EXHIBIT 4.16
Conformed Execution Copy
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▇▇▇▇▇▇ PETROLEUM COMPANY
THE SUBSIDIARY GUARANTORS PARTIES HERETO,
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS TRUSTEE
9.75% Senior Notes due 2010
Series A and B
INDENTURE
Dated as of March 15, 2004
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TABLE OF CONTENTS
Page
ARTICLE I. Definitions and Incorporation by Reference............................................................ 1
Section 1.1 Definitions................................................................................. 1
Section 1.2 Other Definitions........................................................................... 29
Section 1.3 Incorporation by Reference of Trust Indenture Act........................................... 30
Section 1.4 Rules of Construction....................................................................... 31
ARTICLE II. The Securities....................................................................................... 31
Section 2.1 Form, Dating and Terms...................................................................... 31
Section 2.2 Execution and Authentication................................................................ 38
Section 2.3 Registrar and Paying Agent.................................................................. 39
Section 2.4 Paying Agent To Hold Money in Trust......................................................... 40
Section 2.5 Securityholder Lists........................................................................ 40
Section 2.6 Transfer and Exchange....................................................................... 40
Section 2.7 Form of Certificate to be Delivered in Connection with Transfers to Institutional
Accredited Investors...................................................................... 43
Section 2.8 Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S... 46
Section 2.9 Mutilated, Destroyed, Lost or Stolen Securities............................................. 47
Section 2.10 Outstanding Securities...................................................................... 47
Section 2.11 Temporary Securities........................................................................ 48
Section 2.12 Cancellation................................................................................ 48
Section 2.13 Payment of Interest; Defaulted Interest..................................................... 49
Section 2.14 Computation of Interest..................................................................... 50
Section 2.15 CUSIP Numbers............................................................................... 50
ARTICLE III. Covenants........................................................................................... 50
Section 3.1 Reporting Requirements...................................................................... 50
Section 3.2 Maintenance of Properties................................................................... 50
Section 3.3 Environmental Matters....................................................................... 51
Section 3.4 ERISA Compliance............................................................................ 51
Section 3.5 Restricted Subsidiaries..................................................................... 51
Section 3.6 Debt Incurrence............................................................................. 51
Section 3.7 Liens....................................................................................... 52
Section 3.8 Restricted Investments; Restrictive Agreements.............................................. 52
Section 3.9 Sales and Leasebacks........................................................................ 58
Section 3.10 Nature of Business.......................................................................... 58
Section 3.11 Limitation on Leases........................................................................ 58
Section 3.12 ERISA Compliance............................................................................ 58
Section 3.13 Sale or Discount of Receivables............................................................. 60
Section 3.14 Sale of Property............................................................................ 60
Section 3.15 Change in Control........................................................................... 62
Section 3.16 Environmental Matters....................................................................... 63
Section 3.17 Transactions with Affiliates................................................................ 63
Section 3.18 Subordinated Debt........................................................................... 63
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Section 3.19 Issuance and Sale of Capital Stock.......................................................... 63
Section 3.20 Modification of Agreements.................................................................. 64
Section 3.21 Guarantees.................................................................................. 64
Section 3.22 Limitation on Additional Debt............................................................... 64
Section 3.23 Permitted Medusa Transactions............................................................... 64
Section 3.24 Maintenance of Office or Agency............................................................. 64
Section 3.25 Payment of Securities....................................................................... 65
Section 3.26 Compliance Certificate...................................................................... 65
ARTICLE IV. Successor Company.................................................................................... 65
Section 4.1 Consolidation and Merger.................................................................... 65
ARTICLE V. Redemption of Securities.............................................................................. 66
Section 5.1 Optional Redemption......................................................................... 66
Section 5.2 Applicability of Article.................................................................... 66
Section 5.3 Election to Redeem; Notice to Trustee....................................................... 66
Section 5.4 Selection by Trustee of Securities to Be Redeemed........................................... 66
Section 5.5 Notice of Redemption........................................................................ 67
Section 5.6 Deposit of Redemption Price................................................................. 68
Section 5.7 Securities Payable on Redemption Date....................................................... 68
Section 5.8 Securities Redeemed in Part................................................................. 68
ARTICLE VI. Events, Default and Remedies......................................................................... 68
Section 6.1 Events of Default........................................................................... 68
Section 6.2 Acceleration................................................................................ 70
Section 6.3 Other Remedies.............................................................................. 71
Section 6.4 Waiver of Past Defaults..................................................................... 71
Section 6.5 Control by Majority......................................................................... 71
Section 6.6 Limitation on Suits......................................................................... 71
Section 6.7 Rights of Holders to Receive Payment........................................................ 72
Section 6.8 Collection Suit by Trustee.................................................................. 72
Section 6.9 Trustee May File Proofs of Claim............................................................ 72
Section 6.10 Priorities.................................................................................. 73
Section 6.11 Undertaking for Costs....................................................................... 73
ARTICLE VII. Trustee............................................................................................. 73
Section 7.1 Duties of Trustee........................................................................... 73
Section 7.2 Rights of Trustee........................................................................... 75
Section 7.3 Individual Rights of Trustee................................................................ 75
Section 7.4 Trustee's Disclaimer........................................................................ 75
Section 7.5 Notice of Defaults.......................................................................... 76
Section 7.6 Reports by Trustee to Holders............................................................... 76
Section 7.7 Compensation and Indemnity.................................................................. 76
Section 7.8 Replacement of Trustee...................................................................... 77
Section 7.9 Successor Trustee by Merger................................................................. 78
Section 7.10 Eligibility; Disqualification............................................................... 78
Section 7.11 Preferential Collection of Claims Against Company........................................... 78
Section 7.12 Trustee's Application for Instruction from the Company...................................... 78
ARTICLE VIII. Discharge of Indenture; Defeasance................................................................. 78
Section 8.1 Discharge of Liability on Securities; Defeasance............................................ 78
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Section 8.2 Conditions to Defeasance.................................................................... 80
Section 8.3 Application of Trust Money.................................................................. 81
Section 8.4 Repayment to Company........................................................................ 81
Section 8.5 Indemnity for U.S. Government Obligations................................................... 81
Section 8.6 Reinstatement............................................................................... 81
ARTICLE IX. Amendments........................................................................................... 82
Section 9.1 Without Consent of Holders.................................................................. 82
Section 9.2 With Consent of Holders..................................................................... 82
Section 9.3 Compliance with Trust Indenture Act......................................................... 83
Section 9.4 Revocation and Effect of Consents and Waivers............................................... 83
Section 9.5 Notation on or Exchange of Securities....................................................... 84
Section 9.6 Trustee To Sign Amendments.................................................................. 84
ARTICLE X. Subsidiary Guarantee.................................................................................. 84
Section 10.1 Subsidiary Guarantee........................................................................ 84
Section 10.2 Limitation on Liability; Termination, Release and Discharge................................. 86
Section 10.3 Right of Contribution....................................................................... 86
Section 10.4 No Subrogation.............................................................................. 87
ARTICLE XI. Miscellaneous........................................................................................ 87
Section 11.1 Trust Indenture Act Controls................................................................ 87
Section 11.2 Notices..................................................................................... 87
Section 11.3 Communication by Holders with other Holders................................................. 88
Section 11.4 Certificate and Opinion as to Conditions Precedent.......................................... 88
Section 11.5 Statements Required in Certificate or Opinion............................................... 88
Section 11.6 When Securities Disregarded................................................................. 89
Section 11.7 Rules by Trustee, Paying Agent and Registrar................................................ 89
Section 11.8 Legal Holidays.............................................................................. 89
Section 11.9 Governing Law............................................................................... 89
Section 11.10 No Recourse Against Others.................................................................. 89
Section 11.11 Successors.................................................................................. 90
Section 11.12 Multiple Originals.......................................................................... 90
Section 11.13 Variable Provisions......................................................................... 90
Section 11.14 Qualification of Indenture.................................................................. 90
Section 11.15 Table of Contents; Headings................................................................. 90
EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
EXHIBIT C Form of Subsidiary Guarantee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ................................................................... 7.10
(a)(2) ................................................................... 7.10
(a)(3) ................................................................... N.A.
(a)(4) ................................................................... N.A.
(b) ................................................................... 7.8; 7.10
(c) ................................................................... N.A.
311(a) ................................................................... 7.11
(b) ................................................................... 7.11
(c) ................................................................... N.A.
312(a) ................................................................... 2.5
(b) ................................................................... 11.3
(c) ................................................................... 11.3
313(a) ................................................................... 7.6
(b)(1) ................................................................... N.A.
(b)(2) ................................................................... 7.6
(c) ................................................................... 7.6
(d) ................................................................... 7.6
314(a) ................................................................... 3.1; 3.26; 11.2
(b) ................................................................... N.A.
(c)(1) ................................................................... 11.4
(c)(2) ................................................................... 11.4
(c)(3) ................................................................... N.A.
(d) ................................................................... N.A.
(e) ................................................................... 11.5
315(a) ................................................................... 7.1
(b) ................................................................... 7.5; 11.2
(c) ................................................................... 7.1
(d) ................................................................... 7.1
(e) ................................................................... 6.11
316(a)(last sentence) ................................................................... 13.6
(a)(1)(A) ................................................................... 6.5
(a)(1)(B) ................................................................... 6.4
(a)(2) ................................................................... N.A.
(b) ................................................................... 6.7
317(a)(1) ................................................................... 6.8
(a)(2) ................................................................... 6.9
(b) ................................................................... 2.4
318(a) ................................................................... 11.1
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
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INDENTURE dated as of March 15, 2004, among ▇▇▇▇▇▇ PETROLEUM COMPANY, a
Delaware corporation (the "COMPANY"), THE SUBSIDIARY GUARANTORS (as defined
herein) and American Stock Transfer & Trust Company (the "TRUSTEE") as Trustee.
The Company has duly authorized the creation of a series of its debt
securities denominated as its 9.75% Senior Notes due 2010, Series A (the
"ORIGINAL SECURITIES" or "INITIAL SECURITIES") and a second series of such debt
securities denominated as its 9.75% Senior Notes due 2010, Series B (the
"EXCHANGE SECURITIES" and, together with the Original Securities, the
"SECURITIES"), of substantially the tenor and principal amounts hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
The Initial Securities are to be originally issued in an aggregate
principal amount of $200,000,000 on the date hereof pursuant to the Exchange
Agreement between the Company and the lenders party to the 2003 Credit Facility;
and Exchange Securities may also be originally issued from time to time
hereafter, but only in exchange for Initial Securities then outstanding pursuant
to the Exchange and Registration Rights Agreement or a similar agreement.
The Company shall cause each of its Restricted Subsidiaries (as defined
herein), prior to, or contemporaneously with, such Restricted Subsidiary's
incurrence of certain obligations as set forth in this Indenture, to execute and
deliver a supplement hereto pursuant to which such Restricted Subsidiary shall
agree to be bound by the terms of this Indenture, as if it were an original
party hereto, and to guarantee the Company's obligations under this Indenture
and the Securities, thereby becoming a Subsidiary Guarantor for purposes of this
Indenture.
All things necessary have been done on the part of the Company to make
the Securities, when issued and executed by the Company and authenticated and
delivered by the Trustee as herein provided, the valid obligations of the
Company, in accordance with their respective terms.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"2003 CREDIT FACILITY" shall mean the Amended and Restated Senior
Unsecured Credit Agreement, dated December 23, 2003, among the Company as
borrower, ▇▇▇▇▇ Fargo Bank, National Association, as administrative agent, and
the lenders signatory thereto.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" shall mean (without
duplication), as of the date of determination, the remainder of:
(a) the sum of:
(1) discounted future net revenue from proved
oil and gas reserves of the Company and its Restricted
Subsidiaries calculated in accordance with SEC guidelines but
(x) using average prices received by the Company and its
Restricted Subsidiaries during the preceding year (or for
purposes of Section 3.6(b), the NYMEX Strip Price on the date
of such calculation) and (y) before any state, federal or
foreign income taxes, as estimated by the Company in
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a reserve report prepared as of the end of the Company's most
recently completed fiscal year for which audited financial
statements are available, and any other Oil and Gas Property
in which the Company or any Restricted Subsidiary maintains an
interest in oil and gas reserves, as increased by, as of the
date of determination, the estimated discounted future net
revenues from
(A) estimated proved oil and gas reserves of the
Company, its Restricted Subsidiaries and the
Company's and its Restricted Subsidiaries'
share of Oil and Gas Properties acquired
since such year end (including for purposes
of any calculation made pursuant to Section
3.6(b) any Oil and Gas Properties to be
acquired in connection with such incurrence
of Debt), which reserves were not reflected
in such year end reserve report, and
(B) estimated oil and gas reserves of the
Company, its Restricted Subsidiaries and the
Company's and its Restricted Subsidiaries'
share of Oil and Gas Properties attributable
to extensions, discoveries and other
additions and upward revisions of estimates
of proved oil and gas reserves since such
year end due to exploration, development,
exploitation or production activities, in
each case calculated in accordance with SEC
guidelines (utilizing the prices utilized in
such year end reserve report),
and decreased by, as of the date of
determination, the estimated discounted
future net revenues from:
(C) estimated proved oil and gas reserves of the
Company, its Restricted Subsidiaries and the
Company's and its Restricted Subsidiaries'
share of Oil and Gas Properties produced or
disposed of since such year end, and
(D) estimated oil and gas reserves of the
Company, its Restricted Subsidiaries and the
Company's and its Restricted Subsidiaries'
share of Oil and Gas Properties attributable
to downward revisions of estimates of proved
oil and gas reserves since such year end due
to changes in geological conditions or other
factors which would, in accordance with
standard industry practice, cause such
revisions, in each case calculated on a
pre-tax basis and substantially in
accordance with SEC guidelines (utilizing
the prices utilized in such year end reserve
report), in each case as estimated by the
Company's petroleum engineers or any
independent petroleum engineers engaged by
the Company for that purpose;
(2) the capitalized costs that are attributable
to Oil and Gas Properties of the Company, its Restricted
Subsidiaries and the Company's and its Restricted
Subsidiaries' share of Oil and Gas Properties to which no
proved oil and gas
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reserves are attributable, based on the Company's books and
records as of a date no earlier than the date of the Company's
latest available annual or quarterly financial statements;
(3) the consolidated net working capital of the
Company and its Restricted Subsidiaries on a date no earlier
than the date of the Company's latest annual or quarterly
financial statements; and
(4) the greater of:
(A) the net book value 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 annual or quarterly financial
statements, and
(B) 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; minus
(b) the sum of:
(1) minority interests;
(2) to the extent included in (a)(1) above, any
net gas balancing liabilities of the Company and its
Restricted Subsidiaries reflected in the Company's latest
audited financial statements;
(3) to the extent included in (a)(1) above, the
discounted future net revenues, calculated in accordance with
SEC guidelines (utilizing the prices utilized in the Company's
most recent year end reserve report), attributable to reserves
which are required to be delivered to third parties to fully
satisfy the obligations of the Company and its Restricted
Subsidiaries with respect to Volumetric Production Payments
(determined, if applicable, using the schedules specified with
respect thereto); and
(4) the discounted future net revenues,
calculated in accordance with SEC guidelines, attributable to
reserves subject to Dollar-Denominated Production Payments
which, based on the estimates of production and price
assumptions included in determining the discounted future net
revenues specified in (a)(1) above, would be necessary to
fully satisfy the payment obligations of the Company and its
Restricted Subsidiaries with respect to Dollar-Denominated
Production Payments (determined, if applicable, using the
schedules specified with respect thereto).
"AFFILIATE" of any Person shall mean (i) any Person, directly or
indirectly, controlled by, controlling or under common control with such first
Person, (ii) any director or officer of such first Person or of any Person
referred to in clause (i) above and (iii) if any Person in clause (i)
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above is an individual, any member of the immediate family (including parents,
spouse and children) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such immediate family member or trust.
For purposes of this definition, any Person which owns, directly or indirectly,
15% or more of the securities having ordinary voting power for the election of
directors or other governing body of a corporation or 15% or more of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to "control" (including
with its correlative meanings, "controlled by" and "under common control with")
such corporation or other Person.
"ASSET DISPOSITION" shall mean any direct or indirect sale, lease
(other than an operating lease entered into in the ordinary course of business),
transfer, issuance or other disposition, or a series of related sales, leases,
transfers, issuances or dispositions that are part of a common plan, of shares
of capital stock of a Subsidiary (other than directors' qualifying shares), or
other Property (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries, including
any disposition by means of a merger, consolidation or similar transaction.
Notwithstanding the preceding, the following items shall not be deemed
to be Asset Dispositions:
(a) a disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Wholly-Owned
Subsidiary;
(b) the sale of Cash Equivalents in the ordinary course
of business;
(c) a disposition of Hydrocarbons in the ordinary course
of business;
(d) a disposition or abandonment of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Restricted Subsidiaries and that is
disposed of in each case in the ordinary course of business;
(e) transactions permitted under Section 4.1;
(f) an issuance of capital stock by a Restricted
Subsidiary of the Company to the Company or to a Wholly-Owned
Subsidiary;
(g) for purposes of this definition only, the making of a
Permitted Investment or a disposition subject to Section 3.8;
(h) dispositions of assets of the Company designated by
the Company as not constituting an Asset Disposition with an aggregate
fair market value since the Issue Date of less than $5,000,000;
(i) dispositions in connections with Liens permitted
under Section 3.7;
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(j) the licensing or sublicensing of intellectual
property or other general intangibles and licenses, leases or subleases
of other property in the ordinary course of business which do not
materially interfere with the business of the Company and its
Restricted Subsidiaries;
(k) foreclosure on assets;
(l) sale, transfer or abandonment (whether or not in the
ordinary course of business) of Oil and Gas Properties or direct or
indirect interests in Property; provided that at the time of such sale
or transfer such Properties do not have associated with them any
material proved reserves;
(m) the abandonment, farm-out, lease or sublease of
developed or undeveloped Oil and Gas Properties in the ordinary course
of business;
(n) the trade or exchange by the Company or any
Restricted Subsidiary of any Oil and Gas Properties owned or held by
the Company or such Restricted Subsidiary for Oil and Gas Properties
owned or held by another Person, including any cash or Cash Equivalents
necessary in order to achieve an exchange of equivalent value; provided
that any such cash or Cash Equivalents received by the Company or such
Restricted Subsidiary will be subject to the provisions described in
Section 3.14, which the Board of Directors of the Company determines in
good faith by resolution to be of approximately equivalent value.
"BOARD OF DIRECTORs" shall mean, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" shall mean, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" shall mean a day other than a day on which commercial
banks are authorized or required to close in Texas or New York.
"CASH EQUIVALENTS" shall mean:
(a) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality of the United States of America (provided that the full
faith and credit of the United States of America is pledged in support
thereof), having maturities of not more than one year from the date of
acquisition;
(b) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year
from the date of acquisition and, at the time of acquisition, of the
United States of America (provided that the full faith and credit of
the
5
United States is pledged in support thereof) having a credit rating of
"A" or better from either Standard & Poor's Ratings Services or ▇▇▇▇▇'▇
Investors Service, Inc.;
(c) certificates of deposit, time deposits, eurodollar
time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition
thereof issued by any commercial bank, the long-term debt of which is
rated at the time of acquisition thereof at least "A" or the equivalent
thereof by Standard & Poor's Ratings Services, or "A" or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service, Inc., and having combined capital
and surplus in excess of $500,000,000;
(d) repurchase obligations with a term of not more than
seven (7) days for underlying securities of the types described in
clauses (a), (b) and (c) above entered into with any bank meeting the
qualifications specified in clause (c) above;
(e) commercial paper rated at the time of acquisition
thereof at least "A-2" or the equivalent thereof by Standard & Poor's
Ratings Services or "P-2" or the equivalent thereof by ▇▇▇▇▇'▇
Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of investments, and in any case
maturing within one year after the date of acquisition thereof; and
(f) interests in any investment company or money market
fund which invests solely in instruments of the type specified in
clauses (a) through (e) above.
"CHANGE IN CONTROL" shall mean (a) the acquisition by any "person" or
"group" of related persons (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), of beneficial ownership (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Company; or (b) occupation of a majority of the seats on
the Board of Directors of the Company by Persons who were neither (i) nominated
by the Board of Directors of the Company nor (ii) appointed by the Board of
Directors so nominated.
"CLOSING DATE" with respect to any Initial Securities, shall mean the
date on which such Initial Securities are originally issued.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time or any successor statute.
"COMPANY" shall mean ▇▇▇▇▇▇ Petroleum Company or a successor.
"CONSOLIDATED NET INCOME" shall mean with respect to the Company and
its Restricted Subsidiaries, for any period, the aggregate of the net income (or
loss) of the Company and its Restricted Subsidiaries after allowances for taxes
for such period, determined on a consolidated basis in accordance with GAAP;
provided, that there shall be excluded from the calculation of net income (to
the extent otherwise included in the calculation) the following (i) the net
income of any Person in which the Company or any Restricted Subsidiary has an
interest (which interest
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does not cause the net income of such other Person to be consolidated with the
net income of the Company and its Restricted Subsidiaries in accordance with
GAAP), except to the extent of the amount of dividends or distributions actually
paid in such period by such other Person to the Company or to a Restricted
Subsidiary, as the case may be; (ii) the net income (but not loss) of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions or transfers or loans by that Restricted Subsidiary is
not at the time permitted by operation of the terms of its charter or any
agreement, instrument or Governmental Requirement applicable to such Restricted
Subsidiary, or is otherwise restricted or prohibited in each case determined in
accordance with GAAP; (iii) any extraordinary gains or losses, including gains
or losses attributable to Property sales not in the ordinary course of business;
(iv) the cumulative effect of a change in accounting principles; and (v) any
gains or losses attributable to write-up or write downs of assets
"CONSOLIDATED SUBSIDIARIES" shall mean each Subsidiary of the Company
(whether or not existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with the
financial statements of the Company in accordance with GAAP.
"DEBT" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments (including principal,
interest, fees and charges); (ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances, letters of credit,
surety or other bonds and similar instruments; (iii) all obligations of such
Person to pay the deferred purchase price of Property (except trade payables),
which payment is due more than six months after the date of placing such
Property in service; (iv) all obligations under leases which shall have been, or
should have been, in accordance with GAAP, recorded as capital leases in respect
of which such Person is liable (whether contingent or otherwise); (v) all
obligations under operating leases which require such Person to make payments
over the term of such lease based on the purchase price or appraised value of
the Property subject to such lease plus a marginal interest rate, and used
primarily as a financing vehicle for, or to monetize, such Property; (vi) all
Debt (as described in the other clauses of this definition) and other
obligations of others secured by a Lien on any Property of such Person, whether
or not such Debt is assumed by such Person; (vii) all Debt (as described in the
other clauses of this definition) and other obligations of others guaranteed by
such Person or in which such Person otherwise assures a creditor against loss of
the debtor or obligations of others; (viii) all obligations or undertakings of
such Person to maintain or cause to be maintained the financial position or
covenants of others or to purchase the Debt or Property of others; (ix)
obligations to deliver goods or services including Hydrocarbons in consideration
of advance payments; (x) obligations to pay for goods or services whether or not
such goods or services are actually received or utilized by such Person; (xi)
any capital stock of such Person in which such Person has a mandatory obligation
to redeem such stock prior to the maturity of the Securities; (xii) any Debt of
a Special Entity for which such Person is liable either by agreement or because
of a Governmental Requirement; (xiii) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment; and (xiv) all obligations of such Person under
Hedging Agreements; provided that Debt shall not include (y) any debt arising in
connection with the Permitted Medusa Transaction, or (z) any asset retirement
obligations
7
arising under Financial Accounting Standards Board Statement No. 143, Accounting
for Asset Retirement Obligations.
"DEBT COVERAGE RATIO" shall mean as of any date of determination, with
respect to the Company and its Restricted Subsidiaries, the ratio of (x) the
aggregate amount of Debt to (y) EBITDA for such four calendar quarters;
provided, however, that:
(a) for purposes of clause (x) of the introductory
paragraph of this definition, Debt shall only include the obligations
listed in clauses (a) through (e), (g), and (i) through (k) of the
definition of Debt in this Section 1.1;
(b) if the Company or any Restricted Subsidiary:
(1) has incurred any Debt since the beginning of
such period that remains outstanding on such date of
determination or if the transaction giving rise to the need to
calculate the Debt Coverage Ratio is an incurrence of Debt,
EBITDA and Interest Expense for such period will be calculated
after giving effect on a pro forma basis to such Debt as if
such Debt has been incurred on the first day of such period
(except that in making such computation, the amount of Debt
under any revolving credit facility existing on the date of
such calculation will be computed based on the average daily
balance of such Debt during such period; provided that, for
purposes of Section 3.6, the average daily balance deemed
outstanding during such period under a revolving credit
facility being repaid in whole or in part with the proceeds of
such Debt shall be the lesser of (i) the actual average daily
balance of such revolving indebtedness outstanding during such
period and (ii) the amount of such revolving indebtedness
outstanding immediately before the application of the proceeds
of such Debt to repay such revolving indebtedness) and the
discharge of any other Debt repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Debt as if
such discharge had occurred on the first day of such period;
or
(2) has repaid, repurchased, defeased or
otherwise discharged any Debt since the beginning of the
period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to
calculate the Debt Coverage Ratio involves a discharge of
Debt, EBITDA and Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such
discharge of such Debt, including with the proceeds of such
new Debt, as if such discharge had occurred on the first day
of such period;
(c) if since the beginning of such period the Company or
any Restricted Subsidiary will have sold or otherwise disposed of any
material Property or other asset or if the transaction giving rise to
the need to calculate the Debt Coverage Ratio is such a sale or
disposition:
(1) the EBITDA for such period will be reduced
by an amount equal to the EBITDA (if positive) directly
attributable to the assets which are the subject
8
of such sale or disposition for such period or increased by an
amount equal to the EBITDA (if negative) directly attributable
thereto for such period; and
(2) Interest Expense for such period will be
reduced by an amount equal to the Interest Expense directly
attributable to any Debt 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 sale or
disposition for such period (or, if the capital stock of any
Restricted Subsidiary is sold, the Interest Expense for such
period directly attributable to the Debt of such Restricted
Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Debt
after such sale);
(d) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) will have made an
investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary or is merged with or into the Company) or an
acquisition of material Properties or other assets, including any
acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, EBITDA and Interest Expense
for such period will be calculated after giving pro forma effect
thereto (including the incurrence of any Debt) as if such investment or
acquisition occurred on the first day of such period; and
(e) 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) will have sold or otherwise disposed of any material
property or other asset or any investment or acquisition of assets that
would have required an adjustment pursuant to clause (c) or (d) above
if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Interest Expense for such period will be calculated after
giving pro forma effect thereto as if such asset disposition or
investment or acquisition of assets occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations will
be determined in good faith by a responsible financial or accounting officer of
the Company (including pro forma expense and cost reductions calculated in good
faith by the Company). If any Debt bears a floating rate of interest and is
being given pro forma effect, the interest expense on such Debt will be
calculated as if the rate in effect on the date of determination has been the
applicable rate for the entire period (taking into account any interest rate
agreement applicable to such Debt if such interest rate agreement has a
remaining term in excess of 12 months).
For the purposes of this definition an imputed interest rate for any
outstanding or proposed production payment, project financing and other
non-recourse debt will be included in the calculation of Interest Expense and
the corresponding EBITDA, if any and to the extent lowered, will be grossed up,
in a corresponding manner.
"DEFAULT" shall mean an Event of Default or an event which with notice
or lapse of time or both would be, an Event of Default.
9
"DEFERRED COMPENSATION PLAN" shall mean the Company's Deferred
Compensation Plan dated as of December 1, 1996 and the letter to employees dated
December 13, 1996 relating thereto.
"DEFINITIVE SECURITIES" shall mean certificated Securities.
"DISQUALIFIED STOCK" shall mean, with respect to any Person, any
capital stock of such Person which by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable) or upon the
happening of any event:
(a) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise;
(b) is convertible or exchangeable for Debt or
Disqualified Stock (excluding capital stock which is convertible or
exchangeable solely at the option of the Company or a Restricted
Subsidiary); or
(c) is redeemable at the option of the holder thereof, in
whole or in part,
in each case on or prior to the date that is ninety-one (91) days after the date
(i) on which the Securities mature or (ii) on which there are no Securities
outstanding, provided that only the portion of capital stock which so matures or
is mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at the option of the holder thereof prior to such date will be deemed to be
Disqualified Stock; provided, further that any capital stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such capital stock upon the occurrence of a
change of control or asset disposition (each defined in a substantially
identical manner to the corresponding definitions in this Indenture) shall not
constitute Disqualified Stock if the terms of such capital stock (and all such
securities into which it is convertible or for which it is ratable or
exchangeable) provide that the Company may not repurchase or redeem any such
capital stock (and all such securities into which it is convertible or for which
it is ratable or exchangeable) pursuant to such provision prior to compliance by
the Company with the provisions of Section 3.15 and Section 3.8 and such
repurchase or redemption complies with Section 3.14.
"DOLLAR" and "$" shall mean lawful money of the United States of
America.
"DOLLAR-DENOMINATED PRODUCTION PAYMENTS" shall mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.
"DTC" shall mean The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"DUKE CREDIT FACILITY" shall mean that certain credit facility pursuant
to the Credit Agreement dated June 29, 2001, by and among the Company, Duke
Capital Partners, LLC, as Administrative Agent, and the lenders signatory
thereto, as amended from time to time.
10
"EBITDA" shall mean, for the period of the most recent four consecutive
calendar quarters ending prior to the date of determination for which financial
statements are available, the sum of Consolidated Net Income for such period
plus the following expenses or charges to the extent deducted from Consolidated
Net Income in such period: Interest Expense, taxes, depreciation, depletion,
amortization and non cash compensation expense for purposes of this definition
(when used in the calculation of the Interest Coverage Ratio and the Debt
Coverage Ratio) EBITDA, if any and to the extent lowered, relating to any
production payment, project financing and other non-recourse debt and in which
an imputed interest rate has been calculated and used in the definition of
Interest Expense, will be grossed up by a corresponding amount.
"ENVIRONMENTAL LAWS" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Company or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Company or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection laws. The term "oil" shall
have the meaning specified in OPA, the terms "hazardous substance" and "release"
(or "threatened release") have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that (i) in the event either OPA, CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and (ii)
to the extent the laws of the state in which any Property of the Company or any
Subsidiary is located establish a meaning for "oil," "hazardous substance,"
"release," "solid waste" or "disposal" which is broader than that specified in
either OPA, CERCLA or RCRA, such broader meaning shall apply.
"EQUIPMENT FINANCING SUBSIDIARY" shall mean a Subsidiary of the Company
formed for the sole purpose of owning equipment purchased in a Permitted
Equipment Financing and related assets and that has no substantial operations
and conducts no substantial activities other than those related to the ownership
of such equipment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and any successor statute.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with the Company or any Subsidiary would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
11
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" means the Exchange and
Registration Rights Agreement dated the Issue Date among the Company and the
Holders who acquired Initial Securities in the Initial Exchange Offer.
"EXCHANGE SECURITIES" shall have the meaning ascribed to it in the
recitals to this Indenture.
"EXCHANGED PROPERTIES" shall mean Properties used or useful in the oil
and gas business and received by the Company or a Consolidated Subsidiary in
exchange for other Properties owned by it, whether directly or indirectly
through the acquisition of the capital stock of a Person holding such Properties
so that such Person becomes a Wholly-Owned and Consolidated Subsidiary of the
Company, in trade or as a portion of the total consideration for such other
Properties.
"EXISTING SUBORDINATED DEBT" shall mean the 11% Senior Subordinated
Notes due 2005 issued by the Company pursuant to that certain Supplemental
Indenture, dated as of October 26, 2000, to the Indenture dated October 26, 2000
between the Company and American Stock Transfer and Trust Company.
"FISCAL YEAR" shall mean the fiscal year of the Company ending on
December 31 of each year.
"FOREIGN SUBSIDIARY" shall mean any Restricted Subsidiary that is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" shall mean generally accepted accounting principles in the
United States of America (i) as in effect on the date hereof with regard to
Sections 3.6 and 3.8 and (ii) otherwise as in effect from time to time.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement (whether or not having the force of law), including, without
limitation, environmental laws, energy regulations and occupational, safety and
health standards or controls of any governmental authority.
"HEDGING AGREEMENTS" shall mean any commodity, interest rate or
currency swap, cap, floor, collar, forward agreement or other exchange or
protection agreements or any option with respect to any such transaction.
"HOLDER" or "SECURITYHOLDER" shall mean the Person in whose name a
Security is registered in the Note Register.
"HYDROCARBON INTERESTS" shall mean all rights, titles, interests and
estates now or hereafter acquired in and to oil and gas leases, oil, gas and
mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee
interests, overriding royalty and royalty interests, net profit interests and
production payment interests, including any reserved or residual interests of
whatever nature.
12
"HYDROCARBONS" shall mean oil, gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous
hydrocarbons and all products refined or separated therefrom.
"INDENTURE" shall mean this Indenture as amended or supplemented from
time to time.
"INITIAL EXCHANGE OFFER" shall mean the offer by the Company to
exchange the Initial Securities in repayment of indebtedness owed under the 2003
Credit Facility.
"INITIAL SECURITIES" shall have the meaning ascribed to it in the
recitals to this Indenture.
"INTEREST COVERAGE RATIO" shall mean as of any date of determination,
with respect to the Company and its Restricted Subsidiaries, the ratio of (x)
the aggregate amount of EBITDA for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination for
which financial statements are in existence to (y) Interest Expense for such
four fiscal quarters, provided, however, that:
(a) if the Company or any Restricted Subsidiary:
(1) has incurred any Debt since the beginning of such
period that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Interest Coverage
Ratio is an incurrence of Debt, EBITDA and Interest Expense for such
period will be calculated after giving effect on a pro forma basis to
such Debt as if such Debt had been incurred on the first day of such
period (except that in making such computation, the amount of Debt
under any revolving credit facility existing on the date of such
calculation will be computed based on the average daily balance of such
Debt during such period; provided that, for purposes of Section 3.6,
the average daily balance deemed outstanding during such period under a
revolving credit facility being repaid in whole or in part with the
proceeds of such Debt shall be the lesser of (i) the actual average
daily balance of such revolving indebtedness outstanding during such
period and (ii) the amount of such revolving indebtedness outstanding
immediately before the application of the proceeds of such Debt to
repay such revolving indebtedness) and the discharge of any other Debt
repaid, repurchased, defeased or otherwise discharged with the proceeds
of such new Debt as if such discharge had occurred on the first day of
such period; or
(2) has repaid, repurchased, defeased or otherwise
discharged any Debt since the beginning of the period that is no longer
outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Interest Coverage Ratio involves a
discharge of Debt (in each case other than Debt incurred under any
revolving credit facility unless such Debt has been permanently repaid
and the related commitment terminated provided that for purposes of
Section 3.6, this parenthetical clause shall not apply), EBITDA and
Interest Expense for such period will be calculated after giving effect
on a pro forma basis to such discharge of such Debt, including with the
proceeds of such new Debt, as if such discharge had occurred on the
first day of such period;
13
(b) if since the beginning of such period the Company or any
Restricted Subsidiary will have sold or otherwise disposed of any material
Property or other asset or if the transaction giving rise to the need to
calculate the Interest Coverage Ratio is such a sale or disposition:
(1) the EBITDA for such period will be reduced by an
amount equal to the EBITDA (if positive) directly attributable to the
assets which are the subject of such sale or disposition for such
period or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period; and
(2) Interest Expense for such period will be reduced by
an amount equal to the Interest Expense directly attributable to any
Debt 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 sale or
disposition for such period (or, if the capital stock of any Restricted
Subsidiary is sold, the Interest Expense for such period directly
attributable to the Debt of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer
liable for such Debt after such sale);
(c) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary
or is merged with or into the Company) or an acquisition of material Properties
or other assets, including any acquisition of assets occurring in connection
with a transaction causing a calculation to be made hereunder, EBITDA and
Interest Expense for such period will be calculated after giving pro forma
effect thereto (including the incurrence of any Debt) as if such investment or
acquisition occurred on the first day of such period; and
(d) 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) will
have sold or otherwise disposed of any material property or other asset or any
investment or acquisition of assets that would have required an adjustment
pursuant to clause (b) or (c) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Interest Expense for such period will
be calculated after giving pro forma effect thereto as if such asset disposition
or investment or acquisition of assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations will
be determined in good faith by a responsible financial or accounting officer of
the Company (including pro forma expense and cost reductions calculated in good
faith by the Company). If any Debt bears a floating rate of interest and is
being given pro forma effect, the interest expense on such Debt will 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 Debt if such interest rate agreement has a
remaining term in excess of 12 months).
14
For the purposes of this definition an imputed interest rate for any
outstanding or proposed production payment, project financing and other
non-recourse debt will be included in the calculation of Interest Expense and
the corresponding EBITDA, if any and to the extent lowered, will be grossed up,
in a corresponding manner.
"INTEREST EXPENSE" shall mean, for the period of the most recent four
consecutive calendar quarters ending prior to the date of determination for
which financial statements are available, the total cash interest expense of the
Company and its Restricted Subsidiaries determined in accordance with GAAP plus,
to the extent not included in such interest expense (without duplication):
(a) interest expense attributable to capitalized lease
obligations and the interest portion of rent expense associated with
Debt in respect of the relevant lease giving rise thereto, determined
as if such lease were a capitalized lease in accordance with GAAP and
the interest component of any deferred payment obligations to the
extent not accrued in a prior period;
(b) imputed interest expense attributable to any
production payment, project financing by vendors and other non-recourse
debt, but not including any amounts arising out of the Permitted Medusa
Transaction;
(c) interest actually paid by the Company or any
Restricted Subsidiary under any guarantee of Debt or other obligation
of any other Person;
(d) net costs associated with Hedging Agreements for the
purpose of ameliorating interest rate fluctuation risk or any kind of
interest rate agreement (excluding amortization of fees);
(e) the consolidated cash interest expense of the Company
and its Restricted Subsidiaries that was capitalized during such
period; and
(f) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are
used by such plan or trust to pay interest or fees to any Person (other
than the Company or its Restricted Subsidiaries) in connection with
Debt incurred by such plan or trust; provided, however, that there will
be excluded therefrom any such interest expense of any Unrestricted
Subsidiary to the extent the related Debt is not guaranteed or paid by
the Company or any Restricted Subsidiary.
For purposes of the foregoing, total Interest Expense will be determined after
giving effect to any net payments made or received by the Company and its
Restricted Subsidiaries with respect to interest rate agreements; provided,
however, that Interest Expense shall not include (a) to the extent included in
total Interest Expense, amortization or write-off of deferred financing costs or
discount accretion of such Person or (b) accretion of interest charges on future
plugging and abandonment obligations, future retirement benefits and other
obligations that do not constitute Debt.
15
"INVESTMENT" shall mean, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of any direct or
indirect advance, loan (other than advances to customers in the ordinary course
of business) or other extension of credit (including by way of guarantee or
similar arrangement, but excluding any Debt or extension of credit represented
by a bank deposit other than a time deposit) 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, Debt or other similar instruments issued by, such
Person and all other items that are or would be classified as investments on a
balance sheet prepared in accordance with GAAP; provided that none of the
following will be deemed to be an Investment:
(a) Hedging Agreements entered into in the ordinary course of
business and in compliance with this Indenture;
(b) endorsements of negotiable instruments and documents in the
ordinary course of business; and
(c) an acquisition of assets, capital stock or other securities by
the Company or a Subsidiary for consideration to the extent such consideration
consists exclusively of common equity securities of the Company.
For purposes of this definition,
(i) "Investment" shall mean the portion (proportionate to
the Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of
the net assets of such Restricted Subsidiary of the Company at the time
that such Restricted Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company will be deemed to
continue to have a permanent "Investment" in an Unrestricted Subsidiary
in an amount (if positive) equal to (a) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (b) the portion
(proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets (as conclusively determined by
the Board of Directors of the Company in good faith) of such Subsidiary
at the time that such Subsidiary is so redesignated a Restricted
Subsidiary; and
(ii) any Property transferred to or from an Unrestricted
Subsidiary will 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 of the Company.
"ISSUE DATE" shall mean the date on which the Original Securities are
originally issued.
"LIEN" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to (i)
the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease,
16
consignment or bailment for security purposes or (ii) production payments and
the like payable out of Oil and Gas Properties. The term "Lien" shall also mean
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this Indenture, the Company or any
Subsidiary shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, or leases under a financing
lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person in a transaction intended to create a
financing.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse effect on
(i) the assets, liabilities, financial condition, business, operations or
affairs of the Company and its Subsidiaries taken as a whole, or (ii) the
ability of the Company and its Subsidiaries taken as a whole to carry out their
business or meet their obligations under the Indenture on a timely basis.
"MULTIEMPLOYER PLAN" shall mean a Plan defined as such in Section 3(37)
or 4001(a)(3) of ERISA.
"NET AVAILABLE CASH" from an Asset Disposition shall mean cash payments
received (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 consideration received in the form of
assumption by the acquiring person of Debt or other obligations relating to the
Properties that are the subject of such Asset Disposition or received in any
other noncash form) therefrom, in each case net of:
(a) all legal, accounting, investment banking, title and
recording tax expenses, commissions and other fees and expenses
incurred, and all federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP (after taking
into account any available tax credits or deductions and any tax
sharing agreements), as a consequence of such Asset Disposition;
(b) all payments made on any Debt which is secured by any
assets subject to such Asset Disposition, in accordance with the terms
of any Lien upon such assets, or which must by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by
applicable law be repaid out of the proceeds from such Asset
Disposition;
(c) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as
a result of such Asset Disposition; and
(d) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset
Disposition and retained by the Company or any Consolidated Subsidiary
after such Asset Disposition.
"NET CASH PROCEEDS," with respect to any issuance or sale of capital
stock, shall mean the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, listing fees,
discounts or commissions and brokerage, consultant and
17
other fees and charges actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result of such issuance or sale
(after taking into account any available tax credit or deductions and any tax
sharing arrangements).
"NON-U.S. PERSON" means a person who is not a U.S. person, as defined
in Regulation S.
"NYMEX STRIP PRICE" shall mean the average closing price of contracts
for future delivery for the next occurring 24 months as of the close of trading
on the New York Mercantile Exchange ("NYMEX") on the date of any calculation.
For crude oil, the reference contract will be light sweet crude oil, the NYMEX
symbol for which is currently "CL." For natural gas, the reference contract will
be natural gas delivered at the ▇▇▇▇▇ Hub in Louisiana, the NYMEX symbol for
which is currently "NG." To the extent that reference prices are not available
for the entire 24 month period, prices will be determined on the average of the
contracts which are available during such 24 month period.
"OFFICER" shall mean the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"OFFICERS' CERTIFICATE" shall mean a certificate signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company.
"OIL AND GAS PROPERTIES" shall mean Hydrocarbon Interests; the
Properties now or hereafter pooled or unitized with Hydrocarbon Interests; all
presently existing or future unitization, pooling agreements and declarations of
pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any governmental authority)
which may affect all or any portion of the Hydrocarbon Interests; all operating
agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or attributable to such Hydrocarbon Interests; all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, the lands covered thereby
and all rents, issues, profits, proceeds, products, revenues and other incomes
from or attributable to the Hydrocarbon Interests; all tenements, hereditaments,
appurtenances and Properties in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests; and all Properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereinafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil ▇▇▇▇▇, gas ▇▇▇▇▇, injection ▇▇▇▇▇ or other ▇▇▇▇▇,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing. Unless otherwise indicated, Oil
and Gas Properties shall mean such Property of the Company and its Restricted
Subsidiaries.
18
"OPINION OF COUNSEL" shall mean 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.
"ORIGINAL SECURITIES" shall have the meaning set forth in the recitals
to this Indenture.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
Person succeeding to any or all of its functions.
"PERMITTED BUSINESS INVESTMENT" shall mean any Investment made in the
ordinary course of, and of a nature that is or shall have become customary in,
the Related Business including investments or expenditures for exploiting,
exploring for, acquiring, developing, producing, processing, gathering,
marketing or transporting oil and gas through agreements, transactions,
interests or arrangements which permit one to share risks or costs, comply with
regulatory requirements regarding local ownership or satisfy other objectives
customarily achieved through the conduct of the Related Business jointly with
third parties, including (i) ownership interests in oil and gas properties,
processing facilities, gathering systems, pipelines or ancillary real property
interests and (ii) Investments in the form of or pursuant to operating
agreements, processing agreements, farm-in agreements, farm-out agreements,
development agreements, area of mutual interest agreements, unitization
agreements, pooling agreements, joint bidding agreements, service contracts,
joint venture agreements, partnership agreements (whether general or limited),
subscription agreements, stock purchase agreements and other similar agreements
(including for limited liability companies) with third parties, excluding,
however, Investments in corporations other than Restricted Subsidiaries.
"PERMITTED EQUIPMENT FINANCING" shall mean any Debt incurred by the
Company or any Subsidiary to finance or refinance the acquisition, after the
Closing Date, from a third party that is not an Affiliate of the Company of any
equipment and related assets to be used in a Related Business; provided that (i)
the aggregate amount of all such Debt shall not exceed 50% of the cumulative
amount of capital expenditures made by the Company and its Restricted
Subsidiaries after December 8, 2003 for capital equipment to be used in a
Related Business, together with any taxes, duties, installation costs or similar
costs related thereto, and (ii) such Debt shall be non-recourse to the Company
and each Subsidiary of the Company other than an Equipment Financing Subsidiary
related to such acquired equipment.
"PERMITTED INDEBTEDNESS" shall mean:
(a) the Securities or any guaranty of or suretyship arrangement
for the Securities;
(b) Debt (other than that associated with the Senior Secured
Credit Facility and the Duke Credit Facility) of the Company existing on
December 23, 2003;
(c) accounts payable (for the deferred purchase price of Property
or services) from time to time incurred in the ordinary course of business
which, if greater than ninety (90) days past the invoice or billing date, are
being contested in good faith by appropriate proceedings if reserves adequate
under GAAP shall have been established therefor;
19
(d) Debt under capital leases (as required to be reported on the
financial statements of the Company pursuant to GAAP) in addition to any
obligations that are Debt as permitted under Section 3.11;
(e) Debt associated with bonds or surety obligations required by
Governmental Requirements in connection with the operation of the Oil and Gas
Properties;
(f) Hedging Agreements covering (a) oil and gas production of
proved developed producing Oil and Gas Properties of the Company or any
Consolidated Subsidiary; provided, however, that such Hedging Agreements related
to oil or gas production shall not, either individually or in the aggregate,
cover more than 80% of estimated production on the date such ▇▇▇▇▇▇ are entered
into of oil or gas of the Company and the Consolidated Subsidiaries for each
individual period covered by the Hedging Agreements, (b) fluctuations in
interest rates for notional principal amounts not to exceed at any time
outstanding 80% of the Debt for borrowed money of the Company and its
Consolidated Subsidiaries, and (c) foreign exchange risk;
(g) Debt arising out of the Deferred Compensation Plan to the
extent such Debt can be satisfied out of the investments held by such plan and
the proceeds thereof;
(h) Debt arising under the Senior Secured Credit Facility in a
total principal amount outstanding not greater than $125,000,000;
(i) Debt arising under the Duke Credit Facility in a total
principal amount outstanding not greater than $10,000,000;
(j) Debt of a Restricted Subsidiary incurred and outstanding on
the date on which such Restricted Subsidiary is acquired by the Company (other
than Debt incurred (i) to provide all or any portion of the funds utilized to
consummate the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was otherwise
acquired by the Company or (ii) otherwise in connection with, or in
contemplation of, such acquisition); provided, however, that at the time such
Restricted Subsidiary is acquired by the Company, the Company would have been
able to incur $1.00 of additional Debt pursuant to Section 3.6(a) after giving
effect to the incurrence of such Debt pursuant to this clause (j);
(k) Debt incurred in respect of workers' compensation claims,
self-insurance obligations, performance, bid, surety and similar bonds, letters
of credit and guarantees supporting such performance, bid, surety and similar
bonds and completion guarantees provided by the Company or a Restricted
Subsidiary in the ordinary course of business;
(l) Debt arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or capital stock of a Restricted Subsidiary,
provided that the maximum aggregate liability in respect of all such Debt other
than Debt related to environmental liabilities to governmental agencies shall at
no time exceed the gross proceeds actually received by the Company and its
Restricted Subsidiaries in connection with such disposition;
20
(m) Debt arising from the honoring by a bank or other financial
institution of a check, draft of similar instrument (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary course of
business; provided, however, that such Debt is extinguished within five (5)
Business Days of incurrence;
(n) obligations relating to net gas balancing positions arising in
the ordinary course of business and consistent with past practice;
(o) non-recourse debt not to exceed $10,000,000 in the aggregate
at any one time outstanding;
(p) Permitted Equipment Financing;
(q) in addition to the items referred to in clauses (a) through
(p) above, Debt of the Company and its Restricted Subsidiaries in an aggregate
outstanding principal amount which, when taken together with the principal
amount of all other indebtedness incurred pursuant to this clause (q) and then
outstanding, will not exceed $10,000,000; and
(r) renewals or extensions of any Debt referred to in clauses (a)
through (f) above.
"PERMITTED INVESTMENT" shall mean an Investment by the Company or any
Restricted Subsidiary in:
(a) a Restricted Subsidiary or a Person which will, upon the
making of such Investment, become a Restricted Subsidiary; provided, however,
that the primary business of such Restricted Subsidiary is a Related Business;
(b) 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 a Related Business;
(c) cash and Cash Equivalents;
(d) receivables owing to the Company or any Restricted Subsidiary
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;
(e) 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;
(f) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary;
21
(g) 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 or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor;
(h) Investments made as a result of the receipt of non-cash
consideration from an Asset Disposition that was made pursuant to and in
compliance with Section 3.14;
(i) Investments in existence on December 23, 2003;
(j) Hedging Agreements, which transactions or obligations are
incurred in compliance with this Indenture;
(k) Investments by the Company or any of its Restricted
Subsidiaries, together with all other Investments pursuant to this clause (k),
in an aggregate amount at the time of such Investment not to exceed $10,000,000
outstanding at any one time;
(l) guarantees of Debt incurred in compliance with Section 3.6;
(m) Investments representing deferred compensation of employees
and earnings thereon under the Company's KEYSOP plan;
(n) any Investment arising out of the Permitted Medusa
Transaction; and
(o) Permitted Business Investments.
"PERMITTED LIEN" shall mean, with respect to any Person:
(a) Liens securing the obligations of the Company under the Senior
Secured Credit Facility, any other Senior Secured Debt permitted under Section
3.6(b) or the Duke Credit Facility and related Hedging Agreements and Liens on
assets of Restricted Subsidiaries securing Debt and other obligations of the
Company or such Restricted Subsidiaries under the Senior Secured Credit Facility
and the Duke Credit Facility;
(b) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts or leases to which
such Person is a party, or deposits to secure public or statutory obligations of
such Person or deposits or 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 or customs duties or for the payment of rent, in
each case incurred in the ordinary course of business;
(c) Liens imposed by law, including carriers', warehousemen's,
mechanics', materialmen's and operator's Liens, (including Liens arising
pursuant to Article 9.319 of the Texas Uniform Commercial Code or other similar
statutory provisions of other states with respect to production purchased from
others) in each case for sums not yet due or being
22
contested in good faith by appropriate proceedings if a reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made in respect thereof;
(d) Liens for taxes, assessments or other governmental charges not
yet subject to penalties for non-payment or which are being contested in good
faith by appropriate proceedings provided appropriate reserves required pursuant
to GAAP have been made in respect thereof;
(e) Liens in favor of issuers of surety or performance bonds or
letters of credit or bankers' acceptances 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 Debt;
(f) encumbrances, easements or reservations of, or rights of
others for, licenses, rights of way, sewers, electric lines, telegraph and
telephone lines, pipelines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental to the conduct
of the business of such Person or to the ownership of its properties which do
not in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;
(g) Liens securing Hedging Agreements so long as the related Debt
is, and is permitted to be under this Indenture, secured by a Lien on the same
property securing such Hedging Agreements;
(h) leases and subleases of real property which do not materially
interfere with the ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
(i) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment have not been
finally terminated or the period within which such proceedings may be initiated
has not expired;
(j) Liens for the purpose of securing the payment of all or a part
of the purchase price of, or capitalized lease obligations with respect to,
assets or property acquired or constructed in the ordinary course of business
provided that:
(1) the aggregate principal amount of Debt secured by
such Liens is otherwise permitted to be incurred under this Indenture
and does not exceed the cost of the assets or property so acquired or
constructed; and
(2) such Liens are created within one hundred eighty
(180) days of construction or acquisition of such Property and do not
encumber any other Property of the Company or any Restricted Subsidiary
other than such Property affixed or appurtenant thereto;
23
(k) Liens arising solely by virtue of any statutory or common law
provisions relating to banker's Liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a depositary
institution; provided that:
(1) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by
the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board; and
(2) such deposit account is not intended by the Company
or any Restricted Subsidiary to provide collateral to the depository
institution;
(l) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business;
(m) Liens existing on December 8, 2003;
(n) Liens on property or shares of stock of a Person at the time
such Person becomes a Restricted Subsidiary; provided, however, that such Liens
are not created, incurred or assumed in connection with, or in contemplation of,
such other Person becoming a Restricted Subsidiary; provided further, however,
that any such Lien may not extend to any other property owned by the Company or
any Restricted Subsidiary;
(o) Liens on property at the time the Company or a Restricted
Subsidiary acquired the property, including any acquisition by means of a merger
or consolidation with or into the Company or any Restricted Subsidiary;
provided, however, that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such acquisition; provided further,
however, that such Liens may not extend to any other property owned by the
Company or any Restricted Subsidiary;
(p) Liens securing Debt or other obligations of a Restricted
Subsidiary owing to the Company or a Wholly-Owned Subsidiary;
(q) Liens securing the Securities and the Subsidiary Guarantees or
the Obligations under this Indenture;
(r) Liens securing refinancing indebtedness incurred to refinance
Debt that was previously so secured, provided that any such Lien is limited to
all or part of the same Property (plus improvements, future interests and
additional acquired interests in the Property apportionment thereto, accessions,
proceeds or dividends or distributions in respect thereof) that secured (or,
under the written arrangements under which the original Lien arose, could
secure) the Debt being refinanced or is in respect of Property that is the
security for a Permitted Lien hereunder;
24
(s) Liens upon specific Properties of the Company or any of its
Subsidiaries securing Debt incurred in the ordinary course of business to
provide all or part of the funds for the exploration, drilling, production or
development of those Properties;
(t) Liens in respect of Volumetric Production Payments, Dollar
Denominated Production Payments and other similar reserve sales;
(u) farm-out, farm-in, seismic, carried working interests, areas
of mutual interests, joint operating, joint exploration, unitization, gas
balancing, royalty, overriding royalty, bonus, rental, sales and similar
agreements relating to the exploration or development of, or production from,
oil and gas properties and related facilities (production and transportation)
entered into in the ordinary course of business.
(v) Liens on the capital stock or other equity interests of any
Equipment Financing Subsidiary to secure Debt of such Equipment Financing
Subsidiary incurred in connection with a Permitted Equipment Financing; and
(w) Liens with respect to Permitted Indebtedness on the capital
stock or other equity interests of any Unrestricted Subsidiary to secure Debt of
such Unrestricted Subsidiary which is non-recourse to the Company or any
Restricted Subsidiary.
"PERMITTED MEDUSA TRANSACTION" shall have the meaning ascribed to such
term in the credit agreement for the Senior Secured Credit Facility in effect on
the date hereof.
"PERSON" shall mean any individual, corporation, company, association,
partnership, joint venture, trust, unincorporated organization or government or
any agency, instrumentality or political subdivision thereof, or any other form
of entity.
"PLAN" shall mean any employee pension benefit plan, as defined in
Section 3(2) of ERISA, which (i) is currently or hereafter sponsored, maintained
or contributed to by the Company, any Subsidiary or an ERISA Affiliate or (ii)
was at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Company, any Subsidiary or an ERISA Affiliate.
"PREFERRED STOCK", as applied to the capital stock of any Person, shall
mean 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 Person,
over shares of capital stock of any other class of such Person.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"REDEMPTION DATE" shall mean, with respect to any redemption of
Securities, the date of redemption with respect thereto.
"REGISTERED EXCHANGE OFFER" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
25
"RELATED BUSINESS" shall mean any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company and
its Restricted Subsidiaries on the date hereof.
"RESTRICTED INVESTMENT" shall mean any Investment other than a
Permitted Investment.
"RESTRICTED PERIOD" shall mean the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
"RESTRICTED SECURITIES LEGEND" shall mean the Private Placement Legend
set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set forth
in clause (2) of Section 2.1(c), as applicable.
"RESTRICTED SUBSIDIARY" shall mean any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES" shall mean the collective reference to the Original
Securities and the Exchange Securities.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES CUSTODIAN" shall mean the custodian with respect to the
Global Security (as appointed by DTC), or any successor Person thereto and shall
initially be the Trustee.
"SENIOR INDEBTEDNESS" shall mean, whether outstanding on the date
hereof or thereafter issued, created, incurred or assumed, the Senior Secured
Credit Facility Debt, the Duke Credit Facility Debt, and all other Debt of the
Company, including accrued and unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Company at the rate specified in the documentation with respect thereto
whether or not a claim for post filing interest is allowed in such proceeding)
and fees relating thereto; provided, however, that Senior Indebtedness will not
include:
(a) any Debt which, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that the obligations in respect of such Debt are subordinate
to payment of the Securities;
(b) any obligation of the Company to any Subsidiary;
(c) any liability for federal, state, foreign, local or
other taxes owed or owing by the Company;
(d) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities);
26
(e) any Debt, guarantee or obligation of the Company that
is expressly subordinate or junior in right of payment to any other
Debt, guarantee or obligation of the Company, including, without
limitation, any Subordinated Debt; or
(f) any capital stock.
"SENIOR SECURED CREDIT FACILITY" shall mean the Company's primary
senior revolving credit facility or facilities as constituted, amended, modified
or restated from time to time which allow the Company to borrow and reborrow
amounts up to a borrowing base determined by the lenders thereunder, which is
currently the $75,000,000 Senior Secured Credit Facility among the Company,
Wachovia Bank, National Association, as Administrative Agent and the other
lenders thereto.
"SENIOR SECURED DEBT" shall mean, whether outstanding on the date
hereof or thereafter issued, created, incurred or assumed, any Senior
Indebtedness of the Company or any Restricted Subsidiary secured by a Lien,
including, but not limited to the Senior Secured Credit Facility Debt.
"SPECIAL ENTITY" shall mean, with regard to a Person, any joint
venture, limited liability company or partnership, general or limited
partnership or any other type of partnership or company other than a corporation
in which such first Person or one or more of its other Subsidiaries is a member,
owner, partner or joint venturer and owns, directly or indirectly, at least a
majority of the equity of such entity or controls such entity, but excluding any
tax partnerships that are not classified as partnerships under state law.
"SUBORDINATED DEBT" shall mean any Debt of the Company expressly
subordinated to the Securities, on terms including, without limitation, that
payments on such Debt shall be prohibited if a Default exists or would result
from such payment, and other terms and conditions substantially similar to those
found in the Existing Subordinated Debt.
"SUBSIDIARY" shall mean, with regard to a Person, (i) any corporation
of which at least a majority of the outstanding shares of stock having by the
terms thereof ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more of its
Subsidiaries and (ii) any Special Entity of which at least a majority of the
equity interests are owned directly or indirectly or controlled by such Person.
Unless otherwise indicated herein, each reference to the term "Subsidiary" shall
mean a Subsidiary of the Company.
"SUBSIDIARY GUARANTEE" shall mean, individually, any Guarantee of
payment of the Securities by a Subsidiary Guarantor pursuant to the terms of
this Indenture and any supplemental indenture thereto, and, collectively, all
such Guarantees. Each such Subsidiary Guarantee will be in the form prescribed
by this Indenture.
"SUBSIDIARY GUARANTOR" shall mean each Subsidiary of the Company in
existence on the Issue Date and any Restricted Subsidiary created or acquired by
the Company after the Issue Date other than a Foreign Subsidiary.
27
"TIA" or "TRUST INDENTURE ACT" shall mean the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa 77bbbb), as in effect on the date of this
Indenture.
"TRUSTEE" shall mean the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TRUST OFFICER" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"UNRESTRICTED SUBSIDIARY" shall mean:
(a) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Company in the manner provided below; and
(b) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or
consolidation or Investment therein) to be an Unrestricted Subsidiary
only if:
(a) such Subsidiary or any of its Subsidiaries does not
own any capital stock or Debt of or have any Investment in, or own or
hold any Lien on any property of, any other Subsidiary of the Company
which is not a Subsidiary of the Subsidiary to be so designated or
otherwise an Unrestricted Subsidiary;
(b) all the Debt of such Subsidiary and its Subsidiaries
shall, at the date of designation, and will at all times thereafter,
consist of Non-Recourse Debt;
(c) such designation and the Investment of the Company in
such Subsidiary complies with Section 3.8;
(d) such Subsidiary, either alone or in the aggregate
with all other Unrestricted Subsidiaries, does not operate, directly or
indirectly, all or substantially all of the business of the Company and
its Subsidiaries;
(e) such Subsidiary is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any
direct or indirect obligation:
(1) to subscribe for additional capital stock of
such Person; or
28
(2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any
specified levels of operating results; and
(f) on the date such Subsidiary is designated an
Unrestricted Subsidiary, such Subsidiary is not a party to any
agreement, contract, arrangement or understanding with the Company or
any Restricted Subsidiary with terms substantially less favorable to
the Company than those that might have been obtained from Persons who
are not Affiliates of the Company.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any Debt
such Subsidiary shall be deemed to be incurred as of such date.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
incur at least $1.00 of additional Debt under Section 3.6(a) on a pro forma
basis taking into account such designation.
"VOLUMETRIC PRODUCTION PAYMENTS" shall mean production payment
obligations recorded as defined revenue in accordance with GAAP, together with
all undertakings and obligations in connection therewith.
"WHOLLY-OWNED SUBSIDIARY" shall mean a Restricted Subsidiary of the
Company, all of the capital stock of which (other than director's qualifying
shares) is owned by the Company or one or more other Wholly-Owned Subsidiaries.
SECTION 1.2 OTHER DEFINITIONS.
SECTION
TERM DEFINED IN:
---- -----------
"Accredited Investor Global Note" .......................................... 2.1(a)
"Accredited Investor Note" .......................................... 2.1(a)
"Accredited Investors" .......................................... 2.1(a)
"Agent Member" .......................................... 2.1(d)
"Asset Disposition Offer" .......................................... 3.14(b)
"Asset Disposition Offer Amount" .......................................... 3.14(b)
"Asset Disposition Offer Period" .......................................... 3.14(b)
"Asset Disposition Purchase Date" .......................................... 3.14(b)
"Authenticating Agent" .......................................... 2.2
"Change in Control Offer" .......................................... 3.15
"Change in Control Payment" .......................................... 3.15
29
"Change in Control Payment Date" .......................................... 3.15
"Company Order" .......................................... 2.2
"Corporate Trust Office" .......................................... 3.24
"covenant defeasance option" .......................................... 8.1(b)
"Defaulted Interest" .......................................... 2.13
"Event of Default" .......................................... 6.1
"Excess Proceeds" .......................................... 3.14(b)
"Exchange Global Note" .......................................... 2.1(a)
"Global Securities" .......................................... 2.1(a)
"IAI" .......................................... 2.1(a)
"legal defeasance option" .......................................... 8.1(b)
"Legal Holiday" .......................................... 11.8
"Note Register" .......................................... 2.3
"Obligations" .......................................... 10.1
"Pari Passu Notes" .......................................... 3.14(b)
"Paying Agent" .......................................... 2.3
"Permitted Consideration" .......................................... 3.14
"Private Placement Legend" .......................................... 2.1(c)(1)
"QIBs" .......................................... 2.1
"Registrar" .......................................... 2.3
"Regulation D" .......................................... 2.1(a)
"Regulation S" .......................................... 2.1(a)
"Regulation S Global Note" .......................................... 2.1(a)
"Regulation S Legend" .......................................... 2.1(c)(2)
"Regulation S Note" .......................................... 2.1(a)
"Resale Restriction Termination Date" .......................................... 2.6
"Restricted Payment" .......................................... 3.8
"Rule 144A" .......................................... 2.1(a)
"Rule 144A Global Note" .......................................... 2.1(a)
"Rule 144A Note" .......................................... 2.1(a)
"Special Interest Payment Date" .......................................... 2.13(a)
"Special Record Date" .......................................... 2.13(a)
"Successor Company" .......................................... 4.1
"U.S. Government Obligations" .......................................... 8.1(a)
SECTION 1.3 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.
"indenture Securityholder" 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.
30
All other TIA terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.4 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in
the plural include the singular;
(f) unsecured Debt shall not be deemed to be subordinate
or junior to secured Debt merely by virtue of its nature as unsecured
Debt;
(g) 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 issuer dated such
date prepared in accordance with GAAP; and
(h) 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.
ARTICLE II.
THE SECURITIES
SECTION 2.1 FORM, DATING AND TERMS.
(a) Original Securities are being offered and sold by the Company
in repayment of indebtedness under the Company's 2003 Credit Facility to the
lenders under the 2003 Credit Facility who are either (1) accredited investors
as defined in Rule 501 of Regulation D Promulgated under the Securities Act
("REGULATION D") in reliance on Rule 506 of Regulation D ("ACCREDITED
INVESTORS") and (2) Persons other than U.S. Persons (as defined in Regulation S
under the Securities Act ("REGULATION S")) in reliance on Regulation S. Such
Original Securities may after issuance be transferred to among others, qualified
institutional buyers (as defined in Rule 144A under the Securities Act ("RULE
144A")) in reliance on Rule 144A ("QIBS"), purchasers in reliance on Regulation
S and IAIs in accordance with Rule 501 of Regulation D in accordance with the
procedure described herein.
31
Initial Securities offered and sold to qualified institutional buyers
in the United States of America (the "RULE 144A NOTE") will be issued on the
Issue Date in the form of a permanent global Security, without interest coupons,
substantially in the form of Exhibit A, which is hereby incorporated by
reference and made a part of this Indenture, including appropriate legends as
set forth in Section 2.1(c) (the "RULE 144A GLOBAL NOTE"), deposited with the
Trustee, as custodian for DTC, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Rule 144A Global Note may be
represented by more than one certificate, if so required by DTC's rules
regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Rule 144A Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.
Initial Securities offered and sold to Accredited Investors in the
United States of America in reliance on Rule 506 of Regulation D who are not
QIBs (the "ACCREDITED INVESTOR NOTE") will be issued on the Issue Date, and
Initial Securities resold to institutional "accredited investors" (as defined in
Rules 501(a)(1), (2), (3) and (7) under the Securities Act) who are not QIBs
("IAIS") in the United States of America will be issued, in the form of a
permanent global Security, without interest coupons, substantially in the form
of Exhibit A, which is hereby incorporated by reference and made a part of this
Indenture, including appropriate legends as set forth in Section 2.1(c) (the
"ACCREDITED INVESTOR GLOBAL NOTE"), deposited with the Trustee, as custodian for
DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Accredited Investor Global Note may be represented by
more than one certificate, if so required by DTC's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Accredited Investor Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States of
America (the "REGULATION S NOTE") in reliance on Regulation S shall be issued in
the form of a permanent global Security substantially in the form of Exhibit A
(the "REGULATION S GLOBAL NOTE") deposited with the Trustee, as custodian for
DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Regulation S Global Note may be represented by more
than one certificate, if so required by DTC's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Regulation S Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Note, the
Regulation S Note and the Accredited Investor Global Note will be issued in the
form of a permanent global Security substantially in the form of Exhibit B,
which is hereby incorporated by reference and made a part of this Indenture,
deposited with the Trustee as hereinafter provided, including the appropriate
legend set forth in Section 2.1(c) (the "EXCHANGE GLOBAL NOTE"). The Exchange
Global Note may be represented by more than one certificate, if so required by
DTC's rules regarding the maximum principal amount to be represented by a single
certificate.
32
The Rule 144A Global Note, the Regulation S Global Note, the Accredited
Investor Global Note and the Exchange Global Note are sometimes collectively
herein referred to as the "GLOBAL SECURITIES."
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose pursuant to Section 2.3; provided,
however, that, at the option of the Company, each installment of interest may be
paid by (i) check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Note Register or (ii) wire transfer to an account
located in the United States maintained by the payee. Payments in respect of
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 DTC.
(b) Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Security
is sold under an effective registration statement pursuant to the Exchange and
Registration Rights Agreement or a similar agreement, (ii) an Initial Security
is exchanged for an Exchange Security in connection with an effective
registration statement pursuant to the Exchange and Registration Rights
Agreement or a similar agreement, or (iii) two years after the later of the
Issue Date and the last date on which the Company or any Affiliate of the
Company was the owner of the applicable Initial Security,
(1) the Rule 144A Global Note and the Accredited Investor
Global Note shall bear the following legend (the "PRIVATE PLACEMENT
LEGEND") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF,
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY
INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON
33
WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000 OF
SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) AND (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE." and
(2) the Regulation S Global Note shall bear the following
legend (the "REGULATION S LEGEND") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE
34
"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 IT IS NOT A
U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") THAT IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S, (E)
TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, 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, OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER,
35
SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F)
TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM AND IN THE CASE OF THE FOREGOING
CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED
AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING
THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE
OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS
DEFINED IN REGULATION S) AND (B) THE DATE OF THE
CLOSING OF THE ORIGINAL OFFERING. 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."
(3) The Global Securities, whether or not an Initial
Security, shall bear the following legend on the face thereof:
"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 IN 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."
36
(d) Book-Entry Provisions.
(1) This Section 2.1(d) shall apply only to Global
Securities deposited with the Trustee, as custodian for DTC.
(2) Each Global Security initially shall (i) be
registered in the name of DTC for such Global Security or the nominee
of DTC, (ii) be delivered to the Trustee as custodian for DTC and (iii)
bear legends as set forth in Section 2.1(c).
(3) Members of, or participants in, DTC ("AGENT MEMBERS")
shall have no rights under this Indenture with respect to any Global
Security held on their behalf by DTC or by the Trustee as the custodian
of DTC or under such Global Security, and DTC 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 DTC or impair, as between DTC and its Agent
Members, the operation of customary practices of DTC governing the
exercise of the rights of a Holder of a beneficial interest in any
Global Security.
(4) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to subsection (e) of
this Section 2.1 to beneficial owners who are required to hold
Definitive Securities, the Securities Custodian shall reflect on its
books and records the date and a decrease in the principal amount of
such Global Security in an amount equal to the principal amount of the
beneficial interest in the Global Security to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver,
one or more Definitive Securities of like tenor and amount.
(5) In connection with the transfer of an entire Global
Security to beneficial owners pursuant to subsection (e) of this
Section, such Global Security shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute, and the
Trustee shall authenticate and deliver, to each beneficial owner
identified by DTC in exchange for its beneficial interest in such
Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
(6) 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.
(e) Definitive Securities.
(1) Except as provided below, owners of beneficial
interests in Global Securities will not be entitled to receive
Definitive Securities. If required to do so pursuant to any applicable
law or regulation, beneficial owners may obtain Definitive
37
Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with DTC's and the
Registrar's procedures. In addition, Definitive Securities shall be
transferred to all beneficial owners in exchange for their beneficial
interests in a Global Security if (a) DTC notifies the Company that it
is unwilling or unable to continue as depositary for such Global
Security or DTC ceases to be a clearing agency registered under the
Exchange Act, at a time when DTC is required to be so registered in
order to act as depositary, and in each case a successor depositary is
not appointed by the Company within 90 days of such notice or, (b) the
Company executes and delivers to the Trustee and Registrar an Officers'
Certificate stating that such Global Security shall be so exchangeable
or (c) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
(2) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d)(4) or (5)
shall, except as otherwise provided by Section 2.6(c), bear the
applicable legend regarding transfer restrictions applicable to the
Definitive Security set forth in Section 2.1(c).
(3) In connection with the exchange of a portion of a
Definitive Security for a beneficial interest in a Global Security, the
Trustee shall cancel such Definitive Security, and the Company shall
execute, and the Trustee shall authenticate and deliver, to the
transferring Holder a new Definitive Security representing the
principal amount not so transferred.
SECTION 2.2 EXECUTION AND AUTHENTICATION. One Officer shall sign the
Securities for the Company by manual or facsimile signature. 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, after
giving effect to any exchange of Initial Securities for Exchange Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be dated
the date of its authentication.
At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for delivery:
(1) Original Securities for original issue on the Issue Date in an aggregate
principal amount of $200.0 million, and (2) Exchange Securities for issue only
in a Registered Exchange Offer pursuant to the Exchange and Registration Rights
Agreement or a similar agreement, and only in exchange for Initial Securities of
an equal principal amount, 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 (the "COMPANY ORDER"). Such Company 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 or Exchange Securities. The aggregate
principal amount of notes which may be authenticated and delivered under this
Indenture is limited to $200.0 million outstanding, except for Securities
authenticated and delivered upon registration or transfer of, or in exchange
for, or in lieu of, other Securities of the
38
same class pursuant to Section 2.6, Section 2.9, Section 2.11, Section 5.8,
Section 9.5 and except for transactions similar to the Registered Exchange
Offer. All Securities issued on the Issue Date shall be identical in all
respects other than issue dates, the date from which interest accrues and any
changes relating thereto. Notwithstanding anything to the contrary contained in
this Indenture, all Securities issued under this Indenture shall vote and
consent together on all matters as one class and no series of Securities will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an agent (the "AUTHENTICATING AGENT")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company or any Subsidiary Guarantor, pursuant to Article
IV, shall be consolidated or merged with or into any other Person or shall
convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
any Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article IV, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section 2.2 in exchange
or substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
SECTION 2.3 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 Company shall cause each of
the Registrar and the Paying Agent to maintain an office or agency in the
Borough of Manhattan, The City of New York. The Registrar shall keep a register
of the Securities and of their transfer and exchange (the "NOTE REGISTER"). 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 Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
39
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its Restricted Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST. By at least 10:00 a.m.
(New York City time) on the date on which any principal of or interest on any
Security is due and payable, the Company shall deposit with the Paying Agent a
sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Subsidiary Guarantor 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 (other than the Trustee) to pay
all money held by it to the Trustee and to account for any funds disbursed by
such Paying Agent. Upon complying with this Section, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent
for the Securities.
SECTION 2.5 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, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6 TRANSFER AND EXCHANGE. (a) The following provisions shall
apply with respect to any proposed transfer of a Rule 144A Note or an Accredited
Investor Global Note prior to the date which is two years after the later of the
date of its original issue and the last date on which the Company or any
Affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "RESALE RESTRICTION TERMINATION DATE"):
(1) a transfer of a Rule 144A Note or an Accredited
Investor Global Note or a beneficial interest therein to a QIB shall be
made upon the representation of the transferee in the form as set forth
on the reverse of the Security that it is purchasing 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, 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 its foregoing representations in order to claim the
exemption from registration provided by Rule 144A;
40
(2) a transfer of a Rule 144A Note or an Accredited
Investor Global Note or a beneficial interest therein to an IAI shall
be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.7 from the proposed
transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(3) a transfer of a Rule 144A Note or an Accredited
Investor Global Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.8 from the
proposed transferee and, if requested by the Company or the Trustee,
the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(1) a transfer of a Regulation S Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee, in the form of assignment on the reverse of the
certificate, that it is purchasing the 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, 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 its foregoing representations in order to claim the
exemption from registration provided by Rule 144A;
(2) a transfer of a Regulation S Note or a beneficial
interest therein to an IAI shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in
Section 2.7 from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them;
and
(3) a transfer of a Regulation S Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set
forth in Section 2.8 hereof from the proposed transferee and, if
requested by the Company or the Trustee, receipt by the Trustee or its
agent of an opinion of counsel, certification and/or other information
satisfactory to each of them.
After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring certification set forth
in Section 2.7, Section 2.8 or any additional certification.
(c) Upon the transfer, exchange or replacement of Securities not
bearing a Restricted Securities Legend, the Registrar shall deliver Securities
that do not bear a Restricted Securities Legend. Upon the transfer, exchange or
replacement of Securities bearing a Restricted Securities Legend, the Registrar
shall deliver only Securities that bear a Restricted Securities Legend unless
there is delivered to the Registrar an Opinion of Counsel to the effect that
neither such legend
41
nor the related restrictions on transfer are required in order to maintain
compliance with the provisions of the Securities Act.
(d) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.1 or this Section
2.6. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable prior written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges of
Securities.
(1) To permit registrations of transfers and exchanges,
the Company shall, subject to the other terms and conditions of this
Article II, execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-registrar's
request.
(2) No service charge shall be made to a Holder 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 charges
payable upon exchange or transfer pursuant to Sections 3.14, 3.15 or
9.5).
(3) The Registrar or co-registrar shall not be required
to register the transfer of or exchange of any Security for a period
beginning (1) 15 days before the mailing of a notice of an offer to
repurchase or redeem Securities and ending at the close of business on
the day of such mailing or (2) 15 days before an interest payment date
and ending on such interest payment date.
(4) 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.
(5) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d) shall, except
as otherwise provided by Section 2.6(c), bear the applicable legend
regarding transfer restrictions applicable to the Definitive Security
set forth in Section 2.1(c).
(6) 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.
(f) No Obligation of the Trustee.
42
(1) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a member of,
or a participant in, DTC or other Person with respect to the accuracy
of the records of DTC 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 DTC) of any notice (including any
notice of redemption) or the payment of any amount or delivery of any
Securities (or other security or property) 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 in respect of the
Securities shall be given or made only to or upon the order of the
registered Holders (which shall be DTC or its nominee in the case of a
Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through DTC subject to the applicable
rules and procedures of DTC. The Trustee may rely and shall be fully
protected in relying upon information furnished by DTC with respect to
its members, participants and any beneficial owners.
(2) 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 DTC 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.
SECTION 2.7 FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS.
[Date]
▇▇▇▇▇▇ Petroleum Company
c/o American Stock Transfer & Trust Company
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Dear Sirs:
This certificate is delivered to request a transfer of $_________
principal amount of the 9.75% Senior Notes due 2010 (the "SECURITIES") of ▇▇▇▇▇▇
Petroleum Company (the "COMPANY").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
43
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "SECURITIES ACT")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Securities, and we are acquiring the Securities not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risk of our investment in
the Securities and we invest in or purchase securities similar to the Securities
in the normal course of our business. We and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date that is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "RESALE RESTRICTION TERMINATION DATE") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
[Name of Transferee]
44
By:_____________________________
_____________________________
(Authorized Signature)
45
SECTION 2.8 FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S.
[Date]
▇▇▇▇▇▇ Petroleum company
c/o American Stock Transfer & Trust Company
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Re: ▇▇▇▇▇▇ Petroleum Company
9.75% Senior Notes due 2010 (the "SECURITIES")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "SECURITIES ACT"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a person in the
United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(a) or Rule 904(a)
of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(b)(3) or Rule 904(b)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(b)(3) or Rule 904(b)(1), as the case may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal
46
proceedings or official inquiry with respect to the matters covered hereby.
Terms used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:________________________________
___________________________________
Authorized Signature
SECTION 2.9 MUTILATED, DESTROYED, LOST OR STOLEN 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 a replacement
Security if the requirements of Section 8-405 of the Uniform 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, and, in the absence of notice to the Company, any Subsidiary Guarantor
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon Company Order the Trustee shall authenticate
and make available for delivery, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10 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 ceases to be
47
outstanding in the event the Company or a Subsidiary of the Company holds the
Security, provided, however, that (i) for purposes of determining which are
outstanding for consent or voting purposes hereunder, Securities shall cease to
be outstanding in the event the Company or an Affiliate of the Company holds the
Security and (ii) in determining whether the Trustee shall be protected in
making a determination whether the Holders of the requisite principal amount of
outstanding Securities are present at a meeting of Holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which a Trust Officer of the Trustee actually knows to be held by the Company or
an Affiliate of the Company shall not be considered outstanding.
If a Security is replaced pursuant to Section 2.9, 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 2.11 TEMPORARY SECURITIES. Until Definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.
SECTION 2.12 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 all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and dispose of such Securities in accordance with its internal
policies including delivery of a certificate of destruction executed by a Trust
Officer describing such Securities. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.
48
SECTION 2.13 PAYMENT OF INTEREST; DEFAULTED INTEREST. Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Security
(or one or more predecessor Securities) is registered at the close of business
on the regular record date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid when the
same becomes due and payable and such nonpayment continues for a period of 30
days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "DEFAULTED INTEREST") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment (the "SPECIAL INTEREST PAYMENT DATE"), and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a record date (the "SPECIAL RECORD DATE") for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the Special Interest Payment Date and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date, and in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date
therefor to be given in the manner provided for in Section 11.2, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date and Special
Interest Payment Date therefor having been so given, such Defaulted
Interest shall be paid on the Special Interest Payment Date to the Persons
in whose names the Securities (or their respective predecessor Securities)
are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
49
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14 COMPUTATION OF INTEREST. Interest on the Securities shall be
computed on the basis of a 360 day year of twelve 30 day months.
SECTION 2.15 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 CUSIP numbers. The Company
shall promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III.
COVENANTS
SECTION 3.1 REPORTING REQUIREMENTS. Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, to the extent permitted by the Exchange Act, the Company will file
with the Commission, and provide the Trustee and the Holders of the Securities
with, the annual reports and the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may by rules
and regulations prescribe) that are specified in Sections 13 and 15(d) of the
Exchange Act within the time periods specified therein. In the event that the
Company is not permitted to file such reports, documents and information with
the Commission pursuant to the Exchange Act, the Company will nevertheless
provide such Exchange Act information to the Trustee and the Holders of the
Securities as if the Company were subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act within the time periods specified
therein. The Company shall also comply with the other provisions of TIA Section
314(a). Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 3.2 MAINTENANCE OF PROPERTIES. (a) The Company shall and shall
cause each Restricted Subsidiary to: preserve and maintain its corporate
existence and all of its material rights, privileges and franchises; keep books
of record and account in which full, true and correct entries will be made of
all dealings or transactions in relation to its business and activities; comply
with all Governmental Requirements if failure to comply with such requirements
would be reasonably likely to have a Material Adverse Effect; pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper proceedings
50
and against which adequate reserves are being maintained; and keep, or cause to
be kept, insured by financially sound and reputable insurers all Property of a
character usually insured by Persons engaged in the same or similar business
similarly situated against loss or damage of the kinds and in the amounts
customarily insured against by such Persons and carry such other insurance as is
usually carried by such Persons including, without limitation, environmental
risk insurance to the extent reasonably available. Subject to Section 3.18, the
Company will, and will cause each Restricted Subsidiary to, pay, discharge or
otherwise satisfy at or before maturity all liabilities and obligations as and
when due (subject to any applicable subordination provisions), and any
additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such obligations, except to the extent failure to
do so would not, individually or in the aggregate be reasonably likely to have a
Material Adverse Effect.
(b) The Company will and will cause each Restricted Subsidiary to maintain
all of its Oil and Gas Properties as a reasonably prudent operator. The Company
will and will cause each Restricted Subsidiary to keep unimpaired, except for
Liens described in Section 3.7, its rights with respect to its Oil and Gas
Properties and other material Properties and prevent any forfeiture thereof or a
default thereunder. The Company will cause and cause each Restricted Subsidiary
to perform or make reasonable and customary efforts to cause to be performed, in
accordance with industry standards, the obligations required by each and all of
the assignments, deeds, leases, sub-leases, contracts and agreements affecting
its interests in its Oil and Gas Properties and other material Properties.
SECTION 3.3 ENVIRONMENTAL MATTERS. The Company will and will cause each
Subsidiary to maintain and operate all Property of the Company and its
Subsidiaries in compliance with applicable Environmental Laws in all material
respects.
SECTION 3.4 ERISA COMPLIANCE. With respect to each Plan (other than a
Multiemployer Plan), the Company will, and will cause each Subsidiary and ERISA
Affiliate to, (i) satisfy in full and in a timely manner, without incurring any
late payment or underpayment charge or penalty and without giving rise to any
lien, all of the contribution and funding requirements of section 412 of the
Code (determined without regard to subsections (d), (e), (f) and (k) thereof)
and of section 302 of ERISA (determined without regard to sections 303, 304 and
306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely
manner, without incurring any late payment or underpayment charge or penalty,
all premiums required pursuant to sections 4006 and 4007 of ERISA.
SECTION 3.5 RESTRICTED SUBSIDIARIES. The Company shall ensure that each
Restricted Subsidiary is at all times a Consolidated Subsidiary.
SECTION 3.6 DEBT INCURRENCE.
(a) The Company will not, and will not permit any Restricted Subsidiary
to, incur, create or assume any Debt, other than Permitted Indebtedness, if (i)
the Interest Coverage Ratio after giving effect to the incurrence, creation or
assumption of such Debt is less than 2.5 to 1.0, or (ii) the Debt Coverage Ratio
after giving effect to the incurrence, creation or assumption of such Debt is
more than 4.0 to 1.0.
51
(b) The Company will not, and will not permit any Restricted Subsidiary
to, incur, create or assume more than $175,000,000 in aggregate principal amount
of Senior Secured Debt unless the ratio of the Company's Adjusted Consolidated
Net Tangible Assets to Senior Secured Debt is equal to, or greater than, 2.5 to
1.0.
SECTION 3.7 LIENS. Unless the Securities are secured equally and ratably,
The Company will not, and will not permit any Restricted Subsidiary to, create,
incur or assume any Lien securing pari passu or Subordinated Debt on any of its
Properties (now owned or hereafter acquired), except:
(a) Liens securing the payment of the Securities;
(b) Permitted Liens;
(c) Liens securing leases allowed under clause (d) in the
definition of Permitted Indebtedness, but only on the Property under
lease;
(d) Liens existing on December 23, 2003;
(e) Liens on cash or securities of the Company securing Debt
described in clause (e) of the definition of Permitted Indebtedness; and
(f) any Lien on any Property acquired after the date hereof
existing prior to the acquisition thereof by the Company or any Restricted
Subsidiary or existing on any Property of any Person that becomes a
Restricted Subsidiary after the date hereof prior to the time such Person
becomes a Restricted Subsidiary; provided that (i) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Restricted Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other Property of the Company or any
Restricted Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date
such Person becomes a Restricted Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof.
SECTION 3.8 RESTRICTED INVESTMENTS; RESTRICTIVE AGREEMENTS
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries, directly or indirectly, to:
(1) declare or pay any dividend or make any distribution on or in
respect of its capital stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except:
(A) dividends or distributions payable in capital stock of
the Company (other than Disqualified Stock) or in options, warrants
or other rights to purchase such capital stock;
52
(B) dividends or distributions payable to the Company or a
Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of
common capital stock on a pro rata basis); and
(C) dividends on the Company's $2.125 Convertible
Exchangeable Preferred Stock, Series A outstanding on December 23,
2003;
(2) purchase, redeem, retire or otherwise acquire for value any
capital stock of the Company or any direct or indirect parent of the
Company held by Persons other than the Company or a Restricted Subsidiary
of the Company (other than in exchange for capital stock of the Company
(other than Disqualified Stock));
(3) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Debt (other than the
purchase, repurchase or other acquisition of Subordinated Debt 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 purchase, repurchase or acquisition); or
(4) make any Restricted Investment in any Person;
(any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Restricted Investment
referred to in clauses (1) through (4) only shall be referred to herein as
a "RESTRICTED PAYMENT"), if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:
(A) a Default shall have occurred and be continuing (or
would result therefrom); or
(B) the Company is not able to incur an additional $1.00 of
Debt pursuant to Section 3.6(a) after giving effect, on a pro forma
basis, to such Restricted Payment; or
(C) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to the date
hereof would exceed the sum of:
(i) 50% of Consolidated Net Income for the period
(treated as one accounting period) from the beginning of the
first calendar quarter commencing after December 23, 2003 to
the end of the most recent calendar quarter ending prior to
the date of such Restricted Payment for which financial
statements are in existence (or, in case such Consolidated Net
Income is a deficit, minus 100% of such deficit); provided,
however, that writedowns of oil and gas properties due to the
application of the full-cost
53
method of accounting will not be deducted in calculating
Consolidated Net Income for purposes of this paragraph;
(ii) the aggregate Net Cash Proceeds received by the
Company from the issue or sale of its capital stock (other
than Disqualified Stock) or other capital contributions
subsequent to the date hereof (other than Net Cash Proceeds
received from an issuance or sale of such capital stock to a
Subsidiary of the Company or an employee stock ownership plan,
option plan or similar trust to the extent such sale to an
employee stock ownership plan, option plan or similar trust is
financed by loans from or guaranteed by the Company or any
Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination);
(iii) the amount by which Debt 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
date hereof of any Debt of the Company convertible or
exchangeable for capital stock (other than Disqualified Stock)
of the Company (less the amount of any cash, or other
property, distributed by the Company upon such conversion or
exchange); and
(iv) the amount equal to the net reduction in
Restricted Investments made by the Company or any of its
Restricted Subsidiaries in any Person resulting from:
(a) repurchases or redemptions of such
Restricted Investments by such Person, proceeds realized
upon the sale of such Restricted Investment to an
unaffiliated purchaser, repayments of loans or advances
or other transfers of assets (including by way of
dividend or distribution) by such Person to the Company
or any Restricted Subsidiary of the Company; or
(b) the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in each
case as provided in the definition of Investment) not to
exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by the Company or
any Restricted Subsidiary in such Unrestricted
Subsidiary,
which amount in each case under this clause (iv) was
included in the calculation of the amount of Restricted
Payments; provided, however, that no amount will be included
under this clause (iv) to the extent it is already included in
Consolidated Net Income.
The provisions of the preceding paragraph will not prohibit:
54
(1) any purchase or redemption of capital stock or
Subordinated Debt of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, capital stock of
the Company or Subordinated Debt with a maturity after December 31,
2010; provided, however, that (i) such purchase or redemption will
be excluded in subsequent calculations of the amount of Restricted
Payments and (ii) the Net Cash Proceeds from such sale will be
excluded from clause (C)(ii) of the preceding paragraph;
(2) any purchase or redemption of Subordinated Debt of the
Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Debt of the Company
that is refinanced in compliance with this Indenture; provided,
however, that such purchase or redemption will be excluded in
subsequent calculations of the amount of Restricted Payments;
(3) so long as no Default or Event of Default has occurred
and is continuing, any purchase or redemption of Subordinated Debt
from Net Available Cash to the extent permitted under Section 3.14
below; provided, however, that such purchase or redemption will be
excluded in subsequent calculations of the amount of Restricted
Payments;
(4) dividends paid within sixty (60) days after the date of
declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that such dividends
will be included in subsequent calculations of the amount of
Restricted Payments;
(5) so long as no Default or Event of Default has occurred
and is continuing,
(A) the purchase, redemption or other acquisition,
cancellation or retirement for value of capital stock, or
options, warrants, equity appreciation rights or other rights
to purchase or acquire capital stock of the Company or any
Restricted Subsidiary of the Company or any parent of the
Company held by any existing or former directors, employees or
management of the Company or any Subsidiary of the Company or
their assigns, estates or heirs, in each case in connection
with the repurchase provisions under employee or director
stock option or stock purchase agreements or other agreements
to compensate management employees or directors; provided that
such redemptions or repurchases pursuant to this clause will
not exceed $2,000,000 in the aggregate during any calendar
year and $10,000,000 in the aggregate for all such redemptions
and repurchases; provided, however, that the amount of any
such repurchase or redemption will be included in subsequent
calculations of the amount of Restricted Payments; and
(B) loans or advances to employees or directors of the
Company or any Subsidiary of the Company the proceeds of which
are
55
used to purchase capital stock of the Company, in an aggregate
amount not in excess of $2,000,000 at any one time
outstanding; provided, however, that the amount of such loans
and advances will be included in subsequent calculations of
the amount of Restricted Payments;
(6) repurchases of capital stock deemed to occur upon the
exercise of stock options if such capital stock represents a portion
of the exercise price thereof; provided, however, that such
repurchases will be excluded from subsequent calculations of the
amount of Restricted Payments; and
(7) Restricted Payments in an amount not to exceed
$10,000,000; provided that the amount of such Restricted Payments
will be included in the calculation of the amount of Restricted
Payments pursuant to Section 3.8(a)(4)(C).
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of such Restricted Payment of the Property or
securities proposed to be paid, transferred or issued by the Company or
such Restricted Subsidiary, as the case may be, pursuant to such
Restricted Payment. The fair market value of any cash Restricted Payment
shall be its face amount and any non-cash Restricted Payment shall be
determined conclusively by the board of directors of the Company acting in
good faith.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
capital stock or pay any Debt or other obligations owed to the
Company or any Restricted Subsidiary;
(2) make any loans or advances to the Company or any
Restricted Subsidiary; or
(3) transfer any of its Property to the Company or any
Restricted Subsidiary.
The preceding provisions will not prohibit:
(A) any encumbrance or restriction pursuant to this
Indenture, the Senior Secured Credit Facility, the Duke Credit
Facility or an agreement in effect on the date hereof;
(B) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Debt incurred by a Restricted Subsidiary on or before the date
on which such Restricted Subsidiary was acquired by the
Company (other than Debt incurred as
56
consideration in, or to provide all or any portion of the
funds 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 or in contemplation of the transaction) and
outstanding on such date;
(C) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement effecting a
refunding, replacement or refinancing of Debt incurred
pursuant to an agreement referred to in clause (A) or (B) of
this paragraph or this clause (C) or contained in any
amendment to an agreement referred to in clause (A) or (B) of
this paragraph or this clause (C); provided, however, that the
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such agreement are no less
favorable in any material respect to the holders of the
Securities than the encumbrances and restrictions contained in
such agreements referred to in clauses (A) or (B) of this
paragraph on the date hereof or the date such Restricted
Subsidiary became a Restricted Subsidiary, whichever is
applicable;
(D) in the case of clause (3) of this covenant, any
encumbrance or restriction;
(i) that restricts in a customary manner the
subletting, assignment or transfer of any Property that
is subject to a lease, license or similar contract, or
the assignment or transfer of any such lease, license or
other contract;
(ii) contained in mortgages, pledges or other
security agreements permitted under this Indenture
securing Debt of the Company or a Restricted Subsidiary
to the extent such encumbrances or restrictions restrict
the transfer of the Property subject to such mortgages,
pledges or other security agreements; or
(iii) pursuant to customary provisions regarding
preferential rights or rights of first refusal or
restricting dispositions of real property interests set
forth in any reciprocal easement agreements of the
Company or any Restricted Subsidiary;
(E) purchase money obligations for Property acquired
in the ordinary course of business that impose encumbrances or
restrictions of the nature described in clause (3) of this
covenant on the Property so acquired;
(F) any restriction with respect to a Restricted
Subsidiary (or any of its Property) imposed pursuant to an
agreement entered into for the
57
direct or indirect sale or disposition of all or substantially
all the capital stock or Property of such Restricted
Subsidiary (or the Property that is subject to such
restriction) pending the closing of such sale or disposition;
(G) encumbrances or restrictions arising or existing
by reason of applicable law or any applicable rule, regulation
or order;
(H) any encumbrance or restriction arising out of any
Permitted Lien; and
(I) customary provisions with respect to the
distribution of assets or property in joint venture
agreements.
SECTION 3.9 SALES AND LEASEBACKS. Other than in connection with Permitted
Equipment Financings, neither the Company nor any Restricted Subsidiary will
enter into any arrangement, directly or indirectly, with any Person whereby the
Company or any Restricted Subsidiary shall sell or transfer any of its Property,
whether now owned or hereafter acquired, and whereby the Company or any
Restricted Subsidiary shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property which the Company or any
Restricted Subsidiary intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
SECTION 3.10 NATURE OF BUSINESS. Neither the Company nor any Restricted
Subsidiary will allow any material change to be made in the character of its
business.
SECTION 3.11 LIMITATION ON LEASES. Other than in connection with Permitted
Equipment Financings, neither the Company nor any Restricted Subsidiary will
create, incur, assume or permit to exist any obligation for the payment of rent
or hire of Property of any kind whatsoever (real or personal including capital
leases, but excluding leases of Hydrocarbon Interests), under leases or lease
agreements for terms in excess of, or that are non-cancelable by the Company or
such Subsidiary within, twelve months which would cause all payments made by the
Company and its Restricted Subsidiaries pursuant to all such leases or lease
agreements to exceed (i) $2,000,000 per annum during the calendar years 2004 and
2005 or (ii) $4,000,000 per annum during calendar years 2006 through 2010.
SECTION 3.12 ERISA COMPLIANCE. The Company will not at any time:
(a) engage in, or permit any Subsidiary or ERISA Affiliate to
engage in, any transaction in connection with which the Company, any
Subsidiary or any ERISA Affiliate could be subjected to either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax
imposed by Chapter 43 of Subtitle D of the Code;
(b) terminate, or permit any Subsidiary or ERISA Affiliate to
terminate, any Plan in a manner, or take any other action with respect to
any Plan, which could result in any liability to the Company, any
Subsidiary or any ERISA Affiliate to the PBGC;
58
(c) fail to make, or permit any Subsidiary or ERISA Affiliate to
fail to make, full payment when due of all amounts which, under the
provisions of any Plan, agreement relating thereto or applicable law, the
Company, a Subsidiary or any ERISA Affiliate is required to pay as
contributions thereto;
(d) permit to exist, or allow any Subsidiary or ERISA Affiliate to
permit to exist, any accumulated funding deficiency within the meaning of
Section 302 of ERISA or section 412 of the Code, whether or not waived,
with respect to any Plan;
(e) permit, or allow any Subsidiary or ERISA Affiliate to permit,
the actuarial present value of the benefit liabilities under any Plan
maintained by the Company, any Subsidiary or any ERISA Affiliate which is
regulated under Title IV of ERISA to exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV
of ERISA) of such Plan allocable to such benefit liabilities. The term
"actuarial present value of the benefit liabilities" shall have the
meaning specified in section 4041 of ERISA;
(f) contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any Multiemployer Plan;
(g) acquire, or permit any Subsidiary or ERISA Affiliate to
acquire, an interest in any Person that causes such Person to become an
ERISA Affiliate with respect to the Company, any Subsidiary or any ERISA
Affiliate if such Person sponsors, maintains or contributes to, or at any
time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to, (1) any Multiemployer Plan, or (2) any
other Plan that is subject to Title IV of ERISA under which the actuarial
present value of the benefit liabilities under such Plan exceeds the
current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities;
(h) incur, or permit any Subsidiary or ERISA Affiliate to incur, a
liability to or on account of a Plan under sections 515, 4062, 4063, 4064,
4201 or 4204 of ERISA;
(i) contribute to or assume an obligation to contribute to, or
permit any Subsidiary or ERISA Affiliate to contribute to or assume an
obligation to contribute to, any employee welfare benefit plan, as defined
in section 3(1) of ERISA, including, without limitation, any such plan
maintained to provide benefits to former employees of such entities, that
may not be terminated by such entities in their sole discretion at any
time without any material liability; or
(j) amend or permit any Subsidiary or ERISA Affiliate to amend, a
Plan resulting in an increase in current liability such that the Company,
any Subsidiary or any ERISA Affiliate is required to provide security to
such Plan under section 401(a)(29) of the Code.
59
SECTION 3.13 SALE OR DISCOUNT OF RECEIVABLES. Neither the Company nor any
Restricted Subsidiary will discount or sell (with or without recourse) any of
its notes receivable or accounts receivable other than settlement of any past
due accounts in the ordinary course of business and in accordance with prudent
commercial practices.
SECTION 3.14 SALE OF PROPERTY.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, sell, assign, convey or otherwise transfer any Property unless
(i) consideration equal to the fair market value of the Property sold is
received, (ii) the sale is an arm's length transaction; (iii) all of the
consideration received consists of cash, Cash Equivalents, liquid securities or
Exchanged Properties ("PERMITTED CONSIDERATION"); provided, however, that the
Company and its Restricted Subsidiaries may receive Property that does not
constitute Permitted Consideration, so long as the aggregate fair market value
of all Property received pursuant to this proviso shall not exceed 10.0% of
Adjusted Consolidated Net Tangible Assets, as determined by the Company's Board
of Directors.
(b) Within 365 days following the receipt of Net Available Cash, an
amount equal to 100% of the Net Available Cash from such Asset Disposition shall
be applied by the Company or such Restricted Subsidiary, as the case may be:
(1) to apply all or any of the Net Available Cash therefrom to
repay indebtedness under the Senior Secured Credit Facility, or
(2) invest all or any part of the Net Available Cash in Property
that will be used in the oil and gas business of the Company or its
Restricted Subsidiaries.
Any Net Available Cash from Asset Dispositions that are not applied or
invested as provided in the preceding paragraph will be deemed to constitute
"EXCESS PROCEEDS." On the 366th day after an Asset Disposition, if the aggregate
amount of Excess Proceeds exceeds $5,000,000.00, the Company will be required to
make an offer ("ASSET DISPOSITION OFFER") to all holders of Securities and to
the extent required by the terms of other Senior Indebtedness, to all holders of
other Senior Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Senior Indebtedness with the proceeds
from any Asset Disposition ("PARI PASSU NOTES"), to purchase the maximum
principal amount of Securities and any such Pari Passu Notes to which the Asset
Disposition Offer applies that may be purchased out of the Excess Proceeds, at
an offer price in cash in an amount equal to 100% of the principal amount of the
Securities and Pari Passu Notes plus accrued and unpaid interest to the date of
purchase, in accordance with the procedures set forth herein or in the
agreements governing the Pari Passu Notes, as applicable. To the extent that the
aggregate amount of Securities and Pari Passu Notes so validly tendered and not
properly withdrawn pursuant to an Asset Disposition Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes, subject to the other covenants contained herein. If the
aggregate principal amount of Securities surrendered by holders thereof and
other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds
the amount of Excess Proceeds, the Company shall select the Securities and Pari
Passu Notes to be purchased on a pro rata basis on the basis of the aggregate
principal amount of tendered Securities and Pari Passu Notes. Upon
60
completion of such Asset Disposition Offer, the amount of Excess Proceeds shall
be reset at zero.
The Asset Disposition Offer will remain open for a period of twenty (20)
Business Days following its commencement, except to the extent that a longer
period is required by applicable law (the "ASSET DISPOSITION OFFER PERIOD"). No
later than five (5) Business Days after the termination of the Asset Disposition
Offer Period (the "ASSET DISPOSITION PURCHASE DATE"), the Company will purchase
the principal amount of Securities and Pari Passu Notes required to be purchased
pursuant to this covenant (the "ASSET DISPOSITION OFFER AMOUNT") or, if less
than the Asset Disposition Offer Amount has been so validly tendered, all
Securities and Pari Passu Notes validly tendered in response to the Asset
Disposition Offer.
Any accrued and unpaid interest will be paid to the Person in whose name a
Security is registered at the close of business on such date, and no additional
interest will be payable to holders of the Securities who tender Securities
pursuant to the Asset Disposition Offer.
On or before the Asset Disposition Purchase Date, the Company will, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Asset Disposition Offer Amount of Securities and Pari Passu Notes or
portions of Securities and Pari Passu Notes so validly tendered and not properly
withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset
Disposition Offer Amount has been validly tendered and not properly withdrawn,
all Securities and Pari Passu Notes so validly tendered and not properly
withdrawn. the Company will deliver all certificates and notes required, if any,
by this Indenture or the agreements governing the Pari Passu Notes. the Company
will promptly (but in any case not later than the Asset Disposition Purchase
Date) mail or deliver to each tendering holder of Securities or holder or lender
of Pari Passu Notes, as the case may be, an amount equal to the purchase price
of the Securities or Pari Passu Notes so validly tendered and not properly
withdrawn by such holder or lender, as the case may be, and accepted by the
Company for purchase, and the Company will promptly issue a new Security and
will deliver such new Security to such holder, in a principal amount equal to
any unpurchased portion of the Security surrendered. In addition, the Company
will take any and all other actions required by the agreements governing the
Pari Passu Notes. Any Security not so accepted will be promptly mailed or
delivered by the Company to the holder thereof. The Company will publicly
announce the results of the Asset Disposition Offer on the Asset Disposition
Purchase Date.
For the purposes of this covenant, the following will be deemed to be
cash:
(1) the assumption by the transferee of Debt (other than
Subordinated Debt or Disqualified Stock) of the Company or Debt (other
than Preferred Stock) of any Restricted Subsidiary of the Company and the
release of the Company or such Restricted Subsidiary from all liability on
such Debt in connection with such Asset Disposition (in which case the
Company will, without further action, be deemed to have applied such
deemed cash to Debt in accordance with Section 3.14(b)(1) above); and
61
(2) securities, notes or other obligations received by the Company
or any Restricted Subsidiary of the Company from the transferee that are
promptly converted by the Company or such Restricted Subsidiary into cash
or Cash Equivalents.
The Company will comply, to the extent applicable, with the requirements
of securities laws or regulations in connection with the repurchase of
Securities pursuant to this Agreement. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this covenant, the
Company will comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under this Indenture by virtue of
complying with such securities laws and regulations.
SECTION 3.15 CHANGE IN CONTROL. If a Change in Control occurs, each
registered holder of Securities will have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Securities at a purchase price in cash equal to 101% of the
principal amount of the Securities 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 due on the relevant interest payment date).
Within 30 days following any Change in Control, the Company will mail a
notice (the "CHANGE IN CONTROL OFFER") to each registered Holder, with a copy to
the Trustee, stating: (i) that a Change in Control has occurred and that such
Holder has the right to require the Company pursuant to this Section 3.15 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 a record date to
receive interest on the relevant interest payment date) (the "CHANGE IN CONTROL
PAYMENT"); (ii) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed) (the "CHANGE IN CONTROL
PAYMENT DATE"); and (iii) the procedures determined by the Company, consistent
with this Indenture, that a Holder must follow in order to have its Securities
repurchased.
On the Change in Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Securities or portions of Securities (in
integral multiples of $1,000) properly tendered under the Change in Control
Offer, (ii) deposit with the Paying Agent an amount equal to the Change in
Control Payment in respect of all the Securities or portions of Securities so
tendered; and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating the
aggregate principal amount of Securities or portions of Securities being
purchased by the Company. The Paying Agent will promptly mail to each Holder of
the Securities so tendered the Change in Control Payment for such Securities,
and the Trustee will promptly authenticate and mail (or cause to be transferred
by book entry) to each Holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered, if any; provided that each
such new Security will be in a principal amount of $1,000 or an integral
multiple of $1,000.
If the Change in Control Payment Date is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid
interest, if any, will be paid to the Person in whose name a Security is
registered at the close of business on such record date,
62
and no additional interest will be payable to holders who tender pursuant to the
Change in Control Offer.
The Company will not be required to make a Change in Control Offer upon a
Change in Control if a third party makes the Change in Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change in Control Offer made by the Company
and purchases all Securities validly tendered and not withdrawn under such
Change in Control Offer.
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 in connection with the repurchase of Securities pursuant to this
Section 3.15. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue of its
compliance with applicable law.
SECTION 3.16 ENVIRONMENTAL MATTERS. Neither the Company nor any Restricted
Subsidiary will cause or, to the extent within its control, permit any of its
Property to be in violation of, or do anything or, to the extent within its
control, permit anything to be done which will subject any such Property to any
remedial obligations under any Environmental Laws, assuming disclosure to the
applicable governmental authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
SECTION 3.17 TRANSACTIONS WITH AFFILIATES. Neither the Company nor any
Restricted Subsidiary will enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property or the rendering
of any service, with any Affiliate unless such transactions are otherwise
permitted under this Indenture, are in the ordinary course of its business and
are upon fair and reasonable terms no less favorable to it than it would obtain
in a comparable arm's length transaction with a Person not an Affiliate;
provided, however, that notwithstanding the provisions of this Section 3.16, the
Company may engage in the Permitted Medusa Transaction.
SECTION 3.18 SUBORDINATED DEBT. If a Default exists or would result
therefrom, the Company shall not make any payment in respect of any Subordinated
Debt or the Existing Subordinated Debt. the Company will not amend, supplement
or otherwise modify any instruments evidencing, or agreements relating to or
executed in connection with, any Existing Subordinated Debt, in any manner which
would have the effect of (i) accelerating the timing or amount of any scheduled
payments of principal or interest thereon, (ii) increasing the rate of interest
payable thereon or (iii) resulting in a Material Adverse Effect.
SECTION 3.19 ISSUANCE AND SALE OF CAPITAL STOCK. The Company (a) shall not
permit any Restricted Subsidiary to issue any capital stock (other than to the
Company or a Wholly-Owned Subsidiary of the Company) and (b) shall not permit
any Person (other than the Company or a wholly-owned Restricted Subsidiary of
the Company) to own any capital stock of any Restricted Subsidiary, except, in
each case, for (1) directors' qualifying shares, (2) capital stock
63
of a Restricted Subsidiary organized in a foreign jurisdiction required to be
issued to, or owned by, the government of such foreign jurisdiction or
individual or corporate citizens of such foreign jurisdiction in order for such
Restricted Subsidiary to transact business in such foreign jurisdiction, (3) a
sale of all or substantially all the capital stock of a Restricted Subsidiary
effected in connection with a Property sale in accordance with Section 3.14, and
(4) the capital stock of a Restricted Subsidiary owned by a Person at the time
such Restricted Subsidiary became a Restricted Subsidiary or acquired by such
Person in connection with the formation of the Restricted Subsidiary; provided,
however, that any capital stock retained by the Company or a Restricted
Subsidiary shall be treated as an Investment for purposes of Section 3.8, if the
amount of such capital stock represents less than a majority of the voting stock
of such Restricted Subsidiary.
SECTION 3.20 MODIFICATION OF AGREEMENTS. the Company shall not, and shall
not permit any Subsidiary to, amend, modify or change any provision of its
articles, certificate of incorporation, bylaws, partnership agreement,
certificate of formation or operating agreement, as applicable, or the terms of
any class or series of its capital stock, other than in a manner that would not
be reasonably likely to have a Material Adverse Effect or to adversely affect
the right or ability of the Company to receive dividend payments or other
distributions from its Subsidiaries, or amend, modify, cancel or terminate or
fail to renew or extend or permit the amendment, modification, cancellation or
termination of any Material Agreement, except to the extent that such
amendments, modifications, cancellations or terminations would not be reasonably
likely to have a Material Adverse Effect.
SECTION 3.21 GUARANTEES. the Company shall not, and shall not permit any
Restricted Subsidiary to, guarantee, directly or indirectly, any Debt of any
Unrestricted Subsidiary. After the Issue Date, the Company will cause each
Restricted Subsidiary, other than a Foreign Subsidiary, created or acquired by
the Company or one or more of its Restricted Subsidiaries to execute and deliver
to the Trustee a Subsidiary Guarantee pursuant to which such Subsidiary
Guarantor will unconditionally Guarantee, on a joint and several basis, the full
and prompt payment of the principal of, premium, if any, and interest on the
Securities on a senior basis.
SECTION 3.22 LIMITATION ON ADDITIONAL DEBT. The Company shall not incur
any Debt other than (i) Permitted Indebtedness or (ii) Debt incurred under the
Senior Secured Credit Facility. For purposes of this Section 3.22, Debt shall
only include the obligations listed in clauses (a) through (e), (g), and (i)
through (k) of the definition of Debt in Section 1.1.
SECTION 3.23 PERMITTED MEDUSA TRANSACTIONS. Notwithstanding anything in
this Indenture to the contrary, so long as no Default or Event of Default has
occurred and is continuing at the time the Company or any of its Subsidiaries
enters into any Permitted Medusa Transaction, the entering into and carrying out
of such Permitted Medusa Transaction shall be allowed hereunder and shall not in
itself constitute a breach of, non-compliance with, or Default or Event of
Default under this Indenture.
SECTION 3.24 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in
The City of New York, an office or agency where the Securities may be presented
or surrendered for payment, where, if applicable, the Securities may be
surrendered for registration of transfer or
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exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The principal corporate trust
office of the Trustee, or if the Trustee's principal corporate trust office is
not located in The City of New York, any other office or agency maintained by
the Trustee in The City of New York (the "CORPORATE TRUST OFFICE"), shall be
such office or agency of the Company, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such other office or agency.
SECTION 3.25 PAYMENT OF SECURITIES. The Company shall pay the principal of
(and premium, if any) and interest on the Securities in the manner provided in
the Securities. An installment of principal of (and premium, if any) or interest
on the Securities shall be considered paid on the date it is due if the Trustee
or Paying Agent holds on that date money in Dollars designated for and
sufficient to pay the installment.
SECTION 3.26 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each Fiscal Year of the Company an
Officers' 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 or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they do,
the certificate shall describe the Default or Event of 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).
ARTICLE IV.
SUCCESSOR COMPANY
SECTION 4.1 CONSOLIDATION AND MERGER. The Company shall not merge into or
consolidate with or sell all or substantially all of its Property to any Person
or group of affiliated Persons unless (a) either (1) the Company survives, or
(2) the survivor ("SUCCESSOR COMPANY") is an entity organized under United
States law or any state thereof or the District of Columbia and assumes, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture; (b) no Default or Event of Default shall have
occurred and be continuing; (c) except in the case of the consolidation or
merger of any Restricted Subsidiary with or into the Company, the consolidated
net worth of the Company (or the surviving entity) does not decrease; (d)
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immediately after giving effect to the transaction the Successor Company could
incur $1.00 of additional Debt (excluding Permitted Indebtedness) under Section
3.6(a); and (e) if any of the Company's assets become subject to any Lien, the
imposition of such Lien shall have been in compliance with Section 3.7.
Notwithstanding the preceding clause (d), (1) any Restricted Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its
properties and assets to the Company, (2) the Company may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction to realize tax or other benefits and (3) any Wholly-Owned
Subsidiary can consolidate with or merge into any other Wholly-Owned Subsidiary,
except Restricted Subsidiaries cannot merge with Unrestricted Subsidiaries.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture.
ARTICLE V.
REDEMPTION OF SECURITIES
SECTION 5.1 OPTIONAL REDEMPTION. The Company may redeem all or, from time
to time, a part, of the Securities subject to the conditions and at the
redemption prices specified in the form of Securities set forth in Exhibits A
and B hereto, which are hereby incorporated by reference and made a part of this
Indenture, together with accrued and unpaid interest to the Redemption Date.
SECTION 5.2 APPLICABILITY OF ARTICLE. Redemption of Securities at the
election of the Company or otherwise, as permitted or required by any provision
of this Indenture, shall be made in accordance with such provision and this
Article.
SECTION 5.3 ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Company to redeem any Securities pursuant to Section 5.1 shall be evidenced by a
Board Resolution. In case of any redemption at the election of the Company, the
Company shall, upon not later than the earlier of the date that is 30 days prior
to the Redemption Date fixed by the Company or the date on which notice is given
to the Holders (except as provided in Section 5.5 or unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities to be redeemed and shall deliver
to the Trustee such documentation and records as shall enable the Trustee to
select the Securities to be redeemed pursuant to Section 5.4.
SECTION 5.4 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. In the case
of any partial redemption, the Trustee will select the Securities for redemption
in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not listed, then on a pro rata basis, by lot or by such other method as the
Trustee in its sole discretion will deem to be fair and appropriate, although no
Security of $1,000 in original principal amount or less will be redeemed in
part. If any Security is to be redeemed in part only, the notice of redemption
relating to that Security will state the portion of the principal amount thereof
to be redeemed. A new Security in principal amount equal to the unredeemed
portion thereof will be issued in the name of the holder thereof upon
cancellation of the original Security.
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The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 5.5 NOTICE OF REDEMPTION. Notice of redemption shall be given in
the manner provided for in Section 11.2 not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Securities to be redeemed. The
Trustee shall give notice of redemption in the Company's name and at the
Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the Redemption Date, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the following items.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the redemption price and the amount of accrued interest to the
Redemption Date payable as provided in Section 5.7, if any,
(c) if less than all outstanding Securities are to be redeemed,
the identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption,
(d) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder will receive,
without charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
(e) that on the Redemption Date the redemption price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
5.7) will become due and payable upon each such Security, or the portion
thereof, to be redeemed, and, unless the Company defaults in making the
redemption payment, that interest on Securities called for redemption (or
the portion thereof) will cease to accrue on and after said date,
(f) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if
any,
(g) the name and address of the Paying Agent,
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(h) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price,
(i) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in such notice
or printed on the Securities, and
(j) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6 DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.4) an amount of money sufficient to pay the redemption
price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 5.7 SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the redemption price therein
specified (together with accrued interest, if any, to the Redemption Date), and
from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the redemption price,
together with accrued interest, if any, to the Redemption Date (subject to the
rights of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date).
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Securities.
SECTION 5.8 SECURITIES REDEEMED IN PART. Any Security which is to be
redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 3.24 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of such
Security at the expense of the Company, a new Security or Securities, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered, provided, that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.
ARTICLE VI.
EVENTS, DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT. One or more of the following events shall
constitute an "EVENT OF DEFAULT":
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(a) the Company shall default in the payment or prepayment when
due of any principal of or interest on any Security and such default,
other than a default of a payment or prepayment of principal (which shall
have no cure period), shall continue unremedied for a period of thirty
(30) days; or
(b) the Company or any Restricted Subsidiary shall default in the
payment when due of any principal of or interest on any of its other Debt
(other than Debt owed to the Company or any Restricted Subsidiary)
aggregating $10,000,000 or more ($15,000,000 in the case of non-recourse
Debt), or any event specified in any note, agreement, indenture or other
document evidencing or relating to any such Debt shall occur if the effect
of such event is to cause, or (with the giving of any notice or the lapse
of time or both) to permit the holder or holders of such Debt (or a
trustee or administrative agent on behalf of such holder or holders) to
cause, such Debt to become due prior to its stated maturity; or
(c) (i) the Company shall default in the performance of any of its
obligations under Article IV of this Indenture; (ii) the Company shall
default in the performance of any of its obligations under Article III
(other than the payment of amounts due which shall be governed by Section
6.1(a) or defaults under Article IV which shall be governed by Section
6.1(c)(i)) and such default shall continue unremedied for a period of
thirty (30) days after notice thereof specified below or (iii) the Company
shall default in the performance of any of its other obligations under
this Indenture and such default shall continue unremedied for a period of
sixty (60) days after notice thereof as provided below; or
(d) the Company or any Restricted Subsidiary shall admit in
writing its inability to, or be generally unable to, pay its debts as such
debts become due; or
(e) the Company or any Restricted Subsidiary shall (i) apply for
or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, liquidation or
composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Federal Bankruptcy Code, or
(vi) take any corporate action for the purpose of effecting any of the
foregoing; or
(f) a proceeding or case shall be commenced, without the
application or consent of the Company or any Restricted Subsidiary, in any
court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Person of all or any substantial
part of its assets, or (iii) similar relief in respect of such Person
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
69
proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of sixty (60) days; or (iv)
an order for relief against such Person shall be entered in an involuntary
case under the Federal Bankruptcy Code;
(g) a judgment or judgments for the payment of money in excess of
$10,000,000 in the aggregate (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing)
shall be rendered by a court against the Company or any Restricted
Subsidiary and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be
procured, within sixty (60) days from the date of entry thereof and the
Company or such Subsidiary shall not, within said period of sixty (60)
days, or such longer period during which execution of the same shall have
been stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(h) any Subsidiary takes, suffers or permits to exist any of the
events or conditions referred to in clauses (d), (e), (f) or (g), and such
event or condition has a Material Adverse Effect.
The Company shall, promptly after the occurrence of any Default or Event
of Default under this Section 6.1, deliver to the Trustee written notice thereof
in the form of an Officers' Certificate, which such notice shall contain the
status thereof and a description of the action being taken or proposed to be
taken by the Company in respect thereof.
Notwithstanding the foregoing, a Default under clause (c) of this Section
6.1 will not constitute an Event of Default until the Trustee or the Holders of
at least 25% in principal amount of the outstanding Securities notify the
Company of the Default and the Company does not cure such Default within the
time specified in said clause (c) 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".
SECTION 6.2 ACCELERATION. If an Event of Default (other than an Event of
Default specified in Section 6.1(e) or (f)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the outstanding Securities by notice to the Company and the Trustee,
may, and the Trustee at the request of such Holders shall, declare the principal
of, premium, if any, and accrued and unpaid interest, on all the Securities to
be due and payable. Upon such a declaration, such principal, premium, if any,
and accrued and unpaid interest will be due and payable immediately. In the
event of a declaration of acceleration because an Event of Default set forth in
Section 6.1(b) above has occurred and is continuing, the declaration of
acceleration shall be automatically annulled if the event of default or payment
default triggering such Event of Default pursuant to Section 6.1(b) shall be
remedied or cured by the Company or a Restricted Subsidiary of the Company or
waived by the holders of the relevant Debt within 20 days after the declaration
of acceleration with respect thereto and if (i) the annulment of the
acceleration of the Securities would not conflict with any judgment or decree of
a court of competent jurisdiction and (ii) all existing Events of Default,
except nonpayment of principal, premium or interest on the Securities that
became due solely because of such acceleration, have been cured or waived. No
such rescission shall affect any subsequent Default
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or Event of Default or impair any right consequent thereto. If an Event of
Default described in Section 6.1(e) or (f) occurs and is continuing, the
principal of, premium, if any, and accrued and unpaid interest on all the
Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders.
SECTION 6.3 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 premium, if any) 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 6.4 WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may (a)
waive, by their consent (including, without limitation consents obtained in
connection with a purchase of, or tender offer or exchange offer for,
Securities), an existing Default or Event of Default and its consequences except
(i) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on a Security or (ii) a Default or Event of Default
in respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected and (b) rescind any such acceleration
with respect to the Securities and its consequences if (1) rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(2) all existing Events of Default, other than the nonpayment of the principal
of, premium, if any, and interest on the Securities that have become due solely
by such declaration of acceleration, have been cured or waived. When a Default
or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right.
SECTION 6.5 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. This Indenture provides
that in the event an Event of Default has occurred and is continuing, the
Trustee will be required in the exercise of its powers to use the degree of care
that a prudent person would use in the conduct of its own affairs. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Sections 7.1 and 7.2, 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 from the Holders satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.
SECTION 6.6 LIMITATION ON SUITS. Subject to the provisions of this
Indenture relating to the duties of the Trustee, if an Event of Default occurs
and is continuing, the Trustee will be
71
under no obligation to exercise any of the rights or powers under this Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium, if any, or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Securities unless:
(1) such Holder has previously given to the Trustee written notice
stating that an Event of Default is continuing;
(2) Holders of at least 25% in outstanding principal amount of the
Securities have requested 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 have not given the Trustee a direction that, in the
opinion of the Trustee, is inconsistent with such request within 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.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture (including, without limitation, Section 6.6),
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 6.8 COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.1(a) or (b) 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 7.7.
SECTION 6.9 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 Subsidiaries or its or
their respective creditors or properties 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
receiver, trustee, assignee, liquidator, custodian or similar official under the
Federal Bankruptcy Code 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
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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 7.7.
SECTION 6.10 PRIORITIES. If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the Securities
for principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal and interest, respectively; and
THIRD: to the Company.
The Trustee, upon prior notice to the Company, 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 the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders
of more than 10% in outstanding principal amount of the Securities.
ARTICLE VII.
TRUSTEE
SECTION 7.1 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; provided that if an Event of Default occurs and is continuing, the
Trustee will be under no obligation to exercise any of the rights or powers
under this Indenture at the request or direction of any of the Holders unless
such Holders have offered to the Trustee reasonable indemnity or security
against loss, liability or expense.
(b) Except during the continuance of an Event of Default:
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(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, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform on their face to the requirements of
this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this paragraph 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 6.5.
(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 expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(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) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
(including reasonable attorneys' fees and expenses) and liabilities that might
be incurred by it in compliance with such request or direction.
SECTION 7.2 RIGHTS OF TRUSTEE. Subject to Section 7.1,
(a) The Trustee may conclusively rely on any document (whether in
its original or facsimile form) reasonably 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 and/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 an Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers, unless the Trustee's conduct constitutes willful
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, 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 7.3 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 7.4 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 this 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.
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SECTION 7.5 NOTICE OF DEFAULTS. If a Default or Event of Default occurs
and is continuing and if a Trust Officer has actual knowledge thereof, the
Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 45 days after it occurs. Except in the case of a Default or Event
of Default in payment of principal of, premium (if any), or interest on any
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS. As promptly as practicable
after each May 15 beginning with the May 15 following the date of this
Indenture, and in any event prior to July 15 in each year, the Trustee shall, if
required by the TIA, mail to each Securityholder a brief report dated as of such
May 15 that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b). The Trustee shall transmit by mail all reports as required
by TIA Section 313(c).
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 7.7 COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. 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, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, 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, damages, claims or
expense (including reasonable attorneys' fees and expenses) incurred by it
without negligence or willful misconduct on its part in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
Section 7.7) and of defending itself against any claims (whether asserted by any
Securityholder, the Company or otherwise). The Trustee shall notify the Company
promptly of any claim 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 provided
that the Company shall not be required to pay such fees and expenses if it
assumes the Trustee's defense, and, in the reasonable judgment of outside
counsel to the Trustee, there is no conflict of interest between the Company and
the Trustee in connection with such defense. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct or negligence.
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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 Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or Debt of the Company.
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 Default specified in Section 6.1(e) or (f) with respect to the
Company, the expenses are intended to constitute expenses of administration
under the Federal Bankruptcy Code.
SECTION 7.8 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:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or 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 the 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 7.7.
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, at the Company's
expense, 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 jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to this Section,
the Company's obligations under Section 7.7 shall continue for the benefit of
the retiring Trustee.
SECTION 7.9 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 $10 million as set forth in its most
recent published 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.
SECTION 7.12 TRUSTEE'S APPLICATION FOR INSTRUCTION FROM THE COMPANY. Any
application by the Trustee for written instructions from the Company may, at the
option of the Trustee, set forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the date on and/or after which
such action shall be taken or such omission shall be effective. The Trustee
shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE VIII.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) Subject to Section 8.1(c), when (i)(x) the Company delivers to the
Trustee all outstanding Securities (other than Securities replaced pursuant to
Section 2.9) for cancellation or
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(y) all outstanding Securities not theretofore delivered for cancellation have
become due and payable, whether at maturity or upon redemption or will become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name and at the expense of the Company and the
Company or any Subsidiary Guarantor irrevocably deposits or causes to be
deposited with the Trustee as trust funds in trust solely for the benefit of the
Holders money in U.S. dollars, direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged ("U.S. GOVERNMENT OBLIGATIONS"), or a combination
thereof, in such amounts as will be sufficient without consideration of any
reinvestment of interest to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation for
principal, premium, if any, and accrued interest to the date of maturity or
redemption, (ii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any
Subsidiary Guarantor is a party or by which the Company or any Guarantor is
bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be
paid all sums payable by it under this Indenture and the Securities; and (iv)
the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of such Securities at
maturity or the Redemption Date, as the case may be, then 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
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("LEGAL DEFEASANCE OPTION"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under Sections 3.1, 3.2,
3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16,
3.17, 3.18, 3.19, 3.20, 3.21, 3.22 and 4.1 and the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply with such covenants shall no longer constitute a Default
or an Event of Default under Section 6.1(c) and the operation of Sections 6.1(b)
and 6.1(h), and only with respect to a Subsidiary, Sections 6.1(d), 6.1(e) and
6.1(f) and the events specified in such Sections shall no longer constitute an
Event of Default (clauses (ii) being referred to as the "COVENANT DEFEASANCE
OPTION"), but except as specified above, the remainder of this Indenture and the
Securities shall be unaffected thereby. The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option. If the Company exercises its covenant defeasance option, the Company may
elect to have any Subsidiary Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default, and the
Subsidiary Guarantees in effect at such
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time shall terminate. 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 6.1(c) (as such Section relates to 3.1 3.2, 3.3, 3.4, 3.5,
3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19,
3.20, 3.21, 3.22 and 4.1), 6.1(b), 6.1(h), or 6.1(d), (e) or (f) (but only with
respect to a Subsidiary, or because of the failure of the Company to comply with
Section 4.1.
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 the provisions of Sections 8.1(a) and (b), the
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11,
3.24, 3.25, 6.7, 7.7, 7.8 and in this Article 8 shall survive until the
Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2 CONDITIONS TO DEFEASANCE. The Company may exercise its legal
defeasance option or its covenant defeasance option only if:
(a) the Company irrevocably deposits in trust with the Trustee for
the benefit of the Holders money in Dollars or U.S. Government Obligations
or a combination thereof for the payment of principal, premium, if any,
and interest on the Securities to maturity or redemption, as the case may
be;
(b) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal 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;
(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(d) such legal defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a Default under, this Indenture
or any other material agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(e) the deposit does not constitute a default under any other
agreement binding on the Company;
(f) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States 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
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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 legal defeasance had not occurred;
(g) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel (subject to
customary assumptions and exclusions) in the United States to the effect
that the Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to federal income tax on the same amount,
in the same manner and at the same times as would have been the case if
such deposit and covenant defeasance had not occurred; and
(h) 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 and this Indenture as
contemplated by this Article VIII have been complied with.
SECTION 8.3 APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
VIII. 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.
SECTION 8.4 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 upon payment of all the obligations under this Indenture.
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 of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
SECTION 8.5 INDEMNITY FOR U.S. 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 8.6 REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article
VIII 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 obligations of the Company under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII 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 VIII; 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
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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.
ARTICLE IX.
AMENDMENTS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(c) 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;
(d) add Subsidiary Guarantees with respect to the Securities or
release a Subsidiary Guarantor upon its sale or disposition or designation
as an Unrestricted Subsidiary; provided, however, that the designation or
sale or disposition is in accord with the applicable provisions of the
Indenture;
(e) secure the Securities;
(f) add to the covenants of the Company for the benefit of the
Holders or surrender any right or power conferred upon the Company;
(g) make any change that does not adversely affect the rights of
any Holder; or
(h) Comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA.
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 9.2 WITH CONSENT OF HOLDERS. The Company, the Subsidiary
Guarantors 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 seventy-five percent (75%) in principal amount of the Securities then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, Securities). However,
without the consent of each Securityholder affected, an amendment may not:
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(a) reduce the amount of Securities whose Holders must consent to
an amendment;
(b) reduce the stated rate of or extend the stated time for
payment of interest on any Security;
(c) reduce the principal of or extend the maturity of any
Security;
(d) reduce the premium payable upon the redemption or repurchase
of any Security or change the time at which any Security may or shall be
redeemed or repurchased as described above under Section 3.14, Section
3.15 (including an amendment to the definition of "CHANGE IN CONTROL") or
Article V or any similar provision, whether through an amendment to or
waiver of Section 3.14, Section 3.15 or Article V, a definition or
otherwise;
(e) make any Security payable in money other than that stated in
the Security;
(f) impair the right of any Holder to receive payment of principal
of, premium, if any, and interest on such Holder's Securities on or after
the due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities; or
(g) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
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 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4 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. An amendment or waiver shall
become
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effective upon receipt by the Trustee of the requisite number of written
consents under Section 9.1 or 9.2 as applicable.
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 after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION 9.5 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 9.6 TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article IX 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 Sections 7.1, 7.2) 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.
ARTICLE X.
SUBSIDIARY GUARANTEE
SECTION 10.1 SUBSIDIARY GUARANTEE. Each Subsidiary Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and the Trustee the full and punctual payment when due,
whether at maturity, by acceleration, by redemption or otherwise, of the
principal of, premium, if any, and interest on the Securities and all other
obligations of the Company under this Indenture (all the foregoing being
hereinafter collectively called the "OBLIGATIONS"). Each Subsidiary Guarantor
further agrees (to the extent permitted by law) that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
it, and that it will remain bound under this Article X notwithstanding any
extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of payment from
and protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. Each Subsidiary Guarantor waives notice of any default
under the Securities or the Obligations. The obligations of each Subsidiary
Guarantor hereunder shall not be affected by (a) the failure of any Holder to
assert any claim or demand or to enforce any right or remedy against the Company
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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 Obligations or any of them;
(e) the failure of any Holder to exercise any right or remedy against any other
Subsidiary Guarantor; or (f) any change in the ownership of the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment when due (and not a guarantee of
collection) and waives any right to require that any resort be had by any Holder
to any security held for payment of the Obligations.
The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any 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 Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any of
the Obligations is rescinded or must otherwise be restored by any Holder 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 has at law or in equity against any Subsidiary Guarantor by
virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
Each Subsidiary Guarantor further agrees that, as between such Subsidiary
Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity
of the Obligations guaranteed hereby may be accelerated as provided in this
Indenture for the purposes of its Subsidiary Guarantee herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the Obligations guaranteed hereby and (y) in the event of any such
declaration of acceleration of such Obligations, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purposes of this Subsidiary Guarantee.
85
Each Subsidiary Guarantor also agrees to pay any and all reasonable costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
the Holders in enforcing any rights under this Section.
SECTION 10.2 LIMITATION ON LIABILITY; TERMINATION, RELEASE AND DISCHARGE.
The obligations of each Subsidiary Guarantor hereunder will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor (including, without limitation, any
guarantees under the Senior Credit Agreement) and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to its contribution obligations under this
Indenture, result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law.
Each Subsidiary Guarantor may consolidate with or merge into or sell its
assets to the Company or another Subsidiary Guarantor without limitation.
Subject to Article III and Article IV, each Subsidiary Guarantor may consolidate
with or merge into or sell all or substantially all its assets to a corporation,
partnership or trust other than the Company or another Subsidiary Guarantor
(whether or not affiliated with the Subsidiary Guarantor), except that if the
surviving corporation of any such merger or consolidation is a Subsidiary of the
Company, such merger, consolidation or sale shall not be permitted unless (i)
the Person formed by or surviving any such consolidation or merger assumes all
the obligations of such Subsidiary under the Subsidiary Guarantee pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee in respect of the Securities, this Indenture and the Subsidiary
Guarantee, (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; and (iii) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Trustee with
respect to the foregoing matters. Upon the sale or disposition of a Subsidiary
Guarantor (by merger, consolidation, the sale of its capital stock or the sale
of all or substantially all of its assets (other than by lease)) and whether or
not the Subsidiary Guarantor is the surviving corporation in such transaction to
a Person (whether or not an Affiliate of the Subsidiary Guarantor) which is not
the Company or a Restricted Subsidiary of the Company, which sale or disposition
is otherwise in compliance with this Indenture (including Sections 3.14 and
3.19), such Subsidiary Guarantor will be deemed released from all its
obligations under this Indenture and its Subsidiary Guarantee and such
Subsidiary Guarantee will terminate; provided, however, that any such
termination will occur only to the extent that all obligations of such
Subsidiary Guarantor under the Senior Secured Credit Facility and all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, any other Indebtedness of the Company or its Restricted
Subsidiaries will also terminate upon such release, sale or transfer.
A Subsidiary Guarantor will be deemed released and relieved of its
obligations under this Indenture and its Subsidiary Guarantee without any
further action required on the part of the Company or such Subsidiary Guarantor
upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary
in accordance with the terms of this Indenture.
SECTION 10.3 RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby
agrees that to the extent that any Subsidiary Guarantor shall have paid more
than its proportionate share of any
86
payment made on the obligations under the Subsidiary Guarantees, such Subsidiary
Guarantor shall be entitled to seek and receive contribution from and against
the Company or any other Subsidiary Guarantor who has not paid its proportionate
share of such payment. Each Subsidiary Guarantor's right of contribution shall
be subject to the terms and conditions of Section 3.8(c). The provisions of this
Section 10.3 shall in no respect limit the obligations and liabilities of each
Subsidiary Guarantor to the Trustee and the Holders and each Subsidiary
Guarantor shall remain liable to the Trustee and the Holders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.
SECTION 10.4 NO SUBROGATION. Notwithstanding any payment or payments made
by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be
entitled to be subrogated to any of the rights of the Trustee or any Holder
against the Company or any other Subsidiary Guarantor or any collateral security
or guarantee or right of offset held by the Trustee or any Holder for the
payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any other
Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor
hereunder, until all amounts owing to the Trustee and the Holders by the Company
on account of the Obligations are paid in full. If any amount shall be paid to
any Subsidiary Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Obligations.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1 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 provision required by
the TIA shall control. Each Subsidiary Guarantor in addition to performing its
obligations under its Subsidiary Guarantee shall perform such other obligations
as may be imposed upon it with respect to this Indenture under the TIA.
SECTION 11.2 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:
▇▇▇▇▇▇ Petroleum Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇ LLP
87
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
if to the Trustee:
American Stock Transfer & Trust Company
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
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 registered 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 11.3 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 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(a) 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
(b) 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 11.5 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:
(a) a statement that the individual making such certificate or
opinion has read such covenant or condition;
88
(b) 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;
(c) 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
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual matters
on an Officers' Certificate or on certificates of public officials.
SECTION 11.6 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 owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.7 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 11.8 LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a Sunday or
other day on which commercial banking institutions are authorized or required to
be closed in New York City. 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 11.9 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 11.10 NO RECOURSE AGAINST OTHERS. An incorporator, director,
officer, employee, stockholder or controlling person, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of the
Company under the Securities, this Indenture or the Subsidiary Guarantees 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.
89
SECTION 11.11 SUCCESSORS. All agreements of the Company in this Indenture
and the Securities shall bind their respective successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12 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 11.13 VARIABLE PROVISIONS. The Company initially appoints the
Trustee as Paying Agent and Registrar and custodian with respect to any Global
Securities.
SECTION 11.14 QUALIFICATION OF INDENTURE. The Company shall qualify this
Indenture under the TIA in accordance with the terms and conditions of the
Exchange and Registration Rights Agreement and shall pay all reasonable costs
and expenses (including attorneys' fees and expenses for the Company, the
Trustee and the Holders) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the
Securities and printing this Indenture and the Securities. The Trustee shall be
entitled to receive from the Company any such Officers' Certificates, Opinions
of Counsel or other documentation as it may reasonably request in connection
with any such qualification of this Indenture under the TIA.
SECTION 11.15 TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the 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.
90
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ISSUER:
▇▇▇▇▇▇ PETROLEUM COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
TRUSTEE:
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇ PETROLEUM OPERATING COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇▇ OFFSHORE PRODUCTION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Corporate Secretary
91
MISSISSIPPI MARKETING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Corporate Secretary
92
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
No. [___] Principal Amount $[_____________], as
revised by the Schedule of Increases and
Decreases in Global Security attached hereto
CUSIP NO. ____________
ISIN: ____________
9.75% Senior Notes due 2010
▇▇▇▇▇▇ Petroleum Corporation, a Delaware corporation, promises to pay to
[__________], or registered assigns, the principal sum of [_______________]
Dollars, as revised by the Schedule of Increases and Decreases in Global
Security attached hereto, on December 8, 2010 ("FINAL MATURITY DATE").
Interest Payment Dates: March 31, June 30, September 30, and December 31
Record Dates: March 15, June 15, September 15, and December 15
Additional provisions of this Security are set forth on the other side of
this Security.
▇▇▇▇▇▇ PETROLEUM COMPANY
By:_______________________________________
Name:__________________________________
Title:_________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Trustee, certifies that this is one of the Securities referred
to in the Indenture.
By:______________________________________
Authorized Signatory Date: ________, 2004
1
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9.75% Senior Notes due 2010
1. Interest
▇▇▇▇▇▇ Petroleum Company, 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. Notwithstanding the
foregoing, the Company promises to pay interest on the principal amount
outstanding at the rate per annum of 11.75% for the period commencing 10 days
after the occurrence of an Event of Default or Default under Section 6.1(c) of
the Indenture until the same is paid in full or all Events of Default or
Defaults under Section 6.1(c) of the Indenture are cured or waived.
The Company will pay interest quarterly on March 31, June 30, September 30
and December 31 of each year commencing June 30, 2004 and on the Final Maturity
Date. Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Securities or, if no interest has been paid, from
March 15, 2004. The Company shall pay interest on overdue principal or premium,
if any (plus interest on such interest to the extent lawful), at the rate borne
by the Securities to the extent lawful. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
Upon the occurrence of a Registration Default (as defined in the Exchange
and Registration Rights Agreement), the interest rate on Transfer Restricted
Securities shall increase ("SPECIAL INTEREST"), by 0.25% until all Registration
Defaults have been cured. Following the cure of a Registration Default, the
accrual of Special Interest with respect to such Registration default shall
cease and upon the cure of all Registration Defaults the interest rate shall
revert to the original rate. Any Special Interest due on any Security shall be
payable on the appropriate Interest Payment Date to the Holder entitled to
receive the interest payment to be made on such date. Each obligation to pay
Special Interest shall be deemed to accrue from and including the date of the
first applicable Registration Default to but excluding the date on which all
Registration Defaults have been cured.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on March 15, June 15, September 15 and
December 31 next preceding the interest payment date (and on November 23, 2010
for the final interest payment) even if Securities are cancelled, repurchased or
redeemed 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.
2
Payments in respect of Securities represented by a Global Security (including
principal, premium, if any, and interest) will be made by the transfer of
immediately available funds to the accounts specified by The Depository Trust
Company. The Company will make all payments in respect of a Definitive Security
(including principal, premium, if any, and interest) by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
the Securities may also be made, in the case of a Holder of a least $1,000,000
aggregate principal amount of Securities, 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 15 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, American Stock Transfer & Trust Company (the "TRUSTEE"), will
act as Trustee, Paying Agent and Registrar. The Company may appoint and change
any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its Restricted Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of March 15,
2004 (as it may be amended or supplemented from time to time in accordance with
the terms thereof, the "INDENTURE"), among the Company, the Subsidiary
Guarantors 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 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "ACT"). Capitalized terms used herein 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 senior obligations of the Company
limited to $200.0 million aggregate principal amount (subject to Section 2.9 of
the Indenture). This Security is one of the Original Securities (also referred
to as Initial Securities) referred to in the Indenture. The Initial Securities
and the Exchange Securities will be treated as a single class of securities
under the Indenture. The Indenture imposes certain limitations on, among other
things: the incurrence of Debt by the Company and its Restricted Subsidiaries,
the purchase or redemption of capital stock of the Company, certain purchases or
redemptions of Subordinated Debt, the incurrence of Liens by the Company or its
Restricted Subsidiaries, the sale or transfer of assets and capital stock of
Restricted Subsidiaries, the issuance or sale of capital stock of Restricted
Subsidiaries, the business activities and investments of the Company and its
Restricted Subsidiaries, mergers and consolidation, and transactions with
Affiliates. In addition, the Indenture limits the ability of the Company and its
Restricted Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
To guarantee the due and punctual payment of the principal, premium, if
any, and interest 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
3
otherwise, according to the terms of the Securities and the Indenture, the
Subsidiary Guarantors have unconditionally guaranteed (and future Subsidiary
Guarantors, together with the Subsidiary Guarantors, will unconditionally
guarantee), jointly and severally, such obligations on a senior basis pursuant
to the terms of the Indenture.
5. Redemption
Except as set forth below, the Securities will not be redeemable at the
option of the Company prior to December 8, 2007. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid 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 December 8 of the
years set forth below:
Redemption
Period Price
------ -----
2007 ....................................... 105.0%
2008 ....................................... 103.0%
2009 ....................................... 101.0%
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed, then on a pro rata basis, by lot or
by such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Securities of $1,000 in original principal amount
or less will be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the portion
of the principal amount thereof to be redeemed. A new Security in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
redemption date, interest will cease to accrue on Securities or portions thereof
called for redemption as long as the Company has deposited with the Paying Agent
funds in satisfaction of the applicable redemption price pursuant to the
Indenture.
6. Repurchase Provisions
(a) Upon a Change of Control any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder 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 repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
4
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 3.14(b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in Section 3.14
of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
principal amount of $1,000 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 (i)
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) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
9. 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.
10. Defeasance
Subject to certain conditions set forth in the Indenture, 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.
11. 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 seventy-five percent (75%) in principal amount of the then
outstanding Securities and (ii) any default (other than with respect to
nonpayment or in respect to a provision that cannot be amended without the
written consent of each Securityholder affected) or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount of the then outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without 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 IV of the Indenture,
5
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities or
to secure the Securities, or to add additional covenants of the Company and the
Subsidiary Guarantors, or surrender rights and powers conferred on the Company,
or to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to provide for the issuance of Exchange
Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (a) the Company shall
default in the payment or prepayment when due of any principal of or interest on
any Security and such default, other than a default of a payment or prepayment
of principal (which shall have no cure period), shall continue unremedied for a
period of thirty (30) days; (b) the Company or any Restricted Subsidiary shall
default in the payment when due of any principal of or interest on any of its
other Debt (other than Debt owed to the Company or any Restricted Subsidiary)
aggregating $10,000,000 or more ($15,000,000 in the case of non-recourse Debt),
or any event specified in any note, agreement, indenture or other document
evidencing or relating to any such Debt shall occur if the effect of such event
is to cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Debt (or a trustee or administrative agent
on behalf of such holder or holders) to cause, such Debt to become due prior to
its stated maturity; (c) (i) the Company shall default in the performance of any
of its obligations under Article IV of the Indenture; (ii) the Company shall
default in the performance of any of its obligations under Article III of the
Indenture (other than the payment of amounts due which shall be governed by part
(a) of this paragraph or defaults under Article IV which shall be governed by
part (c)(i) of this paragraph and such default shall continue unremedied for a
period of thirty (30) days after notice thereof specified below or (iii) the
Company shall default in the performance of any of its other obligations under
this Indenture and such default shall continue unremedied for a period of sixty
(60) days after notice thereof as provided below; (d) the Company or any
Restricted Subsidiary shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; (e) the Company or any
Restricted Subsidiary shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, liquidation or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; (f) a proceeding or
case shall be commenced, without the application or consent of the Company or
any Restricted Subsidiary, in any court of competent jurisdiction, seeking (i)
its liquidation, reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Person of all or any substantial part
of its assets, or (iii) similar relief in respect of such Person under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of sixty (60) days;
or (iv) an order for relief against such Person shall be entered in
6
an involuntary case under the Federal Bankruptcy Code; (g) a judgment or
judgments for the payment of money in excess of $10,000,000 in the aggregate
(net of any amounts that a reputable and creditworthy insurance company has
acknowledged liability for in writing) shall be rendered by a court against the
Company or any Restricted Subsidiary and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution thereof
shall not be procured, within sixty (60) days from the date of entry thereof and
the Company or such Subsidiary shall not, within said period of sixty (60) days,
or such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; (h) any Subsidiary takes, suffers or permits to exist any of the events
or conditions referred to in clauses (d), (e), (f) or (g), and such event or
condition has a Material Adverse Effect.
Notwithstanding the foregoing, a Default under clause (c) of this
paragraph will not constitute an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities notify
the Company of the Default and the Company does not cure such Default within the
time specified in said clause (c) 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".
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
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 or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, 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.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or controlling
person, as such, of each of the Company, or any Subsidiary Guarantor shall not
have any liability for any obligations of the Company under the Securities, the
Indenture or any Subsidiary Guarantees or for any claim based on, in respect of
or by reason of such obligations or their creation. By
7
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.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. 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
entirety), 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).
17. 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.
18. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
▇▇▇▇▇▇ Petroleum Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
8
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:________________________
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years 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:
CHECK ONE BOX BELOW:
1 [ ] acquired for the undersigned's own account, without transfer; or
2 [ ] transferred to the Company; or
3 [ ] transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"); or
4 [ ] transferred pursuant to an effective registration statement under the
Securities Act; or
5 [ ] transferred pursuant to and in compliance with Regulation S under the
Securities Act; or
9
6 [ ] transferred to an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act), that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter appears as
Section 2.7 of the Indenture); or
7 [ ] transferred pursuant to another available exemption from the
registration requirements of 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 (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request 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) Signature
_______________________________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) OR (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, as amended, 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:
10
[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:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following such signatory of Trustee or
Exchange Global Security Global Security decrease or increase Securities Custodian
-------- ---------------------- ---------------------- ----------------------------- -----------------------
11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.14 or 3.15 of the Indenture, check either box:
[ ] [ ]
3.14 3.15
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.14 or 3.15 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _________________ Your Signature_______________________________________
(Sign exactly as your name appears on
the other side of the Security)
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
12
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Depository Legend, if applicable]
No. [___]
Principal Amount $[_____________], as
revised by the Schedule of Increases and
Decreases in Global Security attached hereto
CUSIP NO. ____________
ISIN: ____________
9.75% Senior Notes due 2010
▇▇▇▇▇▇ Petroleum Company, a Delaware corporation, promises to pay to
[__________], or registered assigns, the principal sum of [_______________]
Dollars, as revised by the Schedule of Increases and Decreases in Global
Security attached hereto, on December 8, 2010 ("FINAL MATURITY DATE").
Interest Payment Dates: March 31, June 30, September 30, December 31
Record Dates: March 15, June 15 September 15, December 15
Additional provisions of this Security are set forth on the other side of
this Security.
▇▇▇▇▇▇ PETROLEUM COMPANY
By:_________________________________
Name:____________________________
Title:___________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Trustee, certifies that this is one of the Securities referred
to in the Indenture.
By:______________________________________
Authorized Signatory Date: ______, 2004
B-1
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
9.75% Senior Notes due 2010
1. Interest
▇▇▇▇▇▇ Petroleum Company, 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. Notwithstanding the
foregoing, the Company promises to pay interest on the principal amount
outstanding at the rate per annum of 11.75% for the period commencing 10 days
after the occurrence of an Event of Default or Default under Section 6.1(c) of
the Indenture until the same is paid in full or all Events of Default or
Defaults under Section 6.1(c) of the Indenture are cured or waived.
The Company will pay interest quarterly on March 31, June 30, September 30
and December 31 of each year commencing June 30, 2004 and on the Final Maturity
Date. Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Securities or, if no interest has been paid, from
March 15, 2004. The Company shall pay interest on overdue principal or premium,
if any (plus interest on such interest to the extent lawful), at the rate borne
by the Securities to the extent lawful. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on March 15, June 15, September 15 and
December 31 next preceding the interest payment date (and on November 23, 2010
for the final interest payment) even if Securities are cancelled, repurchased or
redeemed 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 represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, 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 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
B-2
3. Paying Agent and Registrar
Initially, American Stock Transfer & Trust Company (the "TRUSTEE"), will
act as Trustee, Paying Agent and Registrar. The Company may appoint and change
any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its Restricted Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of March 15,
2004 (as it may be amended or supplemented from time to time in accordance with
the terms thereof, the "INDENTURE"), among the Company, the Subsidiary
Guarantors 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 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "ACT"). Capitalized terms used herein 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 senior subordinated obligations of
the Company limited to $200.0 million aggregate principal amount (subject to
Section 2.9 of the Indenture). The Initial Securities and the Exchange
Securities will be treated as a single class of securities under the Indenture.
The Indenture imposes certain limitations on, among other things: the Incurrence
of Debt by the Company and its Restricted Subsidiaries, the purchase or
redemption of capital stock of the Company, certain purchases or redemptions of
Subordinated Debt, the incurrence of Liens by the Company or its Restricted
Subsidiaries, the sale or transfer of assets and capital stock of Restricted
Subsidiaries, the issuance or sale of capital stock of Restricted Subsidiaries,
the business activities and investments of the Company and its Restricted
Subsidiaries, mergers and consolidation, and transactions with Affiliates. In
addition, the Indenture limits the ability of the Company and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
To guarantee the due and punctual payment of the principal, premium, if
any, and interest 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, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior subordinated basis pursuant to the terms of the
Indenture.
5. Redemption
Except as set forth below, the Securities will not be redeemable at the
option of the Company prior to December 8, 2007. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid
B-3
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 December 8 of the
years set forth below:
Redemption
Period Price
------ -----
2007 ....................................... 105.0%
2008 ....................................... 103.0%
2009 ....................................... 101.0%
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed or, if the Securities are not listed, then on a pro rata basis, by lot or
by such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Securities of $1,000 in original principal amount
or less will be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the portion
of the principal amount thereof to be redeemed. A new Security in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
redemption date, interest will cease to accrue on Securities or portions thereof
called for redemption as long as the Company has deposited with the Paying Agent
funds in satisfaction of the applicable redemption price pursuant to the
Indenture.
6. Repurchase Provisions
Upon a Change of Control any Holder of Securities will have the right to
cause the Company to repurchase all or any part of the Securities of such Holder
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 repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) as provided in, and subject to the terms
of, the Indenture.
In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 3.14(b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in Section 3.14
of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
principal amount of $1,000 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
B-4
(i) 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) for a
period beginning 15 days before the mailing of a notice of Securities to be
redeemed and ending on the date of such mailing or (ii) any Securities for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.
8. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes.
9. 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.
10. Defeasance
Subject to certain conditions set forth in the Indenture, 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.
11. 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 seventy-five percent (75%) in principal amount of the then
outstanding Securities and (ii) any default (other than with respect to
nonpayment or in respect of a provision that cannot be amended without the
written consent of each Securityholder affected) or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount of the then outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without 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 IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants of the Company and the Subsidiary Guarantors, or surrender
rights and powers conferred on the Company, or to comply with any request of the
SEC in connection with qualifying the Indenture under the Act, or to make any
change that does not adversely affect the rights of any Securityholder, or to
provide for the issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (a) the Company shall
default in the payment or prepayment when due of any principal of or interest on
any Security and such default, other than a default of a payment or prepayment
of principal (which shall have no cure
B-5
period), shall continue unremedied for a period of thirty (30) days; (b) the
Company or any Restricted Subsidiary shall default in the payment when due of
any principal of or interest on any of its other Debt (other than Debt owed to
the Company or any Restricted Subsidiary) aggregating $10,000,000 or more
($15,000,000 in the case of non-recourse Debt), or any event specified in any
note, agreement, indenture or other document evidencing or relating to any such
Debt shall occur if the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder or holders of such
Debt (or a trustee or administrative agent on behalf of such holder or holders)
to cause, such Debt to become due prior to its stated maturity; (c) (i) the
Company shall default in the performance of any of its obligations under Article
IV of the Indenture; (ii) the Company shall default in the performance of any of
its obligations under Article III of the Indenture (other than the payment of
amounts due which shall be governed by part (a) of this paragraph or defaults
under Article IV which shall be governed by part (c)(i) of this paragraph and
such default shall continue unremedied for a period of thirty (30) days after
notice thereof specified below or (iii) the Company shall default in the
performance of any of its other obligations under this Indenture and such
default shall continue unremedied for a period of sixty (60) days after notice
thereof as provided below; (d) the Company or any Restricted Subsidiary shall
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due; (e) the Company or any Restricted Subsidiary shall (i)
apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or of all or a substantial
part of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding-up,
liquidation or composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Federal Bankruptcy Code, or (vi)
take any corporate action for the purpose of effecting any of the foregoing; (f)
a proceeding or case shall be commenced, without the application or consent of
the Company or any Restricted Subsidiary, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of such
Person of all or any substantial part of its assets, or (iii) similar relief in
respect of such Person under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of sixty (60) days; or (iv) an order for
relief against such Person shall be entered in an involuntary case under the
Federal Bankruptcy Code; (g) a judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing) shall
be rendered by a court against the Company or any Restricted Subsidiary and the
same shall not be discharged (or provision shall not be made for such
discharge), or a stay of execution thereof shall not be procured, within sixty
(60) days from the date of entry thereof and the Company or such Subsidiary
shall not, within said period of sixty (60) days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal; (h) any Subsidiary takes,
suffers or permits to exist any of the events or conditions referred to in
clauses (d), (e), (f) or (g), and such event or condition has a Material Adverse
Effect.
B-6
Notwithstanding the foregoing, a Default under clause (c) of this
paragraph will not constitute an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities notify
the Company of the Default and the Company does not cure such Default within the
time specified in said clause (c) 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".
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
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 or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, 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.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or controlling
person, as such, of each of the Company, or any Subsidiary Guarantor shall not
have any liability for any obligations of the Company under the Securities, the
Indenture or any Subsidiary Guarantees 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.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. Abbreviations
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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
entirety), 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).
17. 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.
18. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
▇▇▇▇▇▇ Petroleum Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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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:_________________________
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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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:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following such signatory of Trustee or
Exchange Global Security Global Security decrease or increase Securities Custodian
-------- ---------------------- ---------------------- ----------------------------- -----------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.14 or 3.15 of the Indenture, check either box:
[ ] [ ]
3.14 3.15
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.14 or 3.15 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _________________ Your Signature_______________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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EXHIBIT C
FORM OF SUBSIDIARY GUARANTEE
This Supplemental Indenture, dated as of [__________] (this "SUPPLEMENTAL
INDENTURE" or "GUARANTEE"), among [name of future Subsidiary Guarantor] (the
"GUARANTOR"), ▇▇▇▇▇▇ Petroleum Company (together with its successors and
assigns, the "COMPANY"), each other then existing Subsidiary Guarantor under the
Indenture referred to below, and American Stock Transfer & Trust Company, as
Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company, the Subsidiary Guarantors and the Trustee have
heretofore executed and delivered an Indenture, dated as of March 15, 2004 (as
amended, supplemented, waived or otherwise modified, the "INDENTURE"), providing
for the issuance of an aggregate principal amount of $200 million of 9.75%
Senior Securities due 2010 of the Company (the "SECURITIES");
WHEREAS, Section 3.21 of the Indenture provides that the Company is
required to cause (i) each Restricted Subsidiary other than a Foreign Subsidiary
created or acquired by the Company or one or more of its Restricted Subsidiaries
and (ii) each Restricted Subsidiary, at any time such Restricted Subsidiary
ceases to be a Foreign Subsidiary, to execute and deliver to the Trustee a
Subsidiary Guarantee pursuant to which such Restricted Subsidiary will
unconditionally Guarantee, on a joint and several basis with the other
Subsidiary Guarantors, the full and prompt payment of the principal of, premium,
if any, and interest on the Securities on a senior subordinated basis; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor, the Company, the other Subsidiary Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the
Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINED TERMS. As used in this Subsidiary Guarantee, terms
defined in the Indenture or in the preamble or recital hereto are used herein as
therein defined, except that the term "Holders" in this Guarantee shall refer to
the term "Holders" as defined in the Indenture and the Trustee acting on behalf
or for the benefit of such holders. The words "herein," "hereof" and "hereby"
and other words of similar import used in this Supplemental Indenture refer to
this Supplemental Indenture as a whole and not to any particular section hereof.
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ARTICLE II
AGREEMENT TO BE BOUND; GUARANTEE
SECTION 2.1 AGREEMENT TO BE BOUND. The Guarantor hereby becomes a party to
the Indenture as a Subsidiary Guarantor and as such will have all of the rights
and be subject to all of the obligations and agreements of a Subsidiary
Guarantor under the Indenture. The Guarantor agrees to be bound by all of the
provisions of the Indenture applicable to a Subsidiary Guarantor and to perform
all of the obligations and agreements of a Subsidiary Guarantor under the
Indenture.
SECTION 2.2 GUARANTEE. The Guarantor hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Subsidiary Guarantor, to each Holder of the Securities
and the Trustee, the full and punctual payment when due, whether at maturity, by
acceleration, by redemption or otherwise, of the Obligations pursuant to Article
X of the Indenture on a senior basis.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 NOTICES. All notices and other communications to the Guarantor
shall be given as provided in the Indenture to the Guarantor, at its address set
forth below, with a copy to the Company as provided in the Indenture for notices
to the Company.
SECTION 3.2 PARTIES. Nothing expressed or mentioned herein is intended or
shall be construed to give any Person, firm or corporation, other than the
Holders and the Trustee, any legal or equitable right, remedy or claim under or
in respect of this Supplemental Indenture or the Indenture or any provision
herein or therein contained.
SECTION 3.3 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 3.4 SEVERABILITY CLAUSE. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.
SECTION 3.5 RATIFICATION OF INDENTURE. Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture.
SECTION 3.6 COUNTERPARTS. The parties hereto may sign one or more copies
of this Supplemental Indenture in counterparts, all of which together shall
constitute one and the same agreement.
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SECTION 3.7 HEADINGS. The headings of the Articles and the sections in
this Guarantee are for convenience of reference only and shall not be deemed to
alter or affect the meaning or interpretation of any provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NEW SUBSIDIARY GUARANTOR],
as a Subsidiary Guarantor
By:____________________________________
Name:_______________________________
Title:______________________________
AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Trustee
By:____________________________________
Name:_______________________________
Title:______________________________
▇▇▇▇▇▇ PETROLEUM COMPANY
By:____________________________________
Name:_______________________________
Title:______________________________
SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇ PETROLEUM OPERATING COMPANY
By:____________________________________
Name:_______________________________
Title:______________________________
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▇▇▇▇▇▇ OFFSHORE PRODUCTION, INC.
By:____________________________________
Name:_______________________________
Title:______________________________
MISSISSIPPI MARKETING, INC.
By:____________________________________
Name:_______________________________
Title:______________________________
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