date
to the reasonable satisfaction of the Trustee and shall mail promptly to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
Section 2.11. CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers.
40
ARTICLE 3
REDEMPTION
Section 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities
to be redeemed and the paragraph of the Securities pursuant to which the
redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company to the
effect that such redemption will comply with the conditions herein.
Section 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies
with applicable legal and securities exchange requirements, if any, and that
the Trustee in its sole discretion considers fair and appropriate. The
Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000.
Securities and portions of them the Trustee selects shall be in amounts of
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities
called for redemption. The Trustee shall notify the Company and the
Registrar and Paying Agent promptly of the Securities or portions of
Securities to be redeemed.
Section 3.03. NOTICE OF REDEMPTION. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities
to be redeemed.
41
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities
to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date; and
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice,
subject to any condition or contingency stated therein. Upon surrender to
the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest to the redemption date. Failure
to give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
Section 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or
a Subsidiary is the Paying Agent, shall segregate and hold in trust) money
42
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to
the Trustee for cancellation.
Section 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder (at the Company's expense) a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
Section 4.01. PAYMENT OF SECURITIES. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient
to pay all principal and interest then due and the Trustee or the Paying
Agent, as the case may be, is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Section 4.02. SEC REPORTS. Notwithstanding that the Company may
not at any time be subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall file with the SEC and provide
the Trustee and Noteholders with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act (excluding however information with respect to benefit plans and
long-term compensation arrangements) and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be
so filed and provided at the times specified for the filing of such
information, documents and reports under such Sections.
43
Section 4.03. 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 or a
Subsidiary Guarantor may Incur Indebtedness if, on the date of such
Incurrence and after giving effect thereto, the Consolidated Coverage Ratio
equals or exceeds (i) 2.0 to 1.0, if such Indebtedness is Incurred on or
prior to September 30, 1999, (ii) 2.25 to 1.0, if such Indebtedness is
Incurred after September 30, 1999 and on or prior to September 30, 2001, and
(iii) 2.5 to 1.0 if such Indebtedness is Incurred after September 30, 2001.
(b) Notwithstanding the foregoing paragraph (a), the Company and
any Restricted Subsidiary may Incur the following Indebtedness:
(1) Indebtedness of the Company Incurred pursuant to any Credit
Facility, so long as the aggregate principal amount of all Indebtedness
outstanding under all Credit Facilities does not, at any one time, exceed
the aggregate amount of borrowing availability as of such date under all
Credit Facilities that determine availability on the basis of a borrowing
base or other asset-based calculation; PROVIDED, HOWEVER, that in no event
shall the aggregate principal amount of Indebtedness Incurred pursuant to
this Section 4.03(b)(1) outstanding at any one time exceed $250.0 million;
PROVIDED FURTHER, HOWEVER, that if the Company or a Subsidiary Guarantor
Incurs any Indebtedness pursuant to this Section 4.03(b)(1) that would
cause the total principal amount of Indebtedness outstanding under this
Section 4.03(b)(1) to exceed an amount equal to $150.0 million (less the
aggregate amount of all Net Available Cash of Asset Dispositions applied to
reduce Senior Indebtedness pursuant to Section 4.06(a)(i)(A), the
Consolidated Coverage Ratio on the date of such Incurrence must be at least
2.0 to 1.0;
(2) Indebtedness owed to and held by the Company or a Wholly Owned
Subsidiary; PROVIDED, HOWEVER, that any subsequent issuance or transfer of
any Capital Stock which results in any such Wholly Owned Subsidiary ceasing
to be a Wholly Owned Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or another Wholly Owned Subsidiary)
shall be
44
deemed, in each case, to constitute the Incurrence of such Indebtedness
by the issuer thereof;
(3) the Securities and the Subsidiary Guaranties;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in Section 4.03(b)(1), (2) or (3));
(5) Indebtedness or Preferred Stock of a Restricted Subsidiary
Incurred and outstanding on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness or
Preferred Stock 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
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company); PROVIDED, HOWEVER, that on the date of such acquisition and after
giving effect thereto, the Consolidated Coverage Ratio equals or exceeds
(i) 1.8 to 1.0, if such Indebtedness is Incurred on or prior to September
30, 1999, (ii) 2.05 to 1.0, if such Indebtedness is Incurred after
September 30, 1999 and on or prior to September 30, 2001, and (iii) 2.3 to
1.0, if such Indebtedness is Incurred after September 30, 2001;
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to Section 4.03(b)(3), (4) or (5),
this Section 4.03(b)(6) or Section 4.03(b)(7) or (13); PROVIDED, HOWEVER,
that to the extent such Refinancing Indebtedness directly or indirectly
Refinances Indebtedness or Preferred Stock of a Restricted Subsidiary
described in Section 4.03(b)(5), such Refinancing Indebtedness shall be
Incurred only by such Restricted Subsidiary or the Company;
(7) Indebtedness of the Company or a Restricted Subsidiary represented
by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case Incurred for the purpose of financing all or any
part of the purchase price or cost of construction or improvement of
property used in an Oil and Gas Business and in each case Incurred no later
than 365 days after the date of such acquisition or the date of completion
of such construction or improvement;
45
PROVIDED, HOWEVER, that the principal amount of any Indebtedness Incurred
pursuant to this Section 4.03(b)(7) in any single calendar year shall not
exceed $15.0 million;
(8) Indebtedness with respect to Production Payments; PROVIDED,
HOWEVER, that any such Indebtedness shall be Limited Recourse Indebtedness;
PROVIDED FURTHER, HOWEVER, that the Net Present Value of the reserves
related to such Production Payments shall not exceed 30% of the Total
Assets of the Company at the time of Incurrence;
(9) Indebtedness consisting of Interest Rate Agreements directly
related to Indebtedness permitted to be Incurred by the Company and its
Restricted Subsidiaries pursuant to this Indenture;
(10) Indebtedness under Oil and Gas Hedging Contracts and Currency
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;
(11) Indebtedness in respect of letters of credit issued for the
benefit of the Company or any of its Restricted Subsidiaries to the extent
they are issued in connection with the ordinary course of business of the
Company and its Restricted Subsidiaries, Incurred in an aggregate principal
amount which, when taken together with the principal amount of all other
Indebtedness Incurred pursuant to this Section 4.03(b)(11) and then
outstanding, does not exceed $15.0 million;
(12) Indebtedness of the Company or a Restricted Subsidiary Incurred
to finance capital expenditures (or Refinancings thereof) in an aggregate
principal amount which, when taken together with the principal amount of
all other Indebtedness Incurred pursuant to this Section 4.03(b)(12) and
then outstanding, does not exceed $10.0 million;
(13) Indebtedness of the Company or a Restricted Subsidiary Incurred
for the purpose of financing all or any part of the cost of acquiring oil
and gas reserves, another Person (other than a Person that was, immediately
prior to such acquisition, a Subsidiary
46
of the Company) engaged in the Oil and Gas Business or all or
substantially all the assets of such a Person; PROVIDED, HOWEVER, that on
the date of such Incurrence and after giving effect thereto, the
Consolidated Coverage Ratio equals or exceeds (i) 1.8 to 1.0, if such
Indebtedness is Incurred on or prior to September 30, 1999, (ii) 2.05 to
1.0, if such Indebtedness is Incurred after September 30, 1999 and on or
prior to September 30, 2001, and (iii) 2.3 to 1.0 if such Indebtedness is
Incurred after September 30, 2001; and
(14) Indebtedness in an aggregate principal amount which, together
with the principal amount of all other Indebtedness of the Company and its
Restricted Subsidiaries outstanding on the date of such Incurrence (other
than Indebtedness permitted by Section 4.03(b)(1) through (13) above or
Section 4.03(a)) does not exceed the greater of 6% of Adjusted Consolidated
Net Tangible Assets as of the end of the most recent fiscal year ending at
least 90 days prior to the date of such Incurrence and $15.0 million.
(c) Notwithstanding the foregoing, the Company shall not Incur any
Indebtedness pursuant to the foregoing Section 4.03(b) if the proceeds
thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Securities
to at least the same extent as such Subordinated Obligations; PROVIDED,
HOWEVER, that this Section 4.03(c) shall not prohibit the Company from
refinancing at maturity any of its Subordinated Obligations outstanding on
the Issue Date; PROVIDED FURTHER, HOWEVER, that this Section 4.03(c) shall
not prohibit the Refinancing of the Company's 7-7/8% Convertible Subordinated
Securities due 1999, provided that within 30 days thereafter the Company
receives $27.0 million Net Cash Proceeds from the exercise of the Contour
Option.
(d) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses
and (ii) an item of Indebtedness may be divided and classified in more than
one of the types of Indebtedness described above.
47
(e) Notwithstanding Sections 4.03(a) and (b) above, the Company shall
not, and the Company shall not permit any Subsidiary Guarantor to, Incur (i) any
Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness of such Person, unless such Indebtedness is
Senior Subordinated Indebtedness of such Person or is expressly subordinated in
right of payment to Senior Subordinated Indebtedness of such Person or (ii) any
Secured Indebtedness that is not Senior Indebtedness of such Person unless
contemporaneously therewith effective provision is made to secure the Securities
equally and ratably with such Secured Indebtedness for so long as such
Indebtedness is secured by a Lien.
Section 4.04. 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
able to Incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a);
or (3) the aggregate amount of such Restricted Payment and all other Restricted
Payments since the Issue Date would exceed the sum of: (A) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the beginning of the fiscal quarter immediately following the
fiscal quarter during which the Securities are originally issued 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); (B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (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); (C) the aggregate Net Cash
Proceeds received by the Company from the issue or sale subsequent to the Issue
Date of its Capital Stock (other than Disqualified Stock) to an employee stock
ownership plan; PROVIDED, HOWEVER, that if such employee stock ownership plan
incurs any Indebtedness with respect thereto, such aggregate amount shall be
limited to an amount equal to any increase in the Consolidated Net Worth of the
Company resulting from
48
principal repayments made by such employee stock ownership plan with respect
to such Indebtedness; (D) 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) subsequent to the Issue Date, 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); and (E) an amount equal to the sum of (i) the net
reduction in Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers of assets, in
each case to the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, and (ii) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of an
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 Unrestricted Subsidiary, the amount of
Investments previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other 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); PROVIDED, HOWEVER, that
(A) such purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from the calculation of amounts under Section 4.04(a)(3)(B) (but
only to the extent that such Net Cash Proceeds were used to purchase or redeem
such Capital Stock as provided in this Section 4.04(b)(i)); (ii) any purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value
of Subordinated Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Indebtedness of the Company which is permitted
to be Incurred pursuant to Section 4.03; PROVIDED, HOWEVER, that such purchase,
repurchase, redemption, defeasance or other acquisition or
49
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments; (iii) 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 4.04; PROVIDED, HOWEVER, that at the time of
payment of such dividend, no other Default shall have occurred and be
continuing (or result therefrom); PROVIDED FURTHER, HOWEVER, that such
dividend shall be included in the calculation of the amount of Restricted
Payments; (iv) the repurchase of shares of, or options to purchase shares of,
common 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 common stock;
PROVIDED, HOWEVER, that the aggregate amount of such repurchases shall not
exceed $1.0 million in any calendar year and $6.0 million in the aggregate;
PROVIDED FURTHER, HOWEVER, that such repurchases shall be excluded in the
calculation of the amount of Restricted Payments; (v) amounts paid to holders
of the Company's Convertible Exchangeable Preferred Stock to the extent such
amounts do not exceed the amount of dividends in arrears through and
including November 1, 1996 in respect of such Convertible Exchangeable
Preferred Stock; PROVIDED, HOWEVER, that at the time of payment of such
amounts, no Default shall have occurred and be continuing (or result
therefrom); PROVIDED FURTHER, HOWEVER, that such amounts shall be excluded in
the calculation of the amount of Restricted Payments; (vi) dividends paid
from time to time in respect of the Company's Convertible Exchangeable
Preferred Stock (other than amounts permitted by clause (v) above); PROVIDED,
HOWEVER, that at the time of payment of such dividends, no Default shall have
occurred and be continuing (or result therefrom); PROVIDED FURTHER, HOWEVER,
that the amount of such dividends shall be included in the calculation of the
amount of Restricted Payments; or (vii) other Restricted Payments in an
aggregate amount not to exceed $10.0 million; PROVIDED, HOWEVER, that such
Restricted Payment shall be excluded in the calculation of the amount of
Restricted Payments.
Section 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company
50
shall not, and shall not permit any Restricted Subsidiary to, create or
otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary (a) to
pay dividends or make any other distributions on its Capital Stock or pay any
Indebtedness owed to the Company or a Restricted Subsidiary, (b) to make any
loans or advances to the Company or a Restricted Subsidiary or (c) to
transfer any of its property or assets to the Company or a Restricted
Subsidiary, except: (i) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Issue Date; (ii) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to an agreement relating to any Indebtedness Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as consideration
in, 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 Restricted Subsidiary became a Restricted Subsidiary or was
acquired by the Company) and outstanding on such date; (iii) any encumbrance
or restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in clause (i) or
(ii) of this Section 4.05 or this clause (iii) or contained in any amendment
to an agreement referred to in clause (i) or (ii) of this Section 4.05 or
this clause (iii); PROVIDED, HOWEVER, that the encumbrances and restrictions
with respect to such Restricted Subsidiary contained in any such refinancing
agreement or amendment are no less favorable to the Securityholders than
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in such agreements; (iv) any such encumbrance or restriction
consisting of customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict the transfer of
the lease or the property leased thereunder; (v) in the case of clause (c)
above, restrictions contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements or
mortgages; and (vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of
all or substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition.
51
Section 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
(a) In the event and to the extent that the Net Available Cash received by the
Company or any Restricted Subsidiary from one or more Asset Dispositions
occurring on or after the Issue Date in any period of 12 consecutive months
exceeds 10% of Adjusted Consolidated Assets as of the beginning of such 12-month
period, then the Company shall (i) within 180 days (in the case of clause
(A) below) or 360 days (in the case of clause (B) below) after the date such Net
Available Cash so received exceeds such 10% of Adjusted Consolidated Assets
(A) apply an amount equal to such excess Net Available Cash to repay Senior
Indebtedness of the Company or Indebtedness of a Restricted Subsidiary, in each
case owing to a Person other than the Company or any Affiliate of the Company or
(B) invest an equal amount, or the amount not so applied pursuant to clause (A),
in Additional Assets or a Permitted Business Investment or (ii) apply such
excess Net Available Cash (to the extent not applied pursuant to clause (i)) as
provided in the following paragraphs of this Section 4.06. The amount of such
excess Net Available Cash required to be applied during the applicable period
and not applied as so required by the end of such period shall constitute
"Excess Proceeds".
(b)(i) If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Excess Proceeds Offer
(as defined below) totals at least $10.0 million, the Company must, not later
than the fifteenth Business Day of such month, make an offer (an "Excess
Proceeds Offer") to purchase from the Holders on a pro rata basis an aggregate
principal amount of Securities equal to the Excess Proceeds (rounded down to the
nearest multiple of $1,000) on such date, at a purchase price equal to 100% of
the principal amount of such Securities, plus, in each case, accrued interest
(if any) to the date of purchase (the "Excess Proceeds Payment").
(ii) The Company shall commence any Excess Proceeds Offer with
respect to the Securities by mailing a notice to the Trustee and each Holder
stating: (A) that the Excess Proceeds Offer is being made pursuant to this
Section 4.06 and that all Securities validity tendered will be accepted for
payment on a pro rata basis; (B) the purchase price and the date of purchase
(which shall be a Business Day no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the "Excess Proceeds Payment Date");
(C) that any Security not tendered will
52
continue to accrue interest pursuant to its terms; (D) that, unless the
Company defaults in the payment of the Excess Proceeds Payment, any Security
accepted for payment pursuant to the Excess Proceeds Offer shall cease to
accrue interest on and after the Excess Proceeds Payment Date; (E) that
Holders electing to have a Security purchased pursuant to the Excess Proceeds
Offer will be required to surrender the Security, together with the form
entitled "Option of Holder to Elect Purchase" on the reverse side of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day immediately
preceding the Excess Proceeds Payment Date; (F) that Holders will be entitled
to withdraw their election if the Paying Agent receives, not later than the
close of business on the third Business Day immediately preceding the Excess
Proceeds Payment Date, a telegram, facsimile transmission or letter setting
forth the name of such Holder, the principal amount of Securities delivered
for purchase and a statement that such Holder is withdrawing his election to
have such Securities purchased; and (G) that Holders whose Securities are
being purchased only in part will be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered; PROVIDED,
HOWEVER, that each Security purchased and each new Security issued shall be
in a principal amount of $1,000 or integral multiples thereof.
(iii) On the Excess Proceeds Payment Date, the Company shall
(A) accept for payment on a pro rata basis Securities or portions thereof
tendered pursuant to the Excess Proceeds Offer, (B) deposit with the Paying
Agent money sufficient to pay the purchase price of all Securities or portions
thereof so accepted, and (C) deliver, or cause to be delivered, to the Trustee
all Securities or portions thereof so accepted together with an Officers'
Certificate specifying the Securities or portions thereof so accepted for
payment by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered; PROVIDED, HOWEVER; that each Security purchased and each new
Security issued shall be in a principal amount of $1,000 or integral multiples
thereof. The Company will publicly announce the results of the Excess Proceeds
Offer as soon as practicable after the Excess Proceeds Payment Date. For
purposes of this Section 4.06, the Trustee shall act as the Paying Agent.
53
(iv) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations thereunder in the event that such Excess Proceeds are received by
the Company under this Section 4.06 and the Company is required to repurchase
Securities as described above. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.06, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.06 by virtue thereof.
(c) In the event of the transfer of substantially all (but not all)
the property and assets of the Company as an entirety to a Person in a
transaction permitted by Section 5.01, the Successor Company (as defined
therein) shall be deemed to have sold the properties and assets of the Company
not so transferred for purposes of the covenant described hereunder, and shall
comply with the provisions of the covenant described hereunder with respect to
such deemed sale as if it were an Asset Disposition and the Successor Company
shall be deemed to have received Net Available Cash in an amount equal to the
fair market value (as determined in good faith by the Board of Directors) of the
properties and assets not so transferred or sold.
(d) In the event of an Asset Disposition by the Company or any
Restricted Subsidiary that consists of a sale of hydrocarbons and results in
Production Payments, the Company or such Restricted Subsidiary shall apply an
amount equal to the Net Available Cash received by the Company or such
Restricted Subsidiary to (i) reduce Senior Indebtedness of the Company or
Indebtedness of a Restricted Subsidiary, in each case owing to a Person other
than the Company or any Affiliate of the Company, within 180 days after the date
such Net Available Cash is so received or (ii) invest in Additional Assets or a
Permitted Business Investment within 360 days after the date such Net Available
Cash is so received.
Section 4.07. 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
the terms
54
thereof (1) 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 such an Affiliate, (2) if
such Affiliate Transaction involves an amount in excess of $1.0 million, is
set forth in writing and has been approved by a majority of the members of
the Board of Directors having no personal stake in such Affiliate Transaction
or (3) if such Affiliate Transaction involves an amount in excess of $10.0
million, has been determined by a nationally recognized investment banking
firm to be fair, from a financial standpoint, to the Company and its
Restricted Subsidiaries.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any sale
of hydrocarbons or other mineral products or the entering into or performance of
Oil and Gas Hedging Contracts, gas gathering, transportation or processing
contracts or oil or natural gas marketing or exchange contracts, in each case,
in the ordinary course of business, so long as the terms of any such transaction
are approved by a majority of the members of the Board of Directors who are
disinterested with respect to such transaction as being the most favorable of at
least (x) two bids, quotes or proposals, at least one of which is from a Person
that is not an Affiliate of the Company (in the event that the Company
determines in good faith that it is able to obtain only two bids, quotes or
proposals with respect to such transaction) or (y) three bids, quotes or
proposals, at least two of which are from Persons that are not Affiliates of the
Company (in all other circumstances), (ii) the sale to an Affiliate of the
Company of Capital Stock of the Company that does not constitute Disqualified
Stock, (iii) transactions contemplated by any employment agreement or other
compensation plan or arrangement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent with
industry practice, (iv) transactions between or among the Company and its
Restricted Subsidiaries, (v) Restricted Payments and Permitted Investments that
are permitted by Section 4.04, and (vi) the transactions described in the
Offering Memorandum under the caption "Certain Transactions" and loans or
advances to employees in the ordinary course of business and approved by the
Company's Board of Directors in an aggregate principal amount not to exceed
$1.0 million outstanding at any one time.
55
Section 4.08. CHANGE OF CONTROL. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
repurchase 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 4.08(b). In the event that at
the time of such Change of Control the terms of the Indebtedness under the
Credit Agreement restrict or prohibit the repurchase of Securities pursuant to
this Section, then prior to the mailing of the notice to Holders provided for in
Section 4.08(b) below but in any event within 30 days following any Change of
Control, the Company shall (i) repay in full all Indebtedness under the Credit
Agreement or offer to repay in full all such Indebtedness and repay such
Indebtedness of each lender which has accepted such offer or (ii) obtain the
requisite consent under the agreements governing the Indebtedness under the
Credit Agreement to permit the repurchase of the Securities as provided for in
Section 4.08(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 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, cash flow
and capitalization after giving effect to such Change of Control); (3) the
repurchase 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 4.08, that a Holder must follow in order
to have its Securities purchased.
(c) Holders electing to have a Security purchased will 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 will be entitled to
56
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 Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by 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) 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 4.08. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of the covenant described hereunder,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.08 by
virtue thereof.
(f) Notwithstanding the foregoing, the Company shall not be required
to comply with the provisions of this Section 4.08 to the extent any other
Person complies with such provisions as if such Person were the Company.
Section 4.09. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock except (i) to the Company or a Wholly
Owned Subsidiary, (ii) if, immediately after giving effect to such issuance,
sale or other disposition, the Company and its Restricted Subsidiaries would own
less than 20% of the Voting Stock of such Restricted Subsidiary and have no
greater economic interest in such Restricted Subsidiary, (iii) if, immediately
after giving effect to such issuance, sale or other disposition, the Company and
its Restricted Subsidiaries would own greater than 80% of the Voting Stock of
such Restricted Subsidiary and have no lesser economic interest in such
Restricted Subsidiary or (iv) to the extent such shares represent directors'
qualifying shares or shares
57
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary.
Section 4.10. LIMITATION ON LIENS. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit
to exist any Lien of any nature whatsoever on any of its properties (including
Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, to secure Indebtedness that is not Senior Indebtedness of
the Company or such Restricted Subsidiary, other than Permitted Liens, without
effectively providing that the Securities or the applicable Subsidiary Guaranty
shall be secured equally and ratably with (or prior to) the obligations so
secured for so long as such obligations are so secured.
Section 4.11. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless (i) the Company
or such Restricted Subsidiary would be entitled to (A) Incur Indebtedness in an
amount equal to the Attributable Debt with respect to such Sale/Leaseback
Transaction pursuant to Section 4.03 and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing the
Securities or the applicable Subsidiary Guaranty pursuant to Section 4.10,
(ii) the net proceeds received by the Company or any Restricted Subsidiary in
connection with such Sale/Leaseback Transaction are at least equal to the fair
value (as determined by the Board of Directors) of such property and (iii) the
Company applies the proceeds of such transaction in compliance with
Section 4.06.
Section 4.12. FUTURE GUARANTORS. Promptly after the end of the first
fiscal year in which any Restricted Subsidiary (other than the Programs), at the
end of such fiscal year, has total net assets (as set forth on the balance sheet
of such Subsidiary prepared in accordance with GAAP) equal to or greater than
the greater of $2.5 million and one percent (1%) of Adjusted Consolidated Net
Tangible Assets, the Company shall cause such Restricted Subsidiary to issue a
Subsidiary Guaranty for the benefit of the holders of the Securities.
Section 4.13. COMPLIANCE CERTIFICATE. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers'
58
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Company they would normally have knowledge of
any Default and whether or not the signers know of any Default that occurred
during such fiscal year. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section
314(a)(4).
Section 4.14. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
SUCCESSOR COMPANY
Section 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The Company
shall not consolidate with or merge with or into, or convey, transfer or lease,
in one transaction or a series of transactions, all or substantially all its
assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations
of the Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or any Subsidiary as a
result of such transaction as having been Incurred by such Successor
Company or such Subsidiary at the time of such transaction), no Default
shall have occurred and be continuing;
59
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a) or, if applicable, Section
4.03(b)(13);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Adjusted Consolidated Net Tangible Assets
in an amount that is not less than the Adjusted Consolidated Net
Tangible Assets of the Company immediately prior to such transaction;
and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
PROVIDED, HOWEVER, that clauses (iii) and (iv) shall not be applicable to any
such transaction solely between the Company and any Restricted Subsidiary.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease of all or substantially all its assets shall not
be released from the obligation to pay the principal of and interest on the
Securities.
Section 5.02. WHEN SUBSIDIARY GUARANTORS MAY MERGE OR TRANSFER
ASSETS. The Company will not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
series of transactions, all or substantially all its assets to any Person
unless: (i) the resulting, surviving or transferee Person shall expressly
assume by a guaranty agreement, in a form acceptable to the Trustee, all the
obligations of such Subsidiary Guarantor, if any, under its Subsidiary Guaranty;
(ii) immediately after giving effect to such transaction or transactions on a
pro forma basis (and, treating any Indebtedness which becomes an obligation of
the resulting, surviving or transferee Person as a result of such transaction as
having been issued by such Person at time of such transaction), no Default shall
have occurred and be continuing; and (iii) the Company delivers to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and
60
such guaranty agreement, if any, complies with this Indenture.
Notwithstanding the foregoing, if any Subsidiary Guarantor is released from
its obligations under its Subsidiary Guaranty pursuant to Section 11.06, then
such Subsidiary Guarantor's successor or transferee shall be released from
all of such Subsidiary Guarantor's obligations under its Subsidiary Guaranty.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall be
prohibited by Article 10, and such default continues for a period of
30 days;
(2) the Company (i) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise, whether or not such payment shall be prohibited by Article 10 or
(ii) fails to redeem or purchase Securities when required pursuant to this
Indenture or the Securities, whether or not such redemption or purchase
shall be prohibited by Article 10;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06 (other than a failure to purchase Securities when required under
Section 4.06), 4.07, 4.08 (other than a failure to purchase Securities when
required under Section 4.08), 4.09, 4.10, 4.11 or 4.12 and such failure
continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements contained
in the Securities or in this Indenture (other than those referred to in
(1), (2), (3) or (4) above) and such failure continues for 60 days after
the notice specified below;
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(6) Indebtedness of the Company or any Significant Subsidiary (other
than Limited Recourse Indebtedness) is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof
because of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $10.0 million or its foreign currency equivalent at the
time;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of $10.0
million or its foreign currency equivalent at the time is rendered against
the Company or a Significant Subsidiary and is not
62
discharged and either (A) an enforcement proceeding has been commenced
by any creditor upon such judgment or decree or (B) there is a period
of 60 days following the entry of such judgment or decree during which
such judgment or decree is not discharged, waived or the execution
thereof stayed, in either case 10 days after the notice specified
below; or
(10) any Subsidiary Guaranty ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guaranty) or a
Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty if such default continues for a period of 10 days after
the notice specified below.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, XXXXXX XXXXXX CODE, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4), (5), (9) or (10) is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the Securities notify the Company of the Default and the Company does not cure
such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4) or
(5), its status and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default or Event of Default unless one of its Trust Officers receives written
notice thereof from the Company or any of the Holders.
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Section 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by written notice to the
Company, or the Holders of at least 25% in principal amount of the
outstanding Securities by written notice to the Company and the Trustee, may
declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default
specified in Section 6.01(7) or (8) with respect to the Company occurs and is
continuing, the principal of and interest on all the Securities shall IPSO
FACTO become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholders. The Holders of
a majority in principal amount of the outstanding Securities by written
notice to the Trustee may rescind any such acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of acceleration. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
Section 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the Event of Default.
No remedy is exclusive of any other remedy. All available remedies are
cumulative.
Section 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority
in principal amount of the Securities by written notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.02 cannot be amended without the
consent of each
64
Securityholder affected. When a Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or impair any
consequent right.
Section 6.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve
the Trustee in personal liability; PROVIDED, HOWEVER, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall
be entitled to indemnification satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.
Section 6.06. LIMITATION ON SUITS. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
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Section 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of, premium (if any) or interest on
the Securities held by such Holder, on or after the respective due dates
expressed in the Securities, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount then due and owing (together with interest
on any unpaid interest to the extent lawful) and the amounts provided for in
Section 7.07.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may
file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee
in bankruptcy or other Person performing similar functions, and any Custodian
in any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee
any amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and its counsel, and any other
amounts due the Trustee under Section 7.07.
Section 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness to the extent required by
Article 10;
66
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
Section 6.11. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court
in its discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys' fees, against
any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section
does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than an aggregate of 10% in
principal amount of the Securities.
Section 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to
the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
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ARTICLE 7
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
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(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
advance, expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any
of its rights or powers. The Trustee, however, may so advance or expend its
own funds if, in its own reasonable judgment, the Trustee believes that
repayment of such funds or adequate indemnity against such risk or liability
has been reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) Notwithstanding anything to the contrary herein, the Trustee
shall have no duty to review the reports and information documents required
to be provided by Section 4.02 for the purposes of determining compliance
with any provisions of this Indenture.
Section 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
Section 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment of principal of or interest on any
Security (including payments pursuant to the mandatory redemption provisions
of such Security, if any), the Trustee may withhold the notice if and so long
as the Trust Officer responsible for administering this Indenture and the
Securities in good faith determines that withholding notice is not opposed to
the interests of Securityholders.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within sixty (60)
days after May 15 of each year, beginning with May 15, 1997, the Trustee
shall mail to each
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Securityholder a brief report dated as of May 15 of such year, that complies
with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.
Section 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee from time to time and upon its request reasonable compensation
for its services. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's
agents, counsel, accountants and experts. The Company shall indemnify the
Trustee against any and all loss, liability or expense (including attorneys'
fees) incurred by it in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture against the Company (including under Section 7.07).
The Trustee shall notify the Company promptly of any claim (whether asserted
by any Securityholder or the Company) for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder. The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee
through the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust
to pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a
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Default specified in Section 6.01(7) or (8) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
Section 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee
and may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject
to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent
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jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder
or in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Securities
or in this Indenture provided that the certificate of the Trustee shall have.
Section 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50.0 million as set forth in
its most recent annual report of condition. The Trustee shall comply with
TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.06) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee funds sufficient to
pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.06), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the operation of
Sections 6.01(4), 6.01(6), 6.01(7) (but only with respect to Significant
Subsidiaries), 6.01(8) (but only with respect to Significant Subsidiaries),
6.01(9) and 6.01(10) and its obligations under Sections 5.01(iii) and (iv)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section 6.01(4),
6.01(6), 6.01(7) (but only with respect to Significant Subsidiaries), 6.01(8)
(but only with respect to Significant Subsidiaries), 6.01(9) or 6.01(10) or
because of the failure of the Company to comply with Section 5.01(iii) or (iv).
If the Company exercises
74
its legal defeasance option or its covenant defeasance option, each
Subsidiary Guarantor, if any, will be released from all its obligations with
respect to its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 7.07, 7.08 and this Article 8
shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
Section 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on
the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal of and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from
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the deposit does not constitute, or is qualified as, a regulated investment
company under the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3.
Section 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
Money and securities so held in trust are not subject to Article 10.
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Section 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
Section 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
Section 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENTS
Section 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article 10 that would limit or terminate the
benefits available to any holder of Senior Indebtedness (or Representatives
therefor) under Article 10;
(5) to add guarantees with respect to the Securities, including adding
any Subsidiary of the Company as a Subsidiary Guarantor under Article 11,
or to secure the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA; or
(8) to make any change that does not adversely affect the rights of
any Securityholder.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
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representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
Section 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. Without the consent of each Securityholder affected,
however, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon a required purchase (to the extent
the Company has at the time become obligated by the terms of the Indenture
to effect a required purchase) or the redemption of any Security or change
the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Article 10 or that adversely affects the rights
of any Securityholder under Article 10;
(7) make any change in Section 6.04 or 6.07 or the second sentence of
this Section; or
(8) make any change in any Subsidiary Guaranty that would adversely
affect the Securityholders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of
79
any proposed amendment, but it shall be sufficient if such consent approves
the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 or the fourth paragraph of Section 11.01 of
any holder of Senior Indebtedness then outstanding unless the holders of such
Senior Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders
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after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.
Section 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
Section 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
Section 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid or agreed to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
ARTICLE 10
SUBORDINATION
Section 10.01. AGREEMENT TO SUBORDINATE. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the
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extent and in the manner provided in this Article 10, to the prior payment of
all Senior Indebtedness of the Company or the applicable Subsidiary
Guarantor, whether outstanding on the Issue Date or thereafter incurred,
including the Company's and such Subsidiary Guarantor's obligations under the
Credit Agreement, and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Securities shall in
all respects rank PARI PASSU with all other Senior Subordinated Indebtedness
of the Company and only Indebtedness of the Company which is Senior
Indebtedness shall rank senior to the Securities in accordance with the
provisions set forth herein. All provisions of this Article 10 shall be
subject to Section 10.12.
Section 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of the Senior Indebtedness before Securityholders shall be
entitled to receive any payment of principal of or interest on the
Securities; and
(2) until the Senior Indebtedness is paid in full, any payment or
distribution to which Securityholders would be entitled but for this
Article 10 shall be made to holders of Senior Indebtedness as their
interests may appear, except that Securityholders may receive shares of
stock and any debt securities that are subordinated to Senior Indebtedness
to at least the same extent as the Securities.
Section 10.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS. The
Company may not pay the principal of, premium (if any) or interest on the
Securities or make any deposit pursuant to Section 8.01 and may not repurchase,
redeem or otherwise retire any Securities (collectively, "pay the Securities")
if (i) any Designated Senior Indebtedness is not paid when due or (ii) any other
default on Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration
82
has been rescinded or (y) such Designated Senior Indebtedness has been paid
in full; PROVIDED, HOWEVER, that the Company may pay the Securities without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness with respect to which either of the events set forth in clause
(i) or (ii) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Company may not pay the Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a "Blockage Notice") of such default from the
Representative of the holders of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179
days thereafter (or earlier if such Payment Blockage Period is terminated (i)
by written notice to the Trustee and the Company from the Person or Persons
who gave such Blockage Notice, (ii) because the default giving rise to such
Blockage Notice is no longer continuing or (iii) because such Designated
Senior Indebtedness has been repaid in full. Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company shall resume payments on the Securities after the
end of such Payment Blockage Period. Not more than one Blockage Notice may
be given in any consecutive 360-day period, irrespective of the number of
defaults with respect to Designated Senior Indebtedness during such period;
PROVIDED, HOWEVER, that if any Blockage Notice within such 360-day period is
given by or on behalf of any holders of Designated Senior Indebtedness (other
than the lenders under any Credit Agreement), the Representative of the
lenders under any Credit Agreement may give another Blockage Notice within
such period; PROVIDED FURTHER, HOWEVER, that in no event may the total number
of days during which any Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during any 360 consecutive day period. For
purposes of this Section, no default or event of default
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which existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness
initiating such Payment Blockage Period shall be, or be made, the basis of
the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default
shall have been cured or waived for a period of not less than 90 consecutive
days.
Section 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representative) of the acceleration.
Section 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to Securityholders that because of this Article 10 should not have
been made to them, the Securityholders who receive the distribution shall
hold it in trust for holders of Senior Indebtedness and pay it over to them
as their interests may appear.
Section 10.06. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article 10 to holders of Senior Indebtedness which otherwise would have been
made to Securityholders is not, as between the Company and Securityholders, a
payment by the Company on Senior Indebtedness.
Section 10.07. RELATIVE RIGHTS. This Article 10 defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to
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receive distributions otherwise payable to Securityholders.
Section 10.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
Section 10.9. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; PROVIDED,
HOWEVER, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
Section 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
Section 10.11. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure to make a payment pursuant to the Securities
by reason of any provision in this Article 10 shall not be construed as
preventing the occurrence of a Default. Nothing in this
85
Article 10 shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
Section 10.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payment from the money or the
proceeds of U.S. Government Obligations deposited in trust with the Trustee in
accordance with the provisions of Article 8 for the payment of principal of and
interest on the Securities shall not be subordinated to the prior payment of any
Senior Indebtedness or subject to the restrictions set forth in this Article 10,
and none of the Securityholders shall be obligated to pay over any such amount
to the Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
Section 10.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person as
a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or Distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
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Section 10.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 10.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness. The Trustee undertakes to perform or to observe
only such of the covenants and obligations as are specifically set forth in this
Article 10, and no implied covenants or obligations with respect to such holders
of Senior Indebtedness shall be implied in this Indenture against the Trustee.
Section 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE 11
SUBSIDIARY GUARANTY
Section 11.01. GUARANTEE. Each Subsidiary Guarantor, as primary
obligor and not merely as surety, hereby irrevocably and unconditionally
guarantees, jointly and severally, on a senior subordinated basis to each Holder
and to the Trustee and its successors and assigns (a) the full and punctual
payment of principal of and interest on the Securities when due, whether at
Stated Maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of
87
the Company under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Guaranteed Obligations"). Each
Subsidiary Guarantor further agrees that the Guaranteed Obligations of the
Company may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor, and that such Subsidiary
Guarantor shall remain bound under this Article 11 notwithstanding any
extension or renewal of any such Guaranteed Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Guaranteed Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by
(a) the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any extension
or renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the Trustee for
the Guaranteed Obligations or any of them; (e) the failure of any Holder or
Trustee to exercise any right or remedy against any other Subsidiary Guarantor
of the Guaranteed Obligations or (f) any change in the ownership of such
Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
Each Subsidiary Guaranty, as it relates to the principal of, premium
(if any) and interest on the Securities shall be, to the extent and manner set
forth in Article 10, subordinated in right of payment to the prior payment in
full of all Senior Indebtedness of such Subsidiary Guarantor and each such
Subsidiary Guarantor's Subsidiary Guaranty is made subject to such provisions of
this Indenture.
88
The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, wilful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, each
Subsidiary Guarantor shall, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid principal amount of such Guaranteed
Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations
(but only to the extent not prohibited by law) and (iii) all other monetary
Guaranteed Obligations of the Company to the Holders and the Trustee.
89
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations. Each Subsidiary Guarantor further agrees that, as between it, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the Guaranteed Obligations Guaranteed hereby may be accelerated as
provided in Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary
Guaranty, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations Guaranteed hereby,
and (y) in the event of any declaration of acceleration of such Guaranteed
Obligations as provided in Article 6, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantor for
the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
Section 11.02. LIMITATION ON LIABILITY. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor
shall not exceed the maximum amount that can, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (other than any
liabilities of such Subsidiary Guarantor with respect to any Subordinated
Obligation), be hereby guaranteed without rendering this Indenture, as it
relates to the Subsidiary Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.
Section 11.03. SUCCESSORS AND ASSIGNS. This Article 11 shall be
binding upon each Subsidiary Guarantor and its respective successors and assigns
and shall enure to the benefit of the successors and assigns of the Trustee and
the Holders and, in the event of any transfer or assignment of rights by any
Holder or the Trustee, the rights and privileges conferred upon that party in
this Indenture and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of this
Indenture.
90
Section 11.04. NO WAIVER. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
Section 11.05. MODIFICATION. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
Section 11.06. RELEASE OF SUBSIDIARY GUARANTOR. Upon the sale or
disposition (by merger or otherwise) of any Subsidiary Guarantor to an entity
which is neither the Company nor a Subsidiary Guarantor and which sale is
otherwise in compliance with the terms of this Indenture, such Subsidiary
Guarantor shall be deemed released from all obligations under this Article 11
without any further action required on the part of the Trustee, or any Holder.
At the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing such release.
ARTICLE 12
MISCELLANEOUS
Section 12.01. TRUST INDENTURE ACT CONTROLS. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
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Section 12.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Xxxxxx Oil & Gas Corporation
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention of Corporate Secretary
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention of Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking
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any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
Section 12.06. WHEN SECURITIES DISREGARDED. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so
93
owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
Section 12.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
Section 12.08. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
Section 12.09. GOVERNING LAW. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
Section 12.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
Section 12.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 12.12. MULTIPLE ORIGINALS. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
Section 12.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the
94
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
95
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
XXXXXX OIL & GAS CORPORATION,
by
/s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice
President and Chief
Financial Officer
XXXXXX OIL CORPORATION,
by
/s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice
President and Chief
Financial Officer
XXXXXX OPERATING COMPANY, LTD.,
by Xxxxxx Oil Corporation,
its General Partner
by
/s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice
President and Chief
Financial Officer
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee,
by
/s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES AND
EXCHANGE SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Definitive Security" means a certificated Initial Security bearing
the restricted securities legend set forth in Section 2.3(e) and which is held
by an IAI in accordance with Section 2.1(c).
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Exchange Securities" means the 10 3/8% Senior Subordinated Notes Due
2006 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to the Registration Agreement.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Xxxxxx Xxxxxxx & Co. Incorporated, Chase
Securities Inc. and Lazard Fr res & Co. LLC.
"Initial Securities" means the 10 3/8% Senior Subordinated Notes Due
2006 issued under this Indenture on or about the date hereof.
"Placement Agreement" means the Placement Agreement dated October 25,
1996, among the Company and the Initial Purchasers.
"Private Exchange" means the offer by the Company pursuant to the
Registration Agreement, to the Initial Purchasers, to issue and deliver to each
Initial Purchaser, in exchange for the Initial Securities held by each Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
of Private Exchange Securities.
"Private Exchange Securities" means the 10 3/8% Senior Subordinated
Notes Due 2006 to be issued pursuant to
2
this Indenture in connection with a Private Exchange pursuant to the
Registration Agreement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Agreement" means the Registration Agreement dated
October 25, 1996, among the Company and the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Regulation S Global Security or a Restricted Global Security (as appointed by
the Depository), or any successor person thereto and shall initially be the
Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company, in connection with the offer and sale of Initial Securities or
Private Exchange Securities, pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities and
Securities that bear or are required to bear the legend set forth in
Section 2.3(e) hereto.
3
1.2 OTHER DEFINITIONS
Defined in
Term Section:
---- ----------
"Agent Members" . . . . . . . . . . . . . . . . . . . . . .2.1(b)
"Cedel" . . . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
"Euroclear" . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
"Global Security" . . . . . . . . . . . . . . . . . . . . .2.1(b)
"Regulation S". . . . . . . . . . . . . . . . . . . . . . .2.1(a)
"Regulation S Global Security". . . . . . . . . . . . . . .2.1(a)
"Restricted Global Security". . . . . . . . . . . . . . . .2.1(a)
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . .2.1(a)
2. THE SECURITIES.
2.1 FORM AND DATING.
The Initial Securities are being offered and sold by the Company
pursuant to the Placement Agreement.
(a) GLOBAL SECURITIES. Initial Securities offered and sold to a QIB
in reliance on Rule 144A under the Securities Act ("Rule 144A") as provided in
the Placement Agreement, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Restricted Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee, at its New York office, as custodian for
the Depository (or with such other custodian as the Depository may direct), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Restricted Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee, as the case may be, as
hereinafter provided.
Initial Securities offered and sold in reliance on Regulation S under
the Securities Act ("Regulation S"), as provided in the Placement Agreement,
shall be issued initially in the form of one or more permanent global Securities
in definitive, fully registered form without interest coupons with the global
securities legend and restricted securities legend set forth in Exhibit 1 hereto
(the "Regulation S Global
4
Security"), which shall be deposited on behalf of the purchasers of the
Initial Securities represented thereby with the Trustee, as custodian, for
the Depository (or with such other custodian as the Depository may direct),
and registered in the name of the Depository or the nominee of the Depository
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. Prior to the commencement of the Exchange Offer or the
effectiveness of the Shelf Registration Statement, beneficial interests in
the Regulation S Global Security may only be held for the accounts of
designated agents holding on behalf of the Euroclear System ("Euroclear") or
Cedel, S.A. ("Cedel"). Following the commencement of the Registered Exchange
Offer or the effectiveness of the Shelf Registration Statement, beneficial
interests in the Regulation S Global Security may be held through Euroclear,
Cedel or other participants having accounts at the Depository. The aggregate
principal amount of the Regulation S Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depository or its nominee, as the case may be, as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a
Regulation S Global Security and the Restricted Global Security ("Global
Securities") deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as
5
between the Depository and its Agent Members, the operation of customary
practices of such Depository governing the exercise of the rights of a holder
of a beneficial interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities will
not be entitled to receive physical delivery of certificated Securities.
Purchasers of Initial Securities who are IAIs and are not QIBs and did not
purchase Initial Securities sold in reliance on Regulation S will receive
Definitive Securities; PROVIDED, HOWEVER, that upon transfer of such Definitive
Securities to a QIB or in accordance with Regulation S, such Definitive
Securities will, unless the relevant Global Security has previously been
exchanged, be exchanged for an interest in a Global Security pursuant to the
provisions of Section 2.3.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver:
(1) Initial Securities for original issue in an aggregate principal amount of
$125,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Agreement, for a like principal amount of Initial
Securities, in each case upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities,
Exchange Securities or Private Exchange Securities. The aggregate principal
amount of Securities outstanding at any time may not exceed $125,000,000 except
as provided in Section 2.07 of this Indenture.
2.3 TRANSFER AND EXCHANGE. (a) TRANSFER AND EXCHANGE OF DEFINITIVE
SECURITIES. When Definitive Securities are presented to the Registrar or a
co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
6
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section 2.3(b)
or pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
the form set forth on the reverse of the Security); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on the
reverse of the Security); or
(C) if such Definitive Securities are being transferred
(x) pursuant to an exemption from registration in accordance with
Rule 144; or (y) in reliance on another exemption from the
registration requirements of the Securities Act; or (z) to an IAI that
is acquiring the Security for its own account, or for the account of
such an IAI, in each case for investment purposes and not with a view
to, or for an offer or sale in connection with, any distribution in
violation of the Securities Act: (i) a certification to that effect
(in the form set forth on the reverse of the Security) and (ii) such
other certifications as the Trustee may reasonably request and (ii) in
the case of clause (z), if the aggregate principal amount of such
Definitive Securities being transferred is less than $250,000, an
opinion of counsel addressed to the Company as to
7
the compliance with the restrictions set forth in the legend set forth
in Section 2.3(e).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred (A) to a QIB
in accordance with Rule 144A, or (B) outside the United States in an
offshore transaction within the meaning of Regulation S and in compliance
with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to the Regulation S Global Security or the Restricted Global
Security, as the case may be, to reflect an increase in the aggregate
principal amount of the Securities represented by such Global Security,
such instructions to contain information regarding the Depository account
(or in the case of the Regulation S Global Security only, Euroclear or
Cedel account) to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian
(including the rules of Euroclear and Cedel, if applicable), the aggregate
principal amount of Securities represented by the Regulation S Global Security
or the Restricted Global Security, as the case may be, to be increased by the
aggregate principal amount of the Definitive Security to be exchanged and shall
credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in such Global Security equal to the
principal amount of the Definitive Security so cancelled. If no applicable
Global Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new
8
Regulation S Global Security or Restricted Global Security, as the case may
be, in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. (i) The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor, including the rules and procedures of Euroclear and
Cedel, if applicable. A transferor of a beneficial interest in a Global
Security to another Global Security shall deliver to the Registrar:
(A) if applicable, instructions given in accordance with the
Depository's procedures directing the Trustee to credit or cause to be
credited a beneficial interest in the applicable Global Security in an
amount equal to the beneficial interest in the Global Security to be
exchanged; and
(B) a written order given in accordance with the Depository's
procedures containing information regarding the Euroclear, Cedel or
other participant account of the Depository to be credited with such
increase.
The Registrar shall, in accordance with such instructions, instruct
the Depository to increase and reduce, as applicable, the principal amount of
each applicable Global Security to the extent required and to credit to the
account of the Person specified in such instructions a beneficial interest in
the applicable Global Security and to debit the account of the Person making the
transfer the beneficial interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix A (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iii) Prior to the commencement of the Registered Exchange Offer or
the effectiveness of the Shelf Registration Statement, transfers of
interests in the Regulation S Global Security to "U.S. persons" (as
9
defined in Regulation S) shall be limited to transfers to QIBs pursuant
to Rule 144A which Persons shall thereby acquire a beneficial interest
in the Restricted Global Security. The Company shall advise the Trustee
as to the commencement of the Registered Exchange Offer or the
effectiveness of the Shelf Registration Statement and the Trustee may
rely conclusively thereon.
(iv) In the event that a Global Security is exchanged for Securities
in definitive registered form pursuant to Section 2.4 or Section 2.09 of
the Indenture, prior to the consummation of a Registered Exchange Offer or
the effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such transfers
comply with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(i) Subject to Section 2.3(c)(iii), any person having a beneficial
interest in a Transfer Restricted Security that is a Global Security may
transfer such beneficial interest to an IAI that is acquiring the Security
for its own account, or for the account of such an IAI, in each case for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act;
PROVIDED HOWEVER, that any written order or such other form of instructions
as is customary for the Depository from the Depository or its nominee on
behalf of any Person having a beneficial interest in such Global Security
shall be accompanied by (i) a certification from the transferee or
transferor with respect to the transfer (in the form set forth on the
reverse of the Security) and such other certifications as the Trustee may
reasonably request and (ii) if the aggregate principal amount of the
applicable Global Security being transferred is less than $250,000, an
opinion of counsel addressed to the Company as to the compliance with the
restrictions set forth in the legend set forth in Section 2.3(e).
10
Upon receipt by the Trustee of such information and documents, the
Trustee or the Securities Custodian, at the direction of the Trustee, will
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Securities Custodian, including the rules
and procedures of Euroclear or Cedel, if applicable, the aggregate
principal amount of the Global Security to be reduced on its books and
records and, following such reduction, the Company will execute and the
Trustee will authenticate and deliver to the transferee a Definitive
Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.3(d) shall be
registered in such names and in such authorized denominations as Euroclear
or Cedel, if applicable, and the Depository, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Definitive Securities to the
persons in whose names such Securities are so registered in accordance with
the instructions of the Depository.
(e) LEGEND.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
11
REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT
WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO XXXXXX OIL & GAS CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES
AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO XXXXXX OIL & GAS CORPORATION THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE SIDE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
XXXXXX OIL & GAS CORPORATION SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS."
12
Each Regulation S Global will also bear the following additional
legend:
"PRIOR TO THE COMMENCEMENT OF THE REGISTERED EXCHANGE OFFER OR THE
EFFECTIVENESS OF THE SHELF REGISTRATION STATEMENT, TRANSFERS OF
INTERESTS IN THE REGULATION S GLOBAL SECURITY TO U.S. PERSONS SHALL BE
LIMITED TO TRANSFERS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a certificated Security
that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a
certificated Security that does not bear the legend set forth above
and rescind any restriction on the transfer of such Transfer
Restricted Security, if the Holder certifies in writing to the
Registrar that its request for such exchange was made following a sale
or transfer in reliance on Rule 144 (such certification to be in the
form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on
such Initial Security or such Private Exchange Security will cease to
apply, the requirements requiring any such Initial Security or such Private
Exchange Security issued to certain Holders be issued in global form will
cease to apply, and a certificated Initial Security or Private Exchange
Security without legends will be available to the
13
transferee of the Holder of such Initial Securities or Private Exchange
Securities upon exchange of such transferring Holder's certificated Initial
Security or Private Exchange Security or directions to transfer such
Holder's interest in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
cease to apply and certificated Initial Securities with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form without
any restrictive legends will be available to Holders that exchange such
Initial Securities in such Registered Exchange Offer.
(e) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Private Exchange Securities in exchange for their Initial Securities,
all requirements pertaining to such Initial Securities that Initial Securities
issued to certain Holders be issued in global form will still apply, and Private
Exchange Securities in global form with the Restricted Securities Legend set
forth in Exhibit 1 hereto will be available to Holders that exchange such
Initial Securities in such Private Exchange.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depository for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated or
Definitive Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
14
(g) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities,
Definitive Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 3.06, 4.08 and 9.05 of the Indenture.
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of (a) any certificated or Definitive Security
selected for redemption in whole or in part pursuant to Article 3 of this
Indenture, except the unredeemed portion of any certificated or Definitive
Security being redeemed in part, or (b) any Security for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase
or redeem Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
15
(h) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy of the records of
the Depository or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Securities or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depository or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 CERTIFICATED SECURITIES.
(a) A Global Security deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository
16
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or if at any time such Depository ceases to be a
"clearing agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing or (iii) the Company,
in its sole discretion, notifies the Trustee in writing that it elects to
cause the issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depository to the
Trustee located in the Borough of Manhattan, The City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount of certificated
Initial Securities of authorized denominations. Any portion of a Global
Security transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 and any integral multiple thereof
and registered in such names as the Depository shall direct. Any certificated
Initial Security delivered in exchange for an interest in the Global Security
shall, except as otherwise provided by Section 2.3(e), bear the restricted
securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a), the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED
TO IN RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO XXXXXX OIL
& GAS CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT,
2
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT
OF SECURITIES AT THE TIME OF TRANSFER OF LESS THAN $250,000, AN OPINION OF
COUNSEL ACCEPTABLE TO XXXXXX OIL & GAS CORPORATION THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER
OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE SIDE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND XXXXXX OIL & GAS
CORPORATION SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER
OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.
[Regulation S Transfer Legend]
PRIOR TO THE COMMENCEMENT OF THE REGISTERED EXCHANGE OFFER OR THE
EFFECTIVENESS OF THE SHELF REGISTRATION STATEMENT, TRANSFERS OF INTERESTS IN
THIS REGULATION S GLOBAL SECURITY TO U.S. PERSONS SHALL BE LIMITED TO
TRANSFERS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A.
3
No. $
CUSIP:
ISIN:
10 3/8% Senior Subordinated Note Due 2006
XXXXXX OIL & GAS CORPORATION, a Delaware corporation, promises to
pay to , or registered assigns, the principal sum of
Dollars on October 15, 2006.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other
side of this Security.
XXXXXX OIL & GAS CORPORATION,
by
--------------------------
Authorized Officer
--------------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES [Seal]
TRUST COMPANY OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-------------------------
Authorized Signatory
Dated: October 29, 1996
4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10 3/8% Senior Subordinated Note Due 2006
1. INTEREST
Xxxxxx Oil & Gas Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on
the principal amount of this Security at the rate per annum shown above;
PROVIDED, HOWEVER, that if by May 29, 1997, neither the Registered Exchange
Offer is consummated nor, if required in lieu thereof pursuant to the
Registration Agreement, the Shelf Registration Statement is declared
effective by the Commission, interest will accrue on this Security from and
including such date until such date as either the Registered Exchange Offer
is consummated or the Shelf Registration Statement is declared effective by
the Commission at a rate of 0.50% per annum in excess of the interest rate
per annum shown above; PROVIDED FURTHER, HOWEVER, that if by November 29,
1997, neither the Registered Exchange Offer is consummated nor, if required
in lieu thereof pursuant to the Registration Agreement, the Shelf
Registration Statement is declared effective by the Commission, interest will
accrue on this Security from and including such date until such date as
either the Registered Exchange Offer is consummated or the Shelf Registration
Statement is declared effective by the Commission at a rate of 1.00% per
annum in excess of the interest rate per annum shown above. The Company will
pay interest semiannually on April 15, and October 15 of each year. Interest
on the Securities will accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from October 29, 1996. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Company shall pay interest on overdue principal at the rate borne by the
Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
5
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the
close of business on the April 1 or October 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by The Depository Trust Company. The Company will
make all payments in respect of a certificated Security (including principal,
premium and interest), by mailing a check to the registered address of each
Holder thereof; PROVIDED, HOWEVER, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the
payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 30 days immediately preceding
the relevant due date for payment (or such other date as the Trustee may
accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, United States Trust Company of New York, a New York
banking corporation ("Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
October 15, 1996 ("Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of
6
1939, as amended (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities
are subject to all such terms, and Securityholders are referred to the
Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the Company
limited to $125,000,000 aggregate principal amount (subject to Section 2.06
of the Indenture). The Indenture imposes certain limitations on the
Incurrence of Indebtedness by the Company and certain of its Subsidiaries,
the payment of dividends and other distributions on the Capital Stock of the
Company and certain of its Subsidiaries, the purchase or redemption of
Capital Stock of the Company and of certain Capital Stock of such
Subsidiaries, the sale or transfer of assets and Subsidiary stock, the
creation of Liens, the entering into of Sale/Leaseback Transactions and
transactions with Affiliates. In addition, the Indenture limits the ability
of the Company and certain of its Subsidiaries to restrict distributions and
dividends from Subsidiaries. The Indenture also restricts the ability of the
Company and any Subsidiary Guarantor to consolidate or merge with or into, or
to transfer all or substantially all their assets to, another person.
The Indenture also provides that the Company shall cause each
Subsidiary Guarantor, and each Restricted Subsidiary of the Company (other
than the Programs) that has total net assets as of the end of the most recent
fiscal year (as set forth on the balance sheet of such Restricted Subsidiary
prepared in accordance with GAAP) equal to or greater than the greater of
$2.5 million and one percent (1%) of Adjusted Consolidated Net Tangible
Assets as of such date, to Guarantee the Securities pursuant to a Subsidiary
Guaranty. Any such Subsidiary Guaranty will secure the due and punctual
payment of the principal of and interest, if any, on the Securities and all
other amounts payable by the Company under the Indenture and the Securities
when and as the same shall be due and payable, whether at maturity, by
acceleration or otherwise. Any Subsidiary Guaranty will unconditionally
guarantee the Obligations on a senior subordinated basis pursuant to the
terms of the Indenture.
7
5. OPTIONAL REDEMPTION
Except as set forth in the next paragraph, the Securities shall not
be redeemable at the option of the Company prior to October 15, 2001.
Thereafter, the Securities shall be redeemable, at the Company's option, in
whole or in part, at any time or from time to time at the following
redemption prices (expressed in percentages of principal amount), plus
accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
October 15 of the years set forth below:
Period Percentage
------ ----------
2001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.188%
2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.594%
2003 and thereafter . . . . . . . . . . . . . . . . . . . . . . . 100.000%
In addition, at any time and from time to time prior to October 15,
1999, the Company may redeem in the aggregate up to 35% of the principal
amount of Securities with the proceeds of one or more Equity Offerings
following which there is a Public Market, at a redemption price (expressed as
a percentage of principal amount) of 110.375% plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED, HOWEVER, that either at least $75.0 million aggregate principal
amount of Securities must remain outstanding after each such redemption or
such redemption must retire the Securities in their entirety.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If
money sufficient to pay the redemption price
8
of and accrued interest on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such
portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to repurchase all
or any part of the Securities of such Holder at a repurchase price equal to
101% of the principal amount of the Securities to be repurchased plus accrued
interest to the date of repurchase (subject to the right of holders of record
on the relevant record date to receive interest due on the related interest
payment date) as provided in, and subject to the terms of, the Indenture.
8. SUBORDINATION
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 (or in the case of Definitive Securities sold to
institutional accredited investors as described in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act, minimum denominations of $250,000) and whole
multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and
to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part,
9
the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner
of it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the Securities then
outstanding and (ii) any default or noncompliance with any provisions may be
waived with the written consent of the Holders of at least a majority in
principal amount of the Securities then outstanding. Subject to certain
exceptions set forth in the Indenture, without notice to or the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or
the Securities to cure any ambiguity, omission, defect or inconsistency, or
to comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated
10
Securities (provided that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Securities are described in Section 163(f)(2)(B)
of the Code), or to make any change to the subordination provisions of the
Indenture that would limit or terminate the benefits available to any holder
of Senior Indebtedness (or its Representative), or to add guarantees with
respect to the Securities, or to secure the Securities, or to add to the
covenants of the Company for the benefit of the Holders, or to surrender any
right or power conferred on the Company, or to make any change that does not
adversely affect the rights of any Securityholder, or to comply with any
requirement of the SEC in connection with qualifying the Indenture under the
Act. No amendment may be made to the subordination provisions of the
Indenture that adversely affects the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or their representative) consent to such change.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities when due; (ii) default in
payment of principal on the Securities at maturity, upon redemption pursuant
to paragraph 5 or 6 of the Securities, upon declaration or otherwise, or
failure by the Company to redeem or purchase Securities when required; (iii)
failure by the Company to comply with its obligations under certain
covenants, (iv) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (v) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or any
Significant Subsidiary (other than Limited Recourse Indebtedness) if the
amount accelerated (or so unpaid) exceeds $10.0 million; (vi) certain events
of bankruptcy, insolvency or reorganization with respect to the Company or a
Significant Subsidiary; (vii) any judgment or decree for the payment of money
in excess of $10.0 million is rendered against the Company or a Significant
Subsidiary, remains outstanding for a period of 60 days following such
judgment or decree and is not discharged, waived or stayed within 10 days
after notice or (viii) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary Guaranty)
or a Subsidiary
11
Guarantor denies or disaffirms its obligations under its Subsidiary Guaranty
if such default continues for a period of 10 days after notice thereof to the
Company. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities may
declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable immediately. Certain events of bankruptcy,
insolvency or reorganization are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such
Events of Default. A default under clauses (iii) (except for the covenants
referred to in the preceding sentence), (iv), (vii) or (viii) will not
constitute an Event of Default until the Trustee or the Holders of 25% in
principal amount of the outstanding Securities notifies the Company of the
default and the Company does not cure such default within the time specified
after receipt of such notice.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if
it determines that withholding notice is in the interest of the Holders.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if
it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of
the Company under the
12
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
20. HOLDERS' COMPLIANCE WITH REGISTRATION AGREEMENT
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
13
21. GOVERNING LAW
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
14
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture. Requests
may be made to:
Xxxxxx Oil & Gas Corporation
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention of Manager, Investor Relations
15
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him.
-------------------------------------------------------------------------------
Date: Your Signature:
---------------------- -----------------------------------
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
-------------------------------------------------------
(Signature must be guaranteed by an "eligible guarantor
institution", that is, a bank, stockbroker, saving and
loan association or credit union meeting the
requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
16
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED SECURITIES
In connection with any transfer of any of the Securities evidenced
by this certificate occurring prior to the expiration of the period referred
to in Rule 144(k) under the Securities Act after the later of the date of
original issuance of such Securities and the last date, if any, on which such
Securities were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Securities are being transferred in accordance
with its terms:
CHECK ONE BOX BELOW:
(1) / / to the Company or any of its Subsidiaries; or
(2) / / pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) / / inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) / / inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act of 1933) that, prior to
such transfer, furnishes to the Trustee a signed letter
containing certain representations and agreements (the form of
which letter can be obtained from the Trustee) and, if such
transfer is in respect of an aggregate principal amount of
Securities at the time of transfer of less than $250,000, an
opinion of counsel acceptable to the Company that such transfer
is in compliance with the Securities Act of 1933; or
17
(5) / / outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
(6) / / pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; PROVIDED, HOWEVER, that if box
(4) or (5) is checked, the Trustee may require, prior to registering any
such transfer of the Securities, such legal opinions, certifications and
other information as the Company has reasonably requested to confirm that
such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act.
-------------------------------------
Signature
Signature Guarantee:
-------------------------------------------------------
(Signature must be guaranteed by an "eligible guarantor
institution", that is, a bank, stockbroker, saving and
loan association or credit union meeting the
requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
18
[TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED]
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
-------------------- -------------------------------
NOTICE: To be executed by
an executive officer
19
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Security purchased by the Company pursuant
to Section 4.06 or 4.08 of the Indenture, check the box:
/ /
If you elect to have only part of this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box and
state the amount in principal amount at maturity:
/ / $
-----------------
Date: Your Signature:
------------------------ ---------------------------
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee:
-----------------------------------------------------
(Signature must be guaranteed by an "eligible guarantor
institution", that is, a bank, stockbroker, saving and
loan association or credit union meeting the
requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
20
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
Principal Amount
Amount of decrease Amount of increase at Maturity of Signature of
in Principal in Principal this Global authorized officer
Amount at Maturity Amount at Security following of Trustee or
of this Global Maturity of this such decrease or Securities
Date of Exchange Security Global Security increase Custodian
---------------- ------------------ ------------------ ------------------ ------------------
EXHIBIT 2
to
APPENDIX A
[FORM OF FACE OF EXCHANGE SECURITY]
[1/]
[2/]
No. $
CUSIP:
ISIN:
10 3/8% Senior Subordinated Note Due 2006
XXXXXX OIL & GAS CORPORATION, a Delaware corporation, promises to pay
to , or registered assigns, the principal sum
of Dollars on October 15, 2006.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Additional provisions of this Security are set forth on the other side of this
Security.
XXXXXX OIL & GAS CORPORATION,
by
-------------------------
Authorized Officer
-------------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES [Seal]
TRUST COMPANY OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
Dated:
2
______________
1/ [If the Security is to be issued in global form add the Global
Securities Legend from Exhibit 1 to Appendix A and the attachment from such
Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".]
2/ [If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A and
replace the Assignment Form included in this Exhibit 2 with the Assignment Form
included in such Exhibit 1.]
3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10 3/8% Senior Subordinated Note Due 2006
1. INTEREST
Xxxxxx Oil & Gas Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; PROVIDED,
HOWEVER, that if by May 29, 1997, neither the Registered Exchange Offer is
consummated nor, if required in lieu thereof pursuant to the Registration
Agreement, the Shelf Registration Statement is declared effective by the
Commission, interest will accrue on this Security from and including such date
until such date as either the Registered Exchange Offer is consummated or the
Shelf Registration Statement is declared effective by the Commission at a rate
of 0.50% per annum in excess of the interest rate per annum shown above;
PROVIDED FURTHER, HOWEVER, that if by November 29, 1997, neither the Registered
Exchange Offer is consummated nor, if required in lieu thereof pursuant to the
Registration Agreement, the Shelf Registration Statement is declared effective
by the Commission, interest will accrue on this Security from and including such
date until such date as either the Registered Exchange Offer is consummated or
the Shelf Registration Statement is declared effective by the Commission at a
rate of 1.00% per annum in excess of the interest rate per annum shown
above. 3/] The Company will pay interest semiannually on April 15 and
October 15 of each year. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has
been paid, from October 29, 1996. Interest will be computed on the basis of
a 360-day year of twelve 30-day months. The Company shall pay interest on
overdue principal at the rate borne by the Securities plus 1.00% per annum,
and it shall pay interest on overdue installments of interest at the same
rate to the extent lawful.
_____________
3/ Insert if at the time of issuance of the Exchange Security neither the
Registered Exchange Offer has been consummated nor a Shelf Registration
Statement has been declared effective in accordance with the Registration
Agreement.
4
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of Securities
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof or,
if no U.S. dollar account maintained by the payee with a bank in the
United States is designated by any holder to the Trustee or the Paying Agent at
least 30 days prior to the relevant due date for payment (or such other date as
the Trustee may accept in its discretion), by mailing a check to the registered
address of such holder.
3. PAYING AGENT AND REGISTRAR
Initially, United States Trust Company of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
October 15, 1996 ("Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such
terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
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The Securities are general unsecured obligations of the Company
limited to $125,000,000 aggregate principal amount (subject to Section 2.06 of
the Indenture). The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and certain of its Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and
certain of its Subsidiaries, the purchase or redemption of Capital Stock of the
Company and of certain Capital Stock of such Subsidiaries, the sale or transfer
of assets and Subsidiary stock, the creation of Liens, the entering into of
Sale/Leaseback Transactions and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and certain of its Subsidiaries to
restrict distributions and dividends from Subsidiaries. The Indenture also
restricts the ability of the Company and any Subsidiary Guarantor to consolidate
or merge with or into, or to transfer all or substantially all their assets to,
another person.
The Indenture also provides that the Company shall cause each
Subsidiary Guarantor, and each Restricted Subsidiary of the Company (other than
the Programs) that has total net assets as of the end of the most recent fiscal
year (as set forth on the balance sheet of such Restricted Subsidiary prepared
in accordance with GAAP) equal to or greater than the greater of $2.5 million
and one percent (1%) of Adjusted Consolidated Net Tangible Assets as of such
date, to Guarantee the Securities pursuant to a Subsidiary Guaranty. Any such
Subsidiary Guaranty will secure the due and punctual payment of the principal of
and interest, if any, on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise. Any Subsidiary
Guaranty will unconditionally guarantee the Obligations on a senior subordinated
basis pursuant to the terms of the Indenture.
5. OPTIONAL REDEMPTION
Except as set forth in the next paragraph, the Securities shall not be
redeemable at the option of the Company prior to October 15, 2001. Thereafter,
the Securities shall be redeemable, at the Company's option, in whole or in
part, at any time or from time to time at the following redemption prices
(expressed in percentages of principal amount), plus accrued interest to the
redemption
6
date (subject to the right of Holders of record on the relevant record date
to receive interest due on the relevant interest payment date), if redeemed
during the 12-month period commencing on October 15 of the years set forth
below:
Period Percentage
------ ----------
2001. . . . . . . . . . . . . . . . . . . . 105.188%
2002. . . . . . . . . . . . . . . . . . . . 102.594%
2003 and thereafter . . . . . . . . . . . . 100.000%
In addition, at any time and from time to time prior to October 15,
1999, the Company may redeem in the aggregate up to 35% of the principal amount
of Securities with the proceeds of one or more Equity Offerings following which
there is a Public Market, at a redemption price (expressed as a percentage of
principal amount) of 110.375% plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); PROVIDED, HOWEVER,
that either at least $75.0 million aggregate principal amount of Securities must
remain outstanding after each such redemption or such redemption must retire the
Securities in their entirety.
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may
be redeemed in part but only in whole multiples of $1,000. If money sufficient
to pay the redemption price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
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7. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to repurchase all
or any part of the Securities of such Holder at a repurchase price equal to
101% of the principal amount of the Securities to be repurchased plus accrued
interest to the date of repurchase (subject to the right of holders of record
on the relevant record date to receive interest due on the related interest
payment date) as provided in, and subject to the terms of, the Indenture.
8. SUBORDINATION
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 (or in the case of Definitive Securities sold to
institutional accredited investors as described in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act, minimum denominations of $250,000) and whole
multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or transfer documents and
to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.
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10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the Securities then
outstanding and (ii) any default or noncompliance with any provisions may be
waived with the written consent of the Holders of at least a majority in
principal amount of the Securities then outstanding. Subject to certain
exceptions set forth in the Indenture, without notice to or the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or
the Securities to cure any ambiguity, omission, defect or inconsistency, or
to comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities (provided
that the uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code, or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code), or to make any
change to the subordination provisions of the Indenture that would limit or
terminate the benefits
9
available to any holder of Senior Indebtedness (or its Representative), or to
add guarantees with respect to the Securities, or to secure the Securities,
or to add to the covenants of the Company for the benefit of the Holders, or
to surrender any right or power conferred on the Company, or to make any
change that does not adversely affect the rights of any Securityholder, or to
comply with any requirement of the SEC in connection with qualifying the
Indenture under the Act. No amendment may be made to the subordination
provisions of the Indenture that adversely affects the rights of any holder
of Senior Indebtedness then outstanding unless the holders of such Senior
Indebtedness (or their Representative) consent to such change.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities when due; (ii) default in
payment of principal on the Securities at maturity, upon redemption pursuant
to paragraph 5 or 6 of the Securities, upon declaration or otherwise, or
failure by the Company to redeem or purchase Securities when required; (iii)
failure by the Company to comply with its obligations under certain
covenants, (iv) failure by the Company to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (v) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or any
Significant Subsidiary (other than Limited Recourse Indebtedness) if the
amount accelerated (or so unpaid) exceeds $10.0 million; (vi) certain events
of bankruptcy, insolvency or reorganization with respect to the Company or a
Significant Subsidiary; (vii) any judgment or decree for the payment of money
in excess of $10.0 million is rendered against the Company or a Significant
Subsidiary, remains outstanding for a period of 60 days following such
judgment or decree and is not discharged, waived or stayed within 10 days
after notice or (viii) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary Guaranty)
or a Subsidiary Guarantor denies or disaffirms its obligations under its
Subsidiary Guaranty if such default continues for a period of 10 days after
notice thereof to the Company. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the outstanding Securities may declare the principal of and
10
accrued but unpaid interest on all the Securities to be due and payable
immediately. Certain events of bankruptcy, insolvency or reorganization are
Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default. A default under
clauses (iii) (except for the covenants referred to in the preceding
sentence), (iv), (vii) or (viii) will not constitute an Event of Default
until the Trustee or the Holders of 25% in principal amount of the
outstanding Securities notifies the Company of the default and the Company
does not cure such default within the time specified after receipt of such
notice.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if
it determines that withholding notice is in the interest of the Holders.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if
it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of
the Company under the Securities or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the
issue of the Securities.
11
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with rights of survivorship and not
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
20. HOLDERS' COMPLIANCE WITH REGISTRATION AGREEMENT
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Agreement, including, without
limitation, the obligations of the Holders with respect to a registration and
the indemnification of the Company to the extent provided therein.
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21. GOVERNING LAW
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
13
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture. Requests
may be made to:
Xxxxxx Oil & Gas Corporation
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention of Manager, Investor Relations
14
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
-----------------------------------------------------------------------------
Date: Your Signature:
---------------------- --------------------------------
-----------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee: -------------------------------------------------
(Signature must be guaranteed by an "eligible
guarantor institution", that is, a bank,
stockbroker, saving and loan association or credit
union meeting the requirements of the Registrar,
which requirements include membership or
participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined
by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
15
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Security purchased by the Company pursuant
to Section 4.06 or 4.08 of the Indenture, check the box:
/ /
If you elect to have only part of this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box and
state the amount in principal amount at maturity:
/ /
$
---------------------
Date: Your Signature:
------------------ -------------------------------------
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:
---------------------------------------------------------
(Signature must be guaranteed by an "eligible guarantor
institution", that is, a bank, stockbroker, saving and
loan association or credit union meeting the
requirements of the Registrar, which requirements
include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Principal Amount
Amount of decrease Amount of incrase at Maturity Signature of
in Principal in Principal this Global authorized officer
Amount at Maturity Amount at Security following of Trustee or
of this Global Maturity of this such decrease or Securities
Date of Exchange Security Global Security increase Custodian
---------------- ------------------ ------------------- ----------------- ------------------
